Back-to-Back Order Cycle In Order Management

Key Business Drivers

 Do not have stock

 Do not manufacturing
 Lower inventory cycle time and cost
 Link supply to specific demand
 Can offer a variety of product to customer
 Used heavily in contract manufacturing environment where the product is standardized and the company plans to focus more
on product design rather than manufacturing.1

JRD

DHL PO

Supplier Customer
1. Create a B2B item :
o In the Order Management tab, check the Assemble to Order flag (ATO).
o In the Purchasing tab, enter a value in the List Price field (in this demo it is 100).

o In the Work in Process tab, make sure the Build in WIP flag is checked.

o In the General Planning tab, set the Make or Buy flag to Buy.

o Save, and assign to Organization M1

Note: the ATO item attribute is checked as the B2B process utilizes the ATO process of the workflow. However, the item is
not manufactured in WIP, and instead is a 'Buy' item that is replenished by a supply order in PO. Hence the item may also
be called an ATO Buy item
2. Assign the item to the price list
3. Make sure the following periods are open:
1. Inventory Accounting Periods
2. Purchasing Periods
3. GL Period

4. Create a sales order with Order Type Mixed and enter the B2B item in the lines for any quantity.
 Keep Source Type=Internal. (If it is External then it will be a Drop Ship order)

5. Book the order. Note down the Order Number

 The line status will move to Supply Eligible (flow_status_code SUPPLY_ELIGIBLE)
6. Place cursor on the line and go to Actions > Progress Order. Select Create Supply Order - Eligible to progress the workflow of
the line
 The line status will now show PO-ReqRequested (flow_status_code PO_REQ_REQUESTED)
 OM has inserted a record in the PO requisitions interface table.
 Check reservation status: Go to Tools > Scheduling > Reservation Details > 'Supply' tab. Right now it is Inventory as
Requisition is not yet created.
7. Go to Purchasing > Reports > Run and run the concurrent program Requisition Import with the Import Source parameter =
CTO (or blank). Leave the other parameters as default. The concurrent program can also be run from OM > Orders, Returns >
Requisition Import
 The line status of the sales order line will now show PO-ReqCreated (flow_status_code PO_REQ_CREATED)
 Check Reservation status: Go to Tools > Scheduling > Reservation Details > 'Supply' tab. As the requisition has created now
the supply for reservation changes
 8. Go to Purchasing > Requisitions > Requisition Summary.

 In the Find Requisitions window, enter requisition number found in the previous step and click on Find.
 Verify that the status is Approved Requisition must have status APPROVED as we ran Req. Import with Requisition approval
initiation= Yes

9. Go to Purchasing > Autocreate.

 From Edit > Clear > Record, clear any query criteria that may be defaulted.
 Enter requisition number and click Find.
 Check the checkbox to the left of the line, and click on Automatic.
 Enter the Supplier and Supplier site such as the following and click on Create

10. The Purchase Order form will automatically open with the PO that got created.

 Click on the Approve button.

 Click on the OK button in the Approval Documents window to approve the PO.
 Note down the PO number, and verify that the status is Approved.

For More details also Refer: Requisition to Pay Cycle

 The line status of the sales order line will now show PO-Created (flow_status_code PO_CREATED).
 Check Reservation status: Verify that the order line is reserved against the PO.
11. Go to Purchasing > Receiving > Receipts.

 Enter Purchase Order number and click on Find.

 In the Receipts window, check the checkbox to the left of the line and enter
1. Destination Type : Inventory
2. Subinventory : FGI
3. Save the receipt.

12. Go to Purchasing > Receiving > Receiving Transactions Summary.

 Enter the Purchase Order number and click on Find.

 Click on the Transactions button.
 Verify a Receive and Delivery transaction. This means that the B2B item has been received into Inventory.

 The line status of the sales order line will now show Awaiting Shipping (flow_status_code = AWAITING_SHIPPING)
 Check Reservation status: As the material is now in FGI sub-inventory, supply changes to Inventory.

 Check Shipping status of Order on shipping Transaction Form.

13. Pick Release the Sales Order
 Make sure all the concurrent program gets completed successfully.

 Check Shipping status of Order on shipping.

 Check Line Status on Order.

14. Now the Line is eligible for Shipping Activity. Ship the Order and verify the line status.

15. Go ahead with invoicing the Order Line/s.

16. In this case there will be two invoices.
1. One in AR which will be issues against Sales Order
2. One in AP which will be issued against Purchase Order / Receipt.