Set Up Coverages for Sales Orders
Set up and manage coverage items in Oracle Order Management. For example, set up the technical support coverage for a laptop computer.
Note
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If an order line contains a coverage, then you can't use an order management extension or a transformation rule to specify the values for a shipment set on that line. If you create an extension or rule that does attempt to set these values, then Order Management will skip the coverage line when it assigns the shipment set.
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If you import a sales order, and if your import includes a shipment set on an order line that contains a coverage item, then the import ignores the value for the shipment set on the line and creates or updates the line without the shipment set.
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If your import cancels a covered item, then Order Management will also cancel all coverage lines that aren't closed for the item.
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For an example that integrates Order Management with Oracle Receivables, see Create One Invoice for Sales Orders with Items That Can and Can't Ship.
Summary of the Set Up
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Administer parameters.
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Create the covered item.
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Create the coverage item.
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Set up pricing for the coverage item.
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Map time units.
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Test your set up.
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Optional. Add fixed and open-ended coverage. For details, see Add Fixed and Open-Ended Coverage to Sales Orders.
For details, see Coverages and Subscriptions in Sales Orders.
In this example, you will set up variable coverage as an extended warranty for the Standard Desktop computer.
This topic uses example values. You might need different values, depending on your business requirements.
Administer Parameters
Administer the feature and the parameter that affect coverages and subscriptions.
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Go to the Setup and Maintenance work area, then go to the task.
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Offering: Order Management
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Functional Area: Orders
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Task: Manage Order Management Parameters
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On the Manage Order Management Parameters page, set the value.
Parameter Name
Value
Coverage Start Date
To set the coverage's start date to:
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The date when you ship the covered item. Set this parameter to Shipment Date.
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The date when you deliver the covered item. Set this parameter to Delivery Date. You can use this setting only if you integrate with Transportation Management and you set up the integration so it sends the Actual Delivery Date to Order Management.
Order Management ships only the configured item and not the configure options. Order Management updates the shipment date and delivery date only on the parent configured item and not the child configure options. If you enable coverage on a child configure option, then Order Management creates a relationship between the option and the coverage, and Order Management sets the Contract Start Date of the coverage for the child line to the parent configured item's shipment date or delivery date.
Pick-to-Order and Kits
If you set the Ship Model Complete attribute to Yes on the configuration model in the Product Information Management work area, then Order Management doesn't ship the model but does ship the configure options that you select. If you enable coverage for the model, then Order Management sets the model's Contract Start Date to the shippable configure options' Contract Start Date.
Order Management applies the same behavior for a kit, except a kit has included items instead of configure options.
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Create the Covered Item
Create and set up an item so a coverage item can cover it.
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Go to the Product Information Management work area.
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Click Tasks > Create Item.
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In the Create Item dialog, set values, then click OK.
Attribute
Value
Organization
Vision Operations
Number of Items
1
Item Class
Root Item Class
For details, see Item Classes.
Template
You can select any value. For this example, select Finished Goods.
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On the Create Item page, enter the values, then click Save.
Attribute
Value
Item
PTO54222 Standard Personal Desktop Computer
Description
Standard Desktop computer.
Primary Unit of Measure
Each
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Click Specifications, then, under Item Organization, click Sales and Order Management.
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Set the value.
Attribute
Value
Sales Product Type
Select one.
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Goods. A tangible covered item.
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Subscription. An item that provides a product or service that recurs, and that includes a duration and period. For example, a one year subscription to a magazine, a 90 day subscription for cell phone service, and a six month subscription for software usage are each an example of a subscription.
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Empty.
For this example, select Goods.
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Under Item Organization, click Service.
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Set the value, then click Save.
Attribute
Value
Enable Contract Coverage
Yes
You must enable contract coverage so a coverage item can cover the covered item.
Create the Coverage Item
You will create a coverage item that covers the PTO54222 Standard Personal Desktop Computer item. You set up the coverage item as an extended warranty, to display default values for duration and period, and to allow the Order Entry Specialist to modify these values.
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Click Tasks > Create Item.
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In the Create Item dialog, set values, then click OK.
Attribute
Value
Organization
Vision Operations
Number of Items
1
Item Class
Warranty/Services
Template
You can select any value. For this example, select Finished Goods.
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On the Create Item page, set the values, then click Save.
Attribute
Value
Item
Variable Extended Warranty for Standard Desktop
Description
Variable warranty for the Standard Desktop computer.
Primary Unit of Measure
Year
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Click Specifications, then, under Item Organization, click Sales and Order Management.
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Set the value.
Attribute
Value
Sales Product Type
Select one.
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Extended Warranty
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Service Level Agreement
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Software Maintenance
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Preventive Maintenance
You can use only these values for a coverage item.
For this example, select Extended Warranty.
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Under Item Organization, click Service.
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Set the Service Duration Type attribute. For this example, set it to Variable.
Value
Description
Fixed
The Order Management work area will default the values that it displays for Duration and Period to the values that you set, then make them read-only.
Variable
Works the same as Fixed, except the Order Entry Specialist can edit Duration and Period.
Open Ended
Allows the Order Entry Specialist to edit Duration and Period, but doesn't display a default value for these attributes. The Order Entry Specialist must set them.
You can't set the Enable Contract Coverage attribute because this attribute allows a coverage item to cover the item that you're setting up. However, a coverage item can't cover another coverage item. For example, you can't create a 1 Year Standard Desktop Warranty that covers a 5 Year Standard Desktop Warranty.
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Set the values, click Save and Close, then sign out.
Attribute
Value
Duration
5
Duration Period
Year
Note: We strongly recommend that you set these values. Order Management displays them in fields that aren't labeled on the catalog line. If you don't set them, then the fields will be empty, and your users might not understand how to use them.
Set Up Pricing for the Coverage Item
Assume you must allow the Order Entry Specialist to set the coverage so it recurs yearly or monthly, and to calculate the coverage like this:
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For yearly coverage, charge 20% of the covered item price.
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For monthly coverage, charge 10% of the covered item price.
You must set up a charge for each of these durations. For details, see Pricing for Covered Items.
Set up pricing for the coverage item.
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Make sure you have the privileges that you need to administer pricing.
Assume you already set up pricing for the PTO54222 Standard Personal Desktop Computer item so it calculates a pricing basis of $500.
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Go to the Pricing Administration work area, then click Tasks > Manage Price Lists.
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Search for Corporate Segment Price List.
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In the search results, click Action > Add Row, set the values, then click Save.
Attribute
Value
Item
Variable Extended Warranty for Standard Desktop
Line Type
Buy
If you:
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Don't enter a value for Service Duration, then Pricing won't calculate a value for the Duration Extended Amount attribute.
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Enter a value for Service Duration, then Pricing will calculate a value for the Duration Extended Amount attribute.
If the Service Duration Type is Open Ended for the coverage item in the Product Information Management work area:
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The Search Results area won't display a value for Service Duration Period or Service Duration, and won't allow you to edit these attributes.
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And if Pricing prices the sales order instead of your source system pricing it, then the Order Entry Specialist must enter a value for Service Duration Period.
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In the Associated Items column, click Manage Covered Item.
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On the Manage Covered Items page, in search results, click Add Row, set the values, then click Create Charge.
Pricing UOM
Coverage UOM
Action Type
Each
Year
Add
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In the Charge area, set the values, then click Save and Close.
Attribute
Value
Pricing Charge Definition
OAL Recurring Charge
Calculation Method
Covered Item Price Percent
Coverage Basis
Coverage Basis Your Price
Calculation Amount
20
Price Periodicity
Year
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In the search results, click Add Row, set the values, then click Create Charge.
Pricing UOM
Coverage UOM
Action Type
Each
Month
Add
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In the Charge area, set the values, then click Save and Close.
Attribute
Value
Pricing Charge Definition
OAL Recurring Charge
Calculation Method
Covered Item Price Percent
Coverage Basis
Coverage Basis Your Price
Calculation Amount
10
Price Periodicity
Month
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Click Save and Close again, then sign out of Pricing.
Specify Charges for Each Duration
Duration comes predefined to display values.
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Year
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Quarter
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Month
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Week
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Day
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Hours
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Minutes
Note
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Order Management renders pricing details only for each charge that you specify. For example, if you don't specify a charge for Month, and if your user sets Duration to Month, then the order line for the coverage item won't display price details, Order Management will display an error message, and you can't submit the sales order.
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If you set up a coverage item in the Product Information Management work area but don't set up pricing for it in the Pricing Administration work area, then your user might add the coverage item but not be able to submit the sales order because of a pricing error.
Map Time Units
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Go to the Setup and Maintenance work area, then go to the task.
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Offering: Order Management
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Functional Area: Orders
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Task: Manage Time Unit Mappings
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On the Manage Time Unit Mappings page, set the values.
User Unit
Base Unit
Conversion
YEAR
Year
1
MONTH
Month
1
DAY
Day
1
QUARTER
Month
3
WEEK
Day
7
YEAR
Month
12
Make sure you use these values. These values will accommodate most coverages and subscriptions in a typical Order Management implementation.
For details, go to Implementing Oracle Subscription Management, then search for Overview of Unit of Measure, or search for Time Unit Mappings.
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Make sure the Active attribute for each row contains a check mark, then click Save and Close.
Test Your Set Up
Order Management uses time unit mappings to convert the duration of your coverage or subscription between different time units, and to set the Contract End Date attribute, which is required starting in Update 20C.
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Make sure you have the privileges that you need to manage sales orders.
- Go to the Order Management work area and create a sales order.
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On the catalog line, search for the item, then click Add.
Field
Value
Select Item
PTO54222
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On the catalog line, search for the item.
Field
Value
Select Item
Variable Extended Warranty for Standard Desktop
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Wait for the search to finish, then verify that the catalog line displays these values.
Attribute
Value
Duration
5
Period
Year
These are the default values that you set up in Product Information Management.
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Click Select Covered Item, select the order line to cover, then click Add.
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Click View > Columns, then click Period.
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Verify that these values display on the coverage line, by default:
Quantity
Your Price
Amount
Amount for Total Duration
Duration
Period
1
100
100
500
5
Year
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Change the quantity on the covered line from 1 to 2, then verify that the coverage line displays these values:
Quantity
Your Price
Amount
Amount for Total Duration
Duration
Period
2
100
200
1000
5
Year
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Change the quantity on the covered line from 2 to 1.
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Change the Duration to 1, then verify that the coverage line displays these values:
Quantity
Your Price
Amount
Amount for Total Duration
Duration
Period
1
100
100
100
1
Year
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Change the Period to Month, then verify that the coverage line displays these values:
Quantity
Your Price
Amount
Amount for Total Duration
Duration
Period
1
50
50
50
1
Month
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Change the Period to Day, verify that the coverage line doesn't display price details, click Actions > Reprice Order, then notice the error message.
Order Management will display an error for any charge that you don't set up. Recall that you didn't create a charge for Day.
Specify UOM Class for Subscriptions That Have Recurring Charges
If you set up a subscription that has a recurring charge, then you might need to set up a profile. If you don't, you might encounter an error.
Order Management can't price the sales order because it can't identify a charge for an item. A matching price list can't be found for this transaction for the pricing strategy.To avoid this problem, you must specify the default UOM class to use for the service duration. Here's how.
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Set the Default Price Periodicity UOM Class pricing parameter to Time. For details, see Manage Pricing Parameters.
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Set the profile value.
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Go to the setup and maintenance work area, click Tasks, then search for Manage Administrator Profile Values.
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On the Manage Administrator Profile Values page, search for the value.
Attribute
Value
Profile Display Name
SCM Common: Default UOM Class for Service Duration
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In the Profile Values area, set the value.
Attribute
Value
Profile Level
Site
Profile Value
Time
Order Management uses this value as the default UOM class for a service duration.
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