How to Setup, Transact and Use Outside
Processing
OAUG Cost Mgmt SIG Meeting
May 20, 2014
Sue Doughty
Group Business Analysis / Cost
Emerson Network Power Systems North America
[email protected]
Douglas Volz
Douglas Volz Consulting
[email protected]
Introduction
Learn about the outside processing processes with Oracle EBS
Find out about alternate methods
Note some of common workarounds
Discuss current problems you may have
Slide 2
Agenda
Welcome to Our Session!
Cost Management SIG Business
How to Setup, Transact and Use Outside Processing
Scenario
OSP Setup
OSP Transactions: PO Receipt/OSP into WIP
OSP Transaction Inquiries for Receiving & WIP
OSP Value and Distribution Reporting
Alternate OSP Solutions
Conclusions
Slide 3
OAUG Cost Management SIG Business
- Oracle Conferences (http://oaug.org/communities/announcements-news)
Below is a sample, for the latest information go to:
http://oaug.org/communities/announcements-news
OAUG Connection PointAppsTech
July 22-23, 2014
Pittsburgh Marriott City Center, Pittsburgh, PA
2014 NorCal OAUG Training Day
August 26, 2014
San Jose DoubleTree Hotel, San Jose, CA
OpenWorld 2014
September 28October 2, 2014
Moscone Center, San Francisco, CA
Slide 4
OAUG Cost Management SIG Business
- June Elections
June Elections for OAUG Cost SIG Officers:
President, Vice-Presidents (2), Membership Chair (1)
President (SIG Coordinator):
Runs the Cost Mgmt SIG, organizes speakers for monthly webinars
Sets Up SIG meetings at Collaborate and Oracle OpenWorld
Meets with Oracle Cost Development on enhancements and product issues
Vice-Presidents:
Shares in the above tasks, substitutes for President on monthly webinars as needed
(New! Desired!) LinkedIn OAUG Cost Management Q&A Forum
(New! Desired!) Organizes Enhancement Request Feedback from Members
Membership Chair:
Keeps track of membership lists
Updates OAUG Cost Management Website
Slide 5
OAUG Cost Management SIG Business
- Cost Management SIG 2014 Election Timeline
Activity
Date
Send email notice to all members announcing the opening for the
call for candidates
May 26
Send reminder email to all members regarding call for candidates
June 4
Close call for candidates & collect candidate bios by:
Midnight
June 6
Send out ballots
June 11
Send out ballot reminder
June 18
Close elections
Midnight
June 20
Notify candidates of results
June 23
Election results notice to all members
June 26
Slide 6
Scenario and Overall Process
Slide 7
Why, What, How?
Why have outside processing?
You receive goods into receiving, inspect and deliver?
Process PO Receipt/OSP into WIP
How can you see its progress?
How can you see the results?
What is the financial accounting?
Slide 8
Buyer
Outside Processing Process Flow For Assemblies
2.0 Create
Requisition
Processes
Suppliers
4.0 Schedule and
Deliver Purchase
Order
Requirements
Receiver
Inspect?
No
7.0 Receive to
WIP
Prod
Control
5.7 Review
Supplier
Performance
3.0 Manage
Supplier
Deliveries
Start
1.0 Move into
OSP
Operation
Yes
5.0 Receive
Items requiring
Inspection
Inspect
receipt
No
6.0 Reject
from
Inspection
Yes
Return to
Supplier?
Accept?
No
Yes
8.0
Increase to
WIP Value
WIP
Completn
Adjust
Receiving
Process
9.0 Finished
Goods
Subinventory
Inventory
Control
Process
Customer/
Distribution
Center
Slide 9
Types of Supported OSP:
Discrete Work Order OSP
Work order task requires services from outside supplier
Looks like a P/R, PO setup but receive a service into WIP
SubContract Manufacturing
New functionality starting in Release 12.1
Requires separate licensing from Oracle
Four flavors:
Partial Outsourcing
Buy/Sell Outsourcing
Full (Non-Chargeable) Outsourcing
Chargeable / Skikyu Outsourcing (PacRim countries)
From Collaborate14 see the following presentation:
Outsourced Manufacturing for Discrete Manufacturing Industries in
Oracle E-Business Suite
OSP Not Supported For:
Flow Manufacturing (Oracle MetaLink/MOS Doc ID 732866.1)
Work-Orderless (Oracle MetaLink/MOS Doc ID 1464310.1)
Slide 10
Background Information for Purchase Orders
May have multiple lines per
PO
May have multiple scheduled
receipts and PO releases per
line
May have multiple PO
distributions per line or
scheduled receipt
Four stored accounts per PO
distribution
PO HEADERS
(PO_HEADERS_ALL)
PO LINES
(PO_LINES_ALL)
PO SHIPMENTS
PO RELEASES
(PO_LINE_LOCATIONS_ALL)
(PO_RELEASES_ALL)
PO DISTRIBUTIONS
(PO_DISTRIBUTIONS_ALL)
Slide 11
Types of Receipts
Items Vs. No Items:
Expense Receipts may or may not have an item number
Inventory Receipts may be for an expense item or inventory asset item
WIP/OSP is for both an OSP item and a WIP resource at the same time
Three Types of PO Destinations:
Inventory
Shop Floor (WIP / OSP)
Expense
Direct Vs. Two-Step (Receive then Deliver separately):
The receiving routing (item master setting) allows you to pre-select if inspection
is required
Unplanned:
You can receive goods or services temporarily as an unordered receipt
Slide 12
PO Account Sources
(Standard Workflow / Account Generator Rules)
Type of Account
Expense
Destination
Inventory / WIP
Destination
Charge Account
Cost Center or
Expense Account
Matl / WIP Job
OSP Account
Accrual Account
Expense A/P
Accrual Account
Inventory A/P
Accrual Account
Variance (IPV) Account
Cost Center or
Expense Account
Inventory IPV
Account
Expense Budget
Account
Default
Subinv/Org
Encumbrance
Account
Budget Account
Slide 13
OSP Setup
Slide 14
Outside Processing Setup
1. Enable the OSP Workflow
2. Create the OSP item in the Master Organization
3. Create one OSP resources for scheduling to be used on all OSP
routings (optional)
4. Create a unique OSP resource for each assembly being built
(needed for costing and needed for the Import Requisition program
to create the purchase requisition)
5. Create the OSP routing
6. Rollup the new routings and Cost Update
7. Create the work order
8. Move into the outside processing operation (and run Import Reqs)
9. Run AutoCreate POs
Slide 15
Outside Processing Item Controls
- Two Concepts at the Same time
WIP/OSP is for both:
An OSP item
And a WIP resource
OSP Item Controls:
User Item Type: Outside Processing
Not Stockable
Not an Inventory Item
Not Transactable
Not Costed
No Inventory Value (represents a service)
Slide 16
Outside Processing Profile Controls
- WIP: Enable Outside Processing Workflow
Menu path: System Administrator => Profile => System
After lines are created by the OSP Shop Floor Move in the PO_REQUISITION_INTERFACE, this
profiles enables the OSP workflow to fire the Requisition Import concurrent program automatically.
Slide 17
Outside Processing Item Controls
- Main Item Controls
Menu path: Inventory => Items => Organization Items => Main tab
Can be helpful to put real item
number in the description of the
resource, for example, use the
same inventory number with a
suffix like a -S
Standard Oracle OSP procedures requires a unique OSP resource for each OSP item
Slide 18
Outside Processing Item Controls
- Inventory Item Controls
Menu path: Inventory => Items => Organization Items => Inventory tab
Slide 19
Outside Processing Item Controls
- Cost Controls
Menu path: Inventory => Items => Organization Items => Costing tab
Costs are from
the OSP
resource, not
the item
Slide 20
Outside Processing Item Controls
- Purchasing Controls
Menu path: Inventory => Items => Organization Items => Purchasing tab
List Price
defaults to the
purchase
requisition
Unit Type: Assembly or Resource
Assembly: You purchase an outside processing item based on
the number of assemblies you ship to the supplier.
Resource: You purchase an outside processing item based on the number
of assemblies times the resource usage rate or amount
Slide 21
Outside Processing Item Controls
- Lead Times
Menu path: Inventory => Items => Organization Items => Lead Times tab
Use the item lead
times to schedule the
OSP service, including
the time it takes to
create the P/R, PO and
receive the service
from the Supplier.
Slide 22
Set Up the OSP Resource
Menu path: Cost Management SLA => Setup => Sub-Elements => Resources
You can also use a non-costed resource for
scheduling lead times on the routing. Noncosted resources have a time-based UOM for
scheduling purposes. Could be DAY, HR, etc.
Slide 23
Set Up the OSP Resource
Menu path: Cost Management SLA => Setup => Subelements => Resources
For OSP resources, the
Absorption
Account defaults
to the Receiving Account.
This is normal behavior.
See what happens when it
is changed!
This example assumes OSP resource has the standard rate checked. If the resource
definition has standard rate checked (Yes), then the WIP job earns OSP at the standard cost.
Slide 24
Set Up the OSP Resource
Menu path: Cost Management SLA => Setup => Subelements => Resources
OSP Resource Limitations:
Need to create a unique OSP resource for each assembly being built
(for costing and for the Import Requisition program to create the P/R)
Should use a naming convention for OSP resources for your company.
An example would be to start every OSP Resource with OP and a
sequential number.
But be careful, Resource Name field is limited to 10 positions.
OSP Resource Units of Measure:
Dont use a time-based UOM for Costing (HR, DAY, etc.), the resource
unit cost will vary with the hours on the routing
Dont use a currency based resource (USD, GBP, CAD, EUR, etc.) as
the purchase requisition will not be created
Use fixed, per item UOMs, such as EA, EACH and such
Slide 25
Set Up the Routing
Menu path: Bills of Material => Routings => Routings
Slide 26
Set Up the Routing
Menu path: Bills of Material => Routings => Routings
Slide 27
Set Up the Routing
Menu path: Bills of Material => Routings => Routings
This ensures the Cost Rollup
will cost the OSP operation
into your results.
Slide 28
Set Up the Routing Resources
Menu path: Bills of Material => Routings => Routings => Operation Resources
In WIP, when you move into the OSP operation a requisition line
is sent to the Open Requisitions table
Slide 29
Rollup Up the New Routing
Menu path: Cost Management SLA => Supply Chain Costing => Supply Chain Cost Rollup
Slide 30
Rollup Up the New Routing
Menu path: Cost Management SLA => Supply Chain Costing => Supply Chain Cost Rollup
Rollup ID: 196392
Report Date: 07-MAY-2014 10:24:10
Page: 2
Supply Chain Bills of Material Indented Cost Report
Cost Type: Pending
Buy Cost Type:
Assignment Set:
Conversion Type: Corporate
Revision Date: 2014/05/07 23:59:59
Alternate BOM:
Alternate Routing:
Organization: M1
Assembly: MC31749
Seattle Manufacturing
Standard Steel Case
Category: COMPONENT.MECHANICAL
Currency Code: USD
UOM: Ea
Include In Rollup
|
Based On Rollup
Currency
|
|
Asset/Costed
Code
Op
Item/
Description/ Org/
Last |
|
|
Yield/ Planning %
Quantity/
Shrink/ Extended Qty/ Item Unit Cost/
|
Level
Seq Cost Element
Sub-Element
Department Rev |
|
|
Phtm Basis
|
UOM Rate Or Amount Basis Factor Rate Or Amount
Res Unit Cost
Extended Cost |
----------- ---- -------------- ------------- ---------- ---- --- --- --- ---- ---------- ----- --- -------------- ------------ -------------- --------------- --------------- --0
MC31749
Standard Stee M1
A
Yes Yes No
Item
Ea
1.00
0.00
1.00
28.55833
USD
10
Resource
SHEAR
METAL_FAB
Yes
Lot
HR
2.00
0.05
2.00
55.00000
5.50000
10
Overhead
Indirect
METAL_FAB
Res value
USD
0.15
5.50
0.15
0.82500
10
Overhead
Mgmt
METAL_FAB
Res value
USD
0.03
5.50
0.03
0.16500
10
Resource
PRESSBRAKE
METAL_FAB
Yes
Lot
HR
2.00
0.05
2.00
45.00000
4.50000
10
Overhead
Indirect
METAL_FAB
Res value
USD
0.15
4.50
0.15
0.67500
10
Overhead
Mgmt
METAL_FAB
Res value
USD
0.03
4.50
0.03
0.13500
10
Resource
LBR-FAB
METAL_FAB
Yes
Lot
HR
2.00
0.05
2.00
6.50000
0.65000
10
Overhead
Benefits
METAL_FAB
Res value
USD
0.25
0.65
0.25
0.16250
10
Overhead
Equip/Tool
METAL_FAB
Item
USD
0.10
1.00
0.10
0.10000
10
Overhead
Facility
METAL_FAB
Item
USD
0.10
1.00
0.10
0.10000
20
Resource
DRILL
METAL_FAB
Yes
Item
HR
0.17
1.00
0.17
40.00000
6.66667
20
Overhead
Indirect
METAL_FAB
Res value
USD
0.15
6.67
0.15
1.00000
20
Overhead
Mgmt
METAL_FAB
Res value
USD
0.03
6.67
0.03
0.20000
20
Resource
LBR-FAB
METAL_FAB
Yes
Item
HR
0.17
1.00
0.17
6.50000
1.08333
20
Overhead
Benefits
METAL_FAB
Res value
USD
0.25
1.08
0.25
0.27083
20
Overhead
Equip/Tool
METAL_FAB
Item
USD
0.10
1.00
0.10
0.10000
20
Overhead
Facility
METAL_FAB
Item
USD
0.10
1.00
0.10
0.10000
30
Outside Proces ANODIZING
OUTSIDE
Yes
Item
Ea
1.00
1.00
1.00
1.50000
1.50000
40
Resource
LBR-TEST
TESTING
Yes
Item
HR
0.03
1.00
0.03
10.00000
0.34000
40
Overhead
Benefits
TESTING
Res value
USD
0.25
0.34
0.25
0.08500
40
Overhead
Equip/Tool
TESTING
Item
USD
0.10
1.00
0.10
0.10000
40
Overhead
Facility
TESTING
Item
USD
0.10
1.00
0.10
0.10000
.1
10
RW94713
Material
Sheet Metal
Material
M1
Yes No
Yes No
Item
Item
1.00
100 FT2
USD
7.00
0.60
0.00
1.00
7.00
4.20
0.60000
USD
4.20000
--------------- --28.55833 USD
Slide 31
Rollup Up the New Routing
Menu path: Cost Management => Item Costs => Item Costs => Views => Sub-element by Operation
The $1.50 comes from the
Pending Cost Type for the
resource.
Cost Element
Standard Cost
Report Value
Difference
-------------------- ---------------- ---------------- ---------------Material
4.20000
4.20000
0.00000
Material Overhead
0.00000
0.00000
0.00000
Resource
18.74000
18.74000
0.00000
Outside Processing
1.50000
1.50000
0.00000
Overhead
4.11833
4.11833
0.00000
---------------- ---------------- ---------------Total
28.55833
28.55833
0.00000
================ ================ ================
Percent
---------0.0
0.0
0.0
0.0
0.0
---------0.0
==========
Slide 32
Create the Work Order
Menu path: Work in Process => Discrete => Discrete Jobs
Both Count Point and
Autocharge need to be checked
Slide 33
Work Order Scheduling
Menu path: Work in Process => Discrete => Discrete Jobs
4 days lead time is from the
OSP item OP98997
Slide 34
Move into the OSP Operation to Start P/R Process
Menu path: Work in Process => Move Transactions => Move Transactions
Requisition Import Run Report
Date: 07-MAY-14
------------------------------------------------Number of approved requisitions created = 1
Number of unapproved requisitions created = 0
Number of interface lines in error = 0
------------------------------------------------End of Report
Automatically kicked off when
moved into Queue
Slide 35
Move into the OSP Operation to Start P/R Process
Menu path: Work in Process => Discrete => Discrete Jobs
New for Release 12, have to
be set up as an employee to
perform the shop floor move.
Slide 36
Purchase Requisition Creation
Menu path: Purchasing Super User => Requisitions => Requisition Summary
Requisition Import Run Report
Date: 07-MAY-14
------------------------------------------------Number of approved requisitions created = 1
Number of unapproved requisitions created = 0
Number of interface lines in error = 0
------------------------------------------------End of Report
Slide 37
Purchase Requisition Creation
P/R Creation Timing:
The timing of the creation of the purchase requisition is
based on the setting of the WIP parameter Requisition
Creation Time.
At Job/Schedule Release, a purchase requisition is created for
all outside processing operations on a job or schedule when you
release the job or schedule.
At Operation, a purchase requisition is created when you move
into the Queue intraoperation step of an outside processing
operation.
You then use Purchasing's Autocreate feature to convert these
requisitions to purchase orders or releases against blanket
agreements.
Manual, requires you to manually create purchase requisitions
in Oracle Purchasing.
Slide 38
Purchase Order Creation
Menu path: Purchasing Super User => Purchase Orders => Autocreate
List Price was set to
zero
Can also add to existing PO
or Release
Slide 39
Purchase Order Creation
Menu path: Purchasing Super User => Purchase Orders => Autocreate
Slide 40
Purchase Order Creation
Menu path: Purchasing Super User => Purchase Orders => Autocreate
1) Change unit
price
2) Approve PO
Slide 41
Purchase Order Creation
Menu path: Purchasing Super User => Purchase Orders => Autocreate
Shop Floor destination types
is for OSP
PO Shipment is for
the OSP Item
PO Distribution holds the Accrual,
Variance (IPV) and Charge accounts.
Charge account for OSP is not used;
OSP Account on the work order is used.
Slide 42
Purchase Order Creation
Menu path: Purchasing Super User => Purchase Orders => Autocreate
PO Distribution tied
to the work order,
operation and OSP
resource
Slide 43
Purchase Order Review
Menu path: Purchasing Super User => Purchase Orders => Purchase Order Summary
For Purchasing, OSP is an OSP item that you receive.
For WIP, OSP is an OSP resource that you earn.
Purchasing calls Outside Processing a
Shop Floor Destination
OSP is both an item and a resource at the same time.
Slide 44
Purchase Order Review
Menu path: Purchasing Super User => Purchase Orders => Purchase Order Summary => Shipments
Slide 45
Purchase Order Review
Menu path: Purchasing Super User => Purchase Orders => Purchase Order Summary => Shipments => Distributions
Slide 46
WIP Outside Processing PO Receipt
Slide 47
Receive the OSP Service
Menu path: Purchasing Super User => Receiving => Receipts
Dont forget to click here. If
you do not you will create a
PO Receiving Shipment
Header transaction but no
Receiving Shipment lines and
no receiving transaction.
Slide 48
Receive the OSP Service
Transaction Processing Options
Menu path: System Administrator => Profile => System
RCV: Processing Mode Profile
Batch the receiving forms insert transaction information into the receiving interface tables. The
receiving forms take into account all pending transactions, but Purchasing does not update the
transaction history, source documents, and supply information until the transactions are processed
from the receiving interface tables.
Immediate when you save your work, the receiving forms call the Receiving Transaction
Processor for the group of transactions you have entered since you last saved your work.
On-Line gives best online messages but may hold up the screen refresh, the receiving forms
calls the Receiving Transaction Processor when you save your work, for each transaction.
Slide 49
Where Can You See This OSP Receipt?
Menu path: Cost Management SLA => View Transactions => Receiving Transactions
PO Receive transactio
has the PO Accrual
Accounting entry
For Shop Floor destinations, the Deliver transaction has no
accounting in PO/Receiving
(WIP has the OSP resource accounting)
Slide 50
Where Can You See This OSP Receipt?
Menu path: Cost Management SLA => View Transactions => Receiving Transactions => Tools => View Accounting
PO Receive transaction
has the PO Accrual
Accounting entry
Slide 51
Where Can You See This OSP Receipt?
Menu path: Cost Management SLA => View Transactions => Resource Transactions
Slide 52
Where Can You See This OSP Receipt?
Menu path: Cost Management SLA => View Transactions => Resource Transactions => Resource Distributions
Receiving Inspection accounting entry
Says Resource absorption but it is really
Receiving Inspection
Slide 53
Where Can You See This OSP Receipt?
Menu path: Cost Management SLA => View Transactions => Resource Distributions
Why Not $170 into and out of Receiving?
WIP Value is correct, 100 units completed at $1.50
standard cost
Slide 54
Why Not $170? Vision Environment . . .
Menu path: Purchasing Super User => Purchase Orders => Purchase Orders => Actions => Manage Tax
Nonrecoverable Tax Settings
Slide 55
Where Do These WIP Accounts Come From
Menu path: Cost Management SLA => Setup => Sub-Elements => Resources
This account is not used for
the Resource Cost
Worker hit the Receiving
Inspection Account, not the
Absorption Account
This account is used
for OSP PPV
Slide 56
Where Do These WIP Accounts Come From
Menu path: Cost Management SLA => Setup => Account Assignments => Organization Parameters
These accounts are being shared
with Receiving and Inventory
DONT DO THIS
Slide 57
OSP Destinations
Purchase Order Accounting Accrual Summary by T Account
Transaction
Receipt
Delivery to WIP
Invoice Match
Delivery to WIP
Receiving Value
Inventory A/P Accrual
181.73
181.73
181.73
181.73
WIP OSP Value
150.00
Purchase Price Variance
31.73
Trade Payables
181.73
Invoice Match
If self-assessing state taxes,
would have a second line for
accruing self-assessed taxes
Slide 58
Process PO Receipt for OSP
Process PO Receipt into Receiving
Start
Enter
PO Receipt
Transaction
Frequently have
stuck transactions
for both PO
Receipts and RMAs
Receiving
Transaction
Processor
RCV_SHIPMENT
HEADERS
RCV_SHIPMENT_
LINES
MTL_SUPPLY
RCV_
TRANSACTIONS
RCV_RECEIVING
_SUB_LEDGER
XLA_
AE_HEADERS
XLA_AE_LINES
Receiving
Shipments
Created
RCV
Transactions
Interface
Create
Accounting
GL_INTERFACE
Accounting
Entries
Created
Slide 59
Process OSP PO Receipt into WIP (Oracle WIP)
Process PO OSP Receipt into WIP Delivery into WIP
Start
Enter
PO Delivery
Transaction
Receiving
Transaction
Processor
RCV
Transactions
Interface
Supply is relieved since the
goods are going into WIP
RCV_SHIPMENT_
LINES
MTL_SUPPLY
TheCost
WIPResource
Cost Processor
The
Worker
creates the resource/overhead
entries, & the accounting for
resources and resource
overheads
RCV_SHIPMENT
HEADERS
RCV_
TRANSACTIONS
WIP Cost
Transaction
Processor
Purchasing creates shadow delivery
transaction (only the receipt is accounted for
in Purchasing) and WIP creates the accounted
for OSP delivery transaction
WIP_
TRANSACTIONS
WIP_TRANSACTION
_ACCOUNTS
WIP_PERIOD_
BALANCES
Create
Accounting
XLA_
AE_HEADERS
XLA_AE_LINES
GL_INTERFACE
Accounting
Entries
Created
Slide 60
So Where Are We Now?
We have setup and received Outside Processing
How do we see Outside Processing Transactions on Reports?
Receiving Account Distribution Detail Report
WIP Account Detail Report
WIP Account Summary Report
How do we see Receiving Value?
Receiving Value Report
All Inventories Value Report
Slide 61
Receiving Value Report
Menu path: Cost Management SLA => Reports => Valuation Reports => Receiving Value
Slide 62
Receiving Value Report
Menu path: Cost Management SLA Vision Operations => Reports => Valuation Reports => Receiving Value
Slide 63
Receiving Errors
Menu path: Cost Management SLA Vision Operations => Requests => Submit a New Request =>
Receiving Interface Errors Report
Slide 64
Receiving Errors
Menu path: Cost Management SLA Vision Operations => Requests => Submit a New Request =>
Receiving Interface Errors Report
Slide 65
Receiving Errors
Period Close Pending Transactions Report
Menu path: Cost Management SLA Vision Operations => Reports => Transactions =>
Period Close Pending Transactions Report
Slide 66
Receiving Errors
Period Close Pending Transactions Report
Menu path: Cost Management SLA Vision Operations => Reports => Transactions =>
Period Close Pending Transactions Report
Slide 67
Outside Processing Solutions
1.
Use Standard Functionality Requires OSP Item and OSP Resource
2. Use Standard Functionality But Avoid Having new OSP resources for
each OSP Item
3. Use Expense POs for Outside Processing
4. Use Inventory POs for OSP
Slide 68
2) Alternate OSP Solutions
Use Standard Functionality But Avoid Having new OSP resources for each OSP Item
Standard functionality requires too many OSP resources. How to avoid
having a new OSP resource for each OSP Item:
Use OSP in normal way but link OSP resource to an OSP dummy item
Write a database trigger or concurrent program to correctly populate the
assembly_item_id into the purchase requisition open interface table
Advantages:
Only need the number of resources required to correctly set the cost of the vendor
service. And you could name the resource by vendor name and operation
sequence. The OSP resource is still set to PO MOVE autocharge type.
OSP purchase order is linked to work order, with the appropriate leadtime
scheduling.
Standard Oracle process plus the Cost Rollup includes OSP costs
Personnel at receiving dock able to see the work order the receipt goes to.
Disadvantages:
As needed, to avoid directly tying the assembly being built with the OSP process,
may need to automate the creation of OSP items
May still experience OSP receiving errors
Slide 69
3) Alternate OSP Solutions
Use Expense POs for Outside Processing
Charge Expense POs and Relieve the Expense by:
Charge a non-osp resource as the units are built on the routing
Charge the vendor service on EXPENSE purchase orders, hitting the same or
similar account number that the dummy OSP resource credits (resource
absorption account)
Advantages:
Cost rollup includes OSP cost for the assembly
Limited setup needed, dont need dummy OSP item or OSP receipt or link
between OSP resource and OSP item, smaller number of OSP resources to setup
Assembly includes the lead time on the dummy OSP resource on the routing
Dont have the interface/transaction issues common with the OSP PO receipt,
avoid using the shop floor move interface which creates a WIP costing entry
Disadvantages:
OSP purchase order is NOT linked to work order
Personnel at receiving dock not able to see the work order the receipt goes to
Have to manually set up Expense PO for the vendor service
Muddy up the OSP Absorption Account and create another reconciliation
needed for the account
Slide 70
4) Alternate OSP Solutions
Use Inventory POs for Outside Processing
Earn the OSP cost on the routing by:
Better variation for avoiding Oracle OSP setup. The cost of the OSP service and
the leadtime for the OSP service is setup using the same item on the BOM
Receiving personnel receive the OSP item into a OSP subinventory and the OSP
item quantities are backflushed into WIP or manually pushed to the WIP jobs
Advantages:
Bypasses the OSP interface/transaction issues common with the OSP PO receipt
Cost rollup includes OSP cost for the assembly
Limited setup needed, dont need dummy OSP item or OSP receipt or link
between OSP resource and OSP item, smaller number of OSP resources to setup
Assembly includes the lead time on the dummy OSP resource on the routing
Planning can automatically give purchase order recommendations for the OSP
service, per the leadtime for the OSP items
No special receiving instructions needed for OSP, works just like a normal
Inventory receipt into a subinventory, much easier for CLIENT to understand
Disadvantages:
OSP purchase order is NOT linked to work order
Need to set up dummy OSP items on the bills of material
Slide 71
Common Cost Mgmt Customizations for OSP & Receiving
Multi-Org Reporting for:
Receiving Account Summary Report
WIP Account Summary Report
Receiving Value Report (listing OSP information)
Receiving Interface Errors (and the other interface tables as well)
WIP Resource Efficiency Reports
(see which WIP jobs have not earned OSP, so you dont close them early)
Replace Missing R11i Functionality
Receiving Value by Destination Account Report
(needed when you accrue expenses at time of receipt)
Slide 72
Conclusions
Outside Processing can be very useful but it involves lots of setup steps
and can be difficult to use without proper training
Careful OSP training for Purchasing, Production Control and Receiving
staff is essential
Careful monitoring of interface tables is also required, OSP can get stuck
in 2 tables: RCV_TRANSACTIONS_INTERFACE, and
WIP_COST_TXN_INTERFACE
Many companies use custom reports, especially for to report additional
OSP information on Receiving Value, Receiving Interface and distribution
accounting reports
Slide 73
Where to get more information
Oracle Cost Management SIG Minutes
July 2010: WIIFM Release 12 New Cost Features
March 2011: R12 A/P Accruals
June 2011: Receiving as it Relates to Cost Management
April 2012: R11i & R12 Open Interfaces for Month-End Close
Oracle Corporation
Metalink/My Oracle Support:
Outside Processing Frequently Asked Questions (Doc ID 1282909.1)
Oracle Cost Management User Guide
Oracle Purchasing User Guide
Oracle Work in Process Guide on Outside Processing, Chapter 11
Slide 74
Acknowledgements
You, the OAUG Cost Mgmt SIG, thanks for attending this session
Slide 75
Any Questions?
Doug Volz
Sue Doughty
[email protected] [email protected]
http://www.emersonnetworkpower.com
+1 614.841.6610
www.volzconsulting.com
+1 510.755.7050
Slide 76
Professional Background
Doug Volz is a Senior Architect and Business Advisor for Oracle EBS projects, specializing in Cost Management
and Intercompany processes. He has over 35 years accumulated experience, including 5 years in Oracle
Development (co-designing Oracle Cost Management), 19 years implementing Oracle EBS in multiple countries
and 12 years in industry for Cost and Accounting Management positions. His Manufacturing and Cost systems
experience covers project management, software design/development, delivery and consulting services, for both
Oracle Corporation and multiple international consulting firms. Prior to his systems career, Mr. Volz also held
management accounting positions for telecommunications, defense and electronics companies.
In his consulting roles, Doug has served over 100 clients. Many of these were multi-org, multi-currency with
global footprints and intercompany accounting requirements. Countries include US, Mexico, UK, Netherlands,
Belgium, Taiwan, PRC, Norway, Japan, Italy, Switzerland and Germany.
Doug has been recognized as the 2014 OAUG Member of the Year. He leads the OAUG Cost Management
Special Interest Group and freely gives out valued business advice to his SIG members and to the Oracle
community at large. Doug also presents at OAUG Collaborate, UKOUG and Oracle OpenWorld conferences. In
addition he advises and participates on Oracle Customer Advisory Boards and frequently meets with the Oracle
Cost Development team.
Core Expertise
Experience
Multi-organization, Multi-currency Global
Implementations
Cost Accounting Business Solutions
Project Management and Senior Project Advisor
Core manufacturing and distribution processes
Cost Management
Inventory
Bills of Material
WIP
Sample of clients served:
Beckman Coulter (US)
Celgene (US, Switzerland)
Garlock Sealing Tech. (US, Germany)
Logitech (US, Taiwan, P.R.C.)
Matsushita (UK, Mexico)
NTL (UK, now Virgin Media)
Onninen AS (Norway)
Helping people use Oracle Applications since 1990
www.volzconsulting.com
End of Presentation
Slide 78
