Oracle Applications R12

Supply Chain Management

INVENTORY
VERSION 4.0

By Mr. Sudheer 10+ Yrs

Oracle Certified Expert

Communication Address:
Tech Leads,
Ameerpet Branch SR Nagar Branch
FLAT No. 30, FLAT No: 301, 3rd Floor,
SAP Street, Ameerpet, Hyderabad. OPP: SR Nagar Police Station.
Behind HUDA Maitrivanam Hyderabad.

Contact num: 8125323232, 8125824824

 INDEX
Table of Content Page No
1. Defining User 1
2. Defining Responsibility and assigning it to user 1
3. Types of Calendars and Defining a workday calendar 10
4. Cost Elements 18
5. Cost Methods 18
6. Defining Locations 19
7. Multi-Org Structure 25
8. Managing the Items 74
9. Templates and types 79
10. Custom templates 82
11. Transactions Types in inventory 83
12. Unit of measure (UOM) 113
13. Inventory Controls 118
14. Inventory Planning Methods/Replenishment methods 147
15. Inventory Flexi fields 162
16. Item Categories 188
17. Item Catalogs 188
18. Counting Methods/Accuracy Methods 193
19. Key attributes 219
 Inventory
1. Defining User
User Name: operations
Password : welcome
Navigation: System Administrator->Security->User->Define
 Enter ‘User Name’ and ‘Password’ (Enter password twice) and Save it.
Note: Password should be minimum five characters.

Table Name: FND_User

2. Defining Responsibility and give access to user:

[N]: System Administrator->Security->Responsibility->Define
 Enter Responsibility name <- XX Inventory Super User.
 Enter Application Name <- Inventory.
 Enter Responsibility Key <- As u wish
 Data Group <- Standard.
 Application <- Inventory
 Menu <- Inv_Navigate (Pre defined Menu)
 Request Group Name <- All Inclusive GUI Application <- Inventory (Predefined)
Menu:- Menu is a collection of Menus, submenus & functions.
Request Group:- Request Group is collection of Reports/Concurrent Programs.

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Table Name: FND_Resposibilities

 Query your user and attach responsibility to user:

[N]: System administrator->Security->User->Define,
Press F11Enter created user name  Ctrl+F11.
 Attach Inventory Responsibility to the user.
 System Administrator responsibility to the user.

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Basics:
Verify Application Version:
[N]: Open any form -> Help Menu -> About Oracle Applications

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Short cut key list:
[N]: Open any form -> Help Menu -> Keyboard Help

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Verify Record History: (Who Columns)
 Who created record.
 When the record created.
 Last update/Recently updated
 Recently updated date.
 Record Table Name.

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[N]: Open respective form-> Query the record -> Help Menu -> Record History

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Help Menu -> Window Help: Oracle Document opens in another browser which has explanation
about the form/concept.
View Menu -> Show Navigator: It displays the form/function navigation.
View Menu -> Requests -> To Submit any new program & or Verifying the status of
running/completed programs & Reports

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 3. Types Calendars & Defining Workday Calendar:
 Workday Calendar in Inventory.
 Manufacturing Calendar in Manufacturing.
 Transactions Calendar in GL.
 Accounting Calendar in GL.

Workday Calendar Setups:

[N]: Inventory->Setup->Organizations->Calendars
 Enter Calendar Name & Description.
 Quarterly Type of the Calendar.
 Enter Calendar Date Range.
 Enter Default Workday Pattern.
 Enter Shift, workday pattern and timing.
 Build the workday calendar.(Tools->Build)
 Let the generated request completes normal. (View->Requests->Find)

Table Name: BOM_Calendars

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Calendar Exception Template:
 Just applying a holidays to the calendar using the template.
Steps:
1. Define calendar Exception template.
2. Load the created template in the respective calendar
3. Build the calendar.

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[N]: Inventory -> Setup -> Organizations -> Calendar Exception Template

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 4. Cost Elements
 Material cost. -> Raw material cost
 Material overhead cost. -> Transportation cost
 Resource cost.-> Wages
 Outside process cost.-> Some part of the mfg done by outside of the company
 Overheads.-> Loading & Unloading charges.
 Expenses.- > Miscellaneous expenses.

5. Cost Methods
 Standard
 Average
 LIFO
 FIFO

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 6. Defining Locations:
->Defining Location for Business Group
Steps:
[N]: Inventory - > Setups -> Organizations -> Locations
 Enter name of the location.
 Select address style as ‘India’.
 Enter the Address.
 Select the Time Zone as per the location.

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Ship-To Site: Select this option to make the location Name a valid ship-to organization on a
purchase order or requisition.
Receiving Site: Select this option to make the location a valid receiving Location when creating a
receipt or receiving transaction.
Office Site: Select this option to indicate that this location Name is an office site, such as a field
office.
Bill-To Site: Select this option to make the location Name a valid bill-to site. The Bill-To Site, which
is used by Payables, is specified on a purchase order header.
Internal Site: Select this option to make the location a valid internal ship-to location when creating
an internal requisition
EDI Location: If you use Electronic Data Interchange (EDI) to receive Advance Shipment Notices
(ASNs) or ASNs with billing information (ASBNs)
Define Location for Operating Unit:
Steps:
[N]: Inventory - > Setups -> Organizations -> Locations
 Enter name of the location.
 Select address style of the location in “Address Details”.
 Enter the Address.
 Select the Time Zone as per the location.

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Define Location for Hyd Inv Org:

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Define Location for Blre Inv Org:

Table Name: HR_Locations

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 7. Multi-Org Structure:

11i R12
(11.5.10) (12.1.1,12.1.3,12.2.4,12.2.5)

Currency
Currency

4c's
3c's Calendar General
Chart of
accounts
Set of Ledger
Calendar
books Chart of Convention
accounts Methods
(SLA)

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 11i R12
Business Business
Group Group

Set of General
Books Ledger

Legal Legal
Entity Entity

Operating Operating
Unit Unit

Inventory Inventory

Sub Sub
inventory inventory

Locators Locators

Multi-Org: (MOAC)
**Multi Org Access Control:
Accessing of multiple operating units using Single responsibility
Business Group:
The business group represents the highest level in the organization structure, such as the
consolidated enterprise, a major division. The business group secures human resources
information.
General Ledger:
A general ledger is a complete record of financial transactions over the life of a
company. The ledger holds account information that is needed to
prepare financial statements, and includes accounts for assets, liabilities, owners' equity,
revenues and expenses.
A Ledger is a financial reporting entity, all the financial transaction happened in the
organization at last should hit here.
By using some of these reports inside, outside people of the organization can take decisions.

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 Legal Entity:
Legal Entity representing as a legal company, responsible to prepare tax reports, fiscal
reports.
Operating Unit:
It manages all the complete information about Inventory, Order Management, Purchasing,
Account Payables, and Account Receivables etc.
MO: Operating Unit or MO: Security Profile option.
MO: Operating Unit profile option provides access to one operating unit.
MO: Security Profile provides access to multiple operating units from a single responsibility
Inventory:
An organization for which tracks inventory transactions and balances, and/or an
organization that manufactures or distributes products. Examples include manufacturing plants,
warehouses, distribution centers, and sales offices.
Sub Inventory:
It just likes a ware house to the organization. All the items on hand (stock) maintained here.
Locators:
Exact location of the item stock lying in a sub inventory.
Item Master Organization (IMO):
It is a central repository of the items. Initially items are defined here and later assigned to
respective organizations.
Multi-Org Setups:
Define HRMS Responsibility:

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Clearing the Cache
[N]: Functional Administrator -> Core Services - > Caching Framework -> Global Configuration -
> Clear All Cache -> Apply -> Yes

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->Define Business Group
Navigation: HRMS -> Work Structure -> Organization -> Description
Steps:

 Enter name of the Business Group and select type as -> Business Group
 Select Location from LOV.
 Select Organization Classification -> Business Group
 From the ‘Others’ -> Enter ‘Business Group information’.

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TN: HR_ORGANIZATION_UNITS

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Define General Ledger Responsibility:

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Define Legal Entity
[N]: GL->Setup -> Financials -> Accounting Setup Manger -> Accounting setups

Define General Ledger (Step 2)

[N]: GL->Setup -> Financials -> Accounting Setup Manger -> Accounting Setups
Define 4C’s
Currency - INR

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Calendar – TL Accounting Cal

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Chart of accounts – Operations Accounting Flex

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SLA/Convention Methods -> Standard Accrual

Sub Ledger Accounting:

SLA is a common rule-based accounting engine used by Oracle products, Based on the defined
Rules/Conditions accounts gets generated/defaulted.

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Define Accounting Options:
->Add Legal Entity to General Ledger

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 1. Ledger Options -> Update ->

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 2. Reporting Currencies -> Update. ->

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 3. Balancing Segment Value Assignment -> Update

4. Sub Ledger Accounting Options -> Update

It is already updated & Completed

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 5. Operating Units -> Update

6. Sequencing -> Update

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->Define Operating Unit
[N]: Inventory -> Setup -> Organizations -> Organizations
Steps:
 Enter name of the Operating Unit.
 Select Location from LOV.
 Select Organization Classification -> Operating Unit.
 Enter “Operating Unit Information” from “Others” region.
TN: hr_operating_units

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 Operating
Unit
Operating
Unit
Information

->Define Item Master Organization (IMO):

Navigation: Inventory -> Setup -> Organizations -> Organizations
Steps:
 Enter name of the Inventory Organization.
 Select Organization Classification -> Inventory Organization.
 Enter “Accounting Information” and “Inventory Information” from “Others” region.

Inventory
Organization
Accounting
Information

Inventory
Information

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Allow Negative Balances:-
This parameter determines if inventory transactions can drive the inventory onhand/balance
to negative.
EAM Enabled:-
Indicate whether this organization is enabled for the Oracle Enterprise Asset Management
(eAM) application
Process Manufacturing Enabled:-
Indicate whether this organization is enabled for the Oracle Process Manufacturing (OPM)
application

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WMS Enabled:-
Indicate whether this organization is enabled for the Oracle Warehouse Management System
(WMS) application

Material:
An asset account that tracks material cost. Once your perform transaction you cannot change
this account.
Material Overhead cost:
An asset account that tracks material overhead cost.
Resource:
An asset account that tracks resource cost.
Outside processing cost:
An asset account that tracks outside processing cost.
Expense:
The expense account used when tracking non asset item.

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Other Accounts:

**Purchase Price Variance (PPV):

 Difference between standard price and purchase order price.
**Invoice Price Variance (IPV):
 Difference between Purchase Order Price and Invoice Price.
Encumbrance:
An Expense account used to recognize the reservation of funds when a purchase order is
approved.
 Budget for the organization.
Sales (Revenue):
The profit & loss account tracks the default revenue.
COGS (Cost of goods sold):
 Cost of goods sold to the customer.
DCOGS (Deferred Cogs):
 New Feature available in R12
The problem that accountants face with this design is that on the last day of month COGS
gets recognized when we ship confirm the material but invoice gets generated in next month and
so revenue gets recognized in different month. This does not look good from the matching
principle which requires the revenue and cost should get recognized in the same period.
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 The deferred COGS account is the new feature introduced in Release 12. The key
fundamental behind the feature is that the COGS is now directly matched to the Revenue.
In simple terms, this means, COGS for an order line will be recognized only if the revenue is
recognized for that line making sure that the revenue and COGS are posted in the same month.
Matching percentage is also taken care which ensures that revenue and cost are always in sync.
Business Process:
In R11i When a Sales order is shipped and interface trip stop is completed. This make a call
to COGS workflow to generate the COGS account. This then generate following accounting.
Cr Inventory Valuation account $250
Dr COGS Account $250
In R12 when a sales order is shipped and interface trip stop is completed the following accounting
entries gets generated.
Cr Inventory Valuation account $250
Dr Deferred COGS Account $250
After the AR invoice is generated and the revenue is recognised (Considering you don’t have
revenue recognition policies or specific accounting rules), following program will create COGS
recognition transaction. This will reflect a change in the revenue recognition percentage for a sales
order line.

1. Collect Revenue Recognition Information program: This program will collect the change in
revenue recognition percentage based on AR events within the user specified date range. It collects
invoice information of the sale order line from RA_CUST_TRX_LINES_ALL and
RA_CUST_TRX_LINE_GL_DIST_ALL after the revenue is recognized and check the percentage
revenue recognized. It then insert information in CST_REVENUE_RECOGNITION_LINE.
[N]: Cost > COGS Recognition > Collect Revenue Recognition Information

2. Generate COGS Recognition Events: This program will create the COGS recognition
transaction for each sales order line where there is a mismatch between the latest revenue
recognition percentage and the current COGS recognition percentage. This is the program which
also makes the transactions costed by creating these accounting entries. So cost manager is not used
to make these transactions as costed in R12.The COGS account in this entry is taken from the
distribution_account in mtl_material_transactions table (which was generated earlier by COGS
workflow).
Cr Deferred account $250 (Actual Revenue
%)
Dr COGS Account $250 (Actual
Revenue %)
[N]: Cost > COGS Recognition > Generate COGS Recognition Events
This particular COGS recognition transaction actually correspond to a revenue recognition
percentage change.
As we have seen above this new feature does help in resolving some of the key accounting issues
but we need to be aware of the following also
1. With this feature the COGS recognition now requires few extra concurrent requests to be
submitted.
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2. AR revenue need to be recognized to have COGS recognized
3. This functionality is not optional as it is mandatory to be used in R12
4. To make the complete set of transactions visible in the Material Transaction screen, ‘Include
Logical Transaction’ checkbox need to be checked.
This concludes our discussion about Deferred COGS. Now I am planning to pick some topic from
procurement as we have not touched that area till date.

Inventory AP Accrual Account:

 Payments to the supplier tracked from this account
->Define Hyd Inv Org:
[N]: Inventory -> Setup -> Organizations -> Organizations
Steps:
1. Enter name of the Inventory Organization.
2. Select Location from LOV.
3. Select Organization Classification -> Inventory Organization.
4. Enter “Accounting Information” and “Inventory Information” from “Others”
region.

Inventory
Organization
Accounting
Information

Inventory
Information

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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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Define Blre Inv Org:
[N]: Inventory -> Setup -> Organizations -> Organizations
Steps:
1. Enter name of the Inventory Organization.
2. Select Location from LOV.
3. Select Organization Classification -> Inventory Organization.
4. Enter “Accounting Information” and “Inventory Information” from “Others”
region.

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 Inventory
Organization
Accounting
Information

Inventory
Information

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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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Define Sub Inventories for Hyd Inv Org:
[N]: Inventory -> Setup -> Organizations -> Sub Inventories
TN: mtl_secondary_inventories

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Define Sub Inventories for Blre Inv Org:
[N]: Inventory -> Setup -> Organizations -> Sub Inventories

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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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Run “Multi-Org Setup Validation Report” from System Administrator.

8. Managing the Items

[N]: Inventory ->Items ->Master Item

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Steps:

1. Enter name, description of the item.

2. Apply template for the item. (Tools ->Copy from->Template name)
3. Assign it to respective organizations. (Tools->Organization Assignment)

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Step1

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Step 2

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Step3

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TN: mtl_system_items_b
Examples
 Service Items
 Raw Material
 Finished Good
 Inventory Items/Asset Items
 Expense Items -> Expense to the company
9. Templates and Types
When you apply a template to an item it automatically defaults attributes values from the
applied template.
Some of the predefined templates exist. Even we can modify the existing template or you can
create your own template called custom templates.
Throughout the application item behavior is based on the applied template.
Templates can be applied to an item more than once but it will override.

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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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10.Custom templates
Custom templates are nothing but user defined templates. A new template can be created
with new set of attribute values.
[N]: Setup-> items -> templates

Export the attributes values to spreadsheet:-

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 Template_Attributes.
xls

11. Transactions types in inventory

1. Miscellaneous Receipts:
a) Here we will know the destination but we are not going to know source.
b) It is a logical transaction it is not a physical transaction.
c) Whenever you want to create on-hand will use this transaction type (Addition)

[N]: Transactions-> miscellaneous transaction

Steps:
1. Define an item.
2. Perform Misc Receipt.
3. Check on hand availability.

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Step1
Item has already defined in the earlier concept.

To perform transactions period should open:-

[N]: Inventory -> Accounting Close Cycle- > Inventory Accounting Periods (Select Org ->
Inventory Org)

Statuses:
Future -> Open -> Close

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Step2
[N]: Inventory -> Transactions -> Miscellaneous Transaction

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Step3
[N]: Inventory -> On-hand, Availability -> On-hand Quantity

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 2. Miscellaneous Issue:
a) Here we will know the Source but we are not going to know Destination.
b) It is a logical transaction it is not a physical transaction.
c) Whenever you want to remove on hand will use this transaction type. (Minus)

Steps:
1. Define an item.
2. Perform Misc Issue.
3. Check on hand availability.

TN: mtl_material_transactions

Step1
Item has already defined the earlier step.

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Step2
[N]: Inventory -> Transactions -> Miscellaneous transaction

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Step3
[N]: Inventory -> On–hand, Availability -> On-hand Quantity

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 3) Sub Inventory Transfer:
Under the Inventory Organization transferring the material from one
‘Sub inventory ‘to ‘another sub inventory’ is called sub inventory transfer.

[N]: Transactions -> Sub Inventory transfer

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 Steps:
1. Define an item
2. Do the sub inventory transfer (Make sure on hand available for the item)
3. Check on hand availability.

Step1
Item has already defined in the earlier step.
Step2
[N]: Inventory -> Transactions -> Sub inventory Transfer

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Step3
[N]: Inventory -> On–hand, Availability -> On-hand Quantity

4) Move Orders:
There are four types of move order.
a) Requisition Move Order/Manual Move Order.
b) Pick Wave Move Order.
c) Job Move Order.
d) Auto Generated Move Order/ Replenishment Move Order.

 Under the Inventory Organization moving the material from one ‘sub inventory’ to
‘another sub inventory’ called move order transfer.
 Here proper documentation and approval process is needed.

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 Initiate -> Approvals -> Transact
Steps:
1. Define item.
2. On hand should be available in the source sub inventory.
3. Enter the Requisition move order details.
4. Get the approval for requisition move order.
5. Transact ‘requisition move order’.
6. Check on hand availability.
Allocate: Material reserved for this move order.
Transact: Material will be transacted.

**Sub inventory transfer VS Move order transfer

1. No need of approvals 1. It requires approval
2. Reservations are not possible 2. Reservations are possible
3. One step process 3. Three step process

Step1
Item has already defined in the earlier step.
Step2
On-hand is also available in the source sub-inventory

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Step3
[N]: Move Orders -> Move Orders

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Step4:
Select ‘Approve’

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 Step5:
[N]: Move Orders -> Transact Move Orders

Select the Line & Click on ‘Transact’ button

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Step6
[N]: On-hand Availability - > On-hand Quantity

5. Inter-Org Transfer:
Under the Operating Unit Moving the Material from one inventory organization to another
inventory organization.

Operating
Unit1

Inv Org1 Inv Org2

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Steps:
1. Define an item. (Make sure item is available in both the organizations)
2. Do the Shipping Networks setup. (Predefined Setup) (make sure periods are open for both
organizations)
3. Perform Inter-Org transfer.
4. Check on on hand availability.

Step1
Item has already defined in the earlier step and assigned to both the organizations.

Open Periods for Blre Inv Org:

[N]: Inventory -> Accounting Close Cycle -> Inventory Accounting Periods (Select Blre Org)

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Select ‘Hyd’ Inv Org

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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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Step2
[N]: Setup -> Organizations -> Shipping Networks

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Direct:
Inter-organization transfers move inventory/goods directly from the shipping organization to
the destination organization.
Intransit:
Inter-organization transfers move inventory/goods to intransit inventory first (FOB: Free on
board). The destination organization receives from this point.
You can track this inventory until it arrives at the destination organization.

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Step3
[N]: Transactions -> Inter organization transfer

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Step4:
[N]: On-hand Availability -> On-hand Quantity

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12.Unit of Measure(UOM)
The way how you measure the items and counts the item stock
 Primary UOM
 Secondary UOM
Steps:
1. Define item. (Note: Take Primary UOM -> Dozen and Secondary UOM -> Each and try
this concept.
2. Search for your class. (Quantity)
3. Go to conversion define conversion for your created item. (Intra-class) (Quantity)
4. Verify functionality. (miscellaneous transaction)
Intra Class:
Defining a conversion between two unit of measures falling under the same class
Inter Class:
Defining a conversion between two unit of measures falling under different classes called as Inter
class conversion
Primary:
Tracking:
Pricing:
Fixed:
You can enter an item quantity in one unit of measure, and the system converts the quantity
to the secondary unit of measure and displays both quantities.
Default:
You can enter an item quantity in one unit of measure, and the system converts the quantity
to the second unit of measure and displays both quantities. You can change the quantity in the
secondary unit of measure, without changing the quantity in the primary unit of measure
No Default:
The system does not automatically display in the secondary unit of measure when you
specify the quantity for the primary unit of measure. You manually enter the quantity of the
secondary unit of measure before you process a transaction. The secondary quantity can fluctuate
from the default conversion by the factors that you specify in the Deviation + and Deviation -
attributes.
Once UOM is assigned to an item it can’t be change/override.
TN: MTL_UNITS_OF_MEASURE

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Step1

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Step2
[N]: Inventory -> Setup -> Unit of measures -> Classes (Query for ‘Quantity’ class)

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 Step3
[N]: Inventory -> Setup -> Unit of measure -> Conversions

Step4
[N]: Inventory -> Transactions -> Miscellaneous Transaction

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13.Inventory Controls
Four Types of controls are there.
1. Serial Control.
2. Lot Control.
3. Stock Locators
4. Revision Control.
1. Serial Control:
 Serial Numbers maintain unique number for the item qty.
 Serial control is used for costly items & to represent individually.
 In the application we can track item using their individual serial number.
 Serial number generation can be done at “Org Level” or “Item Level”.
Serial Number Generation:
At Receipt: Generating serial number while receiving the stock from the supplier
At sales order issue: Generating serial number while shipping the stock to the customer.
Predefined: When you are keeping the stock in the sub inventory will generate serial numbers.
Steps:
1. Define an item.
2. Select generation of serial numbers at -> Item level & Provide Starting Prefix and Starting
Number at item level.
3. Generate Serial Numbers.
4. Perform miscellaneous transaction.
5. Verify generated serial numbers.
TN: mtl_serial_numbers

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 Step1
[N]: Items -> Master Items

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 Step2
[N]: Inventory-> Items -> Organization Items

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 Step3
[N]: On-hand Availability -> Generate Serial Numbers

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 Step4
[N]: Inventory -> Transactions -> Miscellaneous Transactions

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 Step5
[N]: On-hand Availability -> on -hand Quantity

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Lot Control:
a) Lot control is used represent group of item qty.
b) Lot number generation can be done at “Org Level” or “Item Level”
c) A lot number contain more than one qty.
Steps:
1. Define an item
2. Select generation of lot numbers at -> Item level. (In the organization parameters)
3. Provide Lot prefix & number, select “control-> full control” at item level & select
Material Status <- Active.
4. Do the miscellaneous receipt and generate lot numbers.
5. Verify lot numbers.
TN: mtl_lot_numbers

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Step 1:
[N]: Inventory -> Items-> Master Items

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Step 2
[N]: Inventory -> Setup -> Organizations

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 Step3
[N]: Inventory -> Items -> Organization Items

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 Step4
[N]: Inventory -> Transactions -> Miscellaneous Transaction

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 Step5
[N]: On-hand Availability -> On-hand Quantity

4 Revision Control:
Revision control is nothing but modified version of the existing item.
We can have up to 26 revisions for an item.
Steps:
1. At Organization level parameters “Enter Starting Revision”
2. Define item in Master org,
3. At child org level, under Inventory ->“Revision Control” , provide revision for the item
(Tools-> Revisions)
4. Test the functionality.
5. On-hand Availability.

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 Step1
[N]: Inventory -> Setup -> Organizations -> Parameters

Step2
[N]: Inventory -> Items -> Master Items

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 Step3
[N]: Inventory -> Items -> Organization Items

Tools -> Revision

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 Step4
[N]: Inventory -> Transactions -> Miscellaneous Transaction

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 Step5
[N]: Inventory -> On-hand Availability - > on-hand quantity

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14.Inventory Planning Methods/Replenishment methods
 Min-Max Planning
 Reorder point planning
 Kanban Planning
 Replenishment method
Min - Max Palnning
If an item is min-max planned item, if the system identifies it is under the below specified
min qty based on the type of the item it automatically generates suggestions for the supply.
Quantity on Hand + On Order = Total Available
If Total Available < Minimum Quantity, suggest a new order
Order Quantity = Maximum Quantity - Total Available

 If an item is buy/purchased item it automatically generated Purchase Requisition/Internal

Requisition.
 If an item is make item it automatically generates job order/Work Order
 If it is a “make” item we plan at organization level.
 If it is a “buy/purchased” item we can plan at organization level or sub inventory level (But
both can’t be done at once).

Min-Max planning for make item at Organization Level (Vision)

Steps:
1. Define a make item.
2. Select “Inventory Planning <- min-max” in General Planning & Enter min qty, max qty
and min order qty, max order qty.
3. Run ‘min-max planning’ report with required input parameters
4. Verify the min-max planning report completes normal and child report (WIP Mass Load)
output for the “Job Order”.

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Example:
ItemA
onhand+incoming suply= Total Availability 400
Min 500 Min Order Qty 100
Max 2000 Max Order Qty 500
Order Qty= Max Qty - Total Availability
1600

Suggestion1 500
Suggestion2 500
Suggestion3 500
Suggestion4 100

Step1
[N]: Inventory -> Items -> Master Items

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Step2
[N]: Inventory -> Items -> Organization Items

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Step3
[N]: Inventory -> Planning -> Min Max Planning

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Step4
Completed Norma

Min Max Report Output

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WIP Mass Load Output

Restock: Yes
Min Max Report
WIP Mass Load
No
Min Max Report
Min-Max planning for Buy item at Organization Level (Vision)
Steps:
1. Define Item at master level and select following attributes.
Template: Purchased Item
Planning Method: MinMax (General Planning)
List Price: Enter price (Any number) (Purchasing)
2. Enter Min qty, Max qty and Min order qty, Max order qty,
Source type -> Supplier at child org level.
3. Run min-max planning report with required input parameters.
4. Go to ‘purchasing responsibility’ and submit ‘Requisition import’ request by providing
import source as ‘inv’ and verify the report output completes as normal.
5. Verify the requisition number using ‘requisition summary form’ in purchasing responsibility.

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Source Type - > Supplier -> Purchase Requisition generated
Source Type -> Inventory -> Internal Requisition generated.
Source Type -> Sub inventory -> Move Order number generated. (Nothing but sub inventory
transfer within the inventory organization)

Step1
[N]: Inventory -> Items -> Master Items

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Step2
[N]: Inventory -> Items -> Organization Items

Step3
[N]: Inventory -> Planning -> Min Max Planning

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Select ‘Ok’ & ‘Submit’

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Min Max Planning Report Output

Step4
[N]: Purchasing Vision Operations (USA) ->View Menu -> Request -> Submit new request ->
Requisition Import

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Requisition Import Output

Step5
[N]: Purchasing Vision Operations (USA) -> Requisitions -> Requisitions Summary

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Min - Max Planning for but item at Sub inventory level:
Steps:
1. Define a buy item (In Master Org General Planning -> Min Max)
2. Select “Inventory Planning <- min-max” in General Planning (Items -> Organization
Items)
3. Enter min, max qty and min order qty, max order qty, Sourcing< Sub inventory (Tools -
> Item Sub inventories)
4. Run min max planning report should complete normal.
5. Verify Replenish Move Order Numbers. (Move Orders -> Transaction Move Order)

O Link:
https://support.oracle.com/epmos/faces/DocumentDisplay?_afrLoop=396445909292976&id=6
6712.1&displayIndex=3&_afrWindowMode=0&_adf.ctrl-state=bfye5zuag_134#aref_section311

Verify the following profile options:

INV: Minmax Reorder Approval -- > Pre Approved.
PO: Release during ReqImport -- > Yes
15.Inventory Flexi Fields
Flexi Fields are two types
1. Key Flexi Fields.
2. Descriptive Flexi Fields.
You also determine the appearance of your key flexfield window, including the size of the
window, the number and order of the segments, and the segment descriptions and default
values.
Key Flexi Fields (KFF)
1. Key Flexi Fields are provided by Oracle Corporation.
2. Key Flexi Fields are made by segments here information stored in segments.
3. When you click on that particular area multiple text boxes are opened, technically these
text boxes are called as segments.
Key Flexi Fields are 6 types.
a) System Items.
b) Item Categories.
C) Item Catalogs.
D) Stock Locators.
E) Sales Orders.
F) Account Alias.

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 Step1: Open respective flex field
Step2: Unfreeze
Step3: Create a new segment
Step4: Freeze
Step5: Compile
Step6: Verify changes in the master screen

Step1
[N]: Setup -> Flex fields -> Key -> Segments

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 Step2

Click on segments

Step3

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Click on Open

Step4

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Step5
Click on Compile

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Step6
[N]: Inventory -> Items -> Master Items

Stock Locators

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Uncheck/Disable default stock locator combination (Row, Rack, Bin)
Create new stock locator combination (Block, Floor, Room)

Click on Segments

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Test the functionality

At Organization Parameters form

Select Locator Control -> Determined at sub inventory level
[N]: Inventory -> Setup-> Organization -> Parameters
None:
Inventory transactions within this organization do not require locator information
Pre specified only:
Transactions within this organization require a valid, predefined locator for each item

Dynamic entry allowed:

Inventory transactions within this organization require a locator for each item. You can
select predefined locator, or define a locator dynamically at the time of transaction.
Determined at sub inventory level:
Inventory transactions use locator control combination that you define at the sub inventory
level.

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Define Locator Controlled Sub Inventory & Specify the locators
[N]: Inventory -> Setup -> Organizations -> Sub inventories

Click on Locators

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Create Value Set for Room Segment

Click on Value Set

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Freeze & Compile

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Enter values in the value set
[N]: Inventory -> Setup -> Flex fields -> Key -> Values

Click on Find

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Test the functionality

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Descriptive Flexi Field (DFF)
1. Descriptive Flexi Fields are user defined Flexi Fields.
2. DFF’s are made up by attributes here information stored in attributes.
3. They normally hidden once you click on that particular area automatically multiple text
boxes opened in which you can enter the required information.
4. Descriptive Flexi Fields are used to provide extra information about a particular record.
Steps
1. Identify Descriptive Flex Field Name.
2. Create a new attribute.
3. Verify the functionality.

KFF VS DFF
Predefined by Oracle User defined
Information stored in segments Information stored in attributes

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Item Categories
A category is a logical classification of items that have similar characteristics.
(Or) Classifying the system items based on their nature and characteristics is called Item
Categories.
You can use categories and category sets to group your items for various reports and
programs.
Steps:
1. Define Item Category Flexi Field Structure.
2. Define Item category codes. (Item Category Combinations)
3. Define Item Category Sets.
4. Define an item and test the functionality. (Assign Items to the Categories)

Step 1
[N]: Inventory -> Setup -> Flex Fields -> Key -> Segments

Click on Segments

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Select Segment & Click on Value Set

Attach Value Set to the Segment

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Enter values in the Value Sets
[N]: Inventory -> Setup -> Flex Fields -> Key -> Values

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Step 2
[N]: Inventory -> Setup -> Items -> Categories -> Category Codes
Select NEW
Enter Flex Field Structure
Enter all the possible combinations

Step 3
[N]: Inventory -> Setup -> Items -> Categories -> Category Sets

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Step 4
[N]: Inventory -> Items -> Master Items
Define Item
Tools -> Categories -> Assign the category

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12. Sources for Inventory:

 If it is ‘supplier’ Purchase Requisition gets created.

 If it is ‘Inventory’ using “Internal Requisition” we will get the stock to the inventory.
 If it is ‘Sub inventory’ move order gets created.

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**Safety Stock:
Oracle inventory uses safety stock to maintain item quantities that should not be below to
specified level.
Oracle uses safety stock to handle fluctuation in demand, due to delay in receiving of the
material from the sup1plier and any delays in manufacturing plants due to many reasons.
Reasons:
Due to machine break down.
Due to strikes.
Due to any natural disasters.
Due to fluctuations in demand

Key Attributes/Status Attributes:

1. Stockable
2. BOM Allowed.
3. Purchased/Purchasable.
4. Built in wip.
5. Customers ordered/ Customer orders enabled.
6. Internal Orders Enabled.
7. Invoiceable item.
8. Receipe Enabled.
9. Transactable.
10. Process Execution Enabled

16.Item Categories
 We will categorize the items based on their nature and characteristics.
 Classifying the system items based on their nature and characteristics.
 You can use categories and category sets to group your items for various reports and
programs. A category is a logical classification of items that have similar characteristics
 The flexibility of category sets allows you to report and inquire on items in a way that best
suits your needs.
Steps:
1. Create the segments for categories.
2. Create code combinations.(Setup-> Items -> Categories -> Category Codes)
3. Create Category Set for code combinations. (Setup -> Items -> Categories -> Category Sets)
4. Verify the functionality.
TN: mtl_item_categories

17.Item Catalogs
Detail description of the item (Specifications of the item)
Steps:
1. Define Segment.
2. Define Catalog group. (Setup -> Items -> Catalog groups)
3. Verify the functionality (Item Master -> Catalogs)
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Step1
[N]: Inventory -> Setup -> Flex Fields -> Key -> Segment

Unfreeze & Click on Segments

Select Freeze & Compile

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Step2
[N]: Inventory -> Setup-> Items -> Catalog Groups

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Step3
[N]: Inventory -> Items -> Master Items
Define Item
Tools -> Catalogs

Click on Update Description

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**What is the difference between Expense Item and Asset Item
Expense Item
Costing flag is not enabled
Inventory Item flag not enabled
Asset Item
Costing flag should be enabled
Inventory item flag should be enabled
Restrict Sub inventories:
By using this can restrict item’s to specific sub inventory.
Restrict Locators:
By using this can restrict item’s to specific sub inventory under specific locator.
Vendor Managed Inventory (VMI):
Vendor is responsible for maintain the stock levels.

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18.Counting Methods/Accuracy Methods
a. Cycle Counting.
b. Physical Counting
In any Organization due to missing transactions (or) inaccurate entries of the transactions there will
be possibility of differences in the system on hand quantities and actual quantities lying in a Sub
inventory.
In Order to correct the difference between the system quantity and actual quantity we will do
periodical counting of all the stock.
a. Cycle Counting:
ABC Analysis: Classifying the system items based on their value or quantity. Based on the
classification we will start the cycle counting procedure.

1. Cycle counting can be done periodically

2. Cycle counting can be scheduled periodically based on the number of classes.
3. Here classification is possible.
Steps:
1. Define a new sub inventory.
2. Define items and load on hand for those items.
3. Compile a report.
ABC Analysis
4. Define ABC classes. (Based on the report output).
5. Define ABC Assignment Group, Assign Classes and items to the classes
6. Define Cycle Counting.
7. Run “Cycle count scheduler” from the tools menu
8. Run “Generate count requests” from the tools menu.
9. Run “Cycle count listing report” from the tools menu.
10. Manual Entries.
11. Approve Adjustments. (Adjustments will be processed automatically here)
12. Verify on hand.

Physical Counting VS Cycle Counting

1. Counting has to be done for all the 1. Counting can be done for specific
items items in the organization/sub
In the organization/sub inventory inventory
2. Classification is not possible Items Classification is possible
Scheduling is not possible Automatic Scheduling is possible for
daily/weekly/monthly
Manual scheduling is possible
More disturbance to Production Less disturbance to Production

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Step1
[N]: Inventory -> Setup -> Organizations -> Sub inventories

Step2
[N]: Inventory -> Items -> Master Items & Inventory -> Transactions -> Miscellaneous
Transactions

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Step3
[N]: Inventory -> ABC Codes -> ABC Compiles

Click on Yes

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ABC descending value report Output

Re query and verify compilation status

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Step4
[N]: Inventory -> ABC Codes -> ABC Classes

Step5
[N]: Inventory -> ABC Codes -> ABC Assignment Group

Click on Group Classes

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Click on Assign Items

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Step6
[N]: Inventory -> Counting -> Cycle Counting -> Cycle Counts
Select NEW

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Click on Classes

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Select Option: (Re)initialize & Save

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b. Physical Counting:
1. Physical Counting allows you to take stock check at specific point of time on the total or
particular part of your inventory.
2. You can define multiple physical inventories to count selected portion of your inventory.
3. Physical counting can be performed once or twice in a year for Audit purpose
4. It allows you to take snapshot of the on hand figures to continue processing our transactions
without affecting the result of the stock taken.

Steps:
1. Define a new sub inventory.
2. Define items and load on hand for those items.
3. Define Physical inventory and select scope to a specific sub inventory, Provide tolerances and
submit. (Counting -> Physical Inventory -> Physical Inventories)
4. To generate tags provide created physical inventory name and 'starting tag'. (Counting ->
Physical Inventory -> Tag generation)

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 5. Submit 'physical inventory tag listing report' and view output. (View -> Requests -> Submit
new request)
6. Enter Manually Counted (Warehouse quantity) using tag counts window.
7. Do the Adjustments if required. (Counting -> Physical Inventory -> Approve Adjustments)
8. Run ‘Launch Adjustments’. (Query your Physical Inventory and go to tools--> Launch
Adjustments).
9. Verify on hand figures.

Test Data:
Products System Qty Warehouse Approval Status Final Qty
Qty Required (After
approval)
ItemA 1000 1000 No Auto 1000
Approved
ItemB 2000 1900 No Auto 1900
Approved
ItemC 3000 3200 No Auto 3200
Approved
ItemD 4000 2900 Yes Reject 4000
ItemE 5000 6800 Yes Approve 6800

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Step1
[N]: Inventory -> Setup -> Organizations -> Sub inventories

Step2
[N]: Inventory -> Items -> Master Items
Define all the five items
Load on hand:
[N]: Inventory -> Transactions -> Miscellaneous Transactions

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Step3
[N]: Inventory -> Counting -> Physical Inventory
NEW

Click on Snapshot

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Verify the concurrent request
[N]: View Menu -> Requests -> Find

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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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Step4
[N]: Inventory -> Counting -> Physical Inventory -> Tag Generation

Click on Generate

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Step5
[N]: Inventory -> View Menu -> Requests -> Submit new request -> Single request
Select ‘Physical inventory tag listing’

Click on View Output

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Step6
[N]: Inventory -> Counting -> Physical Inventory ->Tag Counts

Select Yes

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Step7
[N]: Inventory -> Counting -> Physical Inventory -> Approve Adjustments
Click on Yes

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Step8
[N]: Inventory -> Cycle Counting -> Physical Inventory
Query Physical Counting Name

Click on Open

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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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Select Launch Adjustments

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FLAT NO. 30, GAYATRI NAGAR, SAP STREET, BEHIND HUDA MAITRIVANAM, AMEERPET, HYDERABAD.
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Step9
[N]: Inventory -> On hand Availability -> On hand Quantity

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19.Key Attributes.
1. Stockable
2. BOM Allowed.
3. Purchased/Purchasable.
4. Built in wip.
5. Customers ordered/ Customer orders enabled.
6. Internal Orders Enabled.
7. Invoiceable item.
8. Receipe Enabled.
9. Transactable.
10. Process Execution Enabled

Consigned Inventory (CI):

Consigned Inventory is used to manage at the third party location, supplier places inventory
in customer’ stores or warehouse and allows them to sell or consume it. Customer purchases the
stock only after he sells the stock or consumes it.

Profile Options
Profile options are used to control the application behavior.
Profile options controlled at
1. Site
2. Application
3. Responsibility
4. Server
5. Organization
6. User

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 Profile Option Usage
INV: Default Item Status Indicates the default item status for new
items you define.
This profile is updatable at all levels

INV: Default Primary Unit of Measure Indicates the default primary unit of
measure for new items you define.
This profile is updatable at all levels.

INV: Updatable Item Name Indicates whether you can update the item
Inventory predefines a value of No for
this profile for all levels upon installation.
This profile is updatable at all levels.

INV:Minmax Reorder Approval Inventory predefines a value

of Approved for this profile for all levels
upon installation. If you
choose Unapproved, you can optionally
load requisitions as unapproved and use
the document approval functionality in
Oracle Purchasing.

Table Name Importance

Mtl_system_item_B Stores items information
Mtl_item_categories Stores item category information
Mtl_serial_numbers Stores serial number information
Mtl_lot_numbers Stores lot number information
Mtl_demand Stores demand information
Mtl_reservations Stores reservation information
MTL_CUSTOMER_ITEMS Stores customer items information
MTL_MATERIAL_TRANSACTIONS Stores all the transactions information
Mtl_onhand_quantities Stores item on hand information
Mtl_items_revisions_B Stores items revision infromation
Mtl_transactions_interface (Interface Table) First transactions posted to this table,
validates and moves the successful
transaction into base tables

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