How Outside Processing Works With Shipping

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:

• Providing visibility into supply chain functions

• Reducing manual intervention

• Improving management of demand and supply side changes

• Providing better insight into outside processing costs

The outside processing flow begins and ends within the Oracle Manufacturing Cloud solution. Manufacturing sends the shipment lines to Oracle Fusion 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 Fusion Receiving and delivers the processed items to Manufacturing. For more detailed information about the outside processing business process flow, see the Oracle Fusion Cloud SCM: Using Manufacturing guide. For more information about outside processing in Receiving, see the Oracle Fusion Cloud SCM: Using Receiving guide.

The following figure shows a high-level overview of the outside processing flow as it relates to shipping and receiving.

Explanation of callouts:

1. Manufacturing sends shipment lines for outside processing to Shipping.

2. Shipment lines are imported into Shipping for packing and shipping to a supplier or manufacturing partner for outside processing.

3. The supplier or manufacturing partner receives the items and performs the agreed upon outside processing services.

4. After the supplier or manufacturing partner has completed service on the items, the items are sent back to the original manufacturer.

5. 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.

Note: Manufacturing calls Oracle Fusion Supply Chain Orchestration to enable the shipping of partially finished assemblies by creating shipment requests. The supply chain orchestration process tracks and monitors supply orders for outsourced manufacturing operations. For more information about outside processing in Supply Chain Orchestration, see the Oracle SCM Cloud Using Oracle Supply Chain Orchestration guide.

Use the Manage Shipment Lines page and the Edit Shipment Line page to perform shipping-related tasks for outside processing.

The job roles associated with outside processing in shipping are warehouse manager and shipping manager. Using outside processing in Shipping, you can:

• Create shipments for shipment lines to a supplier

• Print shipping documents associated with the shipment, such as the packing slip and bill of lading

Integration with Oracle Global Trade Management Cloud is available for outside processing. However, integration with Oracle Transportation Management Cloud isn't available for outside processing.