Reduce Inventory When a Sales Order Doesn't Pick or Ship

Reduce the amount of on-hand quantity in your warehouse to fulfill sales orders that you submit in Oracle Order Management.

Use this feature to help you reduce on-hand quantity in your warehouse, allocate cost and recognize cost of goods sold when you don't pick, pack, and ship your sales orders. For example, when you deliver the item through an over-the-counter transaction that doesn't require picking and shipping, or when you create and fulfill a sales order in Order Management for a point-of-sale transaction that you already finished.

How it works:

What the Numbers Mean

1. Oracle Order Management validates and submits a sales order to fulfill it from your warehouse without picking or shipping, then sends the order details and a request to reduce inventory to Oracle Inventory Management.

2. Order Management sends the sales order to Oracle Receivables.

3. Receivables invoices the sales order.

4. Inventory Management reduces the amount of on-hand quantity to fulfill the sales order. The transaction type is Direct Sales Order Issue:

   • Reduces it immediately after Order Management sends the order line to inventory, or in the background.

   • Reduces it on the current date or on a date that already happened.

5. Inventory Management sends the finished transaction for the inventory reduction to Oracle Cost Management, then Cost Management allocates cost for the transaction.

6. Receivables recognizes the revenue, then sends revenue details to Cost Management. Cost Management recognizes the cost of goods sold. As an option, you can use Oracle Revenue Management to recognize revenue, then send revenue details to Cost Management.

7. If a change in ownership happens from one business unit to another business unit, then Inventory Management sends a Direct Sales Order Issue transaction to Oracle Financial Orchestration. Financial Orchestration orchestrates financial details, processes the transaction, then sends the transaction to Cost Management.

Realize these benefits:

• Reduce the amount of on-hand quantity that you need to fulfill each sales order when you don't pick and ship the item that you're selling.

• Avoid having to manage details about picking and shipping transactions when you don't pick and ship the item.

• Reduce the number of steps and the time that you need to process and fulfill sales orders from your warehouse.

• Fulfill a large volume of sales orders, increase revenue, and increase customer satisfaction.

• Manage change on the sales order.

• Return an order line that has an inventory transaction in the same way that you return an order line that doesn't have an inventory transaction.

Set Up

You must set up security at the user or group level so your users can view lots and serials in the receiving warehouse on a return order. For details about how, see step 3 in Search According to Your Most Useful Attributes.

You must assign the security policy that you need to use this feature to the role that does the transaction. This policy allows the user to select the locator, lot, and serial number. This example assigns the policy to the Order Entry Specialist job role:

1. Go to the Security Console, query for the Order Entry Specialist (ORA_FOM_ORDER_ENTRY_SPECIALIST_JOB) job role, then click Actions > Edit Role.
2. On the Basic Information page, click Next > Next.
3. On the Data Security Policies page, click Create Data Security Policy, set these values, then click OK:

   Attribute	Value
   Policy Name	Inventory Data Set
   Data Resource	Inventory Organization Its greyed out, but you can set it. Click the magnifying glass.
   Data Set	All Values
   Actions	Manage Inventory Locator Manage On-Hand Quantity Manage Item Lot and Item Serial

4. Click Next > Next > Next > Save and Close.
5. Go to the Scheduled Processes work area and run the Import User and Role Application Security Data scheduled process.

Test

1. Go to the Order Management work area, then click Sales Order (New).
2. Set values on the order header.
3. Add an order line then set these values:

   Attribute	Value
   Warehouse	Select one.
   Subinventory	Select one.
   Allow Inventory Transaction	Yes

4. Click the icon in the Manage column, then set values for these attributes:
   • Revision Number
   • Locator
   • Lot
   • From Serial Number
   • To Serial Number

For more, see Redwood: Reduce Inventory When You Don't Pick or Ship.

For end-user detail, see Manage Transactions That Reduce Inventory.

To view a demonstration, see Presentation to Reduce Inventory. You can also download the slides for this presentation.

For more about processing, see Guidelines for Managing Sales Orders That Have Inventory Transactions.