Oracle Outside Processing

How to setup outside processing –Procure to use in WIP for standard costing

1.Create items:

à Finished Item

(N): InventoryàItemsàMaster Item

Item Name: OSP_FIN_ITEM

(M) ToolsàCopy from
Select template as ‘Finished Good’ Click Done
Save

Assign this item to M1 organization

Create one OSP item

Item name: OSP_ITEM

(N): InventoryàItemsàMaster Item

(M) ToolsàCopy from
Select template as ‘Outside Processing Item’ click done

Save

OSP Item setting:

(T)-Main: Primary Unit of Measure =‘HRS’

(T) Purchasing:
Check Purchasable: Set this attribute to Yes to include an item on a purchase order line.

Check Outside Processing Item: Set this attribute to Yes to link an outside processing item with an outside resource and to include an item on an outside processing purchase order line.

Outside Processing Unit Type – Select Resource (If you want to requisition the usage rate or amount of the outside resource for each assembly you move to an outside operation, you should set the Outside Processing Unit Type to Resource).

If you want to requisition one outside processing item for each assembly you ship to a supplier, then you should set the Outside Processing Unit Type to Assembly.

Assign to M1 organization.

Create subassembly item:

(N): InventoryàItemsàMaster Item

(M) ToolsàCopy from
Select template as ‘subassembly’

Item name: OSP_SUB_ITEM click done

Save.

Create 3 purchased items

Purchased item 1:

Name: OSP_PUR1

(N): InventoryàItemsàMaster Item

(M) ToolsàCopy from
Select template as ‘Purchased Item’

Save the item and assign the M1 organization

Assign the cost for this item in M1 organization

(N): Inventoryàcostàitem cost

Enter item and click find

After opened Item costs Summary (M1) form

Enter Item OSP_PUR1 (PURCHASED ITEM1)
Cost Type -- Pending
Click Open, then click Costs

Click Costs button

Enter Cost Element -- Material
Subelement -- Material
Activity -- Move
Basis -- Item
Rate or Amount -- 100
Go to next line enter Cost Element -- Material Overhead
Enter subelement -- Mat’l Hndlg
Activity -- Move
Basis -- Total Value

Rate or Amount -- 10

Save.

Purchased item 2:

Name: OSP_PUR2 (purchased item2)

(N): InventoryàItemsàMaster Item

(M) ToolsàCopy from
Select template as ‘Purchased Item’

Assign to M1 organization

(N): Inventoryàcostàitem cost

Enter item and click find

Click on cost button.

Enter Cost Element -- Material
Subelement -- Material
Basis -- Item
Rate or Amount -- 100

Save.

Purchased item 3:

Name: OSP_PUR3 (purchased item3)

(N): InventoryàItemsàMaster Item

(M) ToolsàCopy from
Select template as ‘Purchased Item’

Assign to M1 organization

(N): Inventoryàcostàitem cost

Enter item and click find

Click on cost button.

Enter Cost Element -- Material
Subelement -- Material
Basis -- Item
Rate or Amount -- 100

Save.

2: Define outside Resources:

You must define outside resources and link them to outside processing items in order to automatically generate purchase requisitions for outside processing. When assigning outside resources to a routing you also specify a usage rate or amount that determines the quantity you are requisitioning and/or charging to work in process jobs or repetitive schedules.

(N) Order ManagementàBills of materialsàRoutingsàResources

Create resource named OSP-RES (new)
Select Type -- Person
Select UOM -- HR
Select Charge Type -- PO Move (type PO Move or PO Receipt will perform automatically requisition. Purchasing charges these resource to jobs and repetitive schedules when you receive against purchase order lines linked to the resources.
Click Enabled for the outside processing item - and enter OSP_ITEM (OSP Item name)

Select Basis -- Item.
Select Activity -- Move
Click Standard Rate (If you charge at standard, then Purchasing writes any variance between the purchase order actual and the source standard cost to the purchase price variance account of the resource at purchase order receipt) You can also charge at actual PO line price.

Click on rates button

Enter Frozen Cost type and Resource Unit Cost of 20.00.
Pending Cost type and Resource Unit Cost of 20.00.

Save.

3: Set the department and link to resources

(N) Order ManagementàBills of materialsàRoutingsà

Enter Department -- OSP-DEP (Department name)
Enter Description
Class -- Vendor
Location -- Select WILLINGTON.

Click Resource button in Departments form

Click in Resource field under Owned section

Select OSP-RES
Check Available 24 Hours
UOM -- HR
Units -- Enter 10
Group -- Select Vendor
Save

Close the form

Click Rates button in the Departments form

Cost Type -- Select Pending
Go to Overhead Rates Section, Overhead -- Select Indirect
Activity -- Move
Basis -- Resource Value
Rate or Amount -- .05
Save

4: setup the Routing

(N) Order ManagementàBills of materialàRoutingsàRoutings
In item field enter OSP_FIN_ITEM (Finished Good)
Go to the Operations section and enter the following:

Operation.1
Seq - 10
Department - Assembly
Click on Operation Resources.

Go to the Resources section and enter the following:
Seq -- 10
Resource -- LBR-ASSY
UOM should default in with HR
Basis -- Item
Usage -- 1, Close Operation Resources form and go back to main Routing form.

Save.

2nd Operation
Seq - 20
Department -- OSP-DEP (Department name)
Click on Operation Resources.

Go to the Resources section and enter the following:
Seq -- 10
Resource -- OSP-RES (Resources name)

UOM should default in with HR
Basis -- Item
Usage -- 2, Close Operation Resources form and go back to main Routing form.
Save the Routing.

Do the same routing process for subassembly item with routing name= ‘OSP-SUB-ITEM’ (Subassembly Item)

5: Defining Bill Of material

(N) Order ManagementàBills of materialàBillsàBills

Item -- Enter OSP_SUB_ITEM (Subassembly Item)
Components Region:
First Line
Item Seq -- 10
Operation Seq -- select 1
Component – OSP_PUR2 (Purchase Item2)

Quantity – 1

Second Line
Item Seq -- 20
Operation Seq -- 1
Component – OSP_PUR3 (Purchased Item3)

Quantity -- 1

Save

Select the Material Control

Select the Material Control Tab

Supply Type -- Assembly Pull (operation pull not available because we have no routing)
Subinventory -- Floorstock
Save your work.

Go to toolsàclick on Rollup costs

Enter cost type= Pending

Click ok

Go to viewàRequest àfind

Click on view output button

Do the same process for finished good

Item -- Enter OSP_FIN_ITEM (Finished Item)

Components Region:
First Line
Item Seq -- 10
Operation Seq -- select 10
Component – OSP_PUR1 (Purchase item1)
Quantity – 1

Second Line
Item Seq -- 20
Operation Seq -- 10
Component – OSP_SUB_ITEM (Subassembly item)

Quantity -- 1

Save

Select the Material Control Tab
For each component select the following:
Supply Type -- Operation Pull
Subinventory -- Floorstock

Save your work.

After successfully completed check the output for finished good

6: Create miscellaneous receipt for purchased items

(N) InventoryàTransactionsàMiscellaneous Transaction
In Type field and Miscellaneous Receipt,
click Transaction Lines

Enter quantity for 3 purchased items

OSP_PUR1

OSP_PUR2

OSP_PUR3

Save the work.

Verify that Items exists in Inventory: (N) InventoryàOn-Hand AvailabilityàOn-Hand Quantitiesà query for Subinventory = Floorstock

7: create the jobs for subassembly Item

N) WIPàDiscreteàDiscrete Jobs

Click on new button

Enter Job number -- OSP_SUB_JOB (New)
Enter Assembly -- OSP_SUB_ITEM (Subassembly Item)

Class - Discrete
Status - Released
Type - Standard
Start Quantity - 50
Start Date - Enter today’s date.
In TAB Routing enter the Completion Subinventory -- Floorstock
Save

Order ManagementàWIPàMove TransactionsàMove Transaction

Enter the Job = ‘OSP_SUB_JOB’

Enter Qty = 100

Save.

Check that in Subinventory Floorstock we have the on hand of 100

8: setup Employee

Purchasing requires an employee for all requisitions/purchase orders to be created and approved.

ResponsibilityàUS HRMS Manager.
(N) PeopleàEnter and Maintain

Click on new button

Enter Last Name, Gender
Action -- Create Employment
Person Type -- Employee
Social Security Number -- number with format: xxx-xx-xxxx
Enter Birthdate
Save

Click on Assignment Button

Organization -- Vision Operations
(B) Correction
Job-- MGR.500.Manager
Group-- Financial
Position-- MM400.Material manager (this is a position that will have the approval authority for your purchase order)
(B) Yes – to accept the default values

Assign a Supervisor:
(T) Supervisor
Name-- Brown, Ms. Casey

Assign a Default Expense Account:
(T) Purchase Order Information
Set of Books-- Vision Operations
Default Expense Account-- 01-110-7740-0000-000

Save the work.

Link the Employee to the user:
Responsibility System Administrator
(N) SecurityàUseràDefine.
Query up Username
Add Employee to Person field.

Responsibility Manufacturing and Distribution Manager
(N) PurchasingàSetupàPersonnelàBuyers.

Add Employee to Buyer field
Enter Ship-to org of ‘M1 –Seattle’

Click on go and click on Add Buyer

Save.

9: Sourcing Rules

You can define rules for each outside processing item to help you determine from which supplier to source the item.
Creation of the Standard Quotation:

(N) PurchasingàRFQ’s and QuotationsàQuotations
Choose Quotation Type -- Standard Quotation Type
Enter Supplier -- Advanced Networking Devices
Enter Supplier Site -- Santa Clara
Enter Ship-To as M1 – Seattle

Enter Effective Date - Today’s Date
Enter Effective through Date - One Year from now
Change Status from In-Process to Active
Choose Item - ‘OSP_ITEM’ (OSP Item)
enter a price of 20.00

Save - Take note of the Quotation Number

Creation of the Approved Supplier List Entry

(N) PurchasingàSupply BaseàApproved Supplier List
Select M1 organization.

Click in the Item Field and choose the Item created from Step 1 -- ‘OSP-ITEM’
Move to the bottom section of the form -- Choose Direct for the ‘Business’ field.
Enter ‘Advanced Networking Devices’ in the Supplier field since it was used on the quotation.
Enter the Supplier Site ‘SANTA CLARA’ that was used in this test.
Change the status field from NEW to APPROVED.

Switch the tab from ‘KEY ATTRIBUTES’ to ‘RECORD DETAILS’
Update Global Field selection from No to Yes - we are making this entry Global for all Organizations.

Save

Select the attributes button.
Choose Release Method Field and enter ‘Release Using Autocreate’
Do not enter any values for the Price Update Tolerance
Do not enter any values for the Purchasing UOM
Choose the bottom portion of the form - in the field TYPE - Enter ‘Quotation’

Choose the Number field - Hit the List of Values.

Quotation document displaying above you created
choose the Line field and select the number 1 for the line.

Save.

Creation of Sourcing Rule:

(N) PurchasingàSupply BaseàSourcing Rules

Choose Sourcing Rule Name field -- ‘OSP-Advanced Networking Source’
Choose Description field and enter -- ‘Sourcing Rule for Quotation to Req to PO’
Select the ‘ALL ORGS’ radio button to the right of the above two fields
Select Effect Date field - enter first portion of the effective date -- todays date drops

Select lower section of screen - Type field -- Choose ‘BUY FROM’
Skip the Org Field
Move to the Supplier Field -- select ‘Advanced Networking Devices’
Move to the Supplier Site field -- select ‘SANTA CLARA - Vision operations’
Enter Allocation field -- set this to 100%
Select the Rank field -- insert a value of 1

Save.

Creation and Explanation of a Sourcing Rule Assignment Set

(N) PurchasingàSupply BaseàAssign Sourcing Rules

Enter the field Assignment Set -- enter value ‘OSP_TEST’
Description -- ‘Creating Assignment Set to test funct for OSP’
Click underneath the ‘Assigned To’ box -- Choose Item
Select field ‘Item/Category’ select the Item ‘OSP_ITEM’ (OSP ITEM)
Choose field TYPE -- select ‘Sourcing Rule’
Choose field SOURCING RULE/BoD -- Hit the List of Values and select the sourcing rule which was created above -- ‘OSP-Advanced Networking Source’

Save.

Sourcing Rule Assignment Profile Setup and Logic:

(N) Purchasingà Personal Profiles
Query on the profile name with:à MRP:Default Sourcing Assignment Set
Click in the ‘User Value’ section
Select the newly created assignment Set -- PR_OSP_TEST

Save

WIPàSetupàParameters
Select the Outside Processing tab
select ‘At operation’ for Requisition Creation Time
this way, requisitions will be automatically imported into Purchasing immediately upon performing a WIP Move transaction

Save.

10: Create job for Finished Good:

(N) WIPàDiscreteàDiscrete Jobs

Click on new button

Enter Job number -- OSP_-FIN_JOB (new)

Enter Assembly -- OSP_FIN_ITEM (Finished Good)
Class -- Discrete
Status -- Released
Type -- Standard
Start Quantity -- 10
Start Date -- Enter today’s date.
In TAB Routing enter the Completion Subinventory – Stores

Save

11: Perform a WIP move transaction to the Osp Item

(N) WIPàMoveTransactionsàMove Transactions

Select Job – OSP_FIN_JOB (Finished good job)
select the first operation 10 from the list of values for “From” filed and select Queue for “Step” field.
Go to the next row labeled “To” select OSP operation 20
Go to the Step field and select Queue
Go to the Quantity field in the Transaction section.
Enter quantity -- 10.