Oracle Apps – Manufacturing & Distribution

Inventory Setups
1. Define System Items Key Flexfield (R)
2. Define Item Categories Key Flexfield (R)
3. Define Item Catalog Group Key Flexfield (R)
4. Define Stock Locators Key Flexfield (R)
5. Define Account Aliases Key Flexfield (R)
6. Define Sales Orders Key Flexfield (R)
7. Define Locations (O)
8. Define Employees (O)
9. Define Organization Calendar (R)
[Link] Organizations (R)
[Link] Organization Parameters (R)
[Link] Organizations (R)
[Link] Intercompany Relations
[Link] Receiving Options (O)
[Link] Picking Rules (O)
Oracle Apps – Manufacturing & Distribution
Inventory Setups
[Link] ATP Rules (O)
[Link] Planners (O)
[Link] Unit of Measure Classes (R)
[Link] Unit of Measure (R)
[Link] Unit of Measure Conversions (O)
[Link] Subinventories (R)
[Link] Stock Locators (O)
[Link] Item Attribute Controls (R)
[Link] Categories (R)
[Link] Category Set (R)
[Link] Default Category Sets (R)
[Link] Statuses (R)
[Link] Item Catalog Groups (O)
[Link] Item Types (O)
[Link] Item Templates (O)
Oracle Apps – Manufacturing & Distribution
Inventory Setups
[Link] Items
[Link] Cross–Reference Types (O)
[Link] Item Delete Constraints (O)
[Link] Cost Types (R)
[Link] Cost Activities (O)
[Link] Material Sub–Elements (O)
[Link] Material Overheads (O)
[Link] Default Material Overhead Rates
(O)
[Link] Freight Carriers (O)
[Link] Organization Shipping Network (O)
[Link] Shipping Methods (O)
[Link] Movement Statistics Parameters (O)
[Link] Economic Zones (O)
[Link] Account Aliases (O)
Oracle Apps – Manufacturing & Distribution
Inventory Setups

[Link] Transaction Types (O)

[Link] Transaction Reasons (O)
[Link] Purchasing Options (O)
[Link] Accounting Periods (R)
[Link] Interface Managers (O)
[Link] Profile Options (R)
[Link] Container Types (O)
[Link] Commodity Codes (O)
[Link] Customer Items (O)
[Link] Customer Item Cross References (O)
[Link] Notification List
[Link] Shortage Parameters
[Link] Kanban Pull Sequences
Oracle Apps – Manufacturing & Distribution
Item Category
Sequence of Steps for Item Category

 Define Structure
 Define Segment
 Define Value Set
 Freeze Flexfield
 Compile Flexfield
 Define Value
 Define Category Codes
 Define Location
Oracle Apps – Manufacturing & Distribution
Item Category
Sequence of Steps for Item Category
 Define Calendar
 Define the Item Master Org
 Define Organization
 Define Category Sets
 Assign Items to a Category Codes
 List the items belonging to a
particular Category
 Assign Default Category Set
 Generate Item Category Report
Oracle Apps – Manufacturing & Distribution
Category Set
 Master Level: Item assigned to this
category set has the same
category value in all organizations
where it is assigned.

 Org Level: Item assigned to this

category set may have a different
category value in each
organization where it is assigned.
Oracle Apps – Manufacturing & Distribution
Item Category Set
Allow Multiple Item categories Assignment:
 Enable this feature, to assign an item to
multiple categories within a category set.

For example, you may define a Hazard category set.

In this case, an item may be assigned to both the
Poison and Corrosive categories.

Enable this feature to create cartonization groups.

Note: For cost mgmt purposes, Oracle recommends

having a separate category set, with this feature
disabled, for costing fixed assets. Costing functionality
does not permit an item to be associated with multiple
categories within a category set.
Oracle Apps – Manufacturing & Distribution
Item Category Set
Enforce List of valid categories:

 If this feature is not enabled, an item can

be assigned to any category defined
that uses the same flexfield structure as this
category set.
 If this feature is enabled, an item can be
assigned only to those categories
defined as valid categories for this
category set.
 The Category sets are displayed as LOV in
Purchasing module while creating a PO
in enter PO window.
Oracle Apps – Manufacturing & Distribution
Category Set
Oracle Apps – Manufacturing & Distribution
Category Set
Oracle Apps – Manufacturing & Distribution
Define Locations
 Define names and addresses for the
locations to use within the orgs
and Inventory Organizations.
 Inventory uses locations for billing,
requisition, receiving, shipping,
and employee assignment.
 Indicate by way of check boxes,
whether the location is a ship-to-
site, office-site, receiving site, bill- to-
site, and internal site.
Oracle Apps – Manufacturing & Distribution
Define Calendar
 A workday calendar defines the valid
working days for manufacturing org,
and consists of repeating days on and
off and exceptions to that pattern.
 Specifies start and end dates and the
weekend schedule for each calendar.
 Define as many workday calendars
and assign them to any number of
orgs, and any number of orgs can
share a calendar.
Oracle Apps – Manufacturing & Distribution
Define Calendar
 Apply exception to the workday calendar
by specifying individual days, loading them
from an exception template, or copying a
set of exceptions from another calendar.
 Specify any number of shifts to workday
calendar. Each shift can have different
weekend schedule and a list of specific work
interval start and end times. Shifts inherit
workday exceptions and patterns
from the base calendar. Specify
exceptions that can over ride and add to
the base calendar.
Oracle Apps – Manufacturing & Distribution
Define Organization
 Inventory Org track inventory transactions
and on-hand balances that manufactures
and distributes parts and products.
 Choose an org which has been classified
as an inventory org in order to run any of the
following application: INV, BOM, ENG, WIP,
MS/MRP, CPP, and receiving functions in
PO.
 Define item in single org as item master
org. Child orgs refer to the item master for
item definition. Once Item has been defined
in the master Org, it can be enabled or
assigned to any of the other orgs.
Oracle Apps – Manufacturing & Distribution
Define Organization
 To define Inventory Org, you need to
specify org name, org type, and three-
character abbreviation for the org. The unique
code is used to identify the org.
 Before defining the Organization, you
need to understand item definition
process.
 Specify which ledger is associated with
Org.
 Specify which manufacturing calendar is
associated with the Org.
Oracle Apps – Manufacturing & Distribution
Organization Parameters
Org Parameters: These are the source for default
inventory, costing, control, and movement for an org.
This section outline some of the areas and associated
parameters data needed to be specified for an
inventory org.
Demand Class: These are defined to group similar
customers or sales orders and these are used as a
means of forecasting different sources of demand
separately.
Move Orders: Requests for the movement of material
with in single org. It allows planners and facility
managers to request movement within a ware house
or facility for the purpose of replenishment, material
relocation and quality handling. It can be handled
manually or automatically depending on source.
Oracle Apps – Manufacturing & Distribution
Define Employees

 In Inventory employee information is

used primarily to record who perform
cycle count and physical inventory
count transaction.

 Employee will be defined in HR

module if already implemented,
otherwise could be defined in
Inventory module.
Oracle Apps – Manufacturing & Distribution
Define ATP Rule
Available to promise rule define supply &
demand sources, time fence parameters and
calculation methods.

Accumulation Available: Determines a

period’s excess quantity, and carries forward the
available quantity for future demand.
Backward consumption: ATP checks prior
periods for availability if a period has insufficient
supply for existing demand, and used with
Accumulation Available.
Forward Consumption: Determines if the ATP
calculation can match existing demand to supply
in future periods.
Oracle Apps – Manufacturing & Distribution
Define ATP Rule
Past Due Days: ATP does not include any demand and
supply orders with a due date before this time fence.
Infinite Supply: Use this time fence to specify the end
of your ATP horizon. ATP considers any demand that
falls beyond this time fence as available.
 Cumulative manufacturing lead time
 Cumulative total lead time
 Item total lead time
 User–defined time fence
Demand Class:
Supply & Demand Source: Choose a supply and
Demand source for ATP Rule, determine which source to
use for calculation. The supply on non-manufacturing
day will be considered available on next working day.
Oracle Apps – Manufacturing & Distribution
Lead Time Management

 Pre-Processing Lead Time

 Processing Lead Time

 Post Processing Lead Time

 Total Lead Time

 Cumulative Manufacturing Lead Time

 Cumulative Total Lead Time

Oracle Apps – Manufacturing & Distribution
Lead Time Management
Pre-Processing Lead Time:
The time required to prepare a purchase
documents to procure an Item.

Processing Lead Time:

The time required to manufacture or
procure of an item.

Post-Processing Lead Time:

The time required to make a purchased
item available in inventory.
Oracle Apps – Manufacturing & Distribution
Lead Time Management

Total Lead Time:

[Fixed LT + Order Qty x Variable LT]

Fixed Lead Time:

The time taken to prepare initial set of
assembly or production Line.

Variable Lead Time:

The time taken to manufacture or
assemble an individual item.
Oracle Apps – Manufacturing & Distribution
Lead Time Management

Cumulative Manufacturing Lead Time:

The total time required to make an item if
all the raw materials are available in stock
but had to make all subassemblies level
by level.

Cumulative Total Lead Time:

The total time required to make an item if
no inventory existed and had to order all
the raw materials and make all
subassemblies level by level.
Oracle Apps – Manufacturing & Distribution
Lead Time Management
Assembly: A
Manufactured

Sub Assembly: B
Manufactured

Processing Lead Time

Component : C
Purchased

Cumulative Lead Time

Cumulative Total Lead Time

Pre - Processing Lead Time

Processing Lead Time

Post - Processing Lead Time

Oracle Apps – Manufacturing & Distribution
Define Picking Rules
 Picking rule is assigned to an item to define
the priorities that Inventory uses to pick units
of that item for sales order.
 Specify the sources and prioritization for
subinventories, lots, revisions, and locators to
be used when the item is pick released.
 Specify none for any of the criterion for
inventory to ignore while picking.
 Define unique picking rule for each item, or
use generic picking rule for the org.
Oracle Apps – Manufacturing & Distribution
Define Forecast Rules
Forecast Methods:
 Focus
 Statistical

Focus: Uses focus forecasting algorithms, it

test the selected item against a number of
techniques and chooses the best one to
forecast future demand.

Statistical: Uses Exponential smoothing,

trend and seasonality algorithms to forecast
demand.
Oracle Apps – Manufacturing & Distribution
Define Forecast Rules
 Alpha smoothing factor should be
between 0-1, 0 indicates more weight to the
past demand and 1 indicates more weight to
current demand.
 Trend Model: If this model is selected as
base perform smoothing as upward or
downward trend in demand.
Alpha x Forecast + (1-Alpha) x Actual Demand
 Seasonality Model: It produces more even
pattern of seasonal demand from period
to period. Value of 2 indicates the demand
will double in that period due to seasonal
factors.
Oracle Apps – Manufacturing & Distribution
Sub-Inventory

 Asset SI: Subdivision of an org, represent

a physical storage area by logical grouping
of items, where qty balances and values are
maintained for asset items.
Ex: Finished Good, and Raw Material.

 Expense SI: It is a logical receiving location

to receive expense items. Consumables like
Office Supplies, and cafeteria items are
expense Items.
Oracle Apps – Manufacturing & Distribution
UOM - Class
 UOM Class Represent groups of UOM with similar
characteristics.
 Each UOM defined must belong to a UOM class.
 Each class has a base UOM, and is used to
perform conversions between UOM in the class.
 Generally one of the smaller unit is considered
as base unit, CFT / [Link] / FT
UOM Class Base UOM Other UOM
Quantity Each Dozen, box
Weight Gram Pound, KG
Time Seconds Minute, Hour
Volume Cubic inch [Link], [Link]
Oracle Apps – Manufacturing & Distribution
Unit of Measure

UOMs are used by a variety of functions and

transactions to express the quantity of items.
Primary UOM: It is the stocking UOM for an
item in a particular organization, and is an item
attribute that is specified while defining item.
Dual UOM: if the item is under dual UOM
control, system stores inventory in both the
primary and secondary units of measure.
Oracle Apps – Manufacturing & Distribution
UOM - Conversions
 UOM conversions are numerical factors that
enabled, to perform transactions in units
other than the primary unit of the item
being transacted.
Types:
Standard: A conversion common to any item.
Intra Class: A conversion for a specific item
within a UOM class.
Inter Class: A conversion for a specific item
between UOM classes.
Oracle Apps – Manufacturing & Distribution
UOM - Conversions
 UOM classes, UOMs, and UOM conversions
are not organization-specific.

 Inventory transactions and on hand balance

supports decimal precision upto 5 digits.

 Pick UOM: The pick area stores a particular

pack configuration; cases, cartons, units.
The UOM configured for the pack
configuration is know as Pick UOM.
Oracle Apps – Manufacturing & Distribution
UOM - Conversions
 Lot specific conversions:

It is enabled to perform a specific inter-

class conversion for a given lot. This
enables to establish more granular control
over the transactional quantities of a lot. GL
= 15 Pounds

The system creates a lot conversion only

if the item is under Dual UOM control.
Oracle Apps – Manufacturing & Distribution
Business Entity
TATA
BG

TATA TATA TATA TATA

TCS
Hotels Autos Steels CHE

TCS TCS TCS TCS OU

UK US India EU

TCS-UK TCS-US TCS-IND TCS-EU

Ledger Ledger Ledger Ledger

TCS-IND TCS-IND TCS-IND TCS-IND

INV
North South East West ORG

TCS-IND TCS-IND TCS-IND TCS-IND INV

AP TN KA KE ORG
Oracle Apps – Manufacturing & Distribution
Operating Unit/Inventory Org

Telco
South - OU

Telco - AP Telco - TN Telco - KA Telco - KE

Inventory Inventory Inventory Inventory
Org Org Org Org
Oracle Apps – Manufacturing & Distribution
Item Master
Item Master
V1

Inventory Org Inventory Org Inventory Org

M1 M2 M3

Defined at Inventory Org level Defined at Item Master Org Level

Bearing 6210 B-987654

M1 Bearing 6210 B-123789 M1 B-987654

M2 Bearing 6210 B-435210 M2 B-987654

M3 Bearing 6210 B-890765 M3 B-987654

Oracle Apps – Manufacturing & Distribution
Item Attributes
Item Attributes count in Oracle Apps

ver. 11 158 Attributes

ver. 11i 177 Attributes
ver. R12 270 Attributes
 Item attributes are collection of
information about an item.

 Item attributes are grouped and

displayed in tab names in Item Master and
Org Item; Inventory, BOM, Purchasing,
WIP, OM, etc….
Oracle Apps – Manufacturing & Distribution
Status Attributes
 Status attributes indicate the status of
item.
and enable and disable the functionality.
 Customer Order Enabled
 Internal Order Enabled
 Purchasable
 Invoice Enabled
 Process Execution Enabled
 Recipe Enabled
 Build in WIP
 Stockable
 BOM Allowed
Oracle Apps – Manufacturing & Distribution
Item Defining Attributes
 Identifies the nature of an item.
 What designates an item as an
engineering item is the attribute
engineering item, but what controls the
functionality of the item are the collection
of attributes that describe it.
 If item defining attribute is enabled, the
item is automatically assigned to the
default category set of the corresponding
functional area.
Oracle Apps – Manufacturing & Distribution
Item Defining Attributes

Functional Area Item Defining Attribute

Inventory Inventory Item
Purchasing Purchased/Internal ordered
Cost Mgmt Costing Enabled
Engineering Engineering Item
Order Mgmt Customer Order Item
Service Serviceable Product

Item defining and Status attributes are

interdependent.
Oracle Apps
Item– Attributes
Manufacturing & Distribution
Control
Controlled at ORG Level
Preprocessing Lead Time Source SI
Processing Lead Time WIP Supply SI
Post Processing Lead Time Sales Account
Fixed Lead Time WIP Supply Locator
Variable Lead Time Expense Account
Cumulative Mfg Lead Time Source Org
Cumulative Total Lead Time Planner
Cost of Goods Sold Account Encumbrance Account
Planning Exception Set Engineering Item

Controlled at Master Level

Base Model
BOM Item Type
Oracle Apps – Manufacturing & Distribution
Item Relationship
 Item relationships are a way of defining
acceptable substitutes for items.
 Receive a substitute item if supplier
cannot ship the original item on the PO.
 Except in Oracle Purchasing, these
relationships are for inquiry and reporting
purposes only.
 To receive a substitute item correctly,
you should ensure that the ordered item
and the substitute item share the same
base UOM.
Oracle Apps – Manufacturing & Distribution
Define Change Organization
 When sign in to inventory transaction,
the system prompts to pick an org,
then associates the transaction to the
inventory org.

 When first setup the inventory

module no inventory org is defined. To
associate to correct org either log off
and then log back in pick your org or
perform change org transaction.
Oracle Apps – Manufacturing & Distribution
Intercompany Relations

 Define Intercompany Relations, to

establish relationship between two
operating units (Shipping and Selling
orgs) in a multi–organization
environment.
Oracle Apps – Manufacturing & Distribution
Miscellaneous Transactions
 To load all item on-hand quantities at the
start of implementing.
 To issue items to individuals, projects or
department; or to issue damaged items
to expense accounts such as scrap.
 To perform the receipts for items that
were acquired by other than a PO.
 Issue material to research and
development group or an accounting
department.
 Serial Number Triggered: Indicate if
inventory information should be defaulted
from the serial number.
Oracle Apps – Manufacturing & Distribution
Define Receiving Options

 Specify which receiving options are

applicable when receiving the items
from other organizations.

 These are default receiving options for

the organization. However most of
these options can be overridden at the
supplier, purchase order, or item level.
Oracle Apps – Manufacturing & Distribution
Inter-Org Transfer without ISO
 Able to Transfer items between Orgs
only if Shipping Network is defined between
the orgs involved.

 Transaction Types: Direct / In-transit

 FOB: Receipt / Shipment

 Receipt Routing: Direct / Standard /

Inspection Required
Oracle Apps – Manufacturing & Distribution
Inter-org Transfers

 Define From and To Orgs

 Define Item in IMO
 Assign Item to both Orgs
 Define Sub-Inventory for Orgs
 Verify Costing Mgr is Active
 Open Inventory Accounting Period
 Setup Receiving Options to the Org
 Define Shipping Network
Oracle Apps – Manufacturing & Distribution
Inter-org Transfers

 Ensure on-hand Qty is available in From

Org.
 Perform Inter-Org Transfer with “Receipt
Routing” as “Direct”
 Receive the item in Receiving Org
 Verify on-hand quantity

 Repeat the transaction with “Receipt

Routing” as “Standard”

 Repeat the transaction with “Inspection

Required” as Receipt Routing
Oracle Apps – Manufacturing & Distribution
Inter-org Transfers

 Transaction Type:

Direct: Inter-organization transfers move

inventory directly from the shipping
organization to the destination
organization.

In-transit: Inter-organization transfers

move inventory to in-transit inventory first.
You can track this inventory until it arrives at
the destination organization.
Oracle Apps – Manufacturing & Distribution
Inter-org Transfers

 FOB Terms:

Receipt: The shipping organization owns

the shipment until the destination
organization receives it.

Shipment: The destination organization

owns the shipment when the from organization
ships it (and while the shipment is in transit).
Oracle Apps – Manufacturing & Distribution
Inter-org Transfers

 Receipt Routing:

Standard: Receive this item first, then

deliver without inspection.

Direct: At receipt, deliver this item directly

to its location.

Inspection: Receive this item first, inspect

it, then deliver.
Oracle Apps – Manufacturing & Distribution
Inventory Controls
Describes how individual items or group of
items can be tracked when transactions are
performed. OI is capable of handling four
different types of controls on the items that
are assigned to an Org.

 Revision Control
 Locator Control
 Lot Control
 Serial Control
Oracle Apps – Manufacturing & Distribution
Inventory Controls

Revision Control: Adopted for identifying a

modified item. Change to Revision Control is
not possible when item has on-hand quantity.

Locator Control: Adopted to find out where

exactly the item is lying in a store. Normally
adopted for items smaller in Size. The
locators are defined as Row, Rack and Bin.
You can customize “Stock Locator” Key
flexfield as per client requirement.
Oracle Apps – Manufacturing & Distribution
Inventory Controls

Lot Control: Adopted to identify a group of

items. Each truck load of Steel, Cement, Iron
Ore is considered as one lot.

Serial Control: Adopted when tracking of

individual quantity of an item is required.
Oracle Apps – Manufacturing & Distribution
Inventory Planning

 Min-Max Planning

 Reorder Point Planning

 Replenishment

 Kanban
Oracle Apps – Manufacturing & Distribution
Min-Max Planning
 Min-Max planning is generally adopted
for items, which are regularly purchased.
The consumption of these types of items are
more or less same every month. Minimum
and maximum stock level can be fixed for
these items.
 Buy item generates purchase requisition
automatically when item on-hand qty
falls below minimum level.
 Make items generates WIP Discrete Jobs
When on-hand qty falls below minimum level.
Oracle Apps – Manufacturing & Distribution
Min-Max Planning
Org Level Min-Max Planning
 When min-max plan is set at the Org
level, OI looks at inventory balances, POs
and WIP jobs as supply and sales order
and WIP job component requirements as
demand.

SI Level Min-Max Planning

 When min-max plan is set at the SI level,
OI looks at inventory balances, PO and
internal order supply, and optionally,
sales order demand for a single SI only.
Oracle Apps – Manufacturing & Distribution
Min-Max Planning Org Level

Net Quantity on Hand + On Order =

Total Available

 Net Quantity on Hand is the sum of the

quantities on hand for the item across all
the nettable SI within an Org.

 On Order is the sum of open purchase

orders, requisitions, internal orders and
WIP jobs scheduled for receipt on or before
the Supply Cutoff Date.
Oracle Apps – Manufacturing & Distribution
Min-Max Planning - SI Level

Total Available = Qty on Hand + On Order

 Quantity on Hand is the qty in the SI

specified in the Min-Max Planning.

 On Order is the sum of open POs,

requisitions, and internal sales orders
scheduled for receipt to the specified SI
prior on or before the Supply Cutoff Date.
Oracle Apps – Manufacturing & Distribution
Min-Max Planning steps
 Setup the following attributes for the Item.

 Purchasing Tab: Enter List Price

 General Planning Tab: Select Min-Max
Planning as Inventory Method, Make or Buy:
Buy, enter Min/ Max Qty, enter Order Qty,
select Supplier as source.

Order Mgmt Tab: Enable Internal Ordered

 Lead Time Tab: Enter values for
Preprocessing, Processing, and Post
Processing lead time.
Oracle Apps – Manufacturing & Distribution
Reorder Point Planning
RPP uses demand forecasts to decide when to
order a new quantity to avoid dipping into
safety stock.
 Suggests a new order when the available
quantity drops below item's safety stock +
forecast demand during its replenishment.
 The order quantity is an economic
quantity that minimizes the total cost of
ordering and carrying inventory.
 OI automatically generate requisitions to
purchasing that a replenishment order is
required to supply.
Oracle Apps – Manufacturing & Distribution
Reorder Point Planning
Safety stock:
A floor or base level of inventory from which
Inventory performs all planning. The item is
planned as if the safety stock quantity for the
period is zero inventory balance.

EOQ = 2 x Annual Demand x Order Cost

Carrying Cost % x Unit Cost

Note: RPP is possible only at Org level.

Oracle Apps – Manufacturing & Distribution
Reorder Point Planning
Steps involved in ROP planning

 Set the Required Item Attributes

 In Item Master – Order Mgmt Tab
enable Internal Ordered
 In Org Item, Purchasing tab: Enter List
Price
 In Org Item, General Planning Tab:
Select ROP as Inventory Method, Enter
Order Min/Max Qty, Order Cost, Carrying
Cost, Source as Supplier, Enter Bucket
Days, and % for Safety Stock
Oracle Apps – Manufacturing & Distribution
Reorder Point Planning
Steps involved in ROP planning

 Set the Required Item Attributes

 Define a Forecast Set / Forecast / Assign
the Item to Forecast
 Define or Generate Safety Stock
 Run the Reorder Point Report
 Run Requisition Import from Purchasing
 Get Requisition Number from the
Requisition Summary Window with date
Range or Item Name
Oracle Apps – Manufacturing & Distribution
Replenishment Planning
Used to replenish Expense SI. This feature
can be used for replenish Asset SI also.

Even if perpetual on-hand balances are not

maintained in non-tracked SI, this method
can use the replenishment counting system
to plan your inventories.

This may be ideal for replenishing free stock

items that stored on the production floor, or
office supplies kept in departmental cabinets.
Oracle Apps – Manufacturing & Distribution
Kanban Planning

 Kanban is a means of supporting pull-

based replenishment in manufacturing
systems.

 It is a self-regulating pull system that

leads to shorter lead times and reduced
inventory.

 They are typically applied to items that

have relatively constant demand and
medium-to-high production volume.
Oracle Apps – Manufacturing & Distribution
Kanban Planning
 It represent replenishment signals that
are usually manual and highly visible,
such as a color-coded card that moves
with the material, a light that goes on
when replenishment is required, or an
empty bin that is moved to the supply
location to trigger replenishment.
 Kanban is a means of supporting pull-
based replenishment in manufacturing
systems. It is a self-regulating pull
system that leads to shorter lead times and
reduced inventory.
Oracle Apps – Manufacturing & Distribution
Kanban Planning

 The system includes an API that can be

called by external systems, such as bar
code readers, to trigger replenishment
signals.
 Kanbans can be replenished from an
external supplier or an internal
organization.
Oracle Apps – Manufacturing & Distribution
Kanban Planning
The four types of kanbans available in the
system trigger transactions that pull
material from different replenishment
sources.
 Inter Org: Creates internal requisitions.
 Intra Org: Triggers material movement
from a SI in the same org.
 Production: Creates a production job
(discrete job, repetitive schedule, or flow
schedule).
 Supplier: Creates a purchase requisition.
Oracle Apps – Manufacturing & Distribution
Kanban Planning
Supply Status Code

New: The kanban has just been created and is not

yet part of the replenishment chain.
Empty: The kanban is empty and a replenishment
signal has been generated.
Wait: The kanban is waiting until the minimum order
quantity has been met by the aggregation of cards.
In-Process: For the Supplier source type, the
purchase order has been approved. For the Inter Org
source type, the internal requisition has been
approved.
In-Transit: Material is in transit from Supplier end.
Full: The kanban has been replenished.
Oracle Apps – Manufacturing & Distribution
Kanban Planning
Sequence of Steps involved

 Define a Kanban Pull Sequence

 Select Item, SI, Kanban Size, enter Qty,
enter Kanban Card Qty, Lead Time,
Allocation %, and Safety Stock.
 Generate Cards
 Choose a Card and Replenish
 Run Requisition Import from Purchasing
 Query Req. Number from Req.
Summary with Item as reference.
 Accuracy & Distribution
Oracle Apps – Manufacturing

 In any Org due to missing or

inaccurate entries of transaction,
there will be differences in the on-
hand and the actual quantities in the
Sub-Inventory.

 To correct the differences the items

are physically counted and the on-
hand quantity is corrected
periodically, this is called as stock
taking.
Oracle Apps – Manufacturing & Distribution
Accuracy
The two types of stock taking are
Cycle Counting
Physical Inventory
 Cycle Counting: The periodic counting of
individual items throughout the course
of the year to ensure the accuracy of
inventory quantities and values. High
Value items are placed in this method.

 Physical Inventory: Count all the items

physically Half Yearly or Yearly.
Oracle Apps –ABC Analysis& Distribution
Manufacturing

 ABC analysis determines the relative value of a

group of inventory items based on a user-
specified valuation criterion.
 "ABC" refers to the rankings assigned to items
as a result of this analysis, where "A" items are
ranked higher than "B" items, and so on.
 It is used to compile and drive cycle counts,
where high value (A items) items are very
frequently counted, items of lower value less
frequently, and items of lowest value very
infrequently.
A Class Items – 80%
B Class Items – 15%
C Class Items - 5%
Oracle Apps –ABC Analysis& Distribution
Manufacturing

Number of Items in a Organization:

100000 Items
1 Million $

Item Cost Qty Value

110000 10000 B Class Item $150000

15000
2 1000 100 100000 A Class Item
$800000 5000
3 1 100 100 C Class Item $50000
80000
Oracle Apps – Manufacturing & Distribution
ABC Analysis

Sequence of Steps involved

 Define a ABC Compile

 Define ABC Classes
 Define ABC Assignment Groups
 Assign Classes to ABC Assignment Group
 Assign Items to Various Classes within a
group
 Update item assignments
 Purge ABC information
Oracle Apps – Manufacturing & Distribution
Cycle Counting

Sequence of Steps involved

 Define a cycle count

 Define cycle count classes
 Define cycle count items
 Generating Automatic Schedules
 Generating Cycle Count Requests
 Entering Cycle Count Quantities
 Approving Cycle Count Adjustments
Oracle Apps – Manufacturing & Distribution
Physical Inventory
Sequence of Steps involved
 Define a Physical Inventory
 Take a Snapshot of System On-hand Qty
 Generate Physical Inventory Tags
 Print the Generated Tags
 Attach the Tags to its respective item
 Count the Actual Quantities and enter
them in the respective tag
 Collect all the Tags
 Enter the Quantities recorded in the Tag in
the System
 Approve the Physical Inventory
 Launch Adjustments
Oracle Apps – Manufacturing & Distribution
Books Recommended

Oracle E-Business Suite Manufacturing

&
Supply Chain Management

By
Bastin Gerald
Nigel King
Dan Natcheck