Outside Processing in Receiving
In outside processing, one or more manufacturing operations in a work order are outsourced to external providers. The Original Equipment Manufacturer (OEM) handles selective manufacturing operations in house and outsources other manufacturing operations to one or more service providers.
Outside processing improves operational efficiency by:
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Providing visibility into supply chain functions
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Reducing manual intervention
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Improving management of demand and supply side change
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Providing better insight into outside processing costs
The outside processing flow begins and ends within the Oracle Fusion Cloud Manufacturing solution. Manufacturing sends the shipment lines to Oracle Shipping for processing. From Shipping, the lines are packed and shipped to the supplier. The supplier then performs their services on the goods and sends the goods back to the OEM. The OEM receives the goods in Oracle Receiving and delivers the processed items back to Manufacturing. For more information about the outside processing business process flow, see the Oracle Fusion Cloud SCM: Using Manufacturing guide. For information about outside processing in Shipping, see the Oracle Fusion Cloud SCM: Using Shipping guide.
The following figure shows a high-level overview of the outside processing flow as it relates to receiving and shipping.
Explanation of callouts:
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Manufacturing sends shipment lines for outside processing to Shipping.
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Shipment lines are imported into Shipping for packing and shipping to a supplier or manufacturing partner for outside processing.
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The supplier or manufacturing partner receives the items and performs the agreed upon outside processing services.
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After the supplier or manufacturing partner has completed service on the items, the items are sent back to the original manufacturer.
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Outside processing items are received back from the supplier or manufacturing partner in Receiving and delivered to the original manufacturer to progress the work order to completion.
Throughout the entire process, the original manufacturer retains ownership of the goods that are sent to and received back from the supplier or manufacturing partner. The work order and purchase order information follow all the steps of the outside processing flow.
You must deliver Inventory items received from the supplier or manufacturing partner to manufacturing after outside processing to progress a work order to completion. When performing the put away to manufacturing, you're not required to enter subinventory or locator information because the destination type on the shipment lines is work order. After the put away transaction is processed, existing events inform manufacturing that the items are ready to be consumed. Because the custody of the goods is no longer with Receiving, Manufacturing must initiate corrections or returns.
Use the Put Away Receipts page to navigate to the Put Away Lines page to receive and deliver outside processing items to manufacturing.
For consecutive supplier operations, Receiving automates the delivery of goods along with the receipt using an advanced shipment notice for the purchase orders. The goods move from one supplier to the next directly until the last supplier who ships the goods to the original manufacturer after the final supplier operation. This automation progresses the purchase orders and work orders to completion. You can configure the receipt traveler report to include work order and end assembly information.
The job roles associated with outside processing in Receiving are warehouse manager and receiving agent. Using outside processing in Receiving, you can record completed quantities at supplier operations after goods are received and delivered to manufacturing.
Integration with Oracle Fusion Cloud Global Trade Management is available for outside processing. However, integration with Oracle Fusion Cloud Transportation Management isn't available for outside processing.