Oracle Outside

Processing
By:
Devendra Gulve

http:// Oracle Outside Processing

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 Overview of Outside Processing

• The competitive advantages of outside

processing include:
– using specialized supplier skills in manufacturing
process to help lower engineering and manufacturing
costs and increase production quality
– using supplier capacity to temporarily or permanently
increase overall production capacity
• Oracle Manufacturing allows to include supplier-
sourced components and resources in
manufacturing processes.

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 Outside Processing Items and Outside
Resources

• Outside processing items represent supplier-sourced

items, resources, and services included to build process
• Can define outside resources and associate them with
these outside processing items. The outside resources
are included on your routings for scheduling and costing
purposes.
• Work in Process automatically sends requisitions for the
outside processing items associated with outside
resources when you perform move transactions on jobs
or repetitive schedules with outside processed
assemblies
• Purchasing charges outside resources to jobs or
repetitive schedules when you receive the outside
processing items

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 Setups in Inventory

• Define an item representing the outside

processing vendor labor for Purchasing to place
on the vendor PO.  In the Item Master
Purchasing Attributes region, make sure the
following attributes are set correctly:
– Purchased = Yes (required).
– Purchasable = Yes (required).
– Outside Processing Item = Yes (required)
– Outside Processing Unit Type = Assembly or
Resource

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 Setups in Inventory
• Outside Processing Unit Type = Assembly or Resource
(Assembly is recommended if a tangible item) If the item has an
Outside Processing Unit Type of Assembly and the outside
resource has a basis of Item, you receive one outside processing
item for each assembly you receive.  If the outside resource has a
basis of Lot, you receive one outside processing item for each job
or repetitive schedule.  If the outside processing item has an
Outside Processing Unit Type of Resource and the outside
resource has a basis of Item, you receive the extended quantity
(using the outside resource usage rate or amount) of the outside
processing item for each assembly you receive.  For example, if
you purchase 3 hours of plating service for each assembly,
(usage rate or amount is 3), then you receive a quantity of 3
hours for each assembly you receive from the supplier. If the
outside resource has a basis of Lot, you receive 1 outside
processing item extended by the outside resource usage rate or
amount for each job or repetitive schedule.

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 Define OSP Item

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 Setups in Bills of Material
• REQUIRED: Define an Outside Processing Department. 
Enter the location where the outside processed item is to
be delivered (example:  “Shop Floor” or “Assembly”) as
you define the Outside Processing Department.  Note: 
the location must have been previously defined under
Purchasing > Setup > Organizations > Locations.
• REQUIRED: Add the outside processing resource to a
step on the routing. If it is added to the last step, then the
item can be received into inventory as soon as the PO
receipt is entered and the transaction managers run.

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 Setups in Bills of Material
• Make sure that the autocharge attribute is set to PO
MOVE, not PO Receipt.  If you set this attribute to PO
MOVE, then the PO receipt automatically generates the
WIP Move transaction from the outside processing
operation to the next operation on the routing.  If you use
PO RECEIPT, you must manually perform the WIP Move
transaction. The quantity of outside processing items you
receive can relate to the assembly quantity on the job or
repetitive schedule in several ways depending on the
outside processing item’s Outside Processing Unit Type
and the outside resource’s basis. In all cases, Purchasing
charges the job or repetitive schedule using the extended
quantity of the associated outside resource.

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 Define OSP Resource

Assign OSP
Item here

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 Assign Resource to OSP Dept.

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 Define Std. Operation

Std. Operation

Assign OSP
Resource to the
operation

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 Define Routing

Add OSP Operation

to the routing

Note Operation Seq.

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 Check / Add resources

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 Define BOM

Assign OSP Operation to

required component

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 Enter Discrete Job

• Create a discrete job for the assembly. If the

outside processing step is on the first step on the
routing, releasing the job will trigger creation of
the requisition. If the outside processing step is
NOT the first step, then a move transaction must
be performed using the Move Transaction
window.  Move the quantity to be processed by
the outside vendor into the Queue step of the
outside processing operation step. This triggers
creation of the requisition

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 Enter Discrete Job

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 Check Routing for Assembly

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 Check Resources for OSP
operation

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 Release Job

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 Move Transactions

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 Move Transactions

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 Requisition Import

• Now the job is in Queue step of operation 40, which is

Out-Side Processing operation (OSP). As explained
before at this point in time one requisition gets triggered
for item assigned to resource of OSP operation.
• Requisition import program needs to be run to create
requisition.
• Run program with Import Source= WIP

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 Requisition Import

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 Requisition Import

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 Search for Req. Created

Item assigned to
resource of OSP
Operation

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 Requisition Details

Note the details PO has not

yet created

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 Auto Create PO

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 Auto Create PO

• Select the line.

• Provide Supplier Details on next screen

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 Auto Create PO

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 Requisition Details

• Query the requisition once again and see the PO number

populated.

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 PO Details

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 PO Shipment Details
• In the PO line, set the over receipt tolerance for the item
to zero so that no one can receive a quantity greater than
on the PO. If a quantity greater than that in the work
order is received, it will cause problems with the WIP
move transaction to the next operation. THIS IS VERY
IMPORTANT. There will be problems if more is received
than is on the work order outside processing operation
step. This is another reason to use a blanket PO

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 Submit PO for Approval

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 Approved PO

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 Query PO for Receipt

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 Save Receipt

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 Receiving Transaction Summary

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 PO received and delivered
• Once the PO has been received and delivered, and the
Move transaction manager has run, you can see that the
discrete job has been updated and the item is now in the
“To Move” intra-operation step of the outside processing
operation step.
• Go to WIP > Job/Schedule Details > Operations and select
the Quantity alternative region. You should see the
received quantity in the To Move intra-operation step of the
outside processing operation step.
• If the Move transaction has failed or has not yet run, you
will see it in WIP > Move Transactions > Pending
Transactions.

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 Checking Status of Job

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 Checking Status of Job

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 Completion Transactions

• If the step is the last step on the routing, do a WIP

completion transaction into inventory. Otherwise,
continue with the routing steps until complete

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 Completion Transactions

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 Completion Transactions

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 Complete Discrete Job

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 Thank You
• Please post your comments on

• http://functionalguy.blogspot.com/2008/10/out-side-proce
ssing-wip.html

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