R12.x Oracle Inventory Management Fundamentals: D60263GC10 Edition 1.0 April 2010 D66274

Oracle Internal & Oracle Academy Use Only
R12.x Oracle Inventory

Management Fundamentals
Volume 1 - Student Guide
D60263GC10
Edition 1.0
April 2010
D66274
Copyright © 2007, 2010, Oracle. All rights reserved.
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Author
John Salvini
Technical Contributors and Reviewers
Itzik Pripstein, Vera Reyna, Lez Stodart
This book was published using: oracletutor

Table of Contents
R12.x Overview of Oracle Inventory .............................................................................................................1-1

R12.x Overview of Oracle Inventory ............................................................................................................1-3
Objectives ......................................................................................................................................................1-4
Overview of Oracle Inventory .......................................................................................................................1-5
Inventory Capabilities....................................................................................................................................1-6
Receipt to Issue Life Cycle............................................................................................................................1-8
Receiving Inventory ......................................................................................................................................1-9
Quiz ...............................................................................................................................................................1-11
Receiving Inventory ......................................................................................................................................1-12
Transferring Inventory...................................................................................................................................1-13
Issuing Inventory ...........................................................................................................................................1-14
Quiz ...............................................................................................................................................................1-16

Oracle Inventory Application Integration......................................................................................................1-17
Summary........................................................................................................................................................1-21
R12.x Defining Inventory Organizations.......................................................................................................2-1
R12.x Defining Inventory Organizations.......................................................................................................2-3
Objectives ......................................................................................................................................................2-4
Inventory Organizations ................................................................................................................................2-5
Inventory Organization Structure ..................................................................................................................2-6
Quiz ...............................................................................................................................................................2-7
Sample Inventory Organization.....................................................................................................................2-8
Multi-Organization Structure.........................................................................................................................2-9
Setting Up Locations .....................................................................................................................................2-10
Defining Organizations..................................................................................................................................2-11
Quiz ...............................................................................................................................................................2-12
Inventory Parameters.....................................................................................................................................2-13
Costing Parameters ........................................................................................................................................2-14
Revision, Lot, Serial, and License Plate Number (LPN) Parameters ............................................................2-15
ATP, Pick, Item-Sourcing Parameters...........................................................................................................2-16
Interorganization Parameters .........................................................................................................................2-17
Other Account Parameters.............................................................................................................................2-18
Warehouse Management Parameters.............................................................................................................2-19
What Is a Subinventory?................................................................................................................................2-20
Defining Subinventories ................................................................................................................................2-22
Locator Control .............................................................................................................................................2-23
Dynamic and Static Locators.........................................................................................................................2-24
Quiz ...............................................................................................................................................................2-25
Subinventory-Locator Relationship...............................................................................................................2-26
Locator Flexfield Structure............................................................................................................................2-27
Interorganization Shipping Networks............................................................................................................2-28
Shipping Method ...........................................................................................................................................2-29
Additional Setup Steps ..................................................................................................................................2-30
Quiz ...............................................................................................................................................................2-31
Additional Organizational Setups..................................................................................................................2-32
Copying Inventory Organizations..................................................................................................................2-33
Organization Hierarchy .................................................................................................................................2-35
Organization Reports.....................................................................................................................................2-37
Profile Options...............................................................................................................................................2-39
Implementation Considerations .....................................................................................................................2-41
Summary........................................................................................................................................................2-47
R12.x Units of Measure ...................................................................................................................................3-1
Copyright © Oracle, 2009. All rights reserved.
R12.x Oracle Inventory Management Fundamentals Table of Contents

i
R12.x Units of Measure.................................................................................................................................3-3
Objectives ......................................................................................................................................................3-4
Units of Measure ...........................................................................................................................................3-5
Quiz ...............................................................................................................................................................3-6
Uses of Units of Measure ..............................................................................................................................3-7
Unit of Measure Class ...................................................................................................................................3-8
Unit of Measure Conversions ........................................................................................................................3-9
Quiz ...............................................................................................................................................................3-10
Lot-Level Unit of Measure Conversions .......................................................................................................3-11
Units of Measure Setup .................................................................................................................................3-12
Unit of Measure Reports................................................................................................................................3-13
Profile Options...............................................................................................................................................3-14
Organization Parameter Setup .......................................................................................................................3-15
Summary........................................................................................................................................................3-17
R12.x Defining and Maintaining Item Fundamentals ..................................................................................4-1

R12.x Defining and Maintaining Item Fundamentals....................................................................................4-3
Objectives ......................................................................................................................................................4-4
What Is an Item?............................................................................................................................................4-5
Steps to Set Up, Define, and Maintain Items.................................................................................................4-6
Defining Items ...............................................................................................................................................4-7
Item Master Organization ..............................................................................................................................4-9
Item Master....................................................................................................................................................4-11
Quiz ...............................................................................................................................................................4-12
Item Attributes...............................................................................................................................................4-13
Item Attribute Groups....................................................................................................................................4-14
Item Status .....................................................................................................................................................4-15
Unit of Measure Attributes ............................................................................................................................4-16
Item Statuses and Attributes ..........................................................................................................................4-18
Status Attributes and Functionality ...............................................................................................................4-19
Status Attribute Interdependencies ................................................................................................................4-22
Quiz ...............................................................................................................................................................4-25
Item Attribute Relationships..........................................................................................................................4-26
Item Templates ..............................................................................................................................................4-27
Creating Item Templates ...............................................................................................................................4-28
Enabling Attributes in a Template .................................................................................................................4-30
Organization Assignment and Organization Items ........................................................................................4-31
Control Levels ...............................................................................................................................................4-32
Quiz ...............................................................................................................................................................4-34
Revision Control............................................................................................................................................4-35
Restricting Items to Subinventories...............................................................................................................4-36
Item Relationships .........................................................................................................................................4-37
Categories and Category Sets ........................................................................................................................4-38
Assigning Items to Categories .......................................................................................................................4-39
Quiz ...............................................................................................................................................................4-40
Item Catalogs.................................................................................................................................................4-41
Deletion Constraints and Deletion Groups ....................................................................................................4-42
Deletion Constraints ......................................................................................................................................4-43
Item Reports ..................................................................................................................................................4-45
Profile Options...............................................................................................................................................4-48
Summary........................................................................................................................................................4-55
R12.x Lot and Serial Control..........................................................................................................................5-1
R12.x Lot and Serial Control.........................................................................................................................5-3
Objective........................................................................................................................................................5-4
Overview of Lot Control ...............................................................................................................................5-5

ii
Child Lots ......................................................................................................................................................5-6
Setting Up Lot Control (Organization Parameters) .......................................................................................5-7
Quiz ...............................................................................................................................................................5-8
Lot Number Uniqueness ................................................................................................................................5-9
Setting Up Lot Control (Item Attributes) ......................................................................................................5-10
Managing Lots...............................................................................................................................................5-12
Quiz ...............................................................................................................................................................5-14
Expired Lots ..................................................................................................................................................5-15
Disabled Lots.................................................................................................................................................5-16
Quiz ...............................................................................................................................................................5-17
Lot Number Purging......................................................................................................................................5-18
Cycle Counts Under Lot Control...................................................................................................................5-19
Physical Inventory Under Lot Control...........................................................................................................5-20
Serial Number Overview ...............................................................................................................................5-21
Generating Serial Numbers............................................................................................................................5-22
Serial Uniqueness ..........................................................................................................................................5-24

Quiz ...............................................................................................................................................................5-26
Maintaining Serial Numbers..........................................................................................................................5-27
Lot Genealogy ...............................................................................................................................................5-28
Serial Genealogy ...........................................................................................................................................5-29
Lot and Serial Reports ...................................................................................................................................5-30
Profile Options...............................................................................................................................................5-33
Summary........................................................................................................................................................5-37
R12.x Transaction Setup .................................................................................................................................6-1
R12.x Transaction Setup................................................................................................................................6-3
Objectives ......................................................................................................................................................6-4
Overview .......................................................................................................................................................6-5
Inventory Transactions ..................................................................................................................................6-6
Move Orders..................................................................................................................................................6-7
Quiz ...............................................................................................................................................................6-8
Transaction Source Types..............................................................................................................................6-9
Transaction Action ........................................................................................................................................6-11
Transaction Reasons ......................................................................................................................................6-13
Transaction Types..........................................................................................................................................6-14
Predefined Transaction Types .......................................................................................................................6-15
Quiz ...............................................................................................................................................................6-16
Transaction Managers....................................................................................................................................6-17
Running Transaction Managers.....................................................................................................................6-18
Creating Picking Rules ..................................................................................................................................6-20
Quiz ...............................................................................................................................................................6-21
Account Aliases.............................................................................................................................................6-25
Quiz ...............................................................................................................................................................6-26
Accounting Periods........................................................................................................................................6-27
Material Shortage Alerts and Notifications ...................................................................................................6-28
Setting Up Shortage Alerts and Notifications................................................................................................6-30
Setting Up for Move Orders ..........................................................................................................................6-31
Setup Steps for Move Orders.........................................................................................................................6-33
Profile Options...............................................................................................................................................6-35
Implementation Considerations for Shortage Checks....................................................................................6-40
Implementation Considerations for Move Orders .........................................................................................6-41
Summary........................................................................................................................................................6-42
R12.x Issuing and Transferring Material......................................................................................................7-1
R12.x Issuing and Transferring Material.......................................................................................................7-3
Objectives ......................................................................................................................................................7-4
Overview of Inventory Transactions .............................................................................................................7-5

iii
Inventory Transactions ..................................................................................................................................7-6
Inventory Transactions Without Documents and Requisitions......................................................................7-7
Inventory Transactions with Documents and Requisitions............................................................................7-8
Control Options and Restrictions...................................................................................................................7-9
Miscellaneous Transactions...........................................................................................................................7-10
Subinventory Transfer ...................................................................................................................................7-11
Quiz ...............................................................................................................................................................7-12
Inter-Organization Direct Shipment ..............................................................................................................7-13
Inter-Organization Intransit Shipment ...........................................................................................................7-14
Quiz ...............................................................................................................................................................7-16
Managing Receipts ........................................................................................................................................7-17
Quiz ...............................................................................................................................................................7-19
Express Receipts and Receiving Transactions...............................................................................................7-20
Direct Receipts ..............................................................................................................................................7-21
Standard Receipt............................................................................................................................................7-22
Inspection Receipt .........................................................................................................................................7-23

Move Orders..................................................................................................................................................7-24
Quiz ...............................................................................................................................................................7-25
Move Orders Process Flow............................................................................................................................7-26
Move Order Requisition Approval Process ...................................................................................................7-27
Benefits of Managed Material Flow in a Facility ..........................................................................................7-29
Move Order Source Types.............................................................................................................................7-30
Move Order Components ..............................................................................................................................7-32
Generate Move Orders...................................................................................................................................7-34
Move Order Allocating..................................................................................................................................7-36
Item Allocation ..............................................................................................................................................7-38
Transact Move Orders ...................................................................................................................................7-39
Mobile Transactions ......................................................................................................................................7-40
Managing Shipments .....................................................................................................................................7-41
Transactions Reports .....................................................................................................................................7-42
Summary........................................................................................................................................................7-47
R12.x On-hand and Availability.....................................................................................................................8-1
R12.x On-hand and Availability....................................................................................................................8-3
Objectives ......................................................................................................................................................8-4
Overview of On-hand Quantity .....................................................................................................................8-5
Overview of Reservations..............................................................................................................................8-6
Overview of Availability ...............................................................................................................................8-7
Quiz ...............................................................................................................................................................8-8
Reservation Versus Allocation ......................................................................................................................8-9
Quiz ...............................................................................................................................................................8-10
Material Workbench ......................................................................................................................................8-11
Display Options .............................................................................................................................................8-12
Quiz ...............................................................................................................................................................8-14
Viewing Available Items ...............................................................................................................................8-15
Material Workbench Transactions.................................................................................................................8-16
What Are Supply and Demand? ....................................................................................................................8-18
Uses of ATP in Oracle Inventory ..................................................................................................................8-19
Defining Computation Options......................................................................................................................8-20
Specifying Supply and Demand Time Fences ...............................................................................................8-22
Specifying Demand Sources..........................................................................................................................8-26
Specifying Supply Sources ............................................................................................................................8-28
Setting Up Item and Bills for ATP Checking ................................................................................................8-29
ATP Checking ...............................................................................................................................................8-30
Reservation Types .........................................................................................................................................8-31
Supply Types .................................................................................................................................................8-32
Demand Types...............................................................................................................................................8-33

iv
Reserving Material ........................................................................................................................................8-34
Quiz ...............................................................................................................................................................8-36
Reservation Management - Transfer Supply .................................................................................................8-37
Reservation Management - Transfer Demand ...............................................................................................8-38
On-hand and Availability Reports .................................................................................................................8-39
Profile Options...............................................................................................................................................8-40
Summary........................................................................................................................................................8-43
R12.x Material Status......................................................................................................................................9-1
R12.x Material Status ....................................................................................................................................9-3
Objectives ......................................................................................................................................................9-4
Material Status...............................................................................................................................................9-5
Quiz ...............................................................................................................................................................9-6
Material Status Control Levels ......................................................................................................................9-7
Quiz ...............................................................................................................................................................9-8
Material Status Transactions..........................................................................................................................9-9

Quiz ...............................................................................................................................................................9-10
Cumulative Effective Status ..........................................................................................................................9-11
Examples of Material Status..........................................................................................................................9-12
Setting Up Material Status Control................................................................................................................9-13
Defining Item Material Status Control ..........................................................................................................9-14
Assigning Material Status Control to Subinventories and Locators ..............................................................9-15
Assigning Planning Statuses..........................................................................................................................9-16
Disabling Material Statuses ...........................................................................................................................9-17
Quiz ...............................................................................................................................................................9-18
Material Status Reports .................................................................................................................................9-19
Profile Options...............................................................................................................................................9-20
Summary........................................................................................................................................................9-22
R12.x Replenishment Fundamentals..............................................................................................................10-1
R12.x Replenishment Fundamentals .............................................................................................................10-3
Objectives ......................................................................................................................................................10-4
Overview of Inventory Planning ...................................................................................................................10-5
Order Planning...............................................................................................................................................10-6
Quiz ...............................................................................................................................................................10-7
How Much to Order.......................................................................................................................................10-8
Replenishment Process for Intra-Org Supply Sources...................................................................................10-9
Replenishment Process for Supplier Supply Sources ....................................................................................10-10
Replenishment Process for Inter-Org Supply Sources...................................................................................10-11
Replenishment Process for Production Supply Sources ................................................................................10-12
Replenishment Methods ................................................................................................................................10-13
Overview of Inventory Forecasting ...............................................................................................................10-14
Forecast Types...............................................................................................................................................10-16
Quiz ...............................................................................................................................................................10-17
Forecast Setup and Maintenance ...................................................................................................................10-18
Oracle Inventory Replenishment Methods ....................................................................................................10-19
Replenishment Method Levels ......................................................................................................................10-20
Safety Stock...................................................................................................................................................10-21
Economic Order Quantity..............................................................................................................................10-22
Overview of Reorder-Point Planning ............................................................................................................10-23
Uses of Reorder-Point Planning ....................................................................................................................10-24
Quiz ...............................................................................................................................................................10-25
Reorder-Point Planning Steps........................................................................................................................10-26
Performing Reorder-Point Planning ..............................................................................................................10-27
Overview of Min-Max Planning....................................................................................................................10-29
Quiz ...............................................................................................................................................................10-30

v
Uses of Min-Max Planning............................................................................................................................10-31
Min-Max Planning.........................................................................................................................................10-32
Min-Max Planning: How Much to Order? ....................................................................................................10-33
Min-Max Planning Steps ...............................................................................................................................10-34
Item Planning Attributes................................................................................................................................10-35
Min-Max Planning Setup Procedure..............................................................................................................10-36
Selecting a Planning Level ............................................................................................................................10-37
Entering Planning Attributes .........................................................................................................................10-38
Submitting the Min-Max Planning Requests.................................................................................................10-39
Overview of Replenishment Counting ..........................................................................................................10-41
Uses of Replenishment Counting ..................................................................................................................10-42
Quiz ...............................................................................................................................................................10-43
Replenishment Planning Steps ......................................................................................................................10-44
Subinventories Window ................................................................................................................................10-46
Item Subinventories Window ........................................................................................................................10-47
Item Subinventories: Order Modifier Tab .....................................................................................................10-48

Replenishment Count Headers ......................................................................................................................10-49
Replenishment Count Lines...........................................................................................................................10-50
Processing Replenishment Counts.................................................................................................................10-52
Mobile Replenishment Count Overview .......................................................................................................10-53
Overview of PAR Counting...........................................................................................................................10-54
Processing PAR Counts.................................................................................................................................10-55
Reorder Quantity for PAR Count ..................................................................................................................10-56
Overview of Kanban Replenishment.............................................................................................................10-58
Kanban Cards ................................................................................................................................................10-60
Kanban Planned Items ...................................................................................................................................10-61
Kanban Cards ................................................................................................................................................10-62
Kanban Supply Status....................................................................................................................................10-64
Kanban Replenishment Sources ....................................................................................................................10-65
Kanban Card Printing ....................................................................................................................................10-66
Planning and Replenishment Reports ............................................................................................................10-67
Profile Options...............................................................................................................................................10-69
Summary........................................................................................................................................................10-74
R12.x Inventory Accuracy Fundamentals .....................................................................................................11-1
R12.x Inventory Accuracy Fundamentals .....................................................................................................11-3
Objectives ......................................................................................................................................................11-4
Overview of Inventory Accuracy ..................................................................................................................11-5
Overview of ABC Analysis ...........................................................................................................................11-6
Quiz ...............................................................................................................................................................11-7
Defining an ABC Analysis ............................................................................................................................11-8
Defining and Running an ABC Compilation.................................................................................................11-9
Quiz ...............................................................................................................................................................11-10
ABC Compilation Criteria.............................................................................................................................11-11
ABC Valuation Scope ...................................................................................................................................11-13
Defining ABC Groups ...................................................................................................................................11-14
Defining ABC Classes...................................................................................................................................11-15
Quiz ...............................................................................................................................................................11-16
ABC Item Assignments .................................................................................................................................11-17
Cycle Counting Overview .............................................................................................................................11-19
Quiz ...............................................................................................................................................................11-20
Defining and Maintaining a Cycle Count ......................................................................................................11-21
Cycle Count Approval Tolerance ..................................................................................................................11-22
Approval Tolerances......................................................................................................................................11-23
Hit/Miss Tolerance ........................................................................................................................................11-25
Measurement Errors ......................................................................................................................................11-26

vi
Cycle Count Items .........................................................................................................................................11-27
Automatic Scheduling ...................................................................................................................................11-29
Manual Scheduling ........................................................................................................................................11-30
Count Requests ..............................................................................................................................................11-31
Entering Cycle Counts...................................................................................................................................11-33
Cycle Count Open Interface ..........................................................................................................................11-34
Count Adjustments and Approvals ................................................................................................................11-35
Automatic Recounts ......................................................................................................................................11-36
Approving Cycle Counts and Adjustments ...................................................................................................11-37
Mobile Inventory Accuracy Overview ..........................................................................................................11-39
Physical Inventory Overview ........................................................................................................................11-40
Why Perform Physical Inventories? ..............................................................................................................11-41
Defining Physical Inventories........................................................................................................................11-42
Physical Inventory Tags ................................................................................................................................11-43
Inventory Snapshots ......................................................................................................................................11-45
Entering Physical Inventory Counts ..............................................................................................................11-47

Voiding Tags .................................................................................................................................................11-49
Quiz ...............................................................................................................................................................11-50
Approval Tolerances......................................................................................................................................11-51
Physical Inventory Adjustments ....................................................................................................................11-52
Accuracy Reports ..........................................................................................................................................11-53
Profile Options...............................................................................................................................................11-59
Summary........................................................................................................................................................11-63
R12.x Table Information.................................................................................................................................12-1
R12.x Table Information ...............................................................................................................................12-3
Objectives ......................................................................................................................................................12-4
Organization Tables.......................................................................................................................................12-5
Subinventories and Locator Tables................................................................................................................12-6
Item Master Tables ........................................................................................................................................12-8
Item Status Tables .........................................................................................................................................12-10
Item Categories Tables ..................................................................................................................................12-12
Item Reservation Tables ................................................................................................................................12-14
Inventory Transaction Tables ........................................................................................................................12-16
Using the eTRM to View Technical Information ..........................................................................................12-18
Quiz ...............................................................................................................................................................12-20
Summary........................................................................................................................................................12-21

vii
Preface
Profile
Before You Begin This Course
• Working experience with Oracle Applications
Prerequisites
• There are no prerequisites for this course.
How This Course Is Organized

R12.x Oracle Inventory Management Fundamentals is an instructor-led course featuring lecture
and hands-on exercises. Online demonstrations and written practice sessions reinforce the
concepts and skills introduced.

ix
Related Publications
Oracle Publications
Title Part Number
Oracle Inventory User’s Guide E13450-03
Additional Publications
• System release bulletins
• Installation and user’s guides

• Read-me files
• International Oracle User’s Group (IOUG) articles
• Oracle Magazine

x
Typographic Conventions
Typographic Conventions in Text
Convention Element Example
Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.
lowercase check boxes, Select the Can’t Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the ORD block.
windows Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (‘I”, 300);
case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)

(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)
(unless the term is a
proper noun)
Italic Emphasized words Do not save changes to the database.
and phrases, For further information, see Oracle7 Server SQL Language
titles of books and Reference Manual.
courses, Enter user_id@us.oracle.com, where user_id is the
variables name of the user.
Quotation Interface elements Select “Include a reusable module component” and click Finish.
marks with long names
that have only This subject is covered in Unit II, Lesson 3, “Working with
initial caps; Objects.”
lesson and chapter
titles in cross-
references
Uppercase SQL column Use the SELECT command to view information stored in the
names, commands, LAST_NAME
functions, schemas, column of the EMP table.
table names
Arrow Menu paths Select File > Save.
Brackets Key names Press [Enter].
Commas Key sequences Press and release keys one at a time:
[Alternate], [F], [D]
Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]

xi
Typographic Conventions in Code
Convention Element Example
Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;
Passwords DROP USER scott

IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER
(OG_GET_LAYER (‘prod_pie_layer’))
Lowercase Syntax variables CREATE ROLE role

italic
Uppercase SQL commands and SELECT userid
functions FROM emp;
Typographic Conventions in Oracle Application Navigation Paths

This course uses simplified navigation paths, such as the following example, to direct you
through Oracle Applications.
(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
This simplified path translates to the following:
1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches
Summary.
2. (M) From the menu, select Query then Find.
3. (B) Click the Approve button.
Notations:
(N) = Navigator
(M) = Menu
(T) = Tab
(B) = Button
(I) = Icon
(H) = Hyperlink
(ST) = Sub Tab

xii
Typographical Conventions in Oracle Application Help System Paths
This course uses a “navigation path” convention to represent actions you perform to find
pertinent information in the Oracle Applications Help System.
The following help navigation path, for example—
(Help) General Ledger > Journals > Enter Journals
—represents the following sequence of actions:
1. In the navigation frame of the help system window, expand the General Ledger entry.
2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.
4. Review the Enter Journals topic that appears in the document frame of the help system
window.

xiii

xiv
R12.x Overview of Oracle
Inventory
Chapter 1
R12.x Overview of Oracle Inventory

Chapter 1 - Page 1

Chapter 1 - Page 2

Chapter 1 - Page 3
Objectives

Chapter 1 - Page 4
Overview of Oracle Inventory

Overview
Oracle Inventory treats many different types of things as inventory. Inventory can be:
• Finished goods that you sell to customers.
• Services that you sell to customers.
• Spare parts for maintenance.
• Raw materials for manufacturing processes.
• Inventory you purchase from a supplier on consignment.

Chapter 1 - Page 5
Inventory Capabilities

Chapter 1 - Page 6
Inventory Capabilities

Chapter 1 - Page 7
Receipt to Issue Life Cycle

Receipt to Issue
Oracle Inventory uses the receipt to issue process to manage your inventory. When inventory
arrives in your warehouse, you receive it. After you receive inventory, you can transfer it within
your organization or to another organization. Finally, you can issue material out of Oracle
Inventory.

Chapter 1 - Page 8
Receiving Inventory

Receiving Inventory
There are different ways you can receive material into your organization.
Oracle Purchasing
You can use Oracle Purchasing to receive material from outside of your organization. You can
receive:
• Purchase order receipts
• Internal requisitions
• In-transit receipts
• Return material authorizations
• Unexpected receipts
Oracle Work in Process
You can use Oracle Work in Process to receive material from the manufacturing floor. You
can receive:
• Component returns
• Negative component issues
• Assembly returns

Chapter 1 - Page 9
Oracle Inventory
You can use Oracle Inventory to receive material in to your warehouse. You can receive:
• Miscellaneous account receipts
• Receipt from projects
• User-defined receipts
• Interorganization transfers

Chapter 1 - Page 10
Quiz

Answer: b

Chapter 1 - Page 11
Receiving Inventory

Chapter 1 - Page 12
Transferring Inventory

Transferring Inventory
Different applications can generate requests to transfer inventory.
Orale Shipping Execution
You can use Oracle Shipping Execution to generate a transfer to move material from a
storage area to a staging to for shipping.
Oracle Order Management
You can use Oracle Order Management to generate a transfer to move material from a
storage area to a staging area for shipping.
You can use Oracle Work in Process to generate a transfer to acquire components for a
project.
Oracle Inventory
You can use Oracle Inventory to:
• Transfer material between organizations
• Transfer material within an organization
• Replenish materials
• Request transfers

Chapter 1 - Page 13
Issuing Inventory

Issuing Inventory
You can use the following applications to issue material:
Oracle Order Management
Oracle Order Management can generate an inventory issue through:
• Sales orders
• Internal orders
Oracle Purchasing
Oracle Purchasing can generate an inventory issue for:
• Return to vendor materials
Oracle Work in Process can generate an inventory issue through:
• Component issues
• Assembly returns
Oracle Inventory
Oracle Inventory can issue stock through:
• User-defined material issues

Chapter 1 - Page 14
• Interorganization transfers
• Cycle count negative issue
• Issue requests

Chapter 1 - Page 15
Quiz

Answers: b, c

Chapter 1 - Page 16
Oracle Inventory Application Integration

Integration of Oracle Inventory to Manufacturing Applications
Oracle Inventory interacts with the following applications:
• Oracle Cost Management receives cost information and transaction rates from Oracle
Inventory. Oracle Inventory integrates to Oracle General ledger via Oracle Cost
Management
• Oracle Work in Process provides work in process (WIP) activity and available to promise
(ATP) supply information to Oracle Inventory and receives item and on-hand quantity
information from Oracle Inventory.
• 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.
• Oracle Bill of Materials receives item information from Oracle Inventory.
• Oracle Engineering provides engineering item information and receives item information
from Oracle Inventory.
• Oracle Order Management provides shipping, reservations, and demand information and
receives item, ATP, and on-hand quantity information from Oracle Inventory.

Chapter 1 - Page 17
• Oracle Purchasing provides receipt, delivery, ATP supply, and planning supply
information and receives item requisition, and interorganization shipment information from
Oracle Inventory.

Chapter 1 - Page 18
Integration of Oracle Inventory to Financial Applications
• Oracle General Ledger provides ledger and currency exchange rates and receiving
accounting summary and detail information via Oracle Cost Management.
• Oracle Landed Cost Management (LCM) enables you to determine the real costs (such
as insurance, transportation, handling, storage costs, container fees, and import or
export charges) associated with acquiring items. Oracle Landed Cost Management
calculates the actual landed costs after actual values are received from invoices. The
variance between the actual landed cost and the estimated landed cost are passed to
Oracle Cost Management which in turn updates the proper accounts and valuation. To
use Oracle LCM in Oracle Inventory, you need to:
- Set up inventory organization options in the Organization Parameters - Inventory
Parameters window.
- Set up the inventory organizations to be used with Oracle Landed Cost
Management and specify the landed cost management variance account for that
organization.
• Oracle Payables receives Item information from Oracle Inventory.
• Oracle Receivables provides intercompany invoice information and receives item
information from Oracle Inventory.

Chapter 1 - Page 19
• Oracle Assets receives item information from Oracle Inventory.

Chapter 1 - Page 20
Summary

Please refer to the supplemental guide for labs and/or demos for this lesson.

Chapter 1 - Page 21

Chapter 1 - Page 22
R12.x Defining Inventory
Organizations
Chapter 2
R12.x Defining Inventory Organizations

Chapter 2 - Page 1

Chapter 2 - Page 2

Chapter 2 - Page 3
Objectives

Chapter 2 - Page 4
Inventory Organizations

Inventory Organizations
An inventory organization is a facility where you store and transact items. Before you can use
Oracle Inventory, you must define one or more inventory organizations. Inventory
organizations represent distinct entities in your enterprise and can be one of the following:
• A physical entity such as a manufacturing facility, warehouse, or distribution center.
• A logical entity such as an item master organization, which you use to define items.
An inventory organization may have the following attributes:
• An inventory organization can have its own location, ledger, costing method, workday
calendar, and items.
• An inventory organization can share one or more of these characteristics with other
organizations.

Chapter 2 - Page 5
Inventory Organization Structure

Inventory Organization Structure
An inventory organization, where you store and transact items can have one or more
subinventories. Subinventories are unique physical or logical separations of material
inventory, such as raw material inventory, finished goods inventory, or defective goods
inventory. In Oracle Inventory, all material within an organization is held in a subinventory.
You must define at least one subinventory for every organization. You can track item
quantities by subinventory as well as restrict items to specific subinventories.
The subinventories in an inventory organization may be made up of one or more locators. You
use locators to identify physical areas where you store inventory items. You can track items by
locator and restrict items to a specific locator. Locator control is optional in Oracle Inventory.

Chapter 2 - Page 6
Quiz

Answer: b

Chapter 2 - Page 7
Sample Inventory Organization

Chapter 2 - Page 8
Multi-Organization Structure

Multi-Organization Structure
Multi-Organization structure enables you to model multiple business units in an enterprise
using a single installation of Oracle applications. In a multi-organization architecture you can
keep data secure and separate from each business unit.
The following are the benefits of multi-organization structure:
• You can use a single installation of any Oracle Applications product to support any
number of business units, even if those business units use a different ledger.
• Secure access to data so users can access only relevant information.
• You can define a organizational model that best suits your business requirements.
• In Oracle Inventory, you can fulfill any sales order or purchase order regardless of them
being booked from any Inventory organization. You can also determine if any inter-
company invoicing needs to occur based on if the Sales Order or Purchase Order was
booked in a different Operating Unit other than the one to which the Inventory
organization is assigned.

Chapter 2 - Page 9
Setting Up Locations

Setting Up Locations
• Define information describing the physical locations of employees and organizations.
• Locations are shared between Oracle Inventory, Oracle Purchasing, and Oracle Human
Resource Management Systems. Locations flagged as global locations are available to
all business groups. You can associate each organization with only one location;
however, you can associate more than one organization with the same location.
• Physical locations are defined in Oracle Human Resource Management Systems.

Chapter 2 - Page 10
Defining Organizations

Defining Organizations
Classify the Organization
• Choose an organization classification to describe the general purpose of your
organization.
• Examples of organization classifications are inventory organization, legal company, and
HR organization.
• Choose inventory organization as your organization classification to use your
organization for inventory management.
Ledger
• Tie each inventory organization to an operating unit. Each operating unit is associated to
a legal entity and a primary ledger.

Chapter 2 - Page 11
Quiz

Answer: a

Chapter 2 - Page 12
Inventory Parameters

Inventory Parameters
Organization Features
You must enter organization information such as the organization code, and the item master
organization. The system defaults this field to the current organization. You must change this
for any organization that is not an item master organization. The item master organization
should be the first inventory organization you create.
Note: The Manufacturing Partner Organization functionality is only available in Japan, Taiwan
and Korea.
Products and Features
You can enable specific products on the Inventory Parameters tab. These include Oracle
Warehouse Management, Oracle Process Execution, and Oracle Enterprise Asset
Management. If you have Oracle Warehouse Management installed, then you can enable the
Warehouse Control System.

Chapter 2 - Page 13
Costing Parameters

Costing Parameters
Standard costing: A costing method where a predetermined standard cost is used for
charging material,resource, overhead, period close, job close, and cost update transactions
and valuing inventory. Any deviation in actual costs from the predetermined standard is
recorded as a variance.
Average costing: A costing method which can be used to cost transactions in both inventory
only and manufacturing (inventory and work in process) environments. As you perform
transactions, the system uses the transaction price or cost and automatically recalculates the
average unit cost of your items.
LIFO costing: Costing method where it is assumed that items that were received most
recently are transacted first.
FIFO costing: Costing method where it is assumed that items that were received earliest are
transacted first.

Chapter 2 - Page 14
Revision, Lot, Serial, and License Plate Number (LPN)
Parameters

Revision, Lot, Serial, and LPN Parameters
You determine the starting revision for all items in the organization when you define your
inventory organization. You can also choose to set lot control and serial control parameters at
the organization level. Revision control is discussed in the Defining and Maintaining Items
module. Lot control and serial control is discussed in the Lot and Serial Control module.
LPN Generation Options
If you have Oracle Warehouse Management installed, and you are working with a Warehouse
Management enabled organization, you can define License Plate Number (LPN) Generating
Options. LPNs must be unique across organizations. Setting the parameters on the Revision,
Lot, Serial, And LPN tab enables the system to generate LPNs on demand, or through a
concurrent request. As long as the number is unique, Oracle Warehouse Management also
enables you to generate your own LPNs.

Chapter 2 - Page 15
ATP, Pick, Item-Sourcing Parameters

Chapter 2 - Page 16
Interorganization Parameters

Chapter 2 - Page 17
Other Account Parameters

Chapter 2 - Page 18
Warehouse Management Parameters

Warehouse Management Parameters
For more information about Oracle Warehouse Management Organization Parameters see
the Oracle Warehouse Management Implementation Guide.

Chapter 2 - Page 19
What Is a Subinventory?

A subinventory is a physical or logical grouping of inventory such as raw material, finished
goods, defective material, or a freezer compartment. A subinventory can be the primary place
where items are physically stocked. You must specify a subinventory for every inventory
transaction.

Chapter 2 - Page 20

What Is a Subinventory? (continued)
For more information about subinventories, see the Oracle Inventory User’s Guide. Defining
Subinventories.
Note: Types of subinventories other than Storage matter only in WMS. You cannot have a
receiving subinventory unless you are using MSCA or WMS. For example, you can receive
material on the dock and can place it in a receiving subinventory (quantity is not reflected in
on-hand) before you transfer it to a putaway location. There can be many receiving
subinventories in the receiving area of a warehouse. For more information, see the Oracle
Warehouse Management User Guide.

Chapter 2 - Page 21
Defining Subinventories

Defining Subinventories
You define subinventories by organization. Each subinventory must contain the following
information:
• Unique alphanumeric name
• Status
• Cost Group (if you have Oracle Warehouse Management installed)
• Parameters
• Lead times
• Sourcing information
• Account information
For more information about subinventories see Defining Subinventories, Oracle Inventory
User’s Guide.

Chapter 2 - Page 22
Locator Control

Locator Control
Locators are structures within subinventories. Locators are the third level in the enterprise
structuring scheme of Oracle Inventory. Locators may represent rows, aisles, or bins in
warehouses. You can transact items into and out of locators. You can restrict the life of
locators, establish capacity of a specific locator in weight or units, as well as specify
dimensions which define a locator’s capacity by volume.
In coordination with locator settings at the subinventory and item level, you must first specify
locator controls at the Organization level:
• None: Inventory transactions within this organization do not require locator information.
• Prespecified only: Inventory transactions within this organization require a valid,
predefined locator for each item.
• Dynamic entry allowed: Inventory transactions within this organization require a locator
for each item. You can choose a valid, predefined locator, or define a locator dynamically
at the time of transaction.
• Determined at subinventory level: Inventory transactions use locator control
information you define at the subinventory level.

Chapter 2 - Page 23
Dynamic and Static Locators

Chapter 2 - Page 24
Quiz

Answers: b, c

Chapter 2 - Page 25
Subinventory-Locator Relationship

Subinventory-Locator Relationship
You can structure Oracle Inventory in such a way that some of the subinventories and items
have locator control while others do not. If locator control is turned on at the item level, you
must specify a locator when transacting the item into or out of a subinventory. If locator control
is turned on at the subinventory level, you must specify a locator when transacting any item
into or out of that subinventory. Each stock locator you define must belong to a subinventory,
and each subinventory can have multiple stock locators. The possible locator control types
are:
• None
• Prespecified
• Dynamic entry
• Item Level
You cannot use the same locator names within any two subinventories within the same
organization. For more information about setting up locator control see Defining Stock
Locators, Oracle Inventory User’s Guide.

Chapter 2 - Page 26
Locator Flexfield Structure

Locator Flexfield Structure
Locator flexfield structure is common across all organizations. For example if you set up Row
1A Rack 1A and Bin 1A in M1 Seattle, you cannot use Aisle 1A Rack 1A and Bin1A structure
in M2 Boston.
For more information see the Oracle Applications Flexfields Guide.

Chapter 2 - Page 27
Interorganization Shipping Networks

Interorganization Shipping Networks
An interorganization shipping network describes the relationships and accounting information
between a shipping organization and a destination organization. You must define a shipping
network between two organizations before you can transfer material between organizations.
When you set up a shipping network you must select a transfer type: intransit or direct.
• Intransit: Oracle Inventory moves material to an intermediary state before it reaches the
destination organization. After the material arrives at the destination organization, you will
need a receipt transaction to retrieve it. If intransit is selected, you can define:
- Shipping methods
- GL accounts to use in transit
- Material ownership during transfers
- Planning lead-times
- Transfer charges
• Direct: Oracle Inventory moves the material directly to the destination organization.
However, for both transfer types, you can determine default receipt routing and whether
internal orders are required to transfer material. For more information see Interorganization
Shipping Network, Oracle Inventory User’s Guide.

Chapter 2 - Page 28
Shipping Method

Shipping Method
Shipping methods are the way you ship material. When you create a shipping method, you
must enable it before you can use it in a shipping network. If you disable a shipping method, it
cannot be used in a shipping network.

Chapter 2 - Page 29
Additional Setup Steps

Additional Set Up Steps
Entering Employees
Employees who perform cycle and physical inventory counts.
Defining Planners
Identify persons responsible for planning items or groups of items.
Defining Freight Carriers
Enables assignment of a general ledger account to one or more carriers to collect costs
associated with their use. You can assign a carrier to each interorganization transfer.

Chapter 2 - Page 30
Quiz

Answers: a, c

Chapter 2 - Page 31
Additional Organizational Setups

Additional Organizational Setups
Material Shortage Parameters
Define the parameters for the system to determine when unsatisfied demand exceeds
available quantity of incoming supply. This condition can be used by the system to trigger
shortage alerts and notifications.
Organization Access
This controls access to organizations based on the user responsibility assigned to a user by
the system administrator.
When implemented for one user responsibility, it is then required for all other user
responsibilities accessing the same organization.

Chapter 2 - Page 32
Copying Inventory Organizations

Copying Inventory Organizations
You can create new inventory organizations or copy an existing organization. You must
establish a model organization to use as a baseline for new organizations. This model
organization must be a transactional organization and not an item master organization. You
can copy only organizations within the same operating unit. The system creates the new
organizations under the same business group to which the model organization belongs, and
assigns the new organizations to the same operating unit, legal entity, and ledger as the
model organization.
When you copy organizations you specify which information to copy from the model
organization. You can choose to copy the following information from the model organization:
• Organization definition
• Shipping networks
• Hierarchy assignments
• Bills of material and bills of material parameters
• Departments, resources, and routings
• Item information
When you copy a model organization the system automatically copies the following
information:

Chapter 2 - Page 33
• Subinventories
• Locators
• Work in Process parameters
• Work in Process accounting classes
• Planning parameters
• Shipping parameters
Note: The system does not copy organization-specific data including: cost type, cost sub-
element, Process Manufacturing Enabled, Oracle Warehouse Management enabled, and
cost-sharing entities.
For more information about copying inventory organizations see Copy Inventory Organization
Implementation Guide.

Chapter 2 - Page 34
Organization Hierarchy

Organization Hierarchy
Organization hierarchies enable you to group together organizations and perform operations
across all organizations within a hierarchy. You can perform the following operations across
all organizations within an organization hierarchy:
• Assign items to organizations: You can assign an item to any organization that
belongs to the same master organization within the same hierarchy. You can also assign
a range of items or item categories to a single organization, as well as a range of items or
categories to multiple organizations.
• Copy item attributes: You can manage item attributes for many organizations in one
place. You can verify that an item or group of items were set up correctly, copy
organization-level item attributes from one item to other organizations that use the item,
and copy item attributes from one item to another within an organization.
• View item information: You can view on-hand quantity information as well as item
where used information for organizations.
• Open and close accounting periods: You can open and close accounting periods.
• Purge transactions: You can purge transactions.
• Process transactions with the Inventory Transaction Open Interface: You can use
the Inventory Transaction Open Interface to review, submit, or cancel transactions.

Chapter 2 - Page 35
• Manage bills of materials: You can create common bills of material for organizations as
well as delete items, bills, components, routings, and operations.
• Manage engineering change orders: You can automatically implement as well as make
changes to engineering change orders.

Chapter 2 - Page 36
Organization Reports

Chapter 2 - Page 37
Organization Reports

Chapter 2 - Page 38
Profile Options

Profile Options
The following section describes the values for the featured profile options:
• INV: Inter-Organization Currency Conversion: The available values for this profile option
are:
- Corporate: An exchange rate you define to standardize rates for your company. The
corporate exchange rate is generally a standard market rate determined by senior
financial management for use throughout the organization.
- Spot: An exchange rate you enter to perform conversion based on the rate on a
specific date. It applies to the immediate delivery of a currency.
- User: An exchange rate you specify when you enter a foreign currency journal entry
that does not have a daily exchange rate.
• TP: INV Inter-Organization Transfer form: The available values for this profile option are:
- Background processing: When processing starts, control returns immediately to you,
allowing you to continue working. The inter-organization transfer transactions run on
a periodic basis.
- Concurrent processing: When the concurrent process runs, you retain control so you
can continue working in the system windows. Displays the concurrent request

Chapter 2 - Page 39
number of the concurrent process that is running the inter-organization transfer
transactions.
- On-line processing: Processes your inter-organization transfer transactions while you
wait, and control is returned to you after transaction processing has completed.
When Oracle Inventory is installed, this is the default value that is used for all levels
of responsibility.

Chapter 2 - Page 40
Implementation Considerations

When you set up your organizations you need to determine the organization type. For
example, you need to determine if the organization is a process or a discrete organization and
if you are using Oracle Warehouse Management. You can use Oracle Warehouse
Management and Oracle Process Management in the same organization. You should not
however, use Oracle Asset Management with Oracle Warehouse Management or Oracle
Process Execution. If you plan on using Oracle Warehouse Management you need to
determine if you are going to use the Warehouse Control system. If this organization transacts
business with Japan, Taiwan, or Korea you can enable Chargeable Subcontracting for the
organization. You must consider all of this information before you create items or process
transactions.

Chapter 2 - Page 41

Chapter 2 - Page 42

Chapter 2 - Page 43

Chapter 2 - Page 44

Chapter 2 - Page 45

The functional security defined for a responsibility controls whether you can establish shipping
networks for the current organization or between any two organizations.

Chapter 2 - Page 46
Summary


Chapter 2 - Page 47

Chapter 2 - Page 48
R12.x Units of Measure
Chapter 3

Chapter 3 - Page 1

Chapter 3 - Page 2

Chapter 3 - Page 3
Objectives

Chapter 3 - Page 4
Units of Measure

Unit of Measure
You define units of measure for tracking, moving, storing, and counting items.
Primary Unit of Measure
When you define an item you establish a primary unit of measure. The system tracks on-hand
quantity and calculates transactions based on the primary unit of measure.
Secondary Unit of Measure
Optionally, you can establish a secondary unit of measure (dual unit of measure control) for
an item. Secondary unit of measure can be used for cases where you need to track in two
units of measure and there is no constant conversion between the two unit of measures
(UOMs). For example, chickens can be tracked in pounds and eaches.
If an item is under dual unit of measure control the system tracks on-hand quantity based on
both the primary and secondary units of measure. For example, you can track an item in both
eaches and liters.

Chapter 3 - Page 5
Quiz

Answer: b

Chapter 3 - Page 6
Uses of Units of Measure

Uses of Units of Measure
• Planning Products
- Forecasting and consumption
- Master scheduling
- Material requirements planning
• Work in Process
- Shop floor moves
- Resource transaction
- Completion and return transactions
- Inquiries and reports
• Bills of Material and Engineering
- Defining bills of material
- Defining engineering items

Chapter 3 - Page 7
Unit of Measure Class

Unit of Measure Class
Unit of measure classes represent groups of units of measure with similar characteristics. A
unit of measure class contains a base unit of measure. You use the base unit of measure to
perform conversions between units of measure in the class. For this reason, the base unit of
measure should represent the other units of measure in the class, and be one of the smaller
units. For example, quantity is a unit of measure class and each, dozen, and gross are
examples of units of measure within the class. The unit of measure each is the base unit of
measure for this class.

Chapter 3 - Page 8
Unit of Measure Conversions

Units of Measure Conversions
A unit of measure conversion is a mathematical relationship between two different units of
measure. For example, 16 ounces = 1 pound, or 2.2 pounds = 1 kilogram. If you want to
transact items in units of measure belonging to classes other than their primary UOM class,
you must define conversions between the base units of measure in different UOM classes.

Chapter 3 - Page 9
Quiz

Answers: b,d

Chapter 3 - Page 10
Lot-Level Unit of Measure Conversions

Lot-Level Unit of Measure Conversions
Lot specific conversions enable you to perform a specific inter-class conversion for a given lot.
This enables you to establish more granular control over the transactional quantities of a lot.
For example, the standard inter-class conversion for a lot controlled item is one gallon equals
15 pounds; however, when you receive a particular lot of the item, 1 gallon equals 16 pounds.
You can create a lot specific unit of measure for this instance.
You can create lot-specific unit of measure conversions for on-hand lots or lots with a zero
balance. If you create a lot-specific conversion for a lot with on-hand quantities, you can
automatically update the quantities in the system to more accurately reflect the on-hand
quantity.

Chapter 3 - Page 11
Units of Measure Setup

Chapter 3 - Page 12
Unit of Measure Reports

Chapter 3 - Page 13
Profile Options

Chapter 3 - Page 14
Organization Parameter Setup

Organization Parameter Setup
If you set the Auto Create Lot UOM Conversion parameter to Yes or User confirmation, then
the system automatically creates lot-specific unit of measure conversions for items under dual
unit of measure control across the organization. The system bases the conversion on lot
quantities that you receive in the transactional unit of measure, and creates a conversion
between the transactional unit of measure and the secondary unit of measure.

Chapter 3 - Page 15

You can use a maximum of five decimal places for an individual unit of measure within
Oracle Inventory.
Inventory transactions and on hand balance supports decimal precision to 5 digits after
the decimal point. Oracle Work in Process supports decimal precision to 6 digits.
Other Oracle Applications support different decimal precision. As a result of the
decimal precision mismatch, transactions another Oracle Application passes may
be rounded when processed by Inventory. If the transaction quantity is rounded to
zero, Inventory does not process the transaction. It is therefore suggested that the
base unit of measure for an item is set up such that transaction quantities in the
base unit of measure not require greater than 5 digits of decimal precision. For
example, in some industries such as the gold jewellery industry, you may need a
more granular level of control than 5 decimal places. You need to carefully
determine the base unit of measure for each unit of measure class.
Note: After an item is saved, you cannot change its primary unit of measure.

Chapter 3 - Page 16
Summary


Chapter 3 - Page 17

Chapter 3 - Page 18
R12.x Defining and
Maintaining Item
Fundamentals
Chapter 4
R12.x Defining and Maintaining Item Fundamentals

Chapter 4 - Page 1

Chapter 4 - Page 2

Chapter 4 - Page 3
Objectives

Chapter 4 - Page 4
What Is an Item?

What Is an Item?
An item is a part or service you:
• Purchase
• Sell
• Plan
• Manufacture
• Stock
• Distribute
• Prototype
Items can also be containers for items as well as components you build into other items.

Chapter 4 - Page 5
Steps to Set Up, Define, and Maintain Items

Steps to Define and Maintain Items
The following are the steps for creating and maintaining items:
• Define Inventory organization.
• Create the item templates.
• Use the templates or existing items to define items.
• Enter values for additional item attributes.
• Assign a status to the item.
• Enable the item in organizations.
• Update the organizational-level attributes values.
• Assign categories to the item (optional)
• Assign items to catalog groups (optional)
• Define item relationships (optional)
• Delete items (optional)

Chapter 4 - Page 6
Defining Items

Chapter 4 - Page 7
Defining Items

Defining Items
Define only the information you need to maintain the item. You cannot define an item at the
organization level. Oracle Inventory automatically switches to the Master Item window when
you define a new item.

Chapter 4 - Page 8
Item Master Organization

Item Master Organization
An item master organization is a logical entity that you use to define items. You use the other
organizations to store and transact inventory. After you define an item in the item master, you
can assign it to any number of other organizations.
There is no functional or technical difference between the item master organization and other
organizations; however, it is recommended that you limit the item master to an item definition
organization.
You should also define one item master organization per implementation. You can use the
same item master for child organizations across different ledgers. Item masters are distinct
entities with no relationship to each other. You cannot associate items in one item master
organization with another item master organization. You cannot copy items across item
master organizations.
Defining the Item Master Organization
You create the item master organization in the same way that you create other inventory
organizations.
• You use the Organization window to create the item master organization.
• Use the Organization Parameters window to specify the organization as the Item Master.
• You assign child organizations to the item master organization.

Chapter 4 - Page 9
Note: The item master uses itself as its item master.

Chapter 4 - Page 10
Item Master

Item Master
Always define items in the master organization. When you define an item, Oracle
automatically changes your current organization to the master organization. You may enable
your new items in as many child organizations as needed.

Chapter 4 - Page 11
Quiz

Answer: a

Chapter 4 - Page 12
Item Attributes

Item Attributes
Item attributes are the collection of information about an item.

Chapter 4 - Page 13
Item Attribute Groups

Chapter 4 - Page 14
Item Status

Item Status
You can use statuses to provide default values for certain item attributes to control the
functionality of an item. The Item Status attribute has a defined set of yes or no values for the
status attributes. You apply the values to the status attributes when you choose an item status
code when you define an item. For example, in the beginning of a product development cycle
you set the Item Status attribute to Prototype with all of the status attributes defaulted to yes
except for Customer Orders Enabled. When the item is ready, you change the Item Status
attribute to Active to enable all item functions.
You can assign one or more pending statuses for an item, to be implemented on future dates.
These statuses become effective on their assigned effective dates. You can view the status
history of an item if needed.

Chapter 4 - Page 15
Unit of Measure Attributes

Unit of Measure Attributes
You use the units of measure attributes to track your items in the warehouse. The following
are the unit of measure attributes and their definitions:
• Primary Unit of Measure: This is the stocking and selling unit of measure. Any
necessary conversions are based on this unit of measure. The primary unit of measure is
the default for invoices and credit memos entered in Oracle Receivables.
• Tracking: The system can track the item in either the primary only or the primary and
secondary unit of measure. If the system tracks the item by the primary and secondary
unit of measure this is called dual unit of measure control.
• Pricing: This attribute controls if pricing is based on the primary or secondary unit of
measure
• Defaulting: This attribute controls the behavior of dual unit of measure controlled items.
- Fixed: The system stores inventory in both the primary and secondary units of
measure. You can enter an item quantity in one unit of measure, and the system
converts the quantity to the secondary unit of measure and displays both quantities
- Default: The system stores inventory in both the primary and secondary units of
measure. You can enter an item quantity in one unit of measure, and the system
converts the quantity to the second unit of measure and displays both quantities. You

Chapter 4 - Page 16
can change the quantity in the secondary unit of measure, without changing the
quantity in the primary unit of measure.
- No Default: The system stores inventory in both the primary and secondary units of
measure. Use this option when the default conversion between the two units of
measure is usually not the same. The system does not automatically display in the
secondary unit of measure when you specify the quantity for the primary unit of
measure. You manually enter the quantity of the secondary unit of measure before
you process a transaction. The secondary quantity can fluctuate from the default
conversion by the factors that you specify in the Deviation + and Deviation -
attributes.

Chapter 4 - Page 17
Item Statuses and Attributes

Item Statuses and Attributes
You define an item status by selecting the value check boxes for the status attribute. You can
control status attributes and item status at the item level or organization level.

Chapter 4 - Page 18
Status Attributes and Functionality

Chapter 4 - Page 19

Chapter 4 - Page 20

Chapter 4 - Page 21
Status Attribute Interdependencies

Chapter 4 - Page 22

Chapter 4 - Page 23

Chapter 4 - Page 24
Quiz

Answer: d

Chapter 4 - Page 25
Item Attribute Relationships

Item Attribute Relationships
• Required Attributes
You must enter a value for the attribute based on the settings for other related attributes.
• Interdependent Attributes
You can only enter certain values depending on other attribute values.
• Updateable Attributes
You can update values under certain conditions.
• Control Level Dependencies
You can update the control level of some attributes only under special conditions and with
certain consequences.

Chapter 4 - Page 26
Item Templates

Item Templates
Oracle Inventory has several predefined templates that you can use to define and update
items or you can create your own templates.
If you regularly define many items that share the same values for a number of attributes, you
may want to define item templates. You can only use copy once when you define an item. You
can predefine templates with relatively few attributes enabled because you can apply more
than one template to define one item.
Attributes in Templates
You can enable attributes and assign them values in each template that you create. When you
apply a template to an item, Oracle Inventory updates only the attributes that are enabled for
the template. The order in which templates are applied is extremely important.
Further Item Templates Help
For more information about item templates see Item Templates, Oracle Inventory User’s
Guide.

Chapter 4 - Page 27
Creating Item Templates

Notes
The following templates are predefined (each prefixed with an “@” symbol):
• ATO Model
• ATO Option Class
• ATO Item
• Finished Good
• Kit
• Outside Processing Item
• PTO Model
• PTO Option Class
• Phantom Item
• Planning Item
• Purchased
• Reference Item
• Subassembly
• Supply Item

Chapter 4 - Page 28
• Freight
• Product Family

Chapter 4 - Page 29
Enabling Attributes in a Template

Chapter 4 - Page 30
Organization Assignment and Organization Items

Organization Assignment and Organization Items
You can enable an item in all child organizations under your master organization or choose
child organizations where you use the item. Oracle Inventory propagates the item to all
organizations in which you want to enable it. You can enter or change organization-controlled
item attributes. For example, you can choose reorder point planning in one organization and
min-max planning in another organization for the same item.

Chapter 4 - Page 31
Control Levels

Control Levels
Master-Level Control
An attribute you maintain at the master level has identical values across all organizations that
use the item.
Organization-Level Control
An attribute you maintain at the organization level may have different values for each
organization that uses it.
Attribute Control
Some attributes can be maintained at only the master level or the organizational Level. Units
of measure are controlled at the master level. If you are using multiple organizations, then you
should maintain min-max planning at the organization level.
Technical Notes
• Master-Level Control: For example, suppose you want to ensure that items defined in two
organizations are transactable at the same time in both organizations. If you make the
item not transactable in one organization, you want the same item to become not
transactable in the other organization.
• Organization-Level Control: Suppose only one of the two organizations in your Oracle
Inventory implementation performs manufacturing operations, while the other

Chapter 4 - Page 32
organization is strictly a distribution warehouse. For a finished good item used in both
organizations, you would want the flexibility to select the Build in WIP status attribute
check box in the manufacturing organization, and clear the Build in WIP status attribute
check box in the distribution organization.

Chapter 4 - Page 33
Quiz

Answer: b

Chapter 4 - Page 34
Revision Control

Revision Control
A revision is a particular version of an item, bill of material, or routing. Use the revision control
to track item quantities by item revision and specify a revision for each material transaction.
Enable revision control for items you must track version changes or changes that are
significant enough to track but do not affect the function and feature of the item.
You cannot change the revision control item attribute when an item has quantity on hand. If
revision control is controlled at the Master Item level, the check for on-hand quantity is against
the sum of on-hand quantity in all child organizations. If revision control is controlled at the
organizational level, the check for on-hand quantity is against the sum of on-hand quantity in
that organization.
Use letters, numbers, and characters such as A, A1, 2B, and so on to define revision
numbers. Letters are always in upper case and numbers may include decimals. To ensure
revisions sort properly, decimals should always be followed by a number. Revisions are sorted
according to ASCII rules, therefore each revision must be greater than the previous revision.
For example, you cannot use revision 10 after revision 9 because, according to ASCII sorting,
10 precedes 9.
For more information about setting up Revision Control, see Defining Item Revisions, Oracle
Inventory User’s Guide.

Chapter 4 - Page 35
Restricting Items to Subinventories

Restricting Items to Subinventories
You can assign items to a given subinventory. Assigning items to a subinventory does not
restrict the subinventory to that list of items. Rather, the items are restricted to that
subinventory. Thus, you can always issue and receive unrestricted items to any subinventory,
but you can only issue and receive restricted items to those particular subinventories. You
activate the list of subinventories for a restricted item when you set the Restrict Subinventories
attribute. You also use the item-subinventory relationship to specify valid subinventories for
zero quantity cycle counts for an item, and to specify items for an ABC analysis performed at
the subinventory level. In these cases you do not have to set the Restrict Subinventories
attribute, only establish the relationship between the item and subinventory.

Chapter 4 - Page 36
Item Relationships

Item Relationships
You can define relationships between items. This allows you to search for items through these
relationships. Except in Oracle Purchasing, these relationships are for inquiry and reporting
purposes only. For example, you can create an item relationship for substitute items or items
for which you can up-sell.

Chapter 4 - Page 37
Categories and Category Sets

Categories and Category Sets
A category is a logical classification of items that have similar characteristics. A category set is
a distinct grouping scheme and consists of categories. You can define an unlimited number of
categories and group subsets of your categories into category sets. A category can belong to
multiple category sets. You can assign a category to a category set either at the time you
define a category set or at the time you assign an item to the category.
Default Category Sets
When you install Oracle Inventory, you must assign a default category set to each of the
following functional areas: Inventory, Purchasing, Order Management, Costing, Engineering,
and Planning. Product Line Accounting is seeded with the Inventory category set. Oracle
Inventory makes the default category set mandatory for all items defined for use by a
functional area. If your item is enabled for a particular functional area you cannot delete the
item's corresponding default category set assignment. Default category sets are required so
that each functional area has at least one category set that contains all items in that functional
area.

Chapter 4 - Page 38
Assigning Items to Categories

Assigning Items to Categories
When you enable an item in a functional area, the item is assigned to the default (mandatory)
category set and default category of the functional area. You can override the category set's
default category. In addition, you can manually assign your item to an unlimited number of
category sets. You may optionally assign an item to more than one category within a category
set based on the category set definition.

Chapter 4 - Page 39
Quiz

Answer: a

Chapter 4 - Page 40
Item Catalogs

Item Catalogs
To define your catalog, you set up as many distinct item catalog groups as you need to
partition your Item Master. Each group has unique characteristics (called a descriptive
element) that completely describe items belonging to the group. When you assign an item to
an item catalog group, you define values for the descriptive elements that apply to your item.
For example, an item catalog group called mug could have a descriptive element called
material. Possible values for material might be glass or ceramic.
Descriptive Elements
You can define any number of descriptive elements for an item catalog group. You can also
describe whether the descriptive element is required at item definition, and whether the
descriptive element value is included by default in the item catalog description. Descriptive
element values can be concatenated and used to create an item's description. You turn this
feature off or on for each descriptive element in a catalog group. Turn Description Default on
for any element you want included in a concatenated description. You create a concatenated
description when assign an item to an item catalog group.

Chapter 4 - Page 41
Deletion Constraints and Deletion Groups

Deletions Constraints and Deletion Groups
You cannot delete an item if you have on-hand quantity or have performed any type of action
on the item.

Chapter 4 - Page 42
Deletion Constraints

Chapter 4 - Page 43
Deletion Constraints

Chapter 4 - Page 44
Item Reports

Chapter 4 - Page 45
Item Reports

Chapter 4 - Page 46
Item Reports

Chapter 4 - Page 47
Profile Options

Chapter 4 - Page 48
Profile Options

Chapter 4 - Page 49
Profile Options

Chapter 4 - Page 50
Profile Options

Chapter 4 - Page 51
Profile Options

Chapter 4 - Page 52
Profile Options

Chapter 4 - Page 53

Chapter 4 - Page 54
Summary


Chapter 4 - Page 55

Chapter 4 - Page 56
R12.x Lot and Serial Control
Chapter 5

Chapter 5 - Page 1

Chapter 5 - Page 2

Chapter 5 - Page 3
Objective

Chapter 5 - Page 4
Overview of Lot Control

Overview of Lot Control
A lot can represent a quantity of an item that shares the same specifications, one or more
receipts from the same vendor, or whatever you choose. You can divide each lot into child lots
that can reflect whatever characteristics you choose for items within the lot. For example, you
may divide a lot of items from a supplier into child lots to reflect differences in quality
specifications. When you allocate stock for production, you can allocate specific lots to a
production batch based on the potency, age, or other item characteristics. Oracle Inventory
provides complete lot number support for inventory transactions. You can enable lot control
for specific items in your inventory. For items under lot control, you assign lot numbers to each
receipt, and thereafter reference the same lots each time you perform material transactions.
This enables you to have tight control over lot controlled items in your inventory.
All of the material produced in a manufacturing batch may be assigned a lot number. For
example, you can create a manufacturing batch of penicillin and assign it parent lot number
A100. You can then use parent lot A100 to create child lot A100_01 to make pills, child lot
A100_02 to create emulsion, and child lot A100_03 to create capsules. Each child lot has the
same ingredients as the original parent lot A100, but they are in a different format.

Chapter 5 - Page 5
Child Lots

Child Lots
A child lot is a subdivision of a lot that you can use if you produce a lot over a period of time,
but still want to group the material as a single lot. Using a child lot maintains the integrity of
the lot, but enables you to consume it in manageable pieces. When you process transactions
for material under child lot control, you enter the child lot as the lot number. The system also
maintains a genealogy relationship between the parent lot and the child lot.

Chapter 5 - Page 6
Setting Up Lot Control (Organization Parameters)

Setting Up Lot Control (Organization Parameters)
You use the Organization Parameters window to specify whether lot numbers should be
unique for an item. If you do not establish lot number uniqueness, you can assign the same lot
number to multiple items in the same organization and across organizations. If you control lot
number uniqueness at the item level, you can assign a specific lot number only to one item in
the same organization and across organizations. When you perform transactions, Oracle
Inventory checks the lot number uniqueness control to generate lot number defaults.
You use the Organization Parameters window to specify how to generate lot number defaults.
You can generate sequential lot numbers based on an alphanumeric prefix that you specify
when you define an item. Oracle Inventory can also generate lot number defaults for the entire
organization. In this case, you must define a lot number prefix at the Organization level in the
Organization Parameters window.
If you do not want Oracle Inventory to automatically generate lot number defaults for you, you
can enter your own lot numbers when you receive items. You can always override lot number
defaults. For more information See Defining Organization Parameters, Oracle Inventory User's
Guide.

Chapter 5 - Page 7
Quiz

Answer: a

Chapter 5 - Page 8
Lot Number Uniqueness

Lot Number Uniqueness
You use the Organization Parameters window to specify whether lot numbers should be
unique for an item. If you do not establish lot number uniqueness, you can assign the same lot
number to multiple items in the same organization and across organizations. If you set lot
number uniqueness to Across Items, you can assign a specific lot number only to a single
item. When you perform transactions, Oracle Inventory checks the lot number uniqueness
control to generate lot number defaults.

Chapter 5 - Page 9
Setting Up Lot Control (Item Attributes)

Setting Up Lot Control
Item Attributes
You can establish lot control for an item when you define it. You can select either No control
or Full control. If you choose Full Control, then you must assign lot numbers when you receive
the item into inventory. Thereafter, when you transact the item, you must provide a lot number
that you specified when you received the item.
You can update lot control options for an item if it has zero on hand quantity. In addition, you
cannot change lot control when open internal orders or inter-org intransit shipments exist. A lot
number is a combination of an alphanumeric prefix and a numeric suffix. When you define an
item, you can specify the starting lot prefix and the starting lot number. Oracle Inventory uses
this information to generate defaults during transaction entry.
Shelf Life Days
Shelf life is the amount of time that an item can reside in inventory before it expires. When
defining items under lot control, you can choose no control, a certain number of item shelf life
days from the date that you receive the item, or a user-defined expiration date for each lot.
The system does not consider the expired lot as on-hand supply when it performs min-max,
reorder point, or MRP planning calculations. You also cannot reserve an expired lot. See
Oracle Inventory User's Guide Inventory Attribute Group control.

Chapter 5 - Page 10
Grade Control
A grade is a rating that you assign to an item lot for quality control purposes. Grades are
typically based on criteria such as color, size, or quality of the lot. For example, the grade of a
lot of paint could be excellent, average, or poor. A grade is a characteristic of an item lot, and
never a lot location.
Note: The term grade is not necessarily an indicator of quality. For example, suppose a citrus
grower sells oranges based on size categories such as Grade 1, 2, and so on: Grade 1
oranges are larger and priced higher than the smaller Grade 2 oranges. In this example,
grade defines certain technical characteristics/specifications about the oranges but does not
define whether the oranges are of good or poor quality.

Chapter 5 - Page 11
Managing Lots

Managing Lots
Assigning Lot Numbers
You must assign lot numbers when you receive items under lot control. You can also add
quantities to existing lot numbers and split an inventory receipt into several lots, if necessary.
Oracle Inventory uses the default lot number generation method that you entered in the
Organization Parameters window to determine lot numbers – so the Lot Prefix and Starting
Number can be generated from either an Organization or Item-specific Prefix, based on the
Organization Parameters setting.
Note: Alternatively, if the setting is *User-Defined*, then the operator must manually enter or
scan the lot number.
If the item is under user-defined expiration date Lot Expiration (shelf life) Control, you must
specify the expiration date for the lot.
You can either use the lot master to generate new lot numbers or assign lot numbers when
you perform transactions. When you create the lot, the system determines the lot origination
type. If you create the lot on the lot master, the origination type is lot master. If you generate
the lot while performing a transaction, the origination type is Inventory. See Item Lots and
Assigning Lots Within Transactions, Oracle Inventory User’s Guide for more information.

Chapter 5 - Page 12
Maintaining Lot Information
You can update the expiration date of lots for items under lot expiration (shelf–life) control.
You can view all lots that you created in your current organization and the supplier lot
information that is associated with the lots.

Chapter 5 - Page 13
Quiz

Answers: a, c, d

Chapter 5 - Page 14
Expired Lots

Expired Lots
You can assign lot control shelf life days, or enter a lot expiration date to determine when a lot
expires. The expiration date controls the availability of the lot for transacting and planning
purposes. An expired lot:
• Is not considered as on-hand supply when you are performing min-max, reorder point, or
MRP planning calculations.
• Cannot be reserved for a date beyond the expiration date.
• Can be transacted and is included in on-hand quantities.
• Is included in all inquiries and reports, including inventory valuation reports
• Is included in a cycle count and count entry and adjustments are allowed
• Is included in a physical inventory and tag entry and adjustments are allowed
Lot Expiration Action
A lot expiration action is the action that you perform on a lot when it expires. You can assign a
default lot expiration to an item on the Item Master or when you generate a lot. To associate a
lot expiration action with a lot, you must define shelf life days for the item.

Chapter 5 - Page 15
Disabled Lots

Disabled Lots
Disabling a lot only prevents it from appearing in a list of values when you are performing
receipt transactions. If you type in the lot number, it is valid and accepted even though it was
not in the list of values. Disabling is used only for tailoring this specific instance of the list of
values for lot numbers. A disabled lot:
• Is included in available to transact, available to promise, and available to reserve
calculations
• Is included as on-hand supply when you are performing min-max, reorder point or MRP
planning calculations
• Is included as on-hand in all inquiries and reports, including inventory valuation report
• Can be transacted with Inventory functions and the Transaction Open Interface
• Can be reserved

Chapter 5 - Page 16
Quiz

Answer: b

Chapter 5 - Page 17
Lot Number Purging

Chapter 5 - Page 18
Cycle Counts Under Lot Control

Chapter 5 - Page 19
Physical Inventory Under Lot Control

Chapter 5 - Page 20
Serial Number Overview

Serial Numbers Overview
A serial number is an alphanumeric piece of information you assign to an individual unit of an
item. You use serial numbers to track individual item units. Serial number control is a system
technique for enforcing the use of serial numbers during a material transaction. You can use
serial numbers to track items over which you want to maintain very tight control. One serial
number is assigned to each unit of an item.
For more information on setting up serial number control, refer to the online help:
(Help) Oracle Manufacturing Applications > Oracle Inventory > Items > Lot and Serial Number
Control > Setting Up Serial Number Control

Chapter 5 - Page 21
Generating Serial Numbers

Serial Number Generation
How you set up serial number control at the master item level determines serial number
generation. If you specify No Control as the serial number control type, then the system does
not enforce serial number control. If you specify Predefined as the serial number control type,
then you must predefine serial numbers for that item. If you select At inventory receipt or At
sales order issue, then you can optionally predefine serial numbers for the item.
Oracle Inventory uses the starting serial number prefix and the starting serial number you
specify in the Item window to load the number of predefined serial numbers you request. You
can load as many serial numbers as you want for any item under serial number control.
The process of generating serial numbers is done through a concurrent report. This process
does not assign numbers to units in inventory, it simply reserves specific serial numbers for an
item for later use.
For more information on setting up serial number control, refer to the online help:
(Help) Oracle Manufacturing Applications > Oracle Inventory > Items > Lot and Serial Number
Control > Setting Up Serial Number Control
Note: Prefix and Starting Number can be Organization or Item-specific – and is determined at
the Serial Control Generation Setting on the Organization Parameters. Alternatively, they can

Chapter 5 - Page 22
also be User-Defined. If the Setting is User-Defined then the Operator must 'manually' ENTER
or SCAN the Serial Number. The system will not generate the Serial number.

Chapter 5 - Page 23
Serial Uniqueness

Serial Uniqueness
You use the Organization Parameters window to choose a type of serial number uniqueness
for your organization. You can choose to enforce uniqueness Within inventory items, Within
an organization, or Across organizations. The three levels for serial uniqueness are
cumulative, and the definitions are as follows:
• Within Inventory Items: Once you assign a serial number to a particular item you cannot
assign the same serial number to the same item regardless of the organization. For
example if you assign serial number SN100 to item A, you cannot assign serial number
SN100 to any other instance of item A in any organization. This also includes CTO items
derived from base model A. However you could receive item B with serial number SN100
in any organization.
• Within an Organization: In addition to the Within Inventory Items restrictions, the same
serial number cannot exist twice within the same organization. For example, if you assign
SN100 to item A, you cannot receive item B with the serial number SN100 in the same
organization. You can, however, receive item B with the serial number SN100 in any
other organization.
• Across Organizations: In addition to the Within an Organization restrictions, you cannot
assign the same serial number to any other item regardless of the organization. For
example if you assign SN100 to item A you cannot receive item B with the serial number

Chapter 5 - Page 24
SN100 in any organization. In this example SN101 and SN100 belong to different
organizations. If you assign Across Organizations uniqueness to any organization it
restricts the serial generation in all other organizations. If one organization dictates
Across Organizations, all other organizations must do so.

Chapter 5 - Page 25
Quiz

Answers: a, b, d

Chapter 5 - Page 26
Maintaining Serial Numbers

Chapter 5 - Page 27
Lot Genealogy

Lot Genealogy
You can view the genealogy of a lot controlled item in the Genealogy window. Using lot
genealogy, you can track the relationship between lots and trace lots resulting from inventory
transactions such as lot splits, merges, and translations. Lot genealogy also enables you to
view where a particular lot is used. For example, suppose one of your suppliers informs you
that they supplied you with contaminated sugar which needs to be recalled. Although you
already used this sugar as an ingredient to produce orange juice, you can use lot genealogy
to find each lot of orange juice containing the contaminated lots of sugar. You can use lot
genealogy to view the work order details for a WIP (work in process) job, material and pending
transactions, and quality results for both WIP jobs and process batches.
Note: Oracle Process Manufacturing does not support serial numbers or serial genealogy.

Chapter 5 - Page 28
Serial Genealogy

Serial Genealogy
Serial genealogy tracks the transaction and multilevel composition history of any serial-
controlled item from receipt to customer sale. The composition genealogy is captured through
material transactions in Oracle Work in Process thorough Oracle Shipping Execution.
Note: Serial numbers can be assigned for process items at the time of shipping.
The serial genealogy appears in a graphical display, and you can trace an assembly down
through all of its components or from the component to an assembly. This genealogy tracing
enables you to expedite problem isolation and improve customer response times. Serial
genealogy also helps you to track and regulate supplier performance and quality.
You can view the transaction history of the serial across all organizations within an operating
unit and view the current organization where the serial resides. When issuing serialized
components to serial controlled assemblies, you must associate the component serial number
with the assembly serial number. If the component has a supply type of Push, the association
occurs at WIP Issue. If the component has a supply type of Operation Pull, the association
occurs at WIP Move. If the component has a supply type of Assembly Pull, the association
occurs at WIP Completion. If the item is under lot control, then you can also view the lot
genealogy for the same item. When you view the genealogy of the item, the system lists the
item number, followed by the lot number, and finally the serial number.

Chapter 5 - Page 29
Lot and Serial Reports

Chapter 5 - Page 30

Chapter 5 - Page 31

Chapter 5 - Page 32
Profile Options

Chapter 5 - Page 33
Profile Options

Chapter 5 - Page 34

Chapter 5 - Page 35

Chapter 5 - Page 36
Summary


Chapter 5 - Page 37

Chapter 5 - Page 38
R12.x Transaction Setup
Chapter 6

Chapter 6 - Page 1

Chapter 6 - Page 2

Chapter 6 - Page 3
Objectives

Chapter 6 - Page 4
Overview

Transactions
A transaction is an item movement into, within, or out of inventory. A transaction changes the
quantity, location, planning responsibility, or cost of an item. Oracle Inventory supports a
number of predefined and user-defined transaction types. Every material movement has a
corresponding set of accounting transactions that Oracle Inventory automatically generates.
All transactions validate the various controls (revision, locator, lot, dual unit of measure, and
serial number) you enable for your items.
For more information about transactions, see Overview of Inventory Transactions, Oracle
Inventory User’s Guide.

Chapter 6 - Page 5
Inventory Transactions

Inventory Transactions
Inventory transactions enable you to:
• Receive items into your organization.
• Issue items out of your organization.
• Transfer items from one subinventory in your organization to another subinventory in the
same organization
• Transfer items between organizations

Chapter 6 - Page 6
Move Orders

Move Orders
Move orders are requests for the movement of material within a single organization. They
formalize the process to request the movement of material within a warehouse or facility for
purposes like replenishment, material storage relocations, and quality handling. Move orders
are generated manually or automatically depending on the source type. To request a material
transfer between organizations requires an internal requisition.
Move Order Requisitions
A move order requisition is a manually generated request for a move order. It is available for
subinventory transfers and account transfers. Once a requisition has been approved, it
becomes a move order. These requests can optionally go through a workflow-based approval
process before becoming move orders. For more information about move order requisitions,
see Generating Move Order Requisitions, Oracle Inventory User’s Guide.

Chapter 6 - Page 7
Quiz

Answer: b

Chapter 6 - Page 8
Transaction Source Types

Transaction Source Type
Oracle Inventory uses a transaction source type with a transaction action to uniquely identify
the type of transaction performed. You can define additional source types. Predefined
transaction types are as follows:
• Purchase Order
• Account Alias
• Account
• Move Order
• Internal Order
• Standard Cost Update
• Internal Requisition
• Sales Order
• Cycle Count
• Periodic Cost Update
• Physical Inventory
• RMA (Return Material Authorization)

Chapter 6 - Page 9
• Inventory
• Job or Schedule
• External Requisition
• Layer Cost Update
• Project Contract
When you perform a transaction, you specify a transaction type and a source. For example,
for a PO receipt transaction, the transaction source type is Purchase Order and the actual PO
number is the source.

Chapter 6 - Page 10
Transaction Action

Transaction Action
You use transaction actions with a source type. A transaction action identifies a transaction
type. Oracle Inventory provides the following transaction actions:
• Issue from stores
• Subinventory transfer
• Direct organization transfer
• Cycle count adjustment
• Physical inventory adjustment
• Intransit receipt
• Intransit shipment
• Cost update
• Receipt into stores
• Delivery adjustments
• WIP scrap
• Assembly completion
• Assembly return

Chapter 6 - Page 11
• Negative component issue
• Negative component return
• Staging Transfer
• Ownership Transfer
• Logical Issue
• Logical Delivery Adjustment
• Retroactive Price Adjustment
• Logical Receipt
• Delivery Adjustment
• Lot Split
• Lot Merge
• Lot Translate

• Lot Update Quantity
• Logical Expense Requisition Receipt
• Planning Transfer
• Ownership Transfer
• Logical Intercompany Sales
• Logical Intercompany Receipt
• Logical Intercompany Receipt Return
• Logical Intercompany Sales Return
• Container Pack
• Container Unpack
• Container Split
• Cost Group Transfer
• Logical Intransit Receipt
• Logical Intransit Shipment
• Retroactive Price Update
• Container Transaction
• COGS Recognition
• Residual Quantity Issue
• Residual Quantity Return

Chapter 6 - Page 12
Transaction Reasons

Chapter 6 - Page 13
Transaction Types

Transaction Types
A transaction type, which is a combination of a transaction source type and a transaction
action, is used to classify a particular transaction for reporting and querying purposes. Oracle
Inventory also uses transaction types to identify certain transactions to include in historical
usage calculations for ABC analysis or forecasting. Oracle Inventory provides some
predefined transaction types, and you can also create custom transaction types.
In the Transaction Types window, you can define additional transaction types to customize
transaction entry. A user-defined transaction type is a combination of a user-defined
transaction source type and a predefined transaction action. For example, if you frequently
donate items to charity, you might want to define a transaction source type called charity and
a transaction type called Issue to Charity. In this case, the transaction action would be Issue
from Stores. You would then use the Miscellaneous Transactions window to actually issue an
item to charity, using the Issue to Charity transaction type. You would also specify the actual
charity to which you are issuing, such as Goodwill, and the expense account that specifies the
source Goodwill. For more information about transaction types, see Transaction Types,
Oracle Inventory User’s Guide.

Chapter 6 - Page 14
Predefined Transaction Types

Predefined Transaction Types
Oracle predefines transaction types in the system. The table in the slide contains a few
examples of predefined transaction types. For more information on Predefined Transaction
types, see Transaction Types, Oracle Inventory User’s Guide.

Chapter 6 - Page 15
Quiz

Answer: b

Chapter 6 - Page 16
Transaction Managers

Transaction Managers
(N) > Setup > Transactions > Interface Managers

Chapter 6 - Page 17
Running Transaction Managers

Running Transaction Managers
Cost Transaction Manager
The material cost transaction manager costs material transactions in Oracle Inventory and
Oracle Work in Process in the background.
Lot Move Transaction Manager
The resource cost transaction manager processes resource transactions in Oracle Work in
Process and resource transactions you import from barcode readers, payroll systems, time
cards, routing sheets, and custom data entry forms using the Open Resource Transaction
Interface.
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: immediately through immediate concurrent request
submissions, or through periodic concurrent request submissions. You define this transaction
mode for individual transaction windows in the Personal Profile Values window.

Chapter 6 - Page 18
Move Transaction Manager
The move transaction manager processes move transactions in Oracle Work in Process and
move transactions you import from devices such as portable bar code readers or your custom
data entry forms using the Open Move Transaction Interface.

Chapter 6 - Page 19
Creating Picking Rules

Creating Picking Rules
You can create picking rules that enable you determine which material to pick and the order in
which material is picked for sales orders, process manufacturing batches, or work in process
jobs. Oracle Inventory reviews the picking criteria order and the options for each criterion. You
can create rules based on the following restrictions:
• Lot shelf life days
• Single lot: Controls whether the system can allocate multiple lots for a particular demand.
• Partial lot: Controls whether the system can allocate quantities of a lot less than the total
lot quantity available.
• Customer specification matching: To require quality specification matching.
You can also create sort criteria which determines which material is picked first:
• Lot
• Revision
• Subinventory
• Locator

Chapter 6 - Page 20
Quiz

Answers: a, b, d

Chapter 6 - Page 21
Picking Rules and Oracle Order Management
When you define an item, you select a picking rule to determine the order in which revisions,
lots, subinventories, and locators are picked for sales orders. Oracle Shipping Execution
submits requests to Oracle Inventory, which uses the information you enter in the Inventory
Picking Rules window to generate pick lists for sales orders. If you select None for any of the
criteria fields, then Oracle Inventory ignores that criterion. For example, if you select None for
Revision, then Oracle Inventory picks units of an item regardless of revision levels. Oracle
Inventory evaluates the picking criteria in the order in which they appear in the Inventory
Picking Rules window. Then, Oracle Inventory looks at the options (except for None options).
Assigning Picking Rules
• (N) Warehouse Manager: Setup > Warehouse Configuration > Rules > Warehouse
Execution > Rules Workbench
After a rule has been created in the Inventory Picking Rules page, you can assign it to one or
more criteria available in the Rules Workbench window. For example, after you create a
picking rule that allocates material by lot number (in ascending order) followed by locator (in
ascending order), use the Rules Workbench window to assign the rule to an item. This means
for picking, the system allocates the lowest lot number of the item in the lowest locator number
where the item resides.

Chapter 6 - Page 22
The system automatically assigns a sequence number and return type to the rule. You can
modify the sequence number, but you cannot modify the return type. The return type is a
strategy, rule, or value.

Chapter 6 - Page 23
Defining Pick Slip Grouping Rules
Create grouping rules in the Pick Slip Grouping Rules window to organize how picking lines
for released sales orders are grouped on to pick slips. For example, if you select Delivery as a
grouping criteria, all picking lines for the same delivery are grouped together on a pick slip. If
there are multiple deliveries, multiple pick slips are created. You can also define your grouping
criteria further by selecting additional grouping attributes. For example, if you select Delivery
and Carrier as grouping criteria, picking lines for the same delivery and carrier are grouped
together on a pick slip.

Chapter 6 - Page 24
Account Aliases

Aliases
An account alias is an easily recognized name or label representing a general ledger account
number. You can view, report, and reserve against an account alias. During a transaction, you
can use the account alias instead of an account number to refer to the account.
You must create an inventory account alias for each GL account if you wish to use an alias for
that GL account in inventory transactions. Oracle Inventory does not honor GL account
aliases.

Chapter 6 - Page 25
Quiz

Answer: a

Chapter 6 - Page 26
Accounting Periods

Accounting Periods
Oracle Inventory uses accounting periods to group material and work in process transactions
for accounting purposes. An accounting period must be open for you to complete a
transaction; that is, the transaction date you enter must fall within the beginning and ending
dates you define for the period.
Closing Accounting Periods
You can close the earliest accounting period with a status of Open or Error. An automatic
general ledger transfer is processed when you close an accounting period.

Chapter 6 - Page 27
Material Shortage Alerts and Notifications

Material Shortage Alerts and Notifications
A material shortage occurs whenever outstanding demand exceeds the available quantity for
incoming supply. During a receipt transaction, Oracle Inventory checks to see if the material
received is needed elsewhere in the organization. If a shortage exists, the system notifies you
either by a real–time material shortage alert or a workflow–based notification. Set up shortage
parameters to enable the system to send material shortage alerts and notifications. For more
information see Defining Shortage Parameters, Oracle Inventory User’s Guide.
The following receipt transaction windows can generate shortage alerts and notifications.
• Receipts
• Receiving Transactions
• Miscellaneous Transactions
• WIP Material Transactions
• WIP Completions
• Work–Orderless Completions - This occurs only if you have used workflow notification for
the transaction.

Chapter 6 - Page 28
Shortage Alerts
The shortage alert appears in the window during the transaction with the option to go to the
View Potential Shortages form, showing where the shortage exists. Alerts are automatic once
they are set up. Notifications are optional and can be sent to a pre–specified list of individuals.
Sources of Demand
When generating shortage alerts and notifications, the system considers one or more of the
following to be sources of demand:
• WIP jobs
• WIP schedules
• Sales order lines that have been pick released and detailed but for which adequate
quantity was not sourced
Supply Types
The system considers the transaction types you select as supply for the unsatisfied demand.

Shortage alerts and notifications are triggered for system or user defined transaction types
with transaction actions of:
• Receipt into stores
• Intransit receipt
• Direct organization transfer
• Assembly completion
• Negative component issue

Chapter 6 - Page 29
Setting Up Shortage Alerts and Notifications

Setting Up Shortage Alerts and Notifications
• Define the shortage parameters the system will use to detect material shortages.
• Define the transaction types that will trigger shortage alerts and notifications.
• Define which items in the system will trigger a shortage alert or notification when they are
in demand.
• Define the individuals to be notified.

Chapter 6 - Page 30
Setting Up for Move Orders

Setting Up Move Orders
Subinventory Source Type
For Oracle Inventory to automatically create move orders when using min–max planning or
replenishment counting, you must define the subinventory source type at one of the following
levels:
• Subinventory
• Item
To automatically create move orders when using the kanban system, you must define the
subinventory source type at the pull sequence level.
Approval Process Parameters
Approval is required only for requisition move orders. Other move orders created by shipping
or replenishment processes are approved automatically. To require planner approval, you
define two parameters at the organization level:
• Move Order Timeout Period
• Move Order Timeout Action
You can also specify individuals to be notified if a shortage occurs. To bypass the approval
process and automatically approve move order requisitions, enter 0 days for the Move Order

Chapter 6 - Page 31
Timeout Period and select Automatically Approve for the Move Order Timeout Action. The
approval process is also not enabled for organization items without an assigned planner.
Item Transaction Defaults
You can define the item transaction defaults to automatically populate the destination locator
on the move order line from an organization item.
(N) > Setup > Transactions > Item Transaction Defaults.
Move Order Time-Out
Use move order time-out if you want to require approvals for the move orders in your
organization.
Time-out Period
The length of time, in days, you will let your move orders sit in a pending-approval queuing
status.
The following rules apply when you set up time-outs:

• After one time-out period, a reminder is sent to the approver.
• After two time-out periods, the move order time-out action is performed.
• The time-out action is either approved or rejected.
• If the time-out period is 0, all move orders are automatically approved.
• If the time-out period is left blank, the setting defaults to 0.

Chapter 6 - Page 32
Setup Steps for Move Orders

Setup Steps for Move Orders
Set Up Planner
Define a planner for the item in the General Planning tabbed region of the Items window.
Designate a Planner
You designate a planner in the Master Item window when you define an item. If you do not
designate a planner, the move order is automatically approved.
Notification List
When you approve or reject the move order, the system sends a courtesy e-mail to the
Engineering Change Order (ECO) approval list (which is used here as a notification list). It is
attached to the move order source and destination subinventory. You do not need to have
Oracle Engineering to use this feature.
Define Picking Rules
Move orders use the standard picking rules of Oracle Inventory to source material. In a WMS
organization, move orders use Oracle Warehouse Management picking rules.

Chapter 6 - Page 33
Locator Defaults
If a subinventory or item is locator controlled, when you create the move order receipts,
specify a destination locator. If you do not specify a destination locator, the allocating process
uses the item transaction default.
For more information see:
(Help) Oracle Manufacturing Applications > Oracle Inventory > Transactions > Overview of
Move Orders > Setting Up Move Orders

Chapter 6 - Page 34
Profile Options

Chapter 6 - Page 35
Profile Options

Chapter 6 - Page 36
Profile Options

Chapter 6 - Page 37
Profile Options

Chapter 6 - Page 38
Profile Options

Chapter 6 - Page 39
Implementation Considerations for Shortage Checks

Answer the following questions to determine which of the following demand sources should be
considered potential shortages.
• Which inventory organizations should be checked for shortages?
• Which type and statuses of WIP jobs/schedules should be checked for shortages?
Answer the following questions to determine the individuals and the method for delivering
shortage messages.
• Should workflow alerts and notifications be generated when actual shortages exist?
• Who should be notified?
• How frequently should notifications be sent?

Chapter 6 - Page 40
Implementation Considerations for Move Orders

Chapter 6 - Page 41
Summary


Chapter 6 - Page 42

R12.x Oracle Inventory Management Fundamentals: D60263GC10 Edition 1.0 April 2010 D66274

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