Introduction To Supply Chain Management

Supply chain management is a cross-function approach including managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end-consumer. As organizations strive to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other entities that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement. Supply chain is the processes from the initial raw materials to the ultimate consumption of the finished product linking across supplier user companies. The power of supply chain management is its potential to include the customer as a partner in supplying the goods or services provided by a supply chain. Integrating the customer into the management of the supply chain has several advantages. 1. Integration improves the flow of information throughout the supply chain. The customer into the supply chain is that this integrates the product development function with the other functions in the firm. 2. This integration allows the product development staff to communicate more with the customer both internally and externally to the firm, which decreases the firms response time to the customers needs and tends to reduce product development time.

1.1 Introduction To Inventory Inventory refers to the stock of resources, that possess economic value, held by an organization at any point of time. These resource stocks can be manpower, machines, capital goods or materials at various stages. Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting.

The advantages of inventory Reduces turn around time in processing orders Increases customer satisfaction Eliminates duplication of duties Reduces data input time Eliminates costly over stocking or stock outs Provides "just in time" inventory system Reduces storage space needed for stocking materials Ease off the time and effort for physical inventory

1.2 Overview of Organization and Organization Structure Master Organization Master organization is the virtual organization used to create items at Master level and can be assigned to all the other organizations. Not ad viced to perform any material transactions at Master level. where as any changes made at this level will be effected all child organizations .

Set of Books A financial reporting entity is a combination of a. Chart of Accounts b. Functional Currency c. Accounting Calendar. Oracle General Ledger secures transaction information (such as journal entries and balances) by set of books. When you use Oracle General Ledger, you choose a responsibility that specifies a set of books. You then see information for that set of books only. Legal Entity A legal company for which you prepare fiscal or tax reports. You assign tax identifiers and other legal entity information to this type of organization Legal Entity definition by book is any company which is reporting to Government, an entity which exists. A legal entity has a disclosure requirement of their annual revenue (Fiscal Year). An organization which prepares its Balance Sheet and Income Statement. Fiscal years vary between businesses and countries. Fiscal year may also refer to the year used for income tax reporting. Operating Unit It is a business unit that performs one or more business activities and creates transactions with financial impact. An organization that partitions and uses data for Payables, Purchasing, Order Management, Cash Management, Fixed Assets and Receivables. It may be a sales office, a division, or a department. An operating unit is associated with a legal entity. Information is secured by operating unit for these applications. Each user sees information only for their operating unit.

at organization level and not at Master level 1.3 Over view of Items An item is a part or service you Purchase Sell Plan Manufacture Stock Distribute

Prototype
1.4 Master -Child Organization An item created in master Organization can be assigned to other child organization. Any changes made to items in Master organization is effected by items at organization level . Generally all the transactions are performed 1.5 Defining and assigning the items Always define items in the master organization. When you define an item, Oracle automatically changes your current organization to the master organization. You may enable your new items in as many child organizations as needed.

1.6 Overview of Item Attributes and Statuses Status Attributes are item attributes that enable key functionality of an item. Bom enabled Build in WIP Customer Orders Enabled

Internal Orders Enabled Invoice Enabled Transact-able Purchasable Stockable

Creation of Items We can create Purchased, Subassembly and Finished Goods Items using templates or with out using templates Navigation PathIn Inventory responsibility Define Items Master items

Double Click on Master Items Form Organization Window will pop up. Choose Inventory Organization. Enter Item Name and Description and save the item.

Click on Tools Screen and choose copy from Icon from the List of Menu

Choose the Template Purchased Item from the List of Values and Click OK.

Oracle Provides 16 seeded Templates. Click on Apply Button First and then Done Button to copy the Attributes of Purchases Item Properties.

Click on Inventory Tab Ensure the check Boxes of Inventory Item, Stockable, Transactable and Reservable check boxes are enabled.

Click on Bill of Material Tab

Click on Costing Tab and check the following a) Costing Enabled check box is checked or Not. b) Include in Rollup check box is checked or not. This is required to include the Item cost of this item in Cost roll up of finished goods

Click on Purchasing Tab and enter the List Price .This Price will default when we create Purchase Requisition or Purchase Order for this Item. Ensure the Purchased, Purchasable check boxes are enabled or not

Click on Order Management Tab and ensure Customer ordered, Customer Orders enabled, Shippable, OE Transactable, Returnable check boxes are enabled.

Once all the tabs are checked save the item and assign to different organizatios.

2. INVENTORY CONTROLS
2.1:Overview Of Inventory Controls: Inventory controls are optional for all items. You can implement any combination of the four controls for each item. You can implement locator, revision, lot, and serial number control for your items

2.2:Lot Control A lot identifies a specific batch of an item you receive and store in your organization. Lot control is a technique for enforcing the use of lot numbers during material transactions, thus enabling the tracking of batches of items throughout their movement in and out of inventory. If lot control is turned on for an item, you must indicate the lot number to perform a transaction. Oracle Inventory provides complete lot number support for inventory transactions.

You can establish lot number control only for an item that has no quantity on hand. If Lot Control is controlled at the Master Item level, the check for on-hand quantity is against the sum of on-hand quantities in all child organizations. Lot Expiration (Shelf Life) Control: Lot Expiration control governs how long items in a given lot remain availables,we have Shelf life days: Specify a number of days for all lots of an item, beginning on the day you create the lot by receiving the item. You receive a warning message that the lot expires after the specified number of days. No control:Shelf life control not established for this item User-defined: Specify an expiration date as you receive each lot. You receive a warning but are not prevented. 2.3:Serial Controls: A serial number is an alphanumeric piece of information you assign to an individual unit of an item. You use serial numbers to track individual item units. Serial number control is a system technique for enforcing the use of serial numbers during a material transaction. You can use serial numbers to track items over which you want to maintain very tight control. One serial number is assigned to per unit of an item. We can give serial number to a item at various stages. they are At inventory receipt: Create and assign serial numbers when you receive the item. Thereafter, for any material transaction, you must provide a serial number for each unit. At sales order issue: Create and assign serial numbers when you issue (ship) the item against a sales order. If you select this option, serial numbers are required at ship confirm. If you receive an item on an

RMA (return material authorization), you must specify the same serial numbers you created at sales order issue. All other material transactions for this item bypass serial number information. No control: Serial number control not established for this item. All material transactions involving this item bypass serial number information. Predefined: Assign predefined serial numbers when you receive the item. Thereafter, for any material transaction, you must provide a serial number. 2.4:Locator Control: 1. 2. 3. 4. Stock locators are structures within subinventories and are the third level in the enterprise structuring scheme of Oracle Inventory. Locators may represent rows, racks, or bins in warehouses. You can transact items into and out of stock locators.

The possible locator control types are: None. Prespecified. Dynamic entry. Item Level.

2.5:Revision Control: A revision is a particular version of an item, bill of material, or routing. We use a revision when you change the form, fit, or function of an item. Use a number or letter to signify the number of times you change an item.

3.INVENTORY TRANSCATIONS
Inventory Transactions allows you to control the flow of material from the time you receive items to the time you ship finished goods to the customer.

3.1:Overview of Inventory transaction Flows:

we have two types of transaction flows. they are Material Flow Business Flow Material flow:It includes getting items from supplier,moving goods within inventory and shipping the goods to the supplier. Business Flow:It includes getting orders from customers,producing items or providing services to the customers.

3.2:Inventory Transactions:

In inventory we can perform following transactions: transactions without Documents transactions with Document

3.2.1:Miscellaneous Transactions: With a miscellaneous transaction you can issue material to or receive material from general ledger accounts in your current organization. This allows you to issue material to groups that are not inventory, receiving, or work in process such as a research and development group or an accounting department. In miscellaneous Transactions we have Miscellaneous Receipt:we don't know the source Miscellaneous Issue:we don't know the destination.

Navigation for Miscellaneous transactions is: Transactions Misc. Receipt (increase the on hand quantity) Transactions Misc. Issue (Decrease the on hand quantity)avunu Sub inventory Transfer: You can transfer material within your current organization between sub inventories, or between two locators within the same sub inventory. You can transfer from asset to expense sub inventories, as well as from tracked to non-tracked sub inventories. If an item has a restricted list of sub inventories, you can only transfer material from and to sub inventories in that list. Oracle Inventory allows you to use user-defined transaction types when performing a sub inventory transfer. Navigation for Sub inventory transfer is: Transactions Sub Inventory Transfer(back flushing,sub inventory transfer) Inter Org Transactions: You can transfer material from your current organization to another organization, or from your current organization to in transit inventory. Material in in transit inventory belongs to the organization identified by the FOB point. Prerequisites Define an inventory item that is common to both organizations. Define at least two organizations, one of which is valid to receive material from the other. Set up the shipping network between the two organizations. for creating a shipping network between two organizations go to Setup->Organizations->Shipping Networks For direct transfers, if the item to transfer is under serial number control, the item must have

the same unit of measure in each organization. Navigation for Inter Org transaction is: Transactions Inter Oreg Transfer specify: To Org Type: In transit Shipment give shipment number on your wish 3.2.2:Move Orders: Move orders are requests for the movement of material within a single organization. They allow planners and facility managers to request the movement of material within a warehouse or facility for purposes like replenishment, material storage relocation's, and quality handling. You can generate move orders either manually or automatically depending on the source type you use. Move orders are restricted to transactions within an organization. If you are transferring material between organizations you must use the internal requisition process.

4: INVENTORY PLANNING
Oracle Inventory lets you manage your inventory levels for generating orders using inventory planning

4.1:Overview of inventory planning:

Plan any item by establishing minimum and maximum on-hand plus on-order quantity targets. Calculate safety stock levels for reorder point planning. Plan any item using reorder points and safety stock levels. Define non-tracked inventory locations and periodically enter replenishment counts. Generate requisitions for any item requiring replenishment. Summarize demand history for a specific inventory item. Purge replenishment information including the count name, counting methods, and quantities.

Types of Planning
Min-Max planning Reorder-point planning Replenishment counting

Kanban replenishment

4.2:Min-Max Planning:
Min-max planning is used to maintain inventory levels for all your items or selected items. With min-max planning, you specify minimum and maximum inventory levels for your items. When the inventory level for an item drops below the minimum, Oracle Inventory suggests a new requisition or job to bring the balance back up to the maximum. Oracle Inventory performs min-max planning for your items at either the organization level or the subinventory level. When you min-max plan at the organization level, you can optionally include open sales orders and work in process component requirements as demand in the min-max planning calculation. Purchase requisitions for buy items and WIP unreleased jobs for make items for the suggested replenishment quantities can be optionally created. You can then turn these requisitions into purchase orders or internal orders and the unreleased jobs into jobs for the required items. When you min-max plan at the subinventory level, you can optionally include only open sales orders as demand in the min-max planning calculation. Requisitions for the suggested replenishment quantities can be optionally created. Also, subinventory level planning cannot generate jobs and does not consider WIP jobs as supply or WIP components as demand. You can then turn these requisitions into purchase orders or internal orders for the required items.

Min-Max Minimum Quantity Enter the quantity minimum for min-max planning. If an item is min-max planned, the Min-Max Planning Report suggests a new order when quantity drops to the min-max minimum. Min-Max Maximum Quantity Enter the quantity maximum for min-max planning. If an item is min-max planned, the Min-Max Planning Report suggests an order that brings on-hand up to the min-max maximum.

Source Type (Replenishment)

Inventory Fill requisition requests by creating internal requisitions that become internal sales orders, to pull stock f inventory. Supplier Fill requisition requests by creating purchase requisitions that become purchase orders, procuring the ite

Minimum Inventory Level: X Maximum Inventory Level:Y

note: X<Y Condition when MIN-MAX PLANNING comes into action Minimum Inventory Level<X Oracle Inventory suggests a new requisition or job to bring the balance back up to the maximum. STEPS FOR MIN-MAX PLANNING: Create or Query an ITEM

In GENERAL PLANNING select INVENTORY PLANNING METHOD as MIN-MAXNav: item Master item In Min-Max Quantity, Enter Minimum and Maximum values.

TO REQUEST THE MIN-MAX PLANNING REPORT: Nav:Planning Min-Max Palnning select PLANING LEVEL as Organiza level or Sub-Inventory level And ITEM SELECTION as 'items under minimum quantity' or 'items over maximum quantity' or 'min-max planned items'

Now click on OK. By this we are opening a submit request to get the details of all the items which are Min-Max planned or items under minimum or maximum quantity STEP3: Before completion of the request ,we can define the action as NOTIFY a person or take a PRINT or assign a template in LAYOUT

In REQUEST all the item with min-max planning effect will be displayed Nav: view request find

4.3: Reorder-point planning

Reorder point planning uses demand forecasts to decide when to order a new quantity to avoid dipping into safety stock. The reorder-point is calculated by adding expected demand during lead time to safety stock. You perform reorder-point planning for the entire organization. You can use reorder-point planning for items under independent demand. That is, demand for items (or materials) that are independent of the demand for other items (or materials). When you define an item, you can specify reorder-point planning as the inventory planning method.

reorder point = safety stock + forecast demand during lead time NOTE:Order lead time is the total of the item's processing, preprocessing, and postprocessing lead times.

4.4: Replenishment counting

Replenishment counting enables you to perform counts for non-tracked subinventories and then direct Oracle Inventory to check these counts against the minimum quantities that you specified. A non-tracked subinventory is an expense subinventory for which Oracle Inventory does not maintain on-hand quantity information. When you move valued material to a non-tracked subinventory, Oracle Inventory automatically charges the appropriate expense account and discards that quantity. Non-tracked subinventories typically store items of low value, such as office stationery. You can also use replenishment counting if you do your own planning. In this case you may order either a specific quantity or the maximum quantity specified in the Min-Max values. Non-tracked subinventories might include hospital storerooms, where there is no opportunity to record accurate and timely issue-transaction information.

Routing With Navigations

2.1 Resources: You Defining resources: The tables affected are bom_resources. Bom routing resources Resource To give the name of the resource. TypeA resource can be machine, amount, currency, person, miscellaneous Charge typeto specify when a resource will be used ie wip move,po move,po receipt,manual Fill following fields Resource ,type,charge type,uom

Now give employee: Click employees.when type is machine,click equiptment.

2.3 Routing: A routing consists of operation steps. Each operation step occurs at a department and contains resources that perform work, schedule time, or add cost to the assembly. The tables affected here are bom_operational_sequences,bom_opreational_routing. Bom routing routing Fill following fields Item,operationseq,department

Assigning resources to departments: click on operation resources The tables affected here are bom_operational_resources Fill the following fields: Seq,resource,basis ,usage,inverse

DOCUMENT OF BOM
1.1 BILLS OF MATERIAL
Bill Of Materials (BOM)is a list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, components, parts and the quantities of each needed to manufacture an end product . BOMs are hierarchical in nature with the top level representing the finished product which may be a sub-assembly or a completed item. For manufacturing a Product (Finished Good) we define it in a structured manner with the step wise sequence of operation. What has to be manufactured first and what next, the number of components, Resource (Machine and Technical Labour ) that we require to manufacture a Product will be defined in Oracle Bill Of Material.

1.2 TYPES OF Bills Of Materials

1. Standard BOM: We use standard bills of material to specify components that you use to manufacture items. A configuration bill (a type of standard bill) is a set of option choices made from a model bill that comprise a build able, sellable product. Configuration items and bills are automatically created from model bills after a customer chooses options on a sales order. Or, you can manually create configuration bills by choosing options directly from a model bill. 2. Model BOM: A model bill of material defines the list of options and option classes you can choose in Oracle Order Entry to order a configuration. A model bill also specifies mandatory components or included items that are required for each configuration of that model. You do not order or build the model itself: you order and build configurations of the model. 3. Option Class BOM: An option class is an item that groups optional components on a bill. An option class is an item that becomes a level in your model bill of material. Option classes can also have mandatory components that apply for all of its options. For example, when you order a computer, the monitor is an option class, and the specific type of monitor you order is an option within that option class. An option class bill can be either assemble-to-order or pick-to-order. 4. Planning BOM: A planning bill of material is a bill of material structure that includes a percentage distribution for its components. The percentages associated with the components on a planning bill of material do not need to add to 100%.A yield factor of 0.90 means that only 90% of the usage quantity of the component on a bill actually survives to be incorporated into the finished assembly. To compensate for the expected gain or loss, any function that explodes a bill of material increases or decreases the material requirements for the component, based on the yield.

1.3 SINGLE ORGANIZATION BILLS OF MATERIALS

We create items in the master organization and assign them to the manufacturing and distribution organizations in which you use them. Bills of material are always and only single organization entities. You can share the bill of material or copy it across organizations. We create bills of

material in each organization that uses them. Bills of material are always and only single organization entities. You can share the bill of material or copy it across organizations.

1.4 PRIMARY AND ALTERNATE BILLS OF MATERIALS

Each item that has a bill of material has a primary bill of material. If you create other bills of material for standard and planning items, you refer to them as alternate bills of material. A primary bill is a list of the components you most frequently use to build a product. An alternate bill is another list of components for the same basic assembly. Do not create alternate bills of material for model and option class bills of material because you cannot choose alternate bills of material when you configure an order.

1.5 PHANTOM ASSEMBLY

A phantom assembly is a non-stocked assembly that lets you group together material needed to produce a subassembly. When you create a bill of material for a parent item, you can specify whether a component is a phantom. One bill of material can represent a phantom subassembly for one parent item, and a stocked subassembly for another parent item. Work in Process ignores phantom assembly routings when you define a job or repetitive schedule.

1.6 BILL OF MATERIAL REVISION

A bill of material revision is an item revision and might indicate that the components of an item have changed. There is no separate bill of material revision. Example of BOM: If you want to manufacture a pen the Bill Of Materials for Pen will be... 1.Cap - 1 Each 2.Top Cover - 1 Each 3.Bottom Cover - 1 Each 4.Nib - 1 Each 5.Ink - 4 Drops 6.Refill - 1 Each Operation Sequence: 1 - Assemble Nib 2 - Assemble Top & Bottom Cover 3 - Fix the Cap - Final Operation to manufacture pen. Resource Required: 1.Nib Fixing Machine - 2-Each

2.Technical Labour - 2-Each will work on 8-hours shift one person at a time

NAVIGATIONS
Enter BOM: Bills of Material->Bills->Bills Enter the parent item for which you are creating a bill and enter the item sequence, operation sequence,component item and enter the quantity used to make one unit of this assembly item at the current operation.

A primary bill is a list of components you most frequently use to build a product. An alternate bill is another list of components for the same basic assembly. The primary bill is the default for rolling up costs, defining a job, and calculating cumulative item lead times.

Work in Process pulls components from the supply subinventory and the locator during backflushing. Assign a supply subinventory and locator, to components that have a supply type of Assembly pull or Operation pull. For various BOM Item types, the bill of material shall be created differently as. Standard : A standard bill of material is the most common type of bill and lists the mandatory components, the required quantity of each component, and information to control work in process and material planning.

Planning : A planning bill of material is a bill of material structure that includes a percentage distribution for its components. The percentages associated with the components on a planning bill of material do not need to add to 100%. A yield factor of 0.90 means that only 90% of the usage quantity of the component on a bill actually survives to be incorporated into the finished assembly. To compensate for the expected gain or loss, any function that explodes a bill of material increases or decreases the material requirements for the component, based on the yield.

Model : A model bill of material defines the list of options and option classes you can choose in Oracle Order Management to order a configuration.

Option Class : Mutually Exclusive and Optional Fields pertain to options for model and option class bills. All components are mandatory on standard and planning bills. The Optional field indicates whether the component is mandatory or optional. The Mutually Exclusive field applies only to option class bills and indicates whether you can choose one or many options within an option class. Oracle Order Management uses the Mutually Exclusive check box in combination with the Optional check box to determine the number of option items you can or must choose to order the components of the option class bill.

LESSON 4:COST MANAGEMENT

Oracle Cost Management is a full absorption, perpetual cost system for purchasing, inventory, work in process, and order entry transactions. Cost Management supports multiple cost elements, costed transactions, activity-based costing, comprehensive valuation and variance reporting, and thorough integration with Oracle Financial s. Cost Management provides flexible cost setup features, including multiple cost elements and unlimited sub-elements, unlimited resources and overheads, and unlimited activities. For example, you can use one or more of the following cost elements: material, material overhead, resource, outside processing, and overhead. Sub-elements enable you to analyze costs in greater detail. For example, you can have multiple material overhead sub-elements such as purchasing, material handling, freight, duty, and so on. This enables you to accurately define and maintain costs and associate them with items. Cost Management provides comprehensive valuation and variance reporting. Perpetual inventory and work in process balances are maintained on-line. Multiple variances are supported: purchase price, standard cost, cycle count, physical inventory, work in process usage, and work in process efficiency.

Cost Methodology
Product costs are the sum of their elemental costs. With inventory standard and average costing, only the material and material overhead cost elements are used. With manufacturing standard and average costing, you can also use the resource, overhead, and outside processing cost elements.

1.1 Average costing

Under average cost systems, the unit cost of an item is the average value of all receipts of that inventory, on a per unit basis. Each receipt of material to inventory updates the unit cost of the item received. Issues from inventory use the current average cost as the unit cost. For purchased items, this is a weighted average of the actual procurement cost of an item. In an average cost environment, all items in inventory are valued at their procurement cost, i.e. PO cost. This valuation methodology results in a unit cost for each item, which is a weighted average of the purchase order unit costs for all quantity on hand. item to

1.2 Standard Costing

Standard costing is used by Customers who employ predetermined costs for valuing inventory and for charging material, resource, overhead, period close, and job close and schedule complete transactions. Differences between standard costs and actual costs are recorded as variances. Manufacturing industries typically use standard costing. Costs of items can be shared across organizations using standard costing.

1.3 Frozen Cost

Costs currently in use for an operation, process, or item including resources, material and overhead charges. Under standard costing, you use the frozen costs for your cost transactions

1.1 Pending Cost

Updates the existing standard costs with the costs created in the new cost type. The future cost of an item, resource, activity, or overhead. Not used by cost transactions

Cost elements are defined as follows: 1.5 Item Cost

Used with material and material overhead sub-elements to assign a fixed amount per item, generally for purchased components. Used with resource, outside processing and overhead sub-elements to charge a fixed amount per item moved through an operation. If you are using Manufacturing costing, you can use sub-elements as smaller classifications of the cost elements. Each cost element must be associated with one or more sub-elements. Define sub-elements for each cost element and assign a rate or amount to each one. You can define as many sub-elements as needed.

1.6 Material Costs

The raw material/component cost at the lowest level of the bill of material determined from the unit cost of the component item.

1.7 Resource Cost

Direct costs required to manufacture products, calculated as the standard resource rate times the standard units on the routing, per operation, or as a fixed charge per item or lot passing through an operation. Resources can be people (labor), machines, space, or miscellaneous charges.

1.8 Overhead Cost

The overhead cost of resource and outside processing, calculated as a percentage of the resource or outside processing cost, as a fixed amount per resource unit, or as a fixed charge per item or lot passing through an operation. Overhead is used as a means to allocate department costs or activities. For example, you can define multiple overhead sub-elements to cover both fixed and variable overhead, each with its own rate.

2.1 Assembly Roll up

Bills and routing define the foundation for cost Roll ups, elemental distribution, and all related manufacturing costing functions. A full cost Roll up first performs a bill of material explosion for assemblies. The Roll up process builds the cost of assemblies, starting with the lowest level, and works up the structure to top level assemblies. This method gives you the most current bill of material structure and component costs. A single-level Roll up only looks at the first level of the bill structure for each assembly in the Roll up, and rolls the costs for the items at this level into the parent. This method does not reflect structure or cost changes that have occurred at a level below the first level of your assemblies. Purchased assemblies show different elemental costs when you buy the assemblies rather than build ("make") them. When you purchase a "buy" assembly, the total cost consists of the material and material overhead cost elements only. When you build a make assembly, the total cost consists of the material, resource, overhead, and outside processing cost elements. Thus, the value of the material cost element may differ in buy vs. make situations.

2.2 Standard Cost Update

The standard cost update procedure enables users to define and roll up pending costs, simulate changes to standard costs for what if analysis and then update pending costs to the Frozen standard cost type.

Navigation for Cost Management

Responsibility Cost Management -Item costs select Item costs,choose the organization in which you have created a BOM Structure, Select the Item name in Find Item/Cost type Window. -Select the sub-assemblies cost type as pending -Select Assembly Roll up and enable Based on Roll up -Standard Cost Update-Update costs. The tables affected are cst_item_costs,to get the name of cost_type here pending,we need to link with the table cst_cost_types and cst_cost_elements contains the details about cost element here it is material and material overhead.

To run assembly cost roll up:

Enter parameters:

After entering

After assembly cost Roll up:

Standard Cost Update

The standard cost update procedure enables users to define and roll up pending costs, simulate changes to standard costs for what if analysis and then update pending costs to the Frozen standard cost type.

To do standard cost update

Now frozen cost will also be updated:

1.Work in Process.
The graphical genealogy display provides an easy way for users to trace serialized item activities. Users may trace from an assembly down through all of its components or may trace from the component to the finished good. Serial Genealogy provides a tracking method to enable the tracking of the serialized items through the life cycle of a product. This genealogy tracing enables the users to expedite problem isolation and improve response to customer request. It also helps to track and regulate supplier performance and quality. 1.1 Discrete Manufacturing: We use discrete manufacturing for assemblies that we make in groups or batches. we define jobs with a job name, a job type, assembly, a job quantity, a start date, and an end date. For non-standard discrete jobs, we have the option of entering an assembly and job quantity. we can use assembly bills of material to create job material requirements. we can also use routings to schedule job production activities and create operation specific material and resource requirements. In discrete manufacturing, production costs are normally charged to a job. This is called job costing. we open jobs, collect charges, close jobs, and analyze and report costs and variances by job.
1.2 Repetitive Manufacturing:

we use repetitive manufacturing for assemblies we make on a continuous or semi continuous basis over a predefined interval. we identify which assemblies are built on which production lines in advance. we can build assemblies on dedicated lines (one assembly per line) or on mixed model lines (many assemblies per line). we can build an assembly on multiple lines. we define repetitive schedules by the assembly, its daily quantity and its production lines, no job or work order exists. we can schedule production of a single assembly continuously for just a few hours or for any number of days. we can schedule repetitive production based on the fixed lead time of our production line if the lead time does not vary from one assembly to another assembly. If the lead time varies by assembly, we can schedule the repetitive production time based on the routing of the assembly the line is building. In repetitive manufacturing, you charge the cost of production directly to the assembly and line. we analyze and report costs by assembly and line during the period close. At period close, all charges to a repetitive assembly for that period are totalled and divided by the number of assemblies produced during that

period. Period close also calculates assembly costs and usage variances. Repetitive schedules and discrete jobs can coexist. Oracle Master Scheduling/MRP and Oracle Supply Chain Planning plans production using repetitive or discrete planning techniques based on the planning type you specify for the item in Oracle Inventory.
2.SETUP

Following are the prerequisites to record the issue of serialized components to serial controlled assemblies:
PREREQUISITES

1 Any assembly or sub-assembly which is to be included in the genealogy must be set up as: Serial Control - Predefined (Item Master/ Organization Item Setup)
Navigation: Responsibility: Inventory Items/Master Items OR Items/Organization Items

2 The serial numbers for the assembly (referred to in 1) must be generated before creating the WIP jobs to build the assemblies.
Navigation: Responsibility: Inventory On-hand, Availability/Generate Serial Numbers OR Reports/ Items/Serial Generation

3 Serialized components must be set up as: Serial Control - At Receipt or Predefined (Item Master/ Organization Item Setup). 4 Serialized components must have been received into inventory before they can be issued to the assembly job
TEST CASE: DEFINE ITEMS Navigation: Responsibility: Inventory Items/ Master Items

Apply and Done In this demo, we have used the attribute control of serial number at Master level For differences between the predefined and other settings. Assign the item to Inventory Organization, M1 Seattle Manufacturing Similarly create the serialized components by copying it from a Purchased item and assign it to Inventory Organization M1 Seattle Manufacturing. Please note the components (KN00001, AKLH001, BC00001, H000001 and D000001) should be Serial Controlled, either At Receipt or Predefined.

BOM & ROUTING DETAILS

BOM Details:
FALH001 - Front Axle (LH) Components & its Description Quantity Supply Type KN00001 Knuckle 1 Assembly Pull AKLH001- Arm Knuckle (LH) 1 Assembly Pull HD00001 Hub & Disc Assembly 1 Assembly Pull BC00001 Brake caliper 1 Push HD00001 Hub & Disc Assembly Components & its Description Quantity Supply Type H000001 Hub 1 Operation Pull @ Op. 10 D000001 Disc 2 Assembly Pull

Routing Details:
HD00001 FALH001 GENERATE SERIAL NUMBERS

Generate Serial Numbers for Predefined Serial controlled items. (FALH001 and HD00001).
Navigation: Responsibility: Inventory On-hand, Availability/Generate Serial Numbers OR Reports/Items Select Single Request, click OK Chose Serial Generation from the list of values

Select the parameters and Submit the request. Note the Request ID. Ensure the request completes normal. The output of successfully completed Serial Generation request will be similar to the one below: If the process errors out, review the log file and query Metalink for the resolution. Repeat the same steps for generating 100 serial numbers for the Subassembly HD00001 (RX100 to RX199)
RECEIVE SERIALIZED COMPONENTS

Raise a Purchase Order for all the components (AKLH001, KN00001, BC00001, H000001 and D000001) and receive them into Subinventory (Stores)
Navigation: Responsibility: Purchasing Purchase Orders/ Purchase Order

Submit the PO for Approval and get it Approved. To receive these items,

Navigation: Responsibility: Purchasing

Receiving/ Receipts

Query for the Purchase Order 3483 Select the line Click on Lot-Serial button Enter the Start Serial Number and tab out to get the End Serial Number. Click Done to proceed to the next line. Receive the rest of the serialized purchased items BC00001 (serial numbers 5801 5900), H000001 (serial numbers 401 500), D000001 (serial numbers 4301 4500) and KN00001 (serial numbers 1001 - 1100) into the Inventory. Note the Receipt number (5125).
2.2CREATE DISCRETE JOB

Create a Discrete job for subassembly HD00001. Qty=2; Release it.

Navigation: Responsibility: Work in Process Discrete/ Discrete Jobs

Refer to page 3 70 in Oracle Work in Process Users Guide for defining discrete jobs manually. In order to issue components to the job, the job must be in either released or complete status.
2.3WIP MOVE TRANSACTIONS

If the WIP Transaction Processing profiles are set to Background, to issue serialized components to the assembly serial number, it is necessary to perform WIP Material Transaction - Specific Component checked. If the WIP Transaction Processing profiles are set to On-line, the system prompts the user to enter the serial number of the Operation Pull and Assembly Pull components issued to the assembly when performing WIP Move and Completion Transactions respectively. In this test case, the following WIP and INV Transaction Processing (TP) profile options are set to 'Online Processing' to prompt the users to enter the serial number of the components issued and to update the Inventory on-line. TP:WIP Move Transaction TP:WIP Operation Backflush Setup TP:WIP Completion Transaction Form TP:WIP Completion Material Processing TP:INV Transaction Processing Mode
Navigation: Responsibility: Work in Process Move Transactions/ Move Transactions

Move the entire quantity (2 No.s) from 10Que to 20Que Click Save, it prompts you to enter the serial number of the Operation

pull component (H000001) being issued to the job 47533. Enter the quantity issued and Click Lot/ Serial. Choose the serial number being issued from the list of values as shown below. Also enter the assembly serial number which is receiving the serialized component This will link the component serial to the assembly serial for the genealogy tree. Click Done. This brings you back to the Backflush screen. Click Done to save the Move transaction. Move the job through all the operations till it reaches the To Move intra operation of the last operation defined on its routing. Save this Move Transaction.
2.4COMPLETION TRANSACTIONS Navigation: Responsibility: Work in Process Material Transactions/ Completion Transactions

Enter the Job name, tab out and Click Continue Enter the Completion Subinventory and the quantity Click on Lot/Serial Select the Start Serial Number and tab out to get the End serial Number populated. Click Done. Backflush screen pops up prompting the user to enter the serial number of the Assembly pull component/s. Click Lot / Serial Choose the serial number being issued from the list of values. Also enter the assembly serial number that is receiving the serialized component. Click Done to save the Completion Transaction.
2.5CREATE DISCRETE JOB Navigation: Responsibility: Work in Process Discrete/ Discrete Jobs

Now, create a Discrete job for the final Assembly; Release it.
WIP MOVE TRANSACTIONS

Perform Move transactions until the assembly is moved to the To-Move intraoperation of the last operation in the routing. Save it.
2.6MATERIAL TRANSACTIONS

To issue serialized Push components to the assembly serial number: Perform WIP Material Transaction
Navigation: Responsibility: Work in Process

WIP Material Transactions/Material Transactions

Continue Click Lot / Serial After choosing the serial number of the components being issued from the list of values. Chose the assembly serial number that is receiving the serialized component. This will link the component serial to the assembly serial in the genealogy tree Done
COMPLETION TRANSACTIONS Navigation: Responsibility: Work in Process Material Transactions/ Material Transactions

Click Continue Click Lot/ Serial And choose the serial number of the final assembly being built. Click Done Enter the Serial numbers of the Assembly Pull components for the job For each of the components, enter the serial number/s being issued. Also enter the assembly serial number that is receiving the serialized component(s). Done Click Done to save the Completion transaction. The Discrete job 47537 is completed now.
VIEW SERIAL GENEALOGY

To view the Serial Genealogy of the final assembly built,

Navigation: Responsibility: Inventory On-Hand, Availability/Serial numbers

Query for the Serial Number CD1402 for the assembly FALH001 Find Click View Genealogy Expand all the nodes by clicking on each of them (+) The graphical display enables one to track the genealogy (parent & child relationship) of serial controlled items. Users can easily trace from an assembly down through all of its sub assemblies and components and their Serial numbers used in building the final assembly. After expanding all the nodes, clicking on each component shows all the transactions performed on the serialized components/Subassembly. Similarly you can query any component/subassembly
Navigation: Responsibility: Inventory On-Hand, Availability/ Serial numbers

Find Click View Genealogy.

Go to Parent Details tab. This graphical genealogy tree will trace from the component to the finished good. This powerful Serial genealogy feature facilitates the user to map out an assembly down through all its components OR trace from the component to the finished good. This helps the users to expedite problem isolation and improves response times to customer queries. Its also handy to track and regulate supplier performance and quality.

Engineering Change Orders (ECOs)

ECOs enable you to control new item revisions and bill of material changes. With one ECO, you can group several bill of material changes that affect one or more bills. You can define ECOs for all types of items and bills, including: - manufacturing and engineering items - bills and their components - planning, model, option class, and standard items - primary and alternate bills of material An ECO specifies changes to one or more items that are logically related to each other, such as a new product introduction. Each ECO specifies changes for one or more revised items and each revised item can have one or more revised components. Depending on the ECO type, an ECO can update manufacturing bills only or both manufacturing and engineering bills. You can add either engineering or manufacturing items as components on engineering bills. However, you can only add manufacturing items as components on manufacturing bills. You can create ECOs for routings. This is the process of revising engineering and manufacturing routings with change orders for both flow and non-flow environments. An engineering change order (ECO) controls item revisions and bill of material changes. ECOs specify changes to one or more items and each of these items can have one or more revised components. Creating an ECO --------------An ECO's approval status must be Approved before the ECO can be implemented. ` If the approval status is Approval Requested, you cannot modify the ECO. If the approval status is Approved and the ECO is modified, the approval status will be set back to Not Submitted for Approval. When ECO types are defined, they can optionally be associated with a priority as they are being associated with an Oracle Workflow process. When creating the ECO, if the selected ECO type/priority combination matches a defined ECO type/priority combination, the associated workflow process defaults. The approval status is set to Not Submitted for Approval until the Submit button is chosen. If there is no match between entered values and existing ECO type/priority combinations, the approval status is set to Approved and you can enter an approval list. You can create, update and delete ECOs for the current organization, or for the current organization and all subordinate organizations in a given organization hierarchy.

Prerequisites ------------Define at least one ECO type. To Create an ECO ---------------1. Navigate to the Engineering Change Orders window. Engineering: ECOs > ECOs 2. Enter an alphanumeric ECO identifier. If you use ECO autonumbering, the next identifier is defaulted. 3. Enter or select an ECO type. You can only select ECO types that can revise engineering items and bills if the ENG: Engineering Item Change Order Access profile option is set to Yes. If the selected ECO type updates engineering and manufacturing items and bills, any new bills defined on the ECO are engineering bills. 4. Indicate whether to process the ECO across all organizations within the given organization hierarchy, or for the current organization. Note: If the checkbox is not checked, then the ECO applies to the current organization. If the checkbox is checked and a value is provided in the Organization Hierarchy field, then the ECO applies to the current organization and all subordinate organizations under the given organization hierarchy structure. Attention: The Organization Hierarchy driver fields apply to the ECO Header, ECO Revisions, Revised Items, Revised Components, Reference Designators and Substitute Components. 5. Optionally, enter the requestor of the ECO. 6. Optionally, enter the ECO department responsible for the ECO. This can be used to transition the ECO from one department to another, for example, from manufacturing engineering to operations. For new ECOs, the default is derived from the ENG: ECO Department profile option. If you specify that each ECO must have an ECO department, that is, the ENG: Mandatory ECO Departments profile option is set to Yes, then you must specify a responsible department. Access to ECOs by ECO department is as follows:

- You can only view and update ECOs with the same ECO department as your ENG: ECO Department profile option. - If you do not have a value for the profile option ENG: ECO Department, you can query and update any ECO. - Any user can query and update ECOs with no department reference. 7. Optionally, enter a reason for the engineering change. 8. Optionally, enter or select a priority for the ECO. Note: If the ECO type and the priority combination are associated with an Oracle Workflow process, you cannot use an approval list. 9. If a workflow process is not associated with the ECO, you can enter an approval list. If you do not enter an approval list, the ECO approval status defaults to Approved without any kind of approval process. 10. Choose the ECO Revisions button to define ECO revisions. Enter a revision for the ECO. The date that you entered the ECO is displayed for reference. 11. Choose the Revised Items button to define revised items. 12. Select the ECO status from the Tools menu. If the ECO status is Implement or Cancelled, the date of either status change is displayed. 13. If a workflow process is associated with the ECO, choose the Submit button to start the process. 14. If a workflow process is associated with an ECO, choose the Approvals button to view the approval status of the ECO. If you are using an approval list, change the approval status to Ready to Approve. Doing so sends the Alert.

Defining ECO Revised Items -------------------------Each ECO can list one or more revised items whose form, fit, or function needs revision.

Any revised item can have an associated bill of material. You can create a bill for a revised item (if one does not exist) by copying it from another bill or by adding components to it. To Define Revised Items ----------------------1. Navigate to the Revised Items window. Do this by choosing the Revised Items button from the Engineering Change Orders window. 2. Enter or select an item to change with this ECO. Note: You can create a bill for the item (if one does not exist) by choosing the Components button and adding components in the Revised Components window. 3. Optionally, enter an alternate for the item. You can create or update alternate bills using an ECO. 4. Optionally, enter a new revision for the revised item. This must be greater than or equal to the current revision. If you create or update an alternate bill of material, you cannot assign a new item revision. You must enter a new revision for the revised item if you set the ENG: Require Revised Item New Revision profile option to Yes. 5. Optionally, enter a Routing Revision. This must be greater than or equal to existing revisions. You cannot enter any revisions if you selected a Model/Unit effectivity item in the Item field. If you entered a revised item that should not have routings, then the Routing Revision field will be disabled. 6. Enter an effective date for the item and component changes. This date is used to implement the revised item and identify past due revised items. If you select a useup date for this item and its components, a record is created that indicates that this revised item is based on the useup date of the item. If the MRP planning process computes new useup date before this revised item is implemented, Engineering automatically sends an alert to the planner. 7. Choose a status for the ECO revised item from the Tools menu. Note: You can set the revised item status to Hold, Released, Implemented, or Cancelled only if the ECO status is Open. Otherwise, the revised item status defaults from the ECO status.

If the ECO has a Workflow process and the item or its components are changed, the revised items status is changed from Scheduled to Open and the approval status is changed to Not Submitted for Approval. 8. Indicate whether the revised item is MRP Active, that included in the planning process. The default is No if the Status is Hold; Yes if the Status is Open, Release, or Schedule. If the ECO lists engineering changes and has an effective date in the future, you may want the planning process to consider those changes. 9. Open the Item Details tabbed region and view the description and the userdefined item type for that item. 10. Optionally, open the Dates tabbed region and enter the Early Effective date. This is the earliest date you can manually implement the revised item. If applicable, the Cancelled date for the changes of the revised item and its components, or the Implemented date for the revised item is displayed. The Implemented Immediately check box, if enabled, indicates the item was implemented manually from the Tools menu. If disabled, the item is scheduled for automatic implementation. 11. Open the Use Up Details tabbed region and do the following: - If not already selected, enter the item whose useup date is tied to the revised item effective date. The useup item can be the revised item itself or a component of the revised item. - View the useup item associated with the useup date selected as the effective date. - View the name of the MRP plan to use for determining item useup dates. 12. Open the Routing Details tabbed region and do the following: - Indicate whether CTP is enabled. This attribute is derived from the routing header information if the revised item has existing routing information. If routing information does not exist, routing header information is created automatically when you enable this attribute. - Enter a priority value for this item. - Choose a valid subinventory. - Enter Locator information. If the completion subinventory does not have a valid location, or the revised items Locator Control attribute is set to No Control, then this

field is disabled. If the revised items Locator Control attribute is set to Dynamic Entry, then this field is enabled. 13. Open the Work in Process tabbed region and indicate whether to update WIP requirements for unreleased jobs or schedules when the revised item is implemented. 14. Select a disposition for inventory and work in process inventory affected by the ECO. 15. Open the Cancel Details tabbed region to view the cancellation date and cancel comments. 16. Choose the Components button to add, change, or disable components.