OracleAppsBlog

Wednesday, June 30, 2004

Outside Processing Setup Checklist

Outside processing in Oracle Work in Process allows users to substitute vendor labor for in-house labor on a routing. The setup is long and complex. This paper provides a checklist of how to define OSP resources in Oracle to help users avoid some of the more common problems.

Overview

The Outside Processing process comes into play in Oracle Work in Process whenever all or part of the labor on a routing is performed by a third party vendor. More than one step on a routing can be performed by third parties. In Oracle, a link has been defined between Oracle Work in Process and Oracle Purchasing to automate the process of creating a purchase order to the vendor who will perform the OSP labor.

Because what is being purchased is LABOR, one requirement to using this process is to define a resource for each type of labor to be purchased. An item in the Item Master must also be defined for each type of labor to be purchased, and linked to the resource when it is defined. The item must be classified as an outside processing item.

Although this “resource” item is purchasable and transactable, it will never be received into or issued from a subinventory. Instead, receiving this item from the purchase order will cause a move transaction to occur on the WIP routing so that the outside operation step is completed when the items are received back from the vendor. It is important to note that the item must not only be received, but must also be delivered before the outside operation is deemed complete by the system.

When a routing operation uses an outside processing resource, movement into that operation step causes a purchase requisition to be generated for the “labor” resource to be purchased from the vendor.  Note that you are not purchasing the item (as you would a “buy” item), but instead you are purchasing the vendor’s labor as a substitute for using your own in-house resources to perform the labor. This is a subtle distinction, but it is necessary to understand this distinction in order to understand the Oracle process.

This purchase requisition is then imported from WIP into Purchasing.  At this point, the requisition is available (if approved, but that is another issue) to be autocreated into a purchase order. Or, if the buyer so chooses, the buyer may set up sourcing rules such that importing an approved requisition automatically creates a release against a blanket purchase order.

When the vendor returns the item, a receipt must be entered against the PO or release. The “item” is delivered not to a subinventory, but back to the shop floor for continued processing on the routing. If the outside processing step is the only step or the last step on the routing, the finished assembly will be available to be received into inventory using a WIP completion transaction.

Setup Steps

Inventory

1. REQUIRED. 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 (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.
   • Optionally enter a list price greater than zero – this will be used as a default in the PO (you could also set up a blanket PO with prices.)

   Note: the item with the above attributes must be defined in the org which is the Purchasing item validation organization as well as the actual production organization. Check Purchasing > Setup > Organization > Purchasing Options to determine which org has been defined as the validation organization.

2. OPTIONAL. In the Item Master Lead Times attributes region, enter appropriate lead times. These will be used to automatically calculate the need by date for the requisition generated for the OSP item. (This step is not required, but is nice to have.) The need-by date will be automatically entered into the requisition generated by this process, and hence into the PO.

Bill of Material Module

1. 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.
2. REQUIRED. Define a separate outside processing resource for EACH labor “item”.


• Enter the item number defined above in the Item Master for the labor “item”.
• Make sure the variance account defined for the labor resource is the same as the Purchase price variance account defined in Parameters under Inventory setup. If you check the Costed box and the Standard Costing box, you can enter a standard value for this resource by clicking on the Rates button. Any difference between this standard value and the actual purchase price (in a standard cost organization) will be recorded in the Purchase Price Variance Account.
• 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.
3. 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.

Purchasing

1. OPTIONAL. Create a blanket, and be certain to enter the line as an outside processing line type. If your item is not set up correctly, the system will not allow you to complete entry of the PO. Optionally, in the terms region of the PO, check the Supply Agreement box. In Purchasing-Supply Base-AutoSource Rules, link the item with the blanket PO document.  Or if you are using enhanced sourcing rules in Release 10.7, use the menu path “Supplier Scheduling-Supply Base-Approved Supplier List” to link the approved supplier for the item with the blanket PO in the Attributes region. (Note: Enhanced Sourcing Rules in 10.7 is controlled production and your client may not have been approved for using it).
2. OPTIONAL BUT HIGHLY RECOMMENDED. 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.
3. If you are using Supply Chain Planning, there is another little gotcha. Your item could have been set up with a ‘make’ sourcing rule or bill of distribution in the default assignment set.  You can create another assignment set with a ‘buy’ sourcing rule for the outside processing items and link it to the responsibility of the person who will do the requisition import.
4. REQUIRED. The person who initiates the move transaction in WIP must be defined as an employee (in Purchasing or HR, depending on whether or not the HR Module is fully installed) and linked to the person’s user logon in the System Administration module. WIP includes an employee name on the requisition it creates through this process, and the employee name is linked to the move transactions that initiated the requisition. Hence the name of the person who initiated the move transaction will become the name of the “requestor” for the purchased vendor service.

Process

1. REQUIRED. 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.
2. REQUIRED. Run the Requisition Import process (Purchasing > Reports > Run > Requisition Import).
3. REQUIRED. Create a purchase order from the routing.  Or, if using blanket POs, run the Create Release process (Purchasing > Reports > Run > Create Releases).
4. REQUIRED. Receive the purchase order (note:  it must be DELIVERED as well as received. Until the item has been delivered the next step will not happen.) You might want to consider setting the receipt routing to “Direct Delivery” for such items in the Purchasing section of the Item Master unless you require inspection of the item from the vendor first.
5. 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” intraoperation 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 intraoperation 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.
6. 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.

MRP Process

MRP will generate a planned order for the “make” assembly. MRP does not directly generate a requisition for the vendor labor to make the assembly. When the planned order is released as a WIP job, normal processing of the WIP job will result in generation of the purchase requisition for the vendor labor as per the process described above.

One Time WIP Setup for OSP

There is a setup step which should be performed in WIP to prevent users from entering a manual move transaction to the next step on the routing prior to entry of a PO receipt for the OSP item. This need be done only one time and should be part of your WIP setup.

1. WIP > Move Transactions > Shop Floor Status > Shop Floor Status

Define a status called ‘OSP’ - description ‘Outside Processing’ and UNCHECK the Allow Moves box.

2. WIP > Setup > Parameters > Move Transactions Tab

Enter the status created in Step 1 in the Shop Floor Status for PO Moves box.

After this setup has been done, no one will be able to do a move transaction to the next step after the OSP operation until the PO receipt has been entered. This is important, because it will prevent jobs from being closed prior to the PO receipt.

Monday, June 28, 2004

Tips on Loading On-Hand Inventory at Go-Live

Tips on Loading On-Hand Balances into Oracle Inventory

The generally accepted method for transferring on-hand inventory from a legacy system to Oracle Inventory at ‘go-live’ is to enter a miscellaneous receipt transaction into the desired subinventory.  This can be done manually using the form, by means of the Transaction Interface (simulating a ‘miscellaneous receipt’ transaction), or via a Dataloader. 

When loading initial on-hand balances into Inventory, the material valuation account of the receiving subinventory will be debited.  The credit must be entered by the user (since this is a ‘miscellaneous receipt’ transaction).  If general ledger balances are going to be brought over from a legacy system, then generally the credit account is the same as the debit account, giving a zero net value for the transaction, thus not changing the total GL value of on-hand inventory brought over from the legacy system. 

Oracle’s Cost Manager uses the item cost to establish the value of the various debits and credits that it creates when costing a transaction.  The method in which the item’s cost is established depends on the costing method selected for the inventory organization.  If the organization is using standard cost, then the item’s cost must either be entered when the record is first created, or updated using a pending cost and the Standard Cost Update.  When the item master record is saved, a zero cost is automatically entered for the item unless the standard cost is entered during the item creation process.  If items are being created via the Item Open Interface, then a value for the frozen standard cost can be entered when using the ‘Create’ option.  Note that the interface does not allow entry of a standard cost when using the ‘Update’ option.  If items are loaded without a frozen cost and not updated, then they will be valued at zero and any GL charges resulting from a transaction will also be valued at zero. 

In an average cost organization, the cost of an item is not static.  It changes continuously with every receipt into inventory via a weighted average cost recalculation.  It is not necessary to predefine a frozen standard cost prior to loading inventory. 

So the on-hand load process will vary depending on the organization’s costing method.  If using standard cost, create the items in the Item Master and then verify that they have a frozen standard cost other than zero.  If using average cost, establish the current average cost by entering the average cost from the legacy system into the cost field in the Miscellaneous Receipt transaction line.  (In a standard cost system, this field is grayed out.) Note that if no cost is entered into the transaction line, the resulting cost in Inventory will be zero and this will cause the current average cost in future transactions to be too low.

How to clear the Oracle Jinitiator Cache

This post talks about Jinitiator cache and the need to clear it on a periodic basis.

Today I was reminded about the necessity to clear your Jinitiator cache on a periodic basis. I was creating a worksheet in Oracle PSB and having selected the option to “Budget by Position”, when I tried to specify the data extract in the next field I received a rather bizarre error message - field does not understand operation. A quick check on Metalink revealed doc id. 248973.999 which suggested that I clear the Jinitiator cache. I checked the cache folder and found that it had a about 45MB worth of files - obviously it hadn’t been cleared in some time!!

My understanding of the Jinitiator cache is that it’s pretty much like the windows temp directory in that it needs to be cleared periodically. I thought it would be useful to highlight how to clear the cache files as well as remind users that this activity should be performed on a periodic basis as it may lead to obscure errors. I’ve also created a new category for Jinitiator for future posts specifically related to Jinitiator.

The first way to clear the Jinitiator cache is to simply delete all the files found in the cache directory. The cache directory is normally found on c:\program files\oracle\jinitiator 1.x.x\jcache. The second alternative is via the control panel, the steps are as follows: -

1. Go to Start -> Settings -> Control Panel
2. Double click on ‘JInitiator 1.x.x’
3. Select Cache TAB from ‘JInitiator Control Panel’
4. Click the Clear JAR Cache Button.

For an overview, setup and troubleshooting guide to Jinitiator for Oracle’s E-Business Suite 11.5.x (11i) refer to Metalink note 162488.1

For an overview, setup and troubleshooting guide to Jinitiator for Oracle’s E-Business Suite 10.7NCA and 11.0.x refer to Metalink note 206485.1

Friday, June 25, 2004

Implementing a major re-organization

This post contains information about guidelines for implementing a major re-organization.

I found this presentation on the New England Oracle Applications User Group site. The presentation was prepared by Kiran Mundy for OAUG spring 2004 conference.The abstract of the presentation reads “A Company Reorganization changed our company structure from a simple geographical hierarchy to a matrix organization where service organizations were organized by technical specialty and the client sector organizations were organized by Customer Category. Projects would be owned by the Client Sector Orgs and employees by the service orgs. Management needed to be able to view division P&L’s by either the service or Client Sector organization. This paper describes our solution and how we implemented the re-org in 3 months at year-end” I had a look at the presentation and thought that it might be useful for anyone implementing a major change in the organization structure.

New Oracle Projects and Manufacturing contributor

This post contains details of a new author who has joined OracleAppsBlog and will be blogging under the Manufacturing and Projects Categories

Nancy Beck, a Developer working for AAR Corp, is joining OracleAppsBlog and will be writing under the Projects and Manufacturing Categories. Nancy has over six years experience with Oracle as a manufacturing implementation consultant for Oracle E-Business suite, starting with 10.7 and ending with 11.5.9. You can read Nancy’s membership profile here or if you’re a member you can e-mail Nancy via the profile e-mail console.

I wanted to welcome Nancy to the Blog and introduce her to all the other members. Thanks in advance for all your future contributions, I am sure your experience will add some interesting content to the blog  

Oracle Advanced Pricing Module

This post contains details of a new author who has joined OracleAppsBlog and will be blogging under the Advanced Pricing Category

Suvabrata Biswas, an Oracle Applications Consultant who runs a consulting company based out of Houston Texas, is joining OracleAppsBlog and will be blogging under the Advanced Pricing Category. This category didn’t exist before so I have added it.

Suv has broad functional experience in Advanced Pricing, Bills of Materials, Assemble to Order, Quality, Engineering, Inventory, Work in Process, Procurement, Cost Management, Enterprise Asset Management, Order Management, Planning and MultiOrg. He also has broad technical experience with Oracle Application’s technical architecture, Oracle tools and operating systems such as Unix and NT. You should also check out his companies site. You can read Suv’s membership profile here or if you’re a member you can e-mail Suv via the profile e-mail console.

Welcome to OracleAppsBlog and we look forward to your contributions

Is your pricing data secure?

This post contains information about the new pricing security feature available in Release 11.5.9

For a long time, the pricing user community had been waiting for this functionality. Unlike all the financials modules, it was not possible to partition pricing data by operating unit. This was a serious issue in a multi-org environment. A sales order supported multi-org functionality but a price list or modifiers did not. This meant that pricing data was wide open to all the responsibilities that access price lists. There was also no function security available to make the price list ‘read only’ for a specific group of users.

A new HTML form has been introduced in Release 11.5.9 that can be configured using the Pricing Administrator responsibility (also a new responsibility in 11.5.9) to partition pricing data by responsibility, user or operating unit. It is also now possible to grant ‘read only’ access to a pricing user group (responsibility or operating unit) on a specific pricing object. This is really a powerful feature. The good news is that this security feature is available both in advanced pricing and in basic pricing. The bad news is that the new pricing security only works for the HTML interface. Moreover, the HTML interface does not show any of the descriptive flexfields defined in the pricing form. We hope that this gap will soon be taken care of by Oracle.

Conversions, Interfaces and Oracle Applications

This post contains information about data conversion and interfaces throughout the life cycle of an Oracle Implementation project.

Not available

Thursday, June 24, 2004

Oracle Apps Implementation Documentation for a University

This post contains details of implementation documentation for an Oracle Applications Implementation at the Queensland University of Technology. In particular, I will discuss the Chart of Accounts documentation available at the Universities web site.

The Queensland University of Technology has some very useful Business Forms, Procedure Manuals and Training Documentation at the Division of Finance and Resource Plannings site. In particular the Chart of Accounts documentation clearly illustrates the accounting flexfield structure and associated values that should be used in such types of organization as a University.

Another sample Chart of Accounts can also be downloaded from my personal site.

Oracle Applications Documentation - Business Forms, Procedures and Training Manuals

This post contains information on some Oracle Documentation I came across at the Rochester Institute of Technology.

According to their site, “the Rochester Institute of Technology (RIT) implemented Oracle Financials in October 1998. Over 350 users campus wide access the on-line system to prepare journal entries, inquire about account transactions and run custom and standard reports”.

I found some useful documentation on their site and thought I should mention it to readers of the blog. The Finance and Administration section of the Institutes site has some very useful Business Forms, Procedures and Training Manuals which they used in their implementation and which I believe would be useful to other Apps implementors. Make sure you look under the Training Material section where you will find the Accounting Practices, Procedures and Protocol Manual.

Wednesday, June 23, 2004

Threat and Risk Assessment Working Guide

This post contains information on where to find a sample Threat and Risk Assessment document layout.

In a previous post I introduced readers to the Oracle Applications Implementors Journal at ITtoolbox. I talked about the first post on this blog which related to performing a Threat and Risk Assessment for Oracle Applications (TRA). I subsequently spoke to author of this post and asked if there was anywhere on the Internet where I could find a document layout/template that would assist in the preparation of such an assessment. I was provided with a link to a Threat and Risk Assessment Working Guide where you can download a fairly comprehensive 132 page document. According to the site: -

"This document entitled Threat and Risk Assessment Working Guide
provides guidance to an individual (or a departmental team) carrying out a
Threat and Risk Assessment (TRA) for an existing or proposed IT system. This
document will help determine which critical assets are most at risk within that
system, and leads to recommendations for safeguards that will reduce any risks
to acceptable levels.

By following the guidance given therein, a TRA can be carried out such
that it results in a concise report that:

Tuesday, June 22, 2004

The HR Global Driver

The Hrms implementation guide describes a post-install step for Oracle hrms: the global driver. This driver or patch is so famous he got a name. The result of the driver is that low-level seeded data is loaded within the hrms tables.

First step is Data Installer, a java tool to select the legislations and modules you want to load. Your selection is stored within the Hr_legislation_installations table.

Next step is to run the global driver through adpatch, the standard tool to launch a Apps patch. The global driver will mainly load data for the selection made earlier.

Apply the global driver always, even if your legislation in not within the list of available legislations. In that case, the global driver will load common data, necessary for all hrms legislations.

Check some tables to verify if the data was really loaded, and watch the last_update_date. For payroll, I check in 11i the Pay_balance_dimensions table for the ZZ legislation.

One last remark, when you arrive new at an Hrms project, and you notice some surprising behavior, check if the hr global driver was successfully applied. It is not the first time that the dba ensures me he applied the global driver, but that I found out that the data was not loaded.

Monday, June 21, 2004

Oracle Applications Implementor’s Journal - an ITtoolbox blog

An Oracle Applications Implementors Journal has recently started at ITtoolbox. This post contains details of the blog.

The Oracle Applications Implementors Journal urges you to "Follow one Financial Systems Development Officer & Oracle Certified Professional with a strong background in Oracle Applications as he shares unique insights and real-life solutions to approaching business needs with Oracle". The first post is on how to perform Threat and Risk Assessment for Oracle Applications (TRA). All the best to the author who is listed as non other than "Oracle Fan".

Glad to see the blog has an RSS feed, I think I will syndicate it on this site once I figure out how to.

Oracle E-Business Suite implementation documentation

This post contains information about Oracle E-Business Suite project documentation and training materials.

Maricopa Community Colleges have implemented a College Financial System using Oracle E-Business Suite 11.5.8. According to their site "The College Financial System (CFS) is the system of record for all purchasing, accounts payable, fixed assets, and accounting transactions. CFS is used by the Business Services Division, Campus Fiscal Officers, Administrative Secretaries, and Receiving Clerks to create, act upon, and review Purchase Orders, Invoices, Assets and Financial information. The annual Financial Report is derived from information in CFS. The CFS application interfaces with the BDS application, the HR application, and the Student Information System. 

The Application is Oracle E-Business Suite, version 11.5.8, with relatively minor customizations. It operates on a Compaq Tru64 Server with a Unix 5.1a Operating System on an Oracle 8.1.7.4
Database". 

I came across their site and thought this documentation would certainly be useful to anyone implementing Oracle Apps. At the College Financial System site you will find Oracle the following documentation: -

You should also visit the Maricopa Technology Training Services site where there you can obtain training material for a variety of Microsoft and other software products.

Saturday, June 19, 2004

Oracle Applications Documentation - Training Courseware

This post contains information about some useful Oracle Applications Training Courseware.

The University of Northern Iowa has implemented a Modern Executive Management Financial Information System (MEMFIS) using Oracle E-Business Suite.

According to their web site: -

The MEMFIS Project at the University of Northern Iowa is a campus-wide initiative with the primary objective of replacing the core system of human resource, payroll, general ledger, purchasing, accounts payable, grants and contracts, projects, and budgeting. In July 2001 general ledger, purchasing, accounts payable and cash management went “live”. Additional modules are scheduled for implementation in 2004. These modules include human resources, advanced benefits, self service HR, payroll, and time collection”.

I had a look at the site and believe that in particular their training courseware might be particularly useful for anyone implementing or learning Oracle Applications.