Oracle EBS: MultiOrg Concept

Since Oracle EBS or E-Business Suite is a complete automated application and caters
the need of variety of industries. It has an architecture called MultiOrg or Multiple
Organization.
Whenever we talk about an organization irrespective of its multiple structure, we will
find certain common things or feature or let me call it departments. It is not necessary
that every organization has every department. But some departments and/or processes
are more or less the same.
What is an Organization? In EBS it is a vague term, infact, varied term. In
Oracle EBS an organization can be a Legal Entity, or an Inventory, or a department.
Anything can be treated as organization in Oracle. When we go through the
Oracle EBS documentation we will find the excessive use word Organization. But it not
the organization we refer it to here in daily routine.
In our daily routine if we say the word organization, we will certainly be referring to
some company, for example, Inbox Business Technologies, IBM, Acer, HP, these are the
example of organization selling hardware. But in Oracle Multi Org structure they are
referred to as Legal Entities.
The Multi Org structure in Oracle consists of following organizations
1. Business Group or HR Business Group
2. Ledger
3. Legal Entity or GRE
4. Operating Unit
5. Inventory Organization
BUSINESS GROUP (BG)
A business group is the top level in multi org structure. Oracle view human
resource as the basis for the business. A human resource is selling the products that
organization is manufacturing, a human resource is purchasing raw materials required
to make a product, a human resource is making accounting and financials statement. In
short a legal entity transacts because of Human Resources.
In Oracle EBS, Business Group holds the employee information. If there is a Group
of Companies and they all are using a single instance of Oracle Apps then every
employee in each company will be defined at BG level. Each employee will then be
assigned aresponsibility. That responsibility determines which company that
employee belongs to and what type of transaction can be carried out. When a fresh EBS
instance is installed it has a Default Business Group namely Setup Business Group.
We usually rename it as per our requirement.
A BG can have multiple ledger attached to it and there can beMultiple Business
Groups in one instance.
Oracle HR resides at this level of MultiOrg structure.
LEDGER
Formerly called Set of Book in R11i. Ledger is an accounting book.
Take an example of a utility shop with an old man sitting with a big register. In
that register he notes every transaction related to money or finances. Lets say he
sells some bottles of mineral water to a person. He notes the Date on the transaction
took place, theAmount involved in that transaction, Persons name, particulars of
goods sold to that person.
This is similar to what we do in a ledger. There are 4Cs concepts in Ledger.
1. Chart of Account (Particulars of Goods)
2. Currency (Amount)
3. Calendar (Date)
4. Subledger Accounting Convention (Cash / Accrual)
Oracle General Ledger resides at this level.
LEGAL ENTITY
Legal Entity definition by book is any company which is reporting to Government, an
entity which exists. In Oracle EBS a company is also referred to as GRE Government
Reporting Entity. A legal entity has a disclosure requirement of their annual revenue.
An organization which prepares its Balance Sheet and Income Statement.
Oracle says anything can be your legal entity. Yourmanufacturing plant can be your
legal entity, your departmentscan be your legal entity. Your inventory can be your
legal entity. A legal entity is the one for which you want a Balance Sheet and Income
statement. How can a balance sheet be generated for a department is another topic
OPERATING UNIT
Operating Unit (OU) comes under a ledger with a legal context.Legal Context is
referred to as the Legal entity to which it is attached. The purpose of an operating unit
is to segregate or separate subledger transactions. A legal entity having different
branches in Pakistan can treat each branch an operating unit.
Oracle Payables, Purchasing, Receivables, Order Management resides at this level
of MultiOrg.
In general an operating unit is the one dealing with paper work. How?
Take an example of P2P (Procure to Pay) cycle. It involvesPurchasing and Payables.
From Purchasing you generated an RFQ(Request for Quotation) and send it to
vendor, against the RFQyou receive a Quotation. Against that quotation you send
the PO (Purchase Order), Against that PO you receive Goods and GRN(Goods
Received Note), against that GRN you receive payablesInvoice, against that invoice
you make Payment. Each of these documents are from Oracle Purchasing
and Payables.
Similarly there is a O2C (Order to Cash) cycle.
INVENTORY ORGANIZATION
Inventory Organization is last or the lowest level of MultiOrgstructure. Inventory
organization refers to any kind storage of item, finished goods and raw materials, etc.
This storage can be Warehouse, Floors, Cabinets, Drawers, or a logical store
whichdont exists physically.
Inventory in general refers to storage and movement of goods from
one Inventory organization to another. Inventory has two types of inventory: Master
Item Inventory Org, Inventory Organizationand Sub-Inventory Org.
Master item inventory stores the every information of item or the definition of item.
It does not store the information of locationthat item is placed or the quantity of
item available. InventoryOrganization is same as the Master but it has the costing
definition, locator information, and types of item it can store. Each Inventory
organization should have at least one Sub Inventory Organization. There can
be multiple sub inventories under one Inventory Organization. Costing method can
also be defined at subinventory level.
Oracle Inventory, Manufacturing, Warehouse Management, Enterprise Asset
Management resides at this level.







ORACLE PURCHASING

There are two types of Hierarchies used for approval routing.
a. Position Hierarchies
b. Supervisor Hierarchies
Position Hierarchies
========================
Position Hierarchies are hierarchies that have a JOB/POSITION relationship.
For example, you could have a JOB called BUYER and within BUYER you could have various
grades or POSITIONS of BUYER Junior, Senior and Chief
Each POSITION has an approval limit, so when a purchase order exceeds the limits of the
POSITION, the purchase order is forwarded onto the next POSITION in the Hierarchy.
The hierarchy for this JOB/POSITION type of hierarchy is defined on the Position Hierarchy
form. When this is complete or is changed, the Fill Employee Hierarchy concurrent process must
be run for the new hierarchy to come into effect.
The Position Hierarchy form can be found at PO Navigator Setup Personnel Position
Hierarchy
Supervisor Hierarchies
==========================
Supervisor Hierarchies are hierarchies that have an Employee/Supervisor relationship
The supervisor of an employee is defined on the Assignment zone of the Employee form
This type of hierarchy does not use the Position Hierarchy form, but is defined by the employee /
supervisor relationship
If the purchase order raised by the employee exceeds the approval limits, the purchase order is
forwarded onto the employees supervisor, as defined on the Employee form