Oracle Process manufacturing- Outside Processing –Operation / Batch Release12.2.4+ An Oracle White Paper December 2014 Disclaimer The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle
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Oracle Process manufacturing-Outside Processing –Operation / Batch Release12.2.4+ An Oracle White Paper December 2014
Disclaimer
The following is intended to outline our general product direction. It is intended for information purposes
only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code,
or functionality, and should not be relied upon in making purchasing decisions. The development, release,
and timing of any features or functionality described for Oracle’s products remains at the sole discretion of
2. CHANGES IN FORMS AS PART OF OUTSIDE PROCESS MANUFACTURING ............................................................................................................. 9
4. ABILITY TO CREATE THE AUTOMATIC REQUISITIONS ........................................................................................................................................................ 20
4.1 Automatic Creation of Requisitions at Batch Creation ..................................................................... 20
4.1.1 Setup to create the Automatic Requisitions ....................................................................... 20
4.1.2 Process to generate the Requisitions ................................................................................. 20
4.2 Automatic Creation of Requisitions at Batch Release ...................................................................... 23
4.2.1 Setup to create the Automatic Requisitions ....................................................................... 23
4.2.2 Process to generate the Requisitions ................................................................................. 23
4.3 Automatic Creation of Requisitions at Batch Step Release .............................................................. 26
4.3.1 Setup to create the Automatic Requisitions ....................................................................... 26
4.3.2 Process to generate the Requisitions ................................................................................. 26
4.4. MANUAL CREATION OF REQUISITIONS / PURCHASE ORDERS. ................................................................................................................................ 29
4.5 SYNCHRONIZATION OF THE BATCH AND PURCHASE ORDERS................................................................................................................................. 29
4.5.1Change Management Table for the changes on Batches to PO ..................................................... 30
4.5.1.1 for Quantity Changes.......................................................................................................... 30
4.5.1.2 for Date Changes ................................................................................................................ 31
4.5.1.3 Batch Actions where the Requisition / PO can be cancelled ....................................... 31
4.5.1.4 Batch Actions which should not be allowed (If there are Open Requisition / PO
4.6 ACCOUNTING TEMPLATE FOR OSP TRANSACTIONS......................................................................................................................................................... 83
4.7 ABILITY TO RECEIVE FULL / PARTIAL QUANTITY .................................................................................................................................................................. 84
4.7.1 Full Quantity receipt ...................................................................................................................... 84
1. Overview Outside Process Manufacturing is the one of the requirement for process manufactures where they do not
have the capabilities or equipments to perform all the steps in their manufacturing process, the most and
common outside process is the one where certain operations in a process routing are performed by the
subcontractor. This will be referred as Outside Processing. The scope of this document is to provide OPM
users with information related to Outside Processing for step / operation.
This document aims to explain the following in detail:
Changes in forms as part of Outside Process Manufacturing
System Setup
Recipe
Creation of Automatic Requisitions
Synchronization of batch and Purchase Orders
Definitions
Manufacturing Partner (MP)
Within this document, Manufacturing Partners are defined to be the businesses that perform a contract
manufacturing function for the PPM. Many times, they receive intermediate product from a PPM or from
other trading partners and then do additional work on the same
Parent Product Manager (PPM)
This is a manufacturing company that owns the product designs that it sells and must manage its supply
chain whether the manufacturing processes are internal or outsourced to Manufacturing Partners. In this
Doc, PPM is assumed as a deploying company
Outside Processing (OSP)
Batch-Step Level Outsourcing. Specific operation / step of a sequence in a routing is performed by a
Manufacturing Partner.
Author Assumptions
Author assumes that the process users are well known about the Product Development, Process
Execution applications to create and execute the process, Also working knowledge on
Purchasing and Inventory
Created the setup and important transactions for OSP Item type –Assembly, the similar kind of
process can be followed for OSP item type –Resource, please make a note of below
Author has used representative data from
Pharmaceutical industry as an example to explain
the setup and transactions. Business Process
mappings for other industries should be similar.
Business Model Process
High level view of the business processes involved in the OSP flow are depicted with the below
Setup
Batch Created
Batch Updated/Rescheduled
Batch Released
OSP Step Released
OSP step quantity updated and
resource transactions
created
Batch Completed
Batch Closed
Requisition/PO Release Created
Batch Updated/Step rescheduled
Requisition/PO updated
PO Received Fully/Partially
Close PO
Solution Overview
The core of the solution is to associate outside manufacturing services to a resource that is used in the batch that requires the OSP operation. The Resource is associated with an non-Inventory Item classified to be OSP type. Upon release of the Batch, a Purchase Order (PO) gets created (via creation of a Requisition) to reflect the Outside manufacturing services. This is configurable and the PO can be created upon start of the batch or OSP operation if desired. The Batch and Purchase Order are linked by storing the required linkage batch data into the PO schema. The two documents – Batch and PO are kept in synch e.g. for changes in date of the batch leads to change in Need by Date on the corresponding line of the PO.
When the OSP item on the PO is received, corresponding resource transactions are triggered for the OSP batch step and the OSP Actual step quantity gets updated with the receipt quantity. Production supervisor should take the action of completing the step once the complete step quantity is received.
The service charges for the OSP resource are defined as part of Resource cost and are considered in the cost calculation for the product based on the cost source setup as Resource Cost in the OSP resource definition. If the cost source is set to the PO Price, the OSP resource charges are calculated as per the PO Price.
The below diagram represent the high level solution overview
OPM Outside Processing Business Flow
Setup Execution Costing
OP
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Create OSP Item
Create Generic Resource (OSP
Enabled)
Create Plant Resource
(Associate OSP Item)
Create RoutingCreate Recipe and
Validity Rules
Setup Process Execution
Parameter(Requisition Creation Time)
Define Sourcing rules for supplier
Define Over receipt Tolerance
Define Receipt Routing
Define OSP Line Type
Create Resource Cost for OSP resource
Release Batch Release Step
Create Req is set at Batch release
Create Req is set at Step Release
Create Requisition Interface Record
Create Batch
Create Req is set at Batch Creation
B
B
Requisition Import
Concurrent Request
Req Creation with Batch Association
Auto Create PO
Concurrent Request
Create and Approve PO C
Routing Type Receive Inspect Deliver
Standard
Receive with Inspection
Corrections/Returns
Standard Cost rollup/Actual
Cost processor
OSP resource with Standard
rate flag
Calculate Resource charges@standard
cost
Calculate Resource Charges@PO Price
Yes
No
Start
Setup Standard Flag in Plant
resource
A
A
Direct
Receiving Transaction Processor
Create Resource transaction
Interface record
Full
Create Resource transaction
Update the Actual Step
Quantity
Resource Transaction
Manager
Setup Journal Line Entry for the OSP
resource
Run Accounting Preprocessor
Create Accounting/Export to GL
End
Create Operation(Add OSP resource)
Standard Cost rollup/Actual
Cost processor
2. Changes in forms as part of Outside Process
Manufacturing
2.1. Generic Resource
This would hold the main definition of the resource, also there will be a new flag “Outside Processing”.
While defining the resource for the OSP operations the user will have to use this form.
When the resource is not used any operation, as per the current design this flag is editable.
If the flag is checked or unchecked, the corresponding plant resources should also be saved with the OSP flag set or unset.
Definition the resource as OSP across the generic and plant resource will be governed by this OSP flag.
.
2.2 Plant Resource
There would be visual indicator as “Outside Processing” in this form. This would be non editable field; the value of this indicator will be dependent on the set up at the Generic form level. If the “Outside Processing” flag is checked in the Generic Resource form then the same would be reflected in this form and vice versa.
The association of the OSP item will be done at this level. The OSP item LOV would display all the OSP
items defined in that specific plant/inventory organization. Only the OSP items that belong to the
organization of the plant resource should get displayed in the LOV.
OSP Item field should also not be editable if there exists any batches created with this OSP
resource
Possible to associate different items for the same OSP resource in different plants
Possible to associate the same service item to different resources if the business requires doing
so
Selecting Cost Source is mandatory, default value is Resource Cost
2.3. Process Execution Parameters
A new tab, 'Outside Processing' is added to this form and the available setup information is as follows
a) Requisition Creation Time –available values are
At Batch Creation : Requisition would be created at the time of batch creation
At Batch Release : Requisition would be created at the time of batch Release
At Step Release : Requisition would be created at the time of batch Step Release
Manual: Create requisition manually and assign the required batch number.
b) Batch Change Controls for Purchasing Documents
Propagate Batch Change to Purchasing
Automatic - System automatically updates the corresponding Requisition/Purchase order
for the batch changes
Manual: User has to manually update the corresponding Requisition/Purchase order for
the batch changes
c) Need-By Date Tolerance: Need by Date Tolerance controls the PO need by date change using
Days Early
Days Late
3. Recipe
Author assumes that the process users are well known about the Product Development, Process
Execution applications to create and execute the process.
Outside Processing item can be defined as Assembly or Resource as per the requirement.
Steps to create the outside Processing Recipe– outside processing item type Assembly
3.1Create Outside Processing Item (Inventory Super User (Process Operations)>
4. Click Open (You will see the new updated quantity, and also you will see the Revision number for PO)
4.5.1.6 Automatic Date Synchronization on Batch Changes
A) Setup
Refer section 4.5.1.5 A) Setup to make the required setup.
B) Create Batch
Refer the section 4.1.2 A) Create batch section to create the batch
C) Requisition Import
Refer the section 4.1.2 B) Run Requisition Import to import the requisition
D) Check Requisition Number
Refer section 4.1.2 C) Check the requisition number
E) AutoCreate Purchase Order
Refer section 4.5.1.5, F) AutoCreate Purchase Orders to AutoCreate
Purchase Order
E) Reschedule Batch
Navigation: Production Supervisor >Batch Details
1. Navigate the Batch Details window, Find Batches window opens
2. Enter the batch number
3. Click Find, Batch Details window opens
4. Choose the Reschedule from Actions menu, Reschedule window opens
5. Select the desired reschedule date
6. Acknowledge the Decision message to Yes. “Do you want the application to recalculate the other date
based on the batch creation? If you click No, then data gaps or date truncation can occur.
7. Click OK.
You would see the reschedule planned Start date.
E) Check the Planned start date update in PO
Refer section 4.5.1.5 H) Check the Planned Qty update In PO to check the details of the Planned
Start date update in PO
4.5.1.7 Batch Actions – Cancel batch
Batches can be cancelled after creation of Requisition and PO, in such cases Requisitions / PO also
would be cancelled automatically as per setup
A) Setup
Refer the section 4.5.1.5 A) Setup to create the required setup
B) Create Batch
Refer the 4.1.2. A) Create Batch section to create the batch
Batch Details
Batch Steps
C) Run Requisition Import
Refer section '4.1.2 B) Run Requisition Import’ to import the requisition.
D) Check Requisition Number
Refer the section 4.1.2) Check the Requisition Number to view the Requisition
E) AutoCreate PO
Refer section 4.5.1.5, F) AutoCreate Purchase Orders to AutoCreate
Find Requisition lines
Purchase Order
F) Cancel Batch
Navigation: Production Supervisor >Batch Details
1. Navigate the Batch Details window, Find Batches window opens
2. Enter the batch number
3. Click Find
4. Choose the Cancel action from Actions menu, you will get the decision message “Are you sure you
want to cancel (Yes / No)?
5. Click Yes, Batch status changes to Cancelled
G) Check the PO status
Refer section 4.5.1.5 – sub-section H. To check the Purchase Order status
Shipments
4.5.1.8 Batch Actions – Reroute
Prerequisite:
1. Create Batch
2. Recipe and Validity rule that uses the Original batch Formula
Rerouting is the process of selecting a different routing for the batch by selecting a new validity rule that specifies a different recipe that has the same formula but a different routing. When you reroute a batch, the Recipe Validity Rules Summary dialog box displays to select the appropriate validity rule, once re-routing is done batch is updated with new Recipe and Version. For OSP bathes the corresponding PO would be cancelled or new requisition / PO would be created in case of Re-routed recipe also has the OSP step. A) Setup:
Refer the section 4.5.1.5 A) Setup to create the required setup
B) Create Batch
Refer the 4.1.2. A) Create Batch section to create the batch
Batch Steps
C) Run Requisition Import
Refer the section 4.1.2 B) Run Requisition Import to import the requisition
D) Check Requisition Number
Refer the section 4.1.2) Check the Requisition Number to view the Requisition
E) AutoCreate PO
Refer section 4.5.1.5, F) AutoCreate Purchase Orders to AutoCreate
Find Requisition lines
Purchase Orders
F) Rerouting a Batch
1. Navigate the Batch Details window, Find Batches window opens
2. Enter the batch number
3. Click Find, Batch Details window opens
4. Choose Reroute from Actions menu
5. Select an effective validity rule with a different routing or without Routing
6. Click OK; you will get the decision message “Use Workday Calendar” Yes / No
7. Click Yes
8. Batch is updated with new Recipe and Version
G) Check the Purchase Order status
Refer section 4.5.1.5 – sub-section H. To check the Purchase Order status
Shipments
4.5.1.9 Batch Actions – Delete Step
After creation of the Requisition / PO for any reason step deletion is required in a batch, possible to delete
the step, in such cases the corresponding Requisition / PO would be cancelled automatically as per the
setup.
The same is also applicable for OSP resource deletion.
Setup:
Refer the section 4.5.1.5 A) Setup to create the required setup
B) Create Batch
Refer the 4.1.2. A) Create Batch section to create the batch
Batch Steps
C) Run Requisition Import
Refer the section 4.1.2 B) Run Requisition Import to import the requisition
D) Check Requisition Number
Refer the section 4.1.2) Check the Requisition Number to view the Requisition
E) AutoCreate PO
Refer section 4.5.1.5, F) AutoCreate Purchase Orders to AutoCreate
Find Requisition lines
Purchase Orders
F) Delete Step
1. Navigate the Batch Details window, Find Batches window opens
2. Enter the Document number
3. Click Find, Batch Details window opens
4. Click on Steps, Batch Steps window opens
5. Place the cursor on OSP step
6. Delete Step
7. Save the record
G) Check the Purchase Order status
Refer section 4.5.1.5 – sub-section H. To check the Purchase Order status
Shipments
4.5.2 Batch Actions which would not accept when open Requisition / PO exists
Below said some actions would not possible to execute when the open Requisition and PO exists
4.5.2.1 Batch actions which would not accept when open Requisition / PO
exists –Batch Unrelease
System would not allow users to unrelease the batch / Step when the open Requisitions / Pos are
associated to it OR resource transactions exist for OSP step
.
A) Setup
Please follow the steps as per 4.1.1 to make the setup
B) Create Batch
Refer the 4.1.2. A) Create Batch section to create the batch
Batch Steps
C) Release Batch
1. In the Batch Details window Choose Release from Actions menu, Release Batch window opens
2. Enter / Select the desired Actual Start Date
3. Click OK
4. Acknowledge exceptions if any, click Proceed. Batch status changes to WIP, Actual Start date filled-in
D) Run Requisition Import
Refer the section 4.1.2 B) Run Requisition Import to import the requisition
E) Check Requisition Number
Refer the section 4.1.2) Check the Requisition Number to view the Requisition
F) AutoCreate PO
Refer section 4.5.1.5, F) AutoCreate Purchase Orders to AutoCreate
Find Requisition lines
Purchase Order
G) Unrelease Batch
1. Navigate the Batch Details window, Find Batches window opens
2. Enter the batch number
3. Click Find, Batch Details window opens
4. Choose Unrelease from Actions menu, you will get the error message “The action is not allowed if
there is open PO / Requisition linked to the batch/step”
4.5.2.2 Batch actions which would not accept when open Requisition / PO exists
–Batch complete to closed
System would not allow users to close the batch when the open Requisitions / Pos are associated to it.
A) Setup
Please follow the steps as per 4.1.1 to make the setup
B) Create Batch
Refer the 4.1.2. A) Create Batch section to create the batch
Batch Steps
C) Release Batch
1. In the Batch Details window Choose Release from Actions menu, Release Batch window opens
2. Enter / Select the desired Actual Start Date
3. Click OK
4. Acknowledge exceptions if any, click Proceed. Batch status changes to WIP, Actual Start date filled-in
D) Release step
1. Select Step; choose Release Step from Actions menu
2. Enter the Actual Start Date, if you do not enter a date, then this field defaults to system date
3. Click OK, step status changes to WIP
D) Run Requisition Import
Refer the section 4.1.2 B) Run Requisition Import to import the requisition
E) Check Requisition Number
Refer the section 4.1.2) Check the Requisition Number to view the Requisition
F) AutoCreate PO
Refer section 4.5.1.5, F) AutoCreate Purchase Orders to AutoCreate
Find Requisition lines
Purchase Order
G) Complete batch
1. Navigate to the Batch Details window.
2. Query the batch Document number to complete
3. Choose Complete from the Actions menu.
4. Actual Start Date displays the start date entered for the batch. You can edit this field.
5. Enter the Actual Completion Date as the date when the batch is completed and it must be greater than
the Actual Start Date. If there are outstanding issues, then appropriate messages display.
Note: Material transactions not created as it is not required for the current test case.
H) Close batch
1. Navigate to the Batch Details window.
2. Query the batch Document number to close.
3. Choose Close from the Actions menu. The Close Batch dialog box displays.
4. Enter the Batch Close Date, click OK, You will get the error message
“GME_PENDING_RESOURCE_TXN”
("There are no completed resource transactions for the OSP step. Please run resource transaction
manager concurrent program to import pending resource transaction in the resource transaction open
interface”)
4.5.2.3 Step actions which would not accept when open Requisition / PO exists –
Unrelease Step
When open Requisitions or open Purchase Orders exists system would not allow users to unrelease the
step
A) Setup
Please follow the steps as per 4.1.1 to make the setup
B) Create Batch
Refer the 4.1.2. A) Create Batch section to create the batch
Batch Steps
C) Release Batch
1. In the Batch Details window Choose Release from Actions menu, Release Batch window opens
2. Enter / Select the desired Actual Start Date
3. Click OK
4. Acknowledge exceptions if any, click Proceed. Batch status changes to WIP, Actual Start date filled-in
D) Release Step
1. Select Step; choose Release Step from Actions menu
2. Enter the Actual Start Date, if you do not enter a date, then this field defaults to system date
3. Click OK, step status changes to WIP and Actual Start Date filled-in
E) Run Requisition Import
Refer the section 4.1.2 B) Run Requisition Import to import the requisition
F) Check Requisition Number
Refer the section 4.1.2) Check the Requisition Number to view the Requisition
G) AutoCreate PO
Refer section 4.5.1.5, F) AutoCreate Purchase Orders to AutoCreate
Find Requisition lines
Purchase Orders
H) Receipt
Please follow the section 4.7.1 –subsection H to make the receipt
Find Expected Receipts window
Receipt Header
Receipt Lines
Receipt number
I) Please follow the section 4.7.1 –subsection J to view the receipt details
J) Run Resource Transactions Manager
Please follow the section 4.7.1 –subsection L to run the request
K) Check for Batch Updates
Please follow the section 4.7.1 –subsection M to view the batch updates
Batch Details
Batch Steps
Batch Activities
Step Resources
Resource Transactions
L) Unrelase batch step
1. From Batch Steps window, select the OSP Operation.
2. Choose Unrelease Step from Actions menu, You will get the error message “The total actual
usage of OSP resource transaction which are created by PO is greater than Zero, the batch or
step cannot be unreleased”
4.6 Accounting template for OSP transactions The following JLT's are added to support the accounting for OSP transactions:
Event Class:Batch Resource Transactions
Event Type:Step Completion
New JLT:Purchase Price Variance
New JLT:Receiving Inspection
The below said accounts are related to Sub ledger, required to setup by customers as per planned.
Work in Process Valuation Cr/Dr Actual Resource Usage @ (PO Price – Resource Cost)
Batch Close Variance Dr/Cr Actual Resource Usage @ (PO Price – Resource Cost)
4.7 Ability to receive Full / Partial quantity
When the OSP item on the PO is received, corresponding resource transactions are triggered for the OSP batch step and the OSP Actual step quantity gets updated with the receipt quantity. Production supervisor should take the action of completing the step.
4.7.1 Full Quantity receipt
Below is the information about Resource transactions upon receipt of Purchase order
and update Actual Step quantity of OSP step (Though I have given the example in this
document for OSP item type –Assembly, given the information about the OSP item type
–resource also)
User can receive the OSP service when the batch step is in the status of WIP /
Completed.
As part of the delivery process, the resource transactions for the OSP resource should
get created by running the Resource transactions interface program.
The resource transaction gets created with the resource usage calculated based on the
OSP item unit type.
If the OSP item unit type is Assembly
The resource usage is the (delivered quantity * planned resource usage of OSP
resource in the batch /Batch primary product quantity)
If the OSP item unit type is Resource
The resource usage is the delivered quantity (Delivery transaction’s primary quantity)
A) Setup:
Please follow the steps as per 4.1.1 to make the setup
B) Create Batch
Refer the 4.1.2. A) Create Batch section to create the batch
Ingredients
Products
Batch Steps
Step Activities
Step Resources
C) Release batch
1. In the Batch Details window Choose Release from Actions menu, Release Batch window opens
2. Enter / Select the desired Actual Start Date
3. Click OK
4. Acknowledge exceptions if any, click Proceed. Batch status changes to WIP, Actual Start date filled-in
D) Release Step
1. Select Step; choose Release Step from Actions menu
2. Enter the Actual Start Date, if you do not enter a date, then this field defaults to system date
3. Click OK, step status changes to WIP
E) Run Requisition Import
Refer the section 4.1.2 B) Run Requisition Import to import the requisition
F) Check Requisition Number
Refer the section 4.1.2) Check the Requisition Number to view the Requisition
G) AutoCreate PO
Refer section 4.5.1.5, F) AutoCreate Purchase Orders to AutoCreate
Find Requisition lines
PO (Receipt Routing –Standard)
H) Receipt
Navigation: Inventory Super User (Process Operations)>Transactions>Receiving>Receipts