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What is an Internal Requisition?

===================== A requisition in the Purchasing system that will directly result in the generation of a sales order in the Order Management system through the Order Import process in Order Management. Why do we use internal requisition/internal sales order? Internal Requisition/Internal Sales Order provide the mechanism for requesting and transferring material from one inventory organization to other inventory organization or expense location. What is the location in Oracle Purchasing? Oracle Purchasing uses locations to identify the final delivery location for both inventory and vendor sourced requisition. It is using the hr_locations tab le. What is an Internal customer? When using Internal Requisition/Internal Sales Orders, it is required to create an internal customer for each destination organization and a customer ship-to site for each deliver-to location within the destination organization. Define the same address for your customer ship-to-site as your deliver-to location. Overview of Internal Requisitions ====================== Internal requisitions provide the mechanism for requesting and transferring material from inventory to other inventory or expense locations. When Purchasing, Order Management, Shipping Execution, and Inventory are installed, they combine to give you a flexible solution for your inter-organization and intra-organization requests. You should be able to: - Set up your supply chain and automatically source your requirements from inventory or suppliers - Define your inter-organization shipping network, and optionally require that you use internal orders for your inter-organization transfers - Use intransit inventory when you want to track items as they move between organizations - Reduce warehousing, shipping, and handling costs by requesting items in fixed lot sizes - Use the same windows for data entry and inquiry that you use for purchase requisitions and sales orders - Take advantage of standard requisition and sales order functionality to suit your individual business requirements - Automatically generate inventory replenishment requisitions and fulfill them via internal or external suppliers - Automatically source MRP generated requisitions to internal or external suppliers - View the status of requests on?line

- Use internal requisitions to move inventory items from one inventory organization to another, even if that organization belongs to a different operating unit, legal entity, or set of books Major Features =========== Complete Item Sourcing Definition: Purchasing and Inventory combine to provide the flexibility you need to define your item sourcing information. You can use the default sourcing options to automatically determine the correct source type and source for your requests. You can specify either Inventory or Supplier as the default source type, as well as the source organization and subinventory for internal requests. Inter-Organization Shipping Network: Inventory provides the features you need to define your inter-organization shipping network. For transfers between two organizations, you can specify whether to use intransit or direct shipments. You can also require internal orders for transfers between specific organizations. Flexible Processing: You can tailor internal requisition processing to fit your requirements. You can limit on-line interaction by setting up background processes to automatically perform specific actions such as creating inventory replenishment requests and creating internal sales orders in Order Management. Or, you can take advantage of other features such as on-line requisition approvals, internal sales order cycles, and on-line receipt and delivery of internally requested items. Creating Online Requisitions: You can create on-line internal requisitions for both expense and inventory destinations using the same windows you use to create purchase requisitions. You can combine inventory and supplier sourced requisition lines on the same requisition. Also, Purchasing uses your item sourcing information to default the correct source type and supplier for the item and destination. You can define requisition templates for commonly requested internally sourced items. Full Unit of Issue Enforcement: Purchasing offers the option of full unit of issue enforcement in which quantities entered on internal requisitions are automatically rounded to a full unit of issue defined for the item. You can also set this option to recommend a rounded quantity on requisitions, but leave the opportunity to change the recommended quantity. The quantity rounding is based on the specified unit of issue, if available, otherwise on the primary unit of measure.

Inventory Replenishment Requisitions: Inventory generates replenishment requisitions through min-max planning, reorder point planning, subinventory replenishment for replenishment counts, and Kanban replenishment. Purchasing uses your item sourcing information to create interorganization or subinventory transfer requests. For more information, see: Overview of Inventory Planning and Replenishment, Oracle Inventory User's Guide and Demand for Internal Requisitions: Oracle Purchasing User's Guide. MRP Generated Requisitions: MRP generated requisitions are sourced using the same item sourcing information that you define for inventory replenishment and on-line requisitions. For 'buy' items, the Requisition Import process uses the item sourcing information to create either a purchase requisition or an inter-organization internal requisition for planned orders. Approvals and Controls: You can control internal requisition approvals and document security just as you control purchase requisitions. Purchasing gives you the flexibility you need to set up approvals and limits for internal requests. You can use the same authorization rules, or you can relax or tighten controls for internal requisitions. Creation of Internal Sales Orders: When you approve an internal requisition for a stocked item, Purchasing translates the requisition into an internal sales order, providing a link between the end user's requirement and the physical demand against Inventory. Order Management: Once you create an internal sales order from a requisition, you can manage internal requisitions just as you manage regular sales orders. You can use Order Management to define order cycles, approvals and holds to effectively process requisition orders. You can selectively pick release and otherwise process internal sales orders as easily as you do regular sales orders. Complete Requisitions Status Visibility: You get complete visibility on the status of requests through inquiries and reports. You get on-line visibility to the internal sales order number, as well as the shipment and delivery status for requisitions. You can report on backordered items, internal requisition status, and delivery discrepancies. Exception Processing: Internal requisitions help you manage exceptions to your normal business flow. Order Management automatically backorders your request when you have insufficient supply to fill the internal order by creating another shipment line for the unavailable quantity. You can reschedule orders when the shipment date changes, and the expected arrival date on the intransit shipment is updated automatically.

Cancellation of Requisitions: You can easily cancel a request if you have a change in requirements or if you cannot fulfill the entire order. Using Order Management, you can partially or fully cancel the line quantities on the internal sales order. You complete the cancellation process by canceling the original requisition line in Purchasing. Using Internal Requisitions: Internal requisitions provide a flexible solution to your inventory requisitioning needs. You can eliminate user intervention when you do not need it, such as when you are loading internal requisitions into Order Management or placing demand. The following sections describe the entire business and information flow for internal requisitions, and identifies opportunities for you to simplify processing. Demand for Internal Requisitions: Demand for inventory requests can come from several sources. The primary sources are: - Online user's request for stock items out of inventory - Inventory Replenishment Requests - Oracle Master Scheduling/MRP and Supply Chain Planning generated requisitions - External system's requests Online Requests: On-line requisitions give you the choice of supplier or inventory sourced requisitions. Default sourcing information is determined by the requisition type, the item, and the destination of the request. When you enter a requisition, Purchasing automatically selects the correct source type and source information for the item and destination. To restrict certain users to internal requisitions only, set their profile PO: Legal Requisition Type to Internal. Purchasing then requires that they source all internally orderable items from inventory. For more information, see: Entering Requisition Headers: Oracle Purchasing User's Guide. For frequently requested items, you can define requisition templates to create internal requisitions quickly. Requestors can pull up the template they need, fill in the need-by date and destination of the request, and specify the quantity for each desired item. Internal requisitions also use the Account Generator, which automatically builds account distributions. You can specify only one accounting distribution per inventory sourced line. For more information, see: Using the Account Generator in Oracle Purchasing User's Guide. Inventory Replenishment Requests

Inventory automatically generates requisitions to maintain an item's stock level. The requisitions may request stock from an internal predefined source organization or from an outside supplier. For more information, see: Overview of Inventory Planning and Replenishment, Oracle Inventory User's Guide. Inventory generates replenishment requests automatically using the following methods: - Min-Max Planning - Reorder Point Planning - Subinventory Replenishments for Replenishment Counts - Kanban Replenishments All inventory replenishment methods create requisitions via the Requisitions Open Interface. Attention: If the destination subinventory uses locator control, you must specify a primary locator for direct inter-organization and subinventory transfers. Suggestion: You can interface with third-party systems to enter count information and load it into Inventory using the Replenishment Interface. Inventory automatically creates replenishment requisitions using the source and planning method you define. Kanban Replenishments: In a pull-based system, inventory items for a particular part or assembly area are replenished as soon as they are needed. When the items are needed, kanban cards in Oracle Inventory change their Supply Status to Empty, and Inventory generates the kanban replenishment request automatically. Then Requisition Import in Purchasing validates and imports replenishment requests as requisitions. If the Source Type of the request is Supplier, Purchasing creates a blanket release (if a blanket agreement exists) or a standard purchase order (if a valid quotation exists) for the item. If the Source Type is Inter-Org, Requisition Import generates an internal requisition for the item. For more information, see: Overview of Kanban Replenishment, Oracle Inventory User's Guide, and Requisition Import Process: Oracle Purchasing User's Guide. Once Purchasing approves the standard purchase order, blanket release, or internal requisition, Inventory automatically receives a status for the kanban card of In Process. In Purchasing, Kanban replenishment requests look like any other purchasing document, and you receive them like you do any other shipment. As soon as you receive the item for delivery through the Receipts or Receiving Transactions windows in Purchasing, Inventory automatically receives a status for the kanban request of Full, indicating that the inventory supply has been replenished. MRP Generated Requisitions: Master Scheduling/MRP creates requisitions for 'buy' items when you release them using the Planner Workbench. MRP generated requisitions are sourced using the same rules as on-line and inventory replenishment requisitions. However, since MRP is

planning for the entire organization, inventory sourced requisitions for MRP planned orders must be inter-organization transfer requests. You cannot request subinventory transfers using internal requisitions for MRP planned orders, unless you specify a nonnettable source subinventory on the internal requisition. For more information, see: Viewing On-hand Quantities, Oracle Master Scheduling / MRP User's Guide. External Systems: You can automatically import internal requisitions from other Oracle Applications or existing non-Oracle systems using the Requisitions Open Interface. This interface lets you integrate the Purchasing application quickly with new or existing applications. Purchasing automatically validates your data and imports your requisitions. You can import requisitions as often as you want. Then, you can review these requisitions, approve or reserve funds for them if necessary, and place them on internal sales orders. For more information, see: Requisition Import Process: Oracle Purchasing User's Guide. Internal Requisition Approvals ==================== After you create an internal requisition, you can optionally require approval. For on-line requests, you can set up approval rules that are specific for internal requisitions, or you can share the same rules you use for purchase requisitions. If you do not require additional approval steps, you can set up rules so that you can always complete and approve the document in the Requisitions window. For more information see: Entering Requisition Headers: Oracle Purchasing User's Guide. Min-max planning, Reorder Point planning, and MRP generated requisitions are loaded as approved requisitions through the Requisitions Open Interface. If you set the Inventory Profile INV: RC Requisition Approval to Unapproved, you can optionally load Subinventory Replenishment requisitions as unapproved and use the document approval functionality in Purchasing. This profile option affects only Subinventory Replenishment requisitions. For more information see: Oracle Inventory Profile Options, Oracle Inventory User's Guide. An internal requisition corresponding to a kanban card in Oracle Inventory enters Purchasing through Requisition Import with a status of Approved. (If encumbrance/budgetary control is on, Purchasing sets the status to Pre-Approved.) As soon as the internal requisition is approved, Inventory automatically receives a status for the kanban card of In Process. Requisition supply is created for the destination organization as soon as the requisition is approved. If you create approved requisitions through Requisition Import, supply is created at the time the requisition is created. Master Scheduling/MRP gets complete visibility to the incoming internal requisition supply so the planning processes do not create additional reorders for items that you have already requested.