R12.

x Defining Inventory Organizations

Copyright 2010, Oracle and/or its affiliates. All rights reserved.

 Objectives

After completing this lesson, you should be able to:

Understand the structure of an inventory organization.
Understand the multi-organization structure in Oracle
Applications.
Understand how to use the organization reports.
Understand how to set up the organization profile options.
Understand organization implementation considerations.

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 Inventory Organizations

Distribution Center

Company Warehouse
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.

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 Inventory Organization Structure

Subinventories are
unique physical or logical
Organization separations of material
inventory, such as raw
material inventory,
finished goods inventory,
or defective goods
inventory.
Subinventories

You can set up an inventory

organization without subinventories;
however, you cannot transact items
You use locators to in that inventory organization until it
identify physical areas has at least one subinventory.

where you store

inventory items. Locators

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 Quiz

An inventory organization where you store and transact items

can have only one subinventory:
a. True
b. False

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 Sample Inventory Organization

Receiving Raw materials Manufacturing

sub sub sub
Inbound

Finished goods Inspection Defective

sub sub goods
sub

Shipping sub

Outbound Outbound

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 Multi-Organization Structure

What is multi-organization structure?

Applications and database enhancement
Enables you to consolidate your operations under one
installation of Oracle Applications on a single global
instance
Enables you to keep transaction data secure by line of
business

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 Setting Up Locations

Define information describing

the physical locations of
employees and
organizations.
Locations are shared between Physical location
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.

Employees Organizations

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 Defining Organizations

each inventory organization

Ledger to an operating unit. Each
operating unit is associated
to a legal entity and a
primary ledger
Operating unit

organization classifications
Inventory are inventory organization,
Inventory
legal company, and HR
Organization A organization. Organization B

Subinventory Subinventory Subinventory Subinventory

Locator Locator Locator Locator Locator

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 Quiz

Locations define information about the physical locations of

employees and organizations:
a. True
b. False

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 Inventory Parameters

The Inventory Parameters tab enables you to:

Set up organization information
Enable related, optional Oracle Applications

Oracle Enterprise
Asset Management

Oracle Process Oracle Warehouse

Execution Management

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 Costing Parameters

Which costing method is the organization going to use?
Standard
Average
LIFO (last-in-first-out)
FIFO (first-in-first-out)

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 Revision, Lot, Serial, and License Plate Number
(LPN) Parameters

Revision parameters Lot parameters

Revision A Lot 403B

Serial parameters LPN parameters

Item AS5222
Serial #5847329 LPN101

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 ATP, Pick, Item-Sourcing Parameters

The ATP, Pick, Item-Sourcing Parameters tab enables you to:

Set the available to promise (ATP) default rule for the
organization
Set the picking defaults for the organization
Set the item-sourcing defaults for the organization

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 Interorganization Parameters

The Inter-Org Information tab enables you to determine the

parameters the organization uses when it transfers material
between organizations.

M1 Seattle M2 Boston
manufacturing manufacturing

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 Other Account Parameters

You use the Other account parameters tab enables you to set
up receiving account information, profit and loss account
information, and other additional accounts.

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 Warehouse Management Parameters

If you have Oracle Warehouse Management installed you can

enter organization parameters that apply only to Oracle
Warehouse Management.

Oracle Warehouse
Management

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 What Is a Subinventory?

Finished goods

Raw materials

Defective items

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 What Is a Subinventory?

Storage Subinventory Receiving Subinventory

Mandatory Optional
Tracking of goods is Tracking of goods is
possible possible
Material reflects in on- Does not reflect in on
hand quantity hand quantity
Available if receipt is
made through use of
Oracle Warehouse
Management and Oracle
Mobile Supply Chain
Applications

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 Defining Subinventories

Subinventory
Physical or logical separation of material
You must define at least one subinventory for each
organization

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 Locator Control

In coordination with locator settings at the

subinventory and item level, you must first
specify locator controls at the Organization
level

Row

None: Inventory transactions within this organization do not require

locator information.
Prespecified only at item level: Inventory transactions within this
organization require a valid, predefined locator for each item. Rack
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. Bin

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 Dynamic and Static Locators

Dynamic Locators Static Locators

Generate during a Predetermined
transaction as needed

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 Quiz

Locators may represent the following entities in warehouses:

a. Organizations
b. Aisles
c. Rows
d. Shifts

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 Subinventory-Locator Relationship

With locator control Without locator control

Subinventory: BULK Subinventory: FROZEN

The possible locator

control types are:
None
Prespecified
Dynamic entry
Item Level

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 Locator Flexfield Structure

M1 Seattle M2 Boston
Locator flexfield structure is common
across all organizations (sub inventories)
but names should be different
Row 1A Row 1A

Rack 1A Rack 1A

Bin 1A Bin 1A

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 Interorganization Shipping Networks
moves material to
an intermediary
Intransit shipment

Shipping methods
Shipping organization
GL accounts to use in transit
Material ownership during transfers
Planning transfer
Direct organization lead-times
Transfer charges

Destination organization Destination organization

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 Shipping Method

Shipping methods are the

way you ship material

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 Additional Setup Steps

Employees

Employees who perform Planners

cycle and physical
inventory counts.
Freight carriers

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 Quiz

When you set up a shipping network, you must select a transfer

type. Select the valid transfer type(s):
a. Intransit
b. Docking
c. Direct
d. COD

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 Additional Organizational Setups

Organization access Material shortages

This controls trigger shortage alerts and
access to
organizations notifications
based on the user
responsibility
assigned to a user
by the system
administrator.

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 Copying Inventory Organizations

Copy organization

M1 Seattle M2 Boston
manufacturing manufacturing
1. This model organization must be a transactional
organization and not an item master organization.
2. You can copy only organizations within the same
operating unit.
3. 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.

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 Additional Organizational Setups

You can choose to copy When you copy a

the following model organization
information from the the system
model organization: automatically copies
the following
Organization definition information:
Shipping networks
Hierarchy assignments Subinventories
Bills of material and bills of Locators
material parameters
Work in Process parameters
Departments, resources, and
Work in Process accounting
routings
classes
Item information
Planning parameters
Shipping parameters

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 Organization Hierarchy

Organization hierarchies
enable you to group
together organizations and
perform operations across
all organizations within a M1 Seattle
hierarchy manufacturing

M2 Boston M3 Dallas M6 Phoenix

manufacturing manufacturing manufacturing

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 Inventory Reporting

Copyright 2010, Oracle and/or its affiliates. All rights reserved.

 Organization Reports

Report Description

Item-Subinventory Report Lists items assigned to subinventories.

Locator Quantities Report Shows inventory item quantities stored in specific

locators.
Subinventory Quantities Shows inventory item quantities by subinventory.
Report

Freight Carrier Listing
Inter-organization Shipping
Information Listing
Locator Listing
Lists the freight carrier codes for the current
organization.
Lists the shipping networks for the current
organization.
Lists the locators for the current organization.

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 Organization Reports

Report Description

Organization Parameters Listing Lists the organization parameters for the current
organization.
Subinventory Listing Lists the subinventories for the current
organization.
Organization Hierarchy Displays all organizations belong to a legal entity
Exceptions Report that are not assigned to an organization
hierarchy.

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 Profile Options

Profile Option Description

INV: Inter-Organization Indicates the currency conversion for inter-

Currency Conversion organization transfers between organizations using
different currencies. Available values are: Corporate,
Spot, or User.
TP: INV Inter-Organization Indicates the processing control of inter-organization
Transfer form transfers in the Inter-Organization Transfer window.
Available values are: Background processing
(periodically), Concurrent processing (in parallel), or
On-line processing (Default, immediately).

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 Additional
Implementation Considerations

Copyright 2010, Oracle and/or its affiliates. All rights reserved.

 Additional Implementation Considerations

Products and features

Do you need to set up additional products or features?

1. Need to determine if
organization is a process or
a discrete organization

Oracle Process Oracle Enterprise Oracle Warehouse

Execution Asset Management Management

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 Implementation Considerations

Subinventories
Is it necessary to differentiate between receiving and
storage subinventories in your warehouse?
Do you need to link your receipts to a receiving location?
Do you need to track material without it appearing in on-
hand quantity?

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 Implementation Considerations

Locator control
Do you need to implement locator control?
Do you need to need to implement locator control for the
organization, for individual subinventories, or at the item
level?
Should locator control be predefined, just-in-time, or both?

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 Implementation Considerations

Organization access
Should all responsibilities have access to the organization?
Which responsibilities should have access to the
organization?

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 Implementation Considerations

Shipping networks
Do you need to ship material between organizations?
Do you need to track inventory between transfers?
How do you want to ship material between organizations?
Do you ship material to Japan, Korea, or Taiwan?

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 Implementation Considerations

Shipping networks
Who owns the material until receipt the shipping
organization or the receiving organization?
Which receipt routing do you use standard, direct, or
inspection required?
Is an internal order required for each shipment?

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 Summary

In this lesson, you should have learned how to:

Understand the structure of an inventory organization.
Understand the multi-organization structure in Oracle
applications.
Understand how to use the organization reports.
Understand how to set up the organization profile options.
Understand organization implementation considerations.

1 - 45 Copyright 2010, Oracle and/or its affiliates. All rights reserved.