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Oracle Applications (EBS)

Crisp Handout

11i or R12

Wednesday, January 14, 2009

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Oracle Inventory Module
Anything that you can transact (Purchase, Sell, Plan, Manufacture, Stock, Distribute, Prototype) that item is an Inventory. Ex: From
Raw materials to wastage materials.

Inventory Management - How to receive, transact, issue out, store, Control, maintain, Standardize, Valuate, Count, Replenish,
Serialization and accuracy the material is called as " Inventory Management"

1) Item: Item is a part/ service you can purchase, sell, plan, mfg, stock, distribute.
2) Item categories: Grouping of similar items. (Family. Class, Metal. Ferrous, Liquid. Consumable etc)
3) CCID: Code Category Id is the id in which the item stores (Family. Class)
by default all CCID's are not transact able, after creating we have to assign
4) Category sets: Group of similar (item) categories.

set (DCS)

Function DCS
Invnetory Inv.Items
Purchasing Purchsing
Contracts Contracts
Asset Management EAM
Product family Product
All other fn Inv.Items
Default category set: for each functional area default category sets are there

Whenever an item is attached to a function DCS- DCC combination gets attached to the item. They cannot be deleted. They are
mandatory ( Item master -tools- category assignment)
Assigning is automatic, whereas un assigning is manual. ( except BOM type)
Controlled at Master level (after assigning u cannot change in org) and org level (can be changed in org)
Item can be assigned to many categories and a Category can be assigned to many items. (many-many)
An item cannot appear in more than one category in a default category set.

5) Item cross reference: referring an item (oracle) with old legacy number ( free text). ( Inv-Items-cross reference, enter and
6) Customer item cross reference: relegating customer item (PO item) with our (oracle) number.
Note: For both Item cross references u can enter customer item/ legacy item is S.O line. In shipping transaction line the oracle
number will be referenced.
When the item is referenced/ related the color will change in S.O line
7) Item relationship: relating two oracle numbers by up sell, substitute (after enter state if u change the item the new line will be
created), cross sell, related, superseded (after committing u can change).
8) Manufacturing Part number: used in souring rule if u choose distributor.
9) Attributes: are information.
10) Item attributes: collection of information about an item.

1. Mater Items :
Item can be a component, service, Assembly which could be Purchase, Sell, Plan, Manufacture, Stock, Distribute, Prototype
Status control attributes: (8) all are Master level
Inventory: Stockable, Transactable
Purchase: Purchasable, Invoice Enabled 2/20
Order Management: Customer Order Enabled and Internal Orders Enabled.
BOM and WIP: BOM allowed and Build in WIP
Status Attributes are item attributes that enable key functionality of an item. Status attributes are dependent on at least one other
Item Defining Functional Area / Oracle
Status Attribute Functionality
Attribute Product
Stockable Inventory Item Inventory Allows you to store the item in an asset sub inventory.
Inventory, Order Allows you to transact the item in Oracle Inventory, Oracle
Transactable Inventory Item Management, Purchasing, Order Management, Oracle Purchasing and Oracle Work in
Work in Process Process.
Purchasable Purchased Purchasing Allows you to place the item on a purchase order.
Allows you to build the item on a discrete job, and/or
Build in WIP - Work in Process
repetitive schedule.
Customer Orders Customer Ordered
Order Management Allows you to place the item on a sales order.
Enabled Item
Internal Orders Internal Ordered Inventory, Order
Allows you to create an internal sales order for the item
Enabled Item Management, Purchasing
BOM Allowed Inventory Item Bills of Material Allows you to create a bill of material for the item
Invoice enabled Invoiceable Item Receivables Allows you to create an invoice for the item
Inventory (N) -> Items -> Master items
1. Select the attributes and save
2. Assign it to the required Org.

1.1 Item Defining Attributes (IDA)

Main (T) :
Item Status Master
Primary Unit of Measure Master

Inventory (T)
Inventory Item Master
Stockable Master
Transactable Master
Reservable Org
Revision Control Org
Lot Control Org No control / full control
Starting Lot Number Org
Starting Lot Prefix Org
Serial No Generation Org No control/at receipt/at sales order issue/predefined
Starting Serial Number Org
Starting Serial Prefix Org
Lot Expiration Org No / Self life days / user defined
Shelf Life Days Org
Restrict Sub inventories Org
Locator Control Org No control / prespecified / dynamic entry
Restrict Locators Org

Bills of Material (T)

BOM Allowed Master
BOM Item Type Master Std/Model/option class/planning/product family
Base Model Master

Asset Management (T) 3/20
Costing (T)
Costing Enabled Org
Inventory Asset Value Org
Include in Rollup Org
Cost of Goods Sold A/c Org
Standard Lot Size Org

Purchasing (T)
Purchased Master
Purchasable Master
Default Buyer Org
Use Approved Supplier Org
List Price Org
Outside Processing Item Org

Receiving (T)
Receipt Routing Org Direct / Standard / Inspection / none
Receiving sub inventory

Physical Attributes (T)

General Planning (T)

Inv Planning Method Org None / Min-max / Reorder point / VMI
Planner Org
Make or Buy Org Make / Buy
Min-Max Mini Qty Org
Min-Max Max Qty Org
Safety Stock Org Non MRP planned / MRP planned %
Minimum Order Quantity Org
Maximum Order Quantity Org
Fixed Lot Size Multiplier Org
Source Type Org
Source Organization Org
Source Sub inventory Org

MRP / MPS planning (T)

Lead-time (T)
Preprocessing Lead Time Org
Processing Lead Time Org
Post processing Lead Time Org
Fixed Lead Time Org
Variable Lead Time Org
Cum Manufacturing Lead Time Org
Cumulative Total Lead Time Org
Lead Time Lot Size Org

Work in Process (T)

Build in WIP Master
WIP Supply Type Org Operation pull/Assembly pull/push/bulk/supplier/phantom

Order Management (T)

Customer Ordered Master
Customer Orders Enabled Master
Internal Ordered Master
Internal Orders Enabled Master
Shippable Master 4/20
OE Transactable Master
Picking Rule Master
Pick Components Master
Assemble to Order Master
Check ATP Org
ATP Components Org
ATP Rule Master
Ship Model Complete Master
Default Shipping Organization Org
Default SO Source Type Master Internal / External
Returnable Master
RMA Inspection Required Master
Over Shipment Tolerance Master
Under Shipment Tolerance Master
Over Return Tolerance Master
Under Return Tolerance Master
Financing Allowed Org

Invoicing (T)
Invoiceable Item Master
Invoice Enabled Master

Service (T)

Web Options (T)

Back Orderable Master

Tools Menu :
1. Categories to assign to item categories
2. Catalog to assign to item catalog
3. Pending status item status history
4. Revisions
5. Item sub inventories
6. Item relationships Related / Substitute / cross-sell / up-sell / Service etc.,
7. Manufacture part numbers Manufacture & Part number
8. Cross references
9. Item cost to update the cost elements
10. Organization Assignment
11. Find Attribute select the attribute and find, you need not search each tab
12. Copy from used to copy from template or template
Profile Option:

INV: Default Item Status: Indicates the default item status for new items you define
INV: Default Primary Unit of Measure: Indicates the default primary unit of measure for new items you define
INV: Item Master Flex filed: Indicates which flex field is used to define items in MTL_SYTEM_ITEMS
INV: Updateable Customer Item: Indicates if you can change the customer item number.
INV: Updateable Item Name: Indicates whether you can update the item flex field.

Relationships between Attributes

When you define items, Oracle Inventory enforces particular relationships between some of the item attributes:
Required attribute--you must enter a value for the attribute based on the settings for other related attributes.

Interdependent attributes--you can enter only certain values depending on other attribute values.

Updatable attributes--you can update values under certain conditions. 5/20
Control level dependencies--you can update the control level of some attributes only under special conditions and with
certain consequences.

1.2 Item Templates

Templates are defined sets of attributes that you can use over and over to create many similar items. Templates make initial item
definition easier. Oracle recommends that you use templates--either those Oracle provides or those you define--when you define your
1.3 Organization Item
Items specific to the organization. The Org level parameters can be changed for the Org item.

1.4 Item subinventory

Item specific or exclusive to the sub-inventory. The characteristic controls and attributes of the same item will vary among the
1.5 Deletion constraints: are seed used to protect the integrity of your system. U cannot delete an item if on-hand qty exists or
performed any type of action of an item. Oracle inv checks all possible references to item and does not allow it be deleted until every
reference is removed.

1.6 Item copy: a) if a template / item is copied on new item, only the enabled and filled attributes get copied.
b) If template / item is copied on existing item, the enabled fields in the item wont get disturbed, the values will be
overridden by the new values.
c) If template and item is copied at same time first the template will be copied followed by item.
d) u cannot copy items across IMO.
2. Unit of Measurement :

1. A unit of measure is a value that specifies the quantity of an item. For example, "each" is a unit of measure that you
would use to specify the number of units of an item
2. A UOM class is a group of units of measure with similar characteristics. Example, "Weight" can be a unit of measure
class with UOMs such as Kilogram, Gram, Pound and Ounce. From this Class, you should have any one in primary uom
and transaction uom. So you could see one UOM in transaction and another uom in final storage uom.
3. A UOM conversion has 2 classes.
a. Intra class - is a mathematical relationship between two different UOMs (1kg=1000g)
b. Inter class is an user defined logic which won't have any standard relationship (1box=5each)
Set-up :
1. UOM class :
Inventory (N) -> Setup -> Unit of measure -> Classes
1. Insert new record
Name : Description : Base unit & UOM code
2. Unit of Measure (B)
The first uom will be defaulted from the class as base unit for the class.
Name : UOM code :
3. Conversions
a. Standard creating a standard conversion among the UOMs of the class which is applicable for all the Items
b. Intra-class different conversion can be specified for specific items which has the UOM of this class as base UOM
of the item
c. Inter-class conversion between 2 different classes
Example :
Class : XX_Quantity
UOM : Each (base uom), Dozen, Case, Gross
Conversion :
Standard : X_Dozen=12 X_each,X_ Case=24 X_each, X_Gross=144 X_each
Intra-class : Box01=25 X_each
Inter-class : Basket02=5 X_each

3. Inventory controls : 4 types Revision, Lot, Serial, Locator control

3.1 Locator control : A technique used to enforce the storage of items in a SI . It is a way of stocking pattern. Eg: heavy items 6/20
should be stored at bottom rack etc.

It is determined or defined at three level (Organization, Subinventory, Item)

Slno Org parameter Sub-inv parameter Item attribute Result / (Precidence)
1None Defaults from the org None / Prespecified/Dynamic entry No locator control (Org)
2Prespecified -do- -do- Prespecified (Org)
3Dynamic entry -do- -do- Dynamic entry (Org)
Determined at None / Prespecified / -do- None / Prespecified/Dynamic entry (Sub-
4sub-inv Dynamic entry inventory)
5-do- Item level None / Prespecified/Dynamic entry None / Prespecified/Dynamic entry (item)

Note : If the control is at,

1) Organization level - It is applicable to all the sub inventories & items under this Organization
2) Sub-inventory level - Applicable to this sub-inventory and other sub-inventories can have different values in the same
3) Item level - The same item can behave in different manner in different sub inventories of the same Organization.
4) Items can be restricted to locator ( in item attribute, restrict SI and restrict locator should be enabled- but only option is
Predefined). But item/ SI relation has to be specified.
5) Locator control can be changed even if on hand qty exists.

Reports: Locator quantities report, Locator listing report

3.2 Lot control

Lot: represent/ identifies a batch of item you receive and store.
Lot control is a technique for enforcing the use of lot numbers during material transaction, thus enabling the tracking of batches
of items through out their movement in and out of inventory.
Slno Uniqueness Generation Item attribute Result
None At organization level Full control Automatically generate lot nos, sequence maintained at org
1 level but manual override is possible
,, At item level ,, Automatically generate lot nos, sequence maintained at
Item level but manual override is possible. Same lot no used
2 in different items
Across items At organization level ,, Automatically generate lot nos, sequence maintained at org
level. Uniqueness among the items. Unique lot no across
3 org.
,, At item level ,, Automatically generate lot nos, sequence maintained at
4 Item level. Unique lot no.
5 -any- User defined Full control Manual generation and rest are same
6 -any- -any- No control No control
Note : If generation is at,
1) Organization level - Prefix and total length is mandatory in Org parameter. Item level will have no impact.
2) Item level - Prefix and starting no is mandatory in Org item attribute. Org level parameter will have no impact.
3) Lot number purging: eliminates info used in lot reports and inquires. Transactions in closed accounting period can only be
4) Lot expiration: expiry date/ shelf life after the specified day the lot expires
a) U can transact a expired lot but warning will be displayed.
b) Expired lots are not considered as On-hand for Planning ( Min-max, ROP, MRP)
c) Expired lots cannot be reserved.
d) Expired lots are considered as On-hand, all reports, cycle count, and Physical inventory.
5) Disabled lots: Manual holding
a) Disabled lots does not appear in Lot. But u can manually enter the lot number during transaction and proceed.
b) Disabled lots are included as On-hand for Planning, ATP, reservation.
6) Lot splitting: Splitting of lots. Lot split enables attribute should be enabled. Two types
a) Full after splitting , the parent lot has no on-hand qty.
b) Partial- after splitting, the remaining qty lies in the parent lot
7) Lot Merging: combining two or more lots 7/20
8) Lot Genealogy: enables to view transaction history.
INV: Genealogy delimiter
INV: Genealogy prefix or suffix
9) Reports: Lot transaction register,

3.3 Serial control :

Serial number is a alphanumeric / numeric piece of information assigned to an individual item.
Serial control: system technique for enforcing the use of serial numbers during a material transaction. One serial number is
assigned to per unit of an item.

Slno Type Level Parameter Result

1 Organization Uniqueness Across organizations unique numbers throughout all organizations
2 ,, Uniqueness Within organization unique numbers within the current organization
3 ,, Uniqueness Within inventory item unique numbers for inventory items (within items)
4 ,, Generation At organization level Automatically generate numbers, sequence maintained at org level.
5 ,, Generation At item level Automatically generate numbers, sequence maintained at Item level.
6 ,, Generation User defined Manual generation and rest are same
7 Item No control No serial control
8 ,, At Receipt Numbers will be generated at receipt
,, Prespecified Run: Serial number generation concurrent to generate serial
9 numbers and use it in-future
,, At Sales order issue Generation before ship confirm in shipping transaction form tools
10 menu
Note : If generation is at,
1) Organization level - Prefix and total length is mandatory in Org parameter. Item level will have no impact.
2) Item level - Prefix and starting no is mandatory in Org item attribute. Org level parameter will have no impact.
3) Serial Genealogy: enables to view transaction history, for tracking from component to final assy.
4) Report: Serial number transaction register , Serial number detail report.

3.4 Revision control :

A revision is a particular version of an item, bill of material and routing.
You use a revision when you change (three 3Fs) form, fit and function.
We can use a number or letter to signify the number of times that you change an item. Ex: Colors of Mobile.
Cannot change revision control attribute when on hand qty exists.
It is Organization specific. Generated by ASCII rules.
1. Enter the starting the revision no in the Org parameters
2. Query the Item in Org Items or create a new item.
3. Tools(M) -> Revisions, Insert a new record and update the revision, Save

4. Transaction :
1. Transaction is an item movement into, within, out of inventory. It changes the qty, location, planning responsibility and cost of an
2. Transaction managers control the number of transaction workers, processing intervals and number of transactions processed by
each worker during each interval. These run at the periodic intervals that you specify until you disable with the concurrent

Only 6 actions are performed for all the transactions.

(i) cost update (ii) Receipt into stores (iii) Issue from stores
(iv) sub inventory transfer (v) Direct Org transfer (vi) In transit shipment

Transaction source types : Inventory / Sub-inventory / Supplier / None

Transaction destination types : Inventory / Sub-inventory / Customer
4.1 Transaction types :
A transaction type is the combination of a transaction source type and a transaction action.
It is used to classify a particular transaction for reporting and querying purpose. 8/20
It is used to identify certain transactions to include in historical usage calculations for ABC analysis or forecasting.
1Receipt PO Receipt Miscellaneous Receipt
2Transfer with in Sub inventory - Locator -to- Locator
3Transfer between in Sub inventory Move order transfer Sub inventory transfer
4Transfer between Organization ISO Internal sales order IOT Inter Org transfer
5Issue Move order issue Miscellaneous Issue

4.2 Receiving Inventory - Ways

(1) Purchasing Module: (i) Purchase Order receipt (ii) Internal Requisition (iii) In-transit Receipt (iv) Return Material
Authorization (v) Unexpected Receipt
(2) Work in Process Module : (i) Component Return (ii) Negative Component Issue (iii) Assembly Return
(3) Inventory Module: (i) Miscellaneous Account (ii) Receipt from Project (iii) User defined (iv) Inter-Organization receipt
4.3 Transferring Inventory - Ways
(1) Order Management : (i) Shipping - Move the stock from a finished Goods area to Staging area for shipping.
(2) Work in Process: (i) It transfers to acquire components for a project
(3) Inventory : (i) Transfer between Organization (ii) Replenish materials (iii) Request transfers

4.4 Issuing Inventory - Ways

(1) Order Management: (i) Sale Order (ii) Internal Order
(2) Purchasing (i) Return to Vendor Materials
(3) Work in Process (i) Component Issue (ii) Assembly Return
(4) Inventory (i) User defined (ii) Inter-Org Transfer (iii) Cycle Count Negatvie (iv) Request Issue

4.5 Receipt routing :

(i) Direct - Receipt and Deliver
(ii) Standard - Receipt then Deliver
(iii) Inspection - Receipt, Inspect then Deliver

4.6 Miscellaneous transaction :

* Issue material to or receive from general ledger accounts in the current organization
* Receive items without documentation
* Return expired or damaged item
Inventory (N) -> Transactions -> Miscellaneous transactions
4.7 Sub-inventory transfer
Transferring the material between sub inventories within the current Organization
Inventory (N) -> Transactions -> Sub inventory transfer
4.8 Inter Org transfer (IOT)
1. Direct shipment to move inventory directly from shipping Org to destination Org. control is with the destination
organization. Cost and transit-time is not significant.
2. In-transit shipment enter sub inventory, shipment number, freight info, % of transaction value or discrete amount, Cost
and transit-time is not significant and will be accounted.
Set-up :
1. Open accounting period for both the orgs.
Inventory (N) -> Accounting close cycle -> Inventory accounting period
Open the current / required period
2. Shipping network
Inventory (N) -> Set-up -> Organizations -> shipping networks
(i) From & To Orgs (ii) Transfer type: direct / in-transit
(iii) FOB: Shipment / Receipt (Receipt: The shipping organization owns the shipment until the destination organization
receives it; Shipment: The destination organization owns the shipment when the from organization ships it)
(iv) Receipt routing: direct / standard / inspection
Note: FOB & Receipt rounding is applicable only to In transit-mode
(v) Transfer charge is defaulting from Org parameters, can be modified
(vi) Primary and secondary accounts are also defaulting from Org parameters, can be modified
2. Inter-org Transfer
Inventory (N) -> Transactions -> Inter-Org transfer 9/20
Lot and Serial no have to be generated if it is controlled.
Note: Source : not lot/serial/revision control, destination : has LSR controls, Transfer type : should be in-transit
If it is direct, the item won't be displayed in the LOV. In direct transfer, the control will be with the destination

4.9 Move Orders

1. Move orders requests for the movement of material within a single organization. It is mostly for the purposes like replenishment,
material storage and quality handling. Move orders are generated manually or automatically depending on the source type used.
2. A manually generated request, available for sub inventory and account transfers. These requests can optionally go through a
workflow based on approval process before they become move orders that are ready to be sourced and transacted.

Transfer between sub inventory or issue out of Inventory

Transfer with document
Source types :
(i) Manual
(ii) Replenishment - Min-max, Replenishment count, Kan-ban cards when pull sequence calls for sub-inv transfer, Move-
orders can be pre-approved
(iii) WIP transfer - move transaction for WIP components issue
(iv) Pick-way - Sales order pick confirm, issue out of material to staging area
Components of Move order
Header MO no, Transaction type, Source sub-inv, Destination sub-inv (transfer)/Location (issue),
Line - Item, request qty, completed qty, source, destination
Status incomplete, Pre approved, Approved, Closed, Cancelled
Process flow :
1. Create move order and approve it
2. Detail move order the process that uses picking rules to determine where to source the material to fulfill the request line
(reservation allocation qty), detailing should be done only when you actually move the material.
3. Transact move order - allocate the line you want to transact and the transact move open will be closed only when the total
qty are transacted or move order is cancelled.
Profile option TP:INV Move Order Transact Form = on-line processing
In Org parameter - Move order time-out period & action controls the move order.

4.10 Customized Transaction type creation

1. define transaction types by combining transaction actions & transaction source types.
2. In future, the transaction summary can be obtained based on the transaction type. This will be very useful in
categorizing the transactions.
Only 6 actions are performed for all the transactions.
(i) cost update (ii) Receipt into stores (iii) Issue from stores
(iv) sub inventory transfer (v) Direct Org transfer (vi) In transit shipment

3. Set-up :
1. Create a transaction source type. [Inventory (N)->Setup->Transactions->Source type->user(T)]
2. Create transaction types based on the required actions for the source type [Transaction types (B)]

4.11 Profile Options :

1. TP:INV:Cycle count approvals form on-line processing
2. Cycle count entries form - on-line processing
3. Enter Replenishment count form concurrent processing
4. Inter-Organization transfer form On-line processing
5. Transaction processing mode on-line processing
6. Misc. issue and receipt form - on-line processing
7. Server side on-line processing Yes
8. Transfer between sub inventories form - on-line processing
9. Update average cost form on-line processing
10. Transaction date validation allow date in any open period
11. Move order transact form - on-line processing 10/20
4.12 Running Transaction Managers

(i) Cost Manager

The material cost transaction manager costs material transactions in Oracle Inventory and Oracle Work in Process in
the background.
(ii) Lot Move Transaction Manager
The resource cost transaction manager processes resource transactions in Oracle Work in Process and resource
transactions that you import from barcode readers, payroll systems, time cards, routing sheets and custom data entry
forms using the Open Resource Transaction Interface.
(iii) Material Transaction Manager
The material transaction manager immediately executes a material transaction after you save your changes in a
transaction window. By starting the transaction manager you can determine how to execute transactions whether
through immediate concurrent request submissions or through periodic concurrent request submissions.
Profile option: You can define this transaction mode for individual transaction windows in the Personal Profile
Values Window.
(iv) Move Transaction Manager
The move transaction manager processes move transactions in Oracle Work in Process and move transactions that
you import from devices such as portable barcode readers or your custom data entry forms using the Open Move
Transaction Interface.
5. Planning Methods :
Definition :
a) It is a method of inventory planning that determines how much to order based on the minimum & Maximum inventory levels.
b) It is done at Organization & Sub inventory level for a specific item.
c) To perform Min-max at SI, then Item/SI details have be to set.
d) It is used for non-critical items which has independent demand
e) Can't perform Min-max if you are running MRP for the same item
f) It does not consider the lead-time and forecasted demand
g) When -to- order : [(on_hand_qty demand) + planned receipt ] < minimum qty
h) How much -to- order : Maximum_Qty - [(on_hand_qty demand) + planned receipt ]
i) The output of Min-max will be influenced by fixed lot multipliers, min order qty and max order qty.
Set-up :
1. Create Master Item and ensure the following mandatory attributes
1. General planning (T) (planning method min-max ; make/buy based on purchase / WIP item; Minimum &
Maximum Qty ; minimum order qty & Maximum order qty; Source : Inventory / Sub inventory / Supplier / none ; Order
2. If you want to run at Item sub-inventory then specify the details here only for Buy items (Planning, Order modifier,
Sourcing region tabs)
3. Profile option INV: Min-max Reorder Approval pre-approved (not incomplete / approval required) user level or above
4. Verify Purchasing options, Receiving options, Financial options, WIP parameters, WIP accounting classes and Open
accounting period (SOB level, Org level, control purchasing periods in purchase module)
5. Run Min max planning
Process :
1. Run : Min-max planning report
Inventory(N) -> Planning -> Min-Max Planning
Planning level : Organization / Sub inventory
Item selection : Items under minimum quantity
Restock : Yes for requisition or Discrete Jobs
Demand cutoff date:
Supply cutoff date:
2. Output will be based on Source type & make or buy
Buy & Source : Inventory Internal requisition 11/20
Sub inventory Move order
Supplier Purchase requisition
Make : unreleased job order, it won't consider the supply source. Planning level must only be at Org level.

Note: 1. Sub inventory level planning cannot generate jobs and does not consider WIP jobs as supply or WIP components
as demand.
2. The INV:Purchasing by Revision profile option determines whether a revision will be specified when a purchase
requisition is created for revision-controlled items.
3. Accounting information for the Organization is must (SOB, LE, OU)
4. Expired lots will not be considered for Min-max, ROP. But disabled lots will be considered.


Definition :
Is a type of planning which replenishes stock before the stock goes below safety stock.
Used for Items under independent demand, item which needs high control and critical
It uses demand forecasts to decide when to order.
It is done ar Org level but org should be MRP planned.

Max qty (ROQ


Safety stock

Lead-time : The interval between re-order point to safety stock.
Re-order qty: The difference between the maximum qty and the safety stock.
Required information:
1. Safety stock (to protect the fluctuations in the supply and demand)
2. Replenishment lead-time (the consumption time between the re-order point -to- safety stock)
3. Item demand
4. Order cost
5. Carrying cost
When to order : (on hand qty expected supply) < Re-order point

Re-order point = (Safety stock) + [(Lead-time) * (average demand during lead-time)]

Re-order Quantity= EOQ= SQRT{ [ 2* annual demand*ordering cost] / [ inv carrying cost* unit price]}

Re-order qty can be constrained by Fixed lot multiplier, Minimum order qty and Maximum order qty
Setup steps :
1. Enter Item Planning attributes
2. Forecast Item demand
3. Define safety stock
4. Run Re-order point report
Define forecast:

1. Item planning attributes {Organization Items (N) -> General planning (T)}
Planning Method : Reorder point 12/20
Carrying cost % : % of std cost
Order cost : cost of preparation of order
Enter Fixed order qty, fixed lot multipliers, min order qty, Maximum order qty must be null (If it is less than the reorder point,
then order generates for that qty)
Lead-time (T)
Preprocessing, Processing, post processing, lead time lot size
2. Forecast Item demand

2.a. Create forecast set - collection of forecast. Level: Item/ customer/ ship to / bill to

2.b. Create forecast entry

1. Enter a forecast.
2. Enter the Item, Bucket type, Start date, end date (optional), number of buckets (based on start & end date-for next bucket
start date), current qty, Original qty (automatic, multiplied by bucket and original qty)
3. Enter confidence % - by default 100%
3. Enter Safety stock
1. Manual method:
Enter the required qty for an item (Inventory -> Planning -> Safety stocks)
2. User defined % (N) planning safety stock
Run : Safety stock update
1. Method: user defined percentage
2. Forecast name :
3. Safety stock % (it is must for this method)
3. Mean absolute deviation (MAD)
1. Method: Mean absolute deviation (MAD)
2. Forecast name :
3. Service level % (it is must for this method)
4. Run : Reorder point planning

Item selection : All items in ROP / items under ROP
Demand Cutoff date : enter date up to when demand has to be taken for calculation
Supply cutoff date : enter date up to when demand has to be taken for calculation ( PO, in transit shipment)
Restock : No / Yes for ADS
Forecast : enter the forecast name
Default del loc :
First sort : 13/20
Items from to :
Planners :
Buyer :
Requests :

1. Reload safety stocks

2. Reorder Point Report

Forecast , Lead time = 3.75 => 4
1 50 Lead time demand = 50+ 150+150+200 = 550
2 150 Avg = 550 / 4 = 137.5
3 150 lead time demand = 4 * 137.5 = 550
4 200 Safety stock = max safety stock in demand period
5 250
6 - 150
Forecasting Methods :
1. Manual based on experience manually u enter forecast
2. System generated- Oracle inventory uses historical values / transaction for generating forecast
a) Focus forecasting- uses predefined formulas ( 5 methods) and selects the best by APE ( Absolute percentage error)
1) Demand for May 2006 = demand of may 2005
2) Demand for May 2006= demand of April 2006
3) Demand for May 2006= {(demand of April 2006 + demand of March 2006)}/ 2
4) Demand for May 2006= demand of April 2005 * (demand of April 2006 / demand of April 2005)
5) Demand for May 2006= demand of April 2006 * (demand of April 2006 / demand of March 2006)

APE = | (actual demand forecast demand) | / actual demand.

APE is calculated for 5 formulas to previous bucket and best forecast model is selected (lowest error)

b) Statistical forecasting- Enables to use detailed history and applies factors to exponentially smooth data.
1) Exponential smoothing forecast (ESF) - uses exp smoothing factor ( alpha )
2) Trend Enhanced Forecast (TEF) uses exp smoothing factor (alpha) and trend factor (beta) {0 1}
3) Season- Enhanced Forecast (SEF)- uses seasonality factor
4) Trend & Season Enhanced forecast (TSEF) combination of 2 + 3

Forecast Rule: Rule defined to generate system generated forecast. 14/20
Steps for generating forecast:
1. Define Forecast set, forecast
2. Define forecast rule
3. Generate forecast concurrent
Forecast name :
Forecast rule :
Selection : All items / specific items
Overwrite :y/n
Start date
Cutoff date :
4. View entries.


Definition :
1. It is used to replenish the non-tracked so inventory items. Eq: oil barrel in shop floor
2. This method is at sub inventory level.

Setup steps :
1. Specify requisition approval status
2. Define non-tracked sub inventory for which we need to perform replenishment count
3. Define Item/ sub inventory replenishment information ( min-max)
4. Enter replenishment counts
5. Process and report
6. Transact move order.

Process :
1. Profile option INV: Replenishment count requisition approval = pre-approved
INV: Replenishment count line failure = continue processing / Halt processing
INV: Replenishment move order grouping: org / default sub inv
2. Create a sub-inventory,
Uncheck quantity tracked, select default RC type order quantity/ order maximum/ on-hand qty
3. Define Item-sub inventory relationship
attach item, Min-max should be checked, enter min qty and max qty, optionally enter multipliers, define sourcing type:
suppler/subinv/ inv
4. Replenishment information
Counting (T) -> Replenishment counts -> Counts
a)Enter name, select sub inventory ( status: hold)
b) Click default items items assigned to that SI will be displayed
c) Select Count type : On-hand quantity move order generates for (Max qty on hand)
Order quantity - move order generates for order qty and won't consider the max qty
Order Maximum - move order generates for the max qty and qty field is grayed out
d) Enter count entries, Save and exit
5. Process & Report (B)
It generates 2 requests, Process replenishment counts & Item replenishment count report
6. Transact move-order
Note: If RC is run on Tracked sub inv then, only Order quantity and Order maximum will be there.
If u uncheck Min-max then, only option available will be Order qty.
Before entering line if u commit , status will be error.
Count can be used only once.


Definition : 15/20
It is Periodic Automated Replenishment at locator level. Example, model a hospital storeroom as subinventory and the shelves
and trolleys are locators.
Can perform each item stored, when quantity goes below PAR level.
Cannot perform Min-max for that Sub-inv ( since min max should be unchecked)
Setup :
1. Enable PAR level planning for the sub inventories
2. Define locators for the sub inventory
3. Enter the PAR level.
4. Enter Replenishment count
5. Enter count ( default items) Replenishment count: On hand qty/ Order qty/ Order PAR
6. Process and report
Note: If u does not enter PAR qty, then u can choose only Order qty
If it is done at tracked sub inv, then RC type= Order qty / Order PAR.


Definition :
1. Kan-ban itself is a self regulating pull leads to shorter lead time and reduced inventory.
2. Multi-stage replenishment process
3. It is applied to items which has relatively constant demand and medium & high production volume.
4. Kanban can be replenished from the supplier, sub inventory or an internal organization, production, flow schedules, user
5. Locator control can be used even it locator is turned off at the organization and item levels.
6. Cards can be created for Item, Sub inventory, locator
7. Supply status New, Full, Wait, In-transit, Empty, In-process
1. Set item attributes ( MRP/MPS- release time fence = Kan-ban do not release)
2. Define pull sequence
3. Generate cards
4. Replenish
5. check for requisitions/ replenishment.

Kan-ban status:
Card status Active , Hold, Cancel
Supply status New, full, Empty, In process, Wait, In transit, Exception
a) Empty -triggers replenishment
b) wait for replenishment
Set up:
1. Creation of pull sequences {Kan-ban(N) -> pull sequences -> New(B)}
Source (T) - enter item, sub inventory, source type, supplier site.
Kan-ban (T)- (a) calculate : kan-ban size / No of cards / do no calculate
(b) size
( c) number of cards
2. Generate cards (B)
It automatically runs Print Kan-ban Cards request
3. Replenish kan-ban cards
Kan-ban(N) -> Kan-ban cards
Select the cards and replenish, The replenishment activity runs based on the minimum order qty
a) manually change form New -> full -> empty---> In process-- > Move order--> transact-- > status=full

6. Inventory Accuracy Methods :

6.1 ABC Analysis :

Definition : An analysis used to categories items in the inventory into High, medium, low based on On-hand qty/ Value/ 16/20
Consumption/ historical transaction etc. Similar to pareto analysis ( i.e., 80% of the inventory values are held by 20% of the items
and vice-versa )
Mainly used for inventory analysis and for maintain accuracy.
Only costed items are considered for completion.
1. Define & Compile ABC compile
2. Define class
3. ABC Assignment group - Assign items to the classes.
Setup :

1. Define ABC compile {ABC codes(N) -> ABC compiles}

C.S V.S Qty Valuation

1- 300
2- 600
Org Org 4- -1200 3000
SI (3) SI 4-400 800
SI(4) Org 4-1200 2100
Item Value
SI and items 1 100
SI(1) 1 2 3 SI(2)
2 3 4 2 200
3 300
SI(3)- 3 4 1 SI(4) 4 1 2 4 400

Auto Requests: Compile ABC analysis & ABC descending value report

2. Define ABC classes : like High value, Medium value, Low value

3. ABC assignment groups : Link complied and selected classes (i.e)

a) Enter group name, select compile name

b) Group classes

c) Assign items for selected classes Sequence/ Inv value/ Items/ Value

It runs a request: Define ABC assignments

Click Update items (B) to see the items under each class.

Report: ABC assignments report


Definition: Periodic counting of inventory items for accuracy purpose. Inventory records are kept accurate by correcting errors
between the system on-hand and actual quantities. It is performed without affecting the production / Sales and mostly performed for
the high value items.
1. Cycle count entry {Counting(N) -> Cycle counting -> Cycle counts} 17/20
Serial and schedule (T)
Serial control options : whether run cycle count for serial controlled items
a) Count: none/ one per request /Multiple per request
b) Detail: Qty & S.No / Qty only
c) Adjustments: review all adj / Adj if possible
d) Discrepancy: Allowed / not allowed
Auto schedule: for repetitive schedule
Adjustments and ABC (T)
Approval: none/ if and out of tolerance / always
Qty variance tolerance = (system on-hand) (actual count)
Adjusted value tolerance = Qty variance tolerance * current item cost
Hit / Miss tolerance = % of Qty variance tolerance
ABC Initialization
Classes (B)
like classes in ABC and approval variance if required
2. Perform cycle count {Tools(M) -> Perform full cycle count}
Request set: Generate automatic schedule requests
Generate cycle count requests
Cycle count listing
3. Enter cycle count entries {Counting (N) -> Cycle counting -> Cycle count entries}
query count, enter count( Item SI) , count reference( Counted by, date) , adjustments( count-qty, value)
4. Approve, Reject or Recount cycle count {Counting (N) -> Cycle counting -> Approve counts}
5. Commit Concurrent ABC Adjustments


Definition : Reconciliation of system on-hand balances with physical counts in inventory. It can be done for the entire organization
or a Inventory. It is performed once every six months or a year depending upon the orgs requirements. Accurate on-hand quantities
are required for Tax and audit purposes

Setup / Process:
1. Define Physical inventory {Inventory(N) -> Counting -> Physical inventory -> Physical inventories} 18/20
2. Snapshots (B) This will run Freeze physical inventory requests. The output shows the system on-hand qty.
3. Click Tags (B) to set the Tags starting, digits increment
4. Tag generation Click Generate this will run Generate physical inventory tags request
5. Tag count - select our count name and click find.
- enter quantity ( note: for S.No only 0 or 1 is possible) , u can void and unvoid to select items to be counted
- The Main tab shows the item at a sub inventory & locator level. The Detail tab shows the item at a Lot and Serial
control level. -
6. Approval Adjustment - select our count name and click find.
- Approval should be either approved or reject, if any item is selected none then Launch adj will be error.
7. Launch Adjustment ( Tools-->) is concurrent for adjustment
You can't perform the adjustment for reserved / allocated qtys

Difference between Cycle count and Physical Inventory:

S.No Cycle count Physical inventory

1 Periodic counting of invnetory item Done once/ twice a year
2 Seheduling is possible Scheduling is not possible
3 Snapshot not possible Snapshot possible
4 No need to freeze inventory transations Need to freeze inventory transaction
5 Can be performed for specific items Can perform only for all items in Inv/ SI
6 System qty can be viewed System qty cannot be viewed
7 Recount possible ( count history also) Recount not possible
8 Items can be selected by ABC analysis Not possible
9 Approval can be none Approval should be Accept / reject
10 Adjustments processed on approval Seperately have to launch adjustment concurrent
11 Multiple per request for serial numbers is possible Oly one per request ( 0 ot 1)
12 Interface not possibel Interface form external source is possible
13 Can skip counting without entering Have to void to avoid counting

7. Integration of Oracle Inventory to Manufacturing Applications.

1. Oracle Cost Management receives cost information and transaction rates from Oracle Inventory.
2. Oracle Work in Process provides WIP activity and ATP supply information to Oracle Inventory and receives information
regarding UOM, items and on-hand quantity from Oracle Inventory.
3. Oracle Advanced Supply Chain Planning and Oracle Global Order Promising provide ATP supply information and receive
on-hand quantity and forecast information from Oracle Inventory. 19/20
4. Oracle Bill of Material receives UOM and item information from Oracle Inventory.
5. Oracle Engineering provides engineering item information and receives UOM and item information from Oracle Inventory.
6. Oracle Order Management provides shipping, reservations and demand information and receives UOM, items and ATP/on-
hand quantity information from Oracle Inventory.
7.Oracle Purchasing provides receipts/deliveries, ATP supply and planning supply information and receives UOM, requisition and
inter-org shipment information from Oracle Inventory.
8. Integration of Oracle Inventory to Financial Applications.
1. Oracle General Ledger provides set of books and currency exchange rates and receives transaction accounting summary
and/or detail from Oracle Inventory.
2. Oracle Payables receives UOM and item information from Oracle Inventory.
3. Oracle Receivables provides intercompany invoice information and receives UOM and item information from Oracle
4. Oracle Assets receives UOM and item information from Oracle Inventory.

8. Shortage Alerts and Notifications

* Alerting or notifying individuals that material needed elsewhere in the organization is newly available
* A material shortage occurs whenever outstanding demand exceeds the available quantity for incoming supply of material.
* Oracle Inventory can check during a receipt transaction to see if the material received is needed elsewhere in the organization.
* If a shortage exists the system can notify you either by a real-time material shortage alert or a workflow-based notification.
* We can use this technology to increase the product flow through warehouse, stream order fulfillment and reduce unnecessary
material handling.
* Alerts are real-time messages sent to a window before a transaction is committed, allowing you to immediately redirect delivery.
Setup: Material Shortage Parameters

9. Mobile Transaction
Oracle Mobile Materials Management provides the ability to do inventory receiving and shipping transactions using mobile
You can record inspections, deliveries and material movements when entering receiving transactions.
Information is sent from mobile industrial devices to the Telnet Listener. The information is processed and updated in the
application database.
This avoids duplicate data entry and helps to enter the transactions at the spot with accuracy. 20/20