How to setup outside processing Procure to use in WIP for standard costing

1.Create items:
Finished Item
(N): InventoryItemsMaster Item
Item Name: OSP_FIN_ITEM
(M) ToolsCopy from
Select template as Finished Good Click Done
Save

Assign this item to M1 organization

Create one OSP item

Item name: OSP_ITEM
(N): InventoryItemsMaster Item
(M) ToolsCopy from
Select template as Outside Processing Item click done
Save

OSP Item setting:

(T)-Main: Primary Unit of Measure =HRS

(T) Purchasing:
Check Purchasable: Set this attribute to Yes to include an item on a purchase order line.
Check Outside Processing Item: Set this attribute to Yes to link an outside processing item with an
outside resource and to include an item on an outside processing purchase order line.
Outside Processing Unit Type Select Resource (If you want to requisition the usage rate or
amount of the outside resource for each assembly you move to an outside operation, you should set
the Outside Processing Unit Type to Resource).
If you want to requisition one outside processing item for each assembly you ship to a supplier, then
you should set the Outside Processing Unit Type to Assembly.

Assign to M1 organization.
Create subassembly item:
(N): InventoryItemsMaster Item
(M) ToolsCopy from
Select template as subassembly
Item name: OSP_SUB_ITEM click done
Save.

Create 3 purchased items

Purchased item 1:
Name: OSP_PUR1
(N): InventoryItemsMaster Item
(M) ToolsCopy from
Select template as Purchased Item

Save the item and assign the M1 organization

Assign the cost for this item in M1 organization
(N): Inventorycostitem cost
Enter item and click find

After opened Item costs Summary (M1) form

Enter Item OSP_PUR1 (PURCHASED ITEM1)
Cost Type -- Pending
Click Open, then click Costs

Click Costs button

Enter Cost Element -- Material
Subelement -- Material
Activity -- Move
Basis -- Item
Rate or Amount -- 100

Go to next line enter Cost Element -- Material Overhead

Enter subelement -- Matl Hndlg
Activity -- Move
Basis -- Total Value
Rate or Amount -- 10

Save.
Purchased item 2:
Name: OSP_PUR2 (purchased item2)
(N): InventoryItemsMaster Item
(M) ToolsCopy from
Select template as Purchased Item

Assign to M1 organization
(N): Inventorycostitem cost
Enter item and click find

Click on cost button.

Enter Cost Element -- Material
Subelement -- Material
Basis -- Item
Rate or Amount -- 100

Save.
Purchased item 3:
Name: OSP_PUR3 (purchased item3)
(N): InventoryItemsMaster Item
(M) ToolsCopy from
Select template as Purchased Item

Assign to M1 organization
(N): Inventorycostitem cost
Enter item and click find

Click on cost button.

Enter Cost Element -- Material
Subelement -- Material
Basis -- Item
Rate or Amount -- 100

Save.
2: Define outside Resources:
You must define outside resources and link them to outside processing items in order to
automatically generate purchase requisitions for outside processing. When assigning outside
resources to a routing you also specify a usage rate or amount that determines the quantity you are
requisitioning and/or charging to work in process jobs or repetitive schedules.
(N) Order ManagementBills of materialsRoutingsResources
Create resource named OSP-RES (new)
Select Type -- Person
Select UOM -- HR
Select Charge Type -- PO Move (type PO Move or PO Receipt will perform automatically
requisition. Purchasing charges these resource to jobs and repetitive schedules when you receive
against purchase order lines linked to the resources.
Click Enabled for the outside processing item - and enter OSP_ITEM (OSP Item name)
Select Basis -- Item.
Select Activity -- Move
Click Standard Rate (If you charge at standard, then Purchasing writes any variance between the
purchase order actual and the source standard cost to the purchase price variance account of the
resource at purchase order receipt) You can also charge at actual PO line price.

Click on rates button

Enter Frozen Cost type and Resource Unit Cost of 20.00.
Pending Cost type and Resource Unit Cost of 20.00.

Save.
3: Set the department and link to resources
(N) Order ManagementBills of materialsRoutings
Enter Department -- OSP-DEP (Department name)
Enter Description
Class -- Vendor
Location -- Select WILLINGTON.

Click Resource button in Departments form

Click in Resource field under Owned section
Select OSP-RES
Check Available 24 Hours
UOM -- HR

Units -- Enter 10
Group -- Select Vendor
Save

Close the form

Click Rates button in the Departments form
Cost Type -- Select Pending
Go to Overhead Rates Section, Overhead -- Select Indirect
Activity -- Move
Basis -- Resource Value
Rate or Amount -- .05
Save

4: setup the Routing

(N) Order ManagementBills of materialRoutingsRoutings
In item field enter OSP_FIN_ITEM (Finished Good)
Go to the Operations section and enter the following:
Operation.1
Seq - 10
Department - Assembly
Click on Operation Resources.

Go to the Resources section and enter the following:

Seq -- 10
Resource -- LBR-ASSY
UOM should default in with HR
Basis -- Item
Usage -- 1, Close Operation Resources form and go back to main Routing form.

Save.

2nd Operation
Seq - 20
Department -- OSP-DEP (Department name)
Click on Operation Resources.

Go to the Resources section and enter the following:

Seq -- 10
Resource -- OSP-RES (Resources name)
UOM should default in with HR
Basis -- Item
Usage -- 2, Close Operation Resources form and go back to main Routing form.
Save the Routing.

Do the same routing process for subassembly item with routing name= OSP-SUB-ITEM
(Subassembly Item)

5: Defining Bill Of material

(N) Order ManagementBills of materialBillsBills
Item -- Enter OSP_SUB_ITEM (Subassembly Item)
Components Region:
First Line
Item Seq -- 10
Operation Seq -- select 1
Component OSP_PUR2 (Purchase Item2)
Quantity 1
Second Line
Item Seq -- 20
Operation Seq -- 1
Component OSP_PUR3 (Purchased Item3)
Quantity -- 1

Save

Select the Material Control

Select the Material Control Tab

Supply Type -- Assembly Pull (operation pull not available because we have no routing)
Subinventory -- Floorstock
Save your work.

Go to toolsclick on Rollup costs

Enter cost type= Pending

Click ok

Go to viewRequest find

Click on view output button

Do the same process for finished good
Item -- Enter OSP_FIN_ITEM (Finished Item)
Components Region:
First Line
Item Seq -- 10
Operation Seq -- select 10
Component OSP_PUR1 (Purchase item1)
Quantity 1
Second Line
Item Seq -- 20
Operation Seq -- 10
Component OSP_SUB_ITEM (Subassembly item)
Quantity -- 1

Save
Select the Material Control Tab
For each component select the following:
Supply Type -- Operation Pull
Subinventory -- Floorstock

Save your work.

After successfully completed check the output for finished good

6: Create miscellaneous receipt for purchased items
(N) InventoryTransactionsMiscellaneous Transaction
In Type field and Miscellaneous Receipt,
click Transaction Lines
Enter quantity for 3 purchased items
OSP_PUR1
OSP_PUR2
OSP_PUR3

Save the work.

Verify that Items exists in Inventory: (N) InventoryOn-Hand AvailabilityOn-Hand
Quantities query for Subinventory = Floorstock
7: create the jobs for subassembly Item
N) WIPDiscreteDiscrete Jobs
Click on new button
Enter Job number -- OSP_SUB_JOB (New)
Enter Assembly -- OSP_SUB_ITEM (Subassembly Item)
Class - Discrete
Status - Released
Type - Standard
Start Quantity - 50
Start Date - Enter todays date.
In TAB Routing enter the Completion Subinventory -- Floorstock
Save

Order ManagementWIPMove TransactionsMove Transaction

Enter the Job = OSP_SUB_JOB
Enter Qty = 100

Save.
Check that in Subinventory Floorstock we have the on hand of 100
8: setup Employee
Purchasing requires an employee for all requisitions/purchase orders to be created and approved.
ResponsibilityUS HRMS Manager.
(N) PeopleEnter and Maintain
Click on new button
Enter Last Name, Gender
Action -- Create Employment
Person Type -- Employee
Social Security Number -- number with format: xxx-xx-xxxx
Enter Birthdate
Save

Click on Assignment Button

Organization -- Vision Operations
(B) Correction
Job-- MGR.500.Manager

Group-- Financial
Position-- MM400.Material manager (this is a position that will have the approval authority for
your purchase order)
(B) Yes to accept the default values

Assign a Supervisor:
(T) Supervisor
Name-- Brown, Ms. Casey

Assign a Default Expense Account:

(T) Purchase Order Information
Set of Books-- Vision Operations
Default Expense Account-- 01-110-7740-0000-000

Save the work.

Link the Employee to the user:
Responsibility System Administrator
(N) SecurityUserDefine.
Query up Username
Add Employee to Person field.

Responsibility Manufacturing and Distribution Manager

(N) PurchasingSetupPersonnelBuyers.

Add Employee to Buyer field

Enter Ship-to org of M1 Seattle

Click on go and click on Add Buyer

Save.
9: Sourcing Rules
You can define rules for each outside processing item to help you determine from which supplier to
source the item.
Creation of the Standard Quotation:
(N) PurchasingRFQs and QuotationsQuotations
Choose Quotation Type -- Standard Quotation Type
Enter Supplier -- Advanced Networking Devices
Enter Supplier Site -- Santa Clara
Enter Ship-To as M1 Seattle
Enter Effective Date - Todays Date
Enter Effective through Date - One Year from now
Change Status from In-Process to Active
Choose Item - OSP_ITEM (OSP Item)

enter a price of 20.00

Save - Take note of the Quotation Number

Creation of the Approved Supplier List Entry

(N) PurchasingSupply BaseApproved Supplier List
Select M1 organization.
Click in the Item Field and choose the Item created from Step 1 -- OSP-ITEM
Move to the bottom section of the form -- Choose Direct for the Business field.
Enter Advanced Networking Devices in the Supplier field since it was used on the quotation.
Enter the Supplier Site SANTA CLARA that was used in this test.
Change the status field from NEW to APPROVED.

Switch the tab from KEY ATTRIBUTES to RECORD DETAILS

Update Global Field selection from No to Yes - we are making this entry Global for all
Organizations.

Save
Select the attributes button.
Choose Release Method Field and enter Release Using Autocreate
Do not enter any values for the Price Update Tolerance
Do not enter any values for the Purchasing UOM
Choose the bottom portion of the form - in the field TYPE - Enter Quotation
Choose the Number field - Hit the List of Values.

Quotation document displaying above you created

choose the Line field and select the number 1 for the line.

Save.
Creation of Sourcing Rule:
(N) PurchasingSupply BaseSourcing Rules
Choose Sourcing Rule Name field -- OSP-Advanced Networking Source
Choose Description field and enter -- Sourcing Rule for Quotation to Req to PO
Select the ALL ORGS radio button to the right of the above two fields
Select Effect Date field - enter first portion of the effective date -- todays date drops
Select lower section of screen - Type field -- Choose BUY FROM
Skip the Org Field
Move to the Supplier Field -- select Advanced Networking Devices
Move to the Supplier Site field -- select SANTA CLARA - Vision operations
Enter Allocation field -- set this to 100%
Select the Rank field -- insert a value of 1

Save.

Creation and Explanation of a Sourcing Rule Assignment Set

(N) PurchasingSupply BaseAssign Sourcing Rules
Enter the field Assignment Set -- enter value OSP_TEST
Description -- Creating Assignment Set to test funct for OSP
Click underneath the Assigned To box -- Choose Item
Select field Item/Category select the Item OSP_ITEM (OSP ITEM)
Choose field TYPE -- select Sourcing Rule
Choose field SOURCING RULE/BoD -- Hit the List of Values and select the sourcing rule which
was created above -- OSP-Advanced Networking Source

Save.
Sourcing Rule Assignment Profile Setup and Logic:
(N) Purchasing Personal Profiles
Query on the profile name with: MRP:Default Sourcing Assignment Set
Click in the User Value section
Select the newly created assignment Set -- PR_OSP_TEST

Save
WIPSetupParameters
Select the Outside Processing tab
select At operation for Requisition Creation Time

this way, requisitions will be automatically imported into Purchasing immediately upon performing
a WIP Move transaction

Save.
10: Create job for Finished Good:
(N) WIPDiscreteDiscrete Jobs
Click on new button
Enter Job number -- OSP_-FIN_JOB (new)
Enter Assembly -- OSP_FIN_ITEM (Finished Good)
Class -- Discrete
Status -- Released
Type -- Standard
Start Quantity -- 10
Start Date -- Enter todays date.
In TAB Routing enter the Completion Subinventory Stores

Save

11: Perform a WIP move transaction to the Osp Item

(N) WIPMoveTransactionsMove Transactions
Select Job OSP_FIN_JOB (Finished good job)
select the first operation 10 from the list of values for From filed and select Queue for Step
field.
Go to the next row labeled To select OSP operation 20
Go to the Step field and select Queue
Go to the Quantity field in the Transaction section.
Enter quantity -- 10.

Save.
Check with requisition

Note the requisition_header_id

For check the item we can query with requisition_header_id in PO_REQUISITION_LINES_ALL
Here we can see our OSP item details.
Go to purchasingrequisitionsrequisition summary

Click on find button.

Copy the purchased order number. Check whether purchase order is approved or not.
After approve Create a receipt based on the purchased order number.
Now complete the job for finished item (OSP_FIN_JOB) from Queue to To move as specified in
subassembly job.
Check finished item in on hand quantity.

Referred Link:
https://support.oracle.com/CSP/main/article?cmd=show&type=NOT&doctype=WHITE
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