Oracle Order Management
- Oracle Order Management is an order-to-cash solution that provides capabilities for customers, partners and employees to select the right products and services, negotiate the best prices and ensure timely fulfillment.
- Order management is simply the process of efficiently tracking and fulfilling sales orders. It includes the cycle of people, processes, and suppliers to create a positive customer experience.
- Sales departments give notification to the warehouse to fulfill the order, and the order is then shipped to the customer.
- Order management involves the seamless integration of orders from multiple channels with inventory databases, data collection, order processing including credit card verification, fulfillment systems and returns across the entire fulfillment network
Order to Cash
- Order to Cash, also known as O2C or OTC, refers to the set of business processes for receiving and processing customer sales orders for goods and services and their payment.
- Customer order is documented. ... Invoice is created and sent to customer. Customer sends payment /Collection.
A bill is "an amount of money owed for goods supplied or services rendered, set out in a printed or written statement of charges",
while an invoice is "a list of goods sent or services provided, with a statement of the sum due for these"; the NOAD reports also that invoice means bill.
Order to cash process steps can be listed as below
- Enter the Sales Order
- Book the Sales Order
- Launch Pick Release
- Ship Confirm
- Create Invoice
- Create the Receipts either manually or using Auto Lockbox
- Transfer to General Ledger
- Journal Import
- Posting
Involved Modules
Order Management: Creating and shipping the Order
Inventory: Onhand availability, Reservation
Receivables: For Receipt against invoice
General Ledger: Importing, entering and posting the journal
Enter the Sales Order: Enter the Customer details (Ship to and Bill to address), Order type.
Enter Order Number: -
Yellow Fields are Mandatory.
Click on Lines Tab. Enter the Item to be ordered and the quantity required
Line is scheduled automatically when the Line Item is saved.
- Scheduling/unscheduling can be done manually by selecting Schedule/Un schedule from the Actions Menu.
- We can check if the item to be ordered is available in the Inventory by clicking on Availability Button.
Book the Sales Order
Book the Order by clicking on the Book Order button
Now that the Order is BOOKED, the status on the header will change accordingly.
Launch Pick Release
Shipping > Release Sales Order > Release Sales Orders
Give the Sales Order and Rule details as required
Key in the details in Shipping Tab,
Autocreate Delivery: Yes,
Auto Pick Confirm: Yes,
Autopack Delivery: Yes
Then select Execute Now button.
Pick Release process will in turn run few more concurrent requests like
- Auto Pack Report,
- Pick Slip Report,
- Shipping Exceptions Report
(These are what we have chosen in the shipping tab during Pick Release)
Pick Release is the process of putting reservation on on-hand quantity available in the inventory and pick them for particular sales order. Pick Release can be done from “Release sales order”.
Pick Confirm the Order:
- If Auto Pick Confirm is set to Yes during Pick Release, then this process will happen systematically.
- In other cases, need to do this by doing a move order transaction
- Inventory Super User > Move Order> Transact Move Order
Ship Confirm the Order:
Order Management > Shipping > Transactions
Find by Order Number
Pick Confirm / Move order Transaction
Items are transferred from source sub-inventory to staging sub-inventory.
Material Transaction occurs here.
Sales order line status is changed to “Picked” and in the shipping Transaction form status is shown as “staged/Pick confirmed”.
If the line status is Staged/Pick Confirmed, we can go for a shipment
Then Click on the Delivery tab
Then Click Ship Confirm
Note: If Ship Confirm button is inactive, then please check to the user id you are logged in, whether Shipping Grant given or not. If not, they add a shipping grant to the user id and try again
Then OK.
The Status in Shipping Transaction form in Delivery tab should be closed
Create Invoice:
Run workflow background Process
Order Management >view >Requests
And spawns Auto Invoice Master Program and Auto invoice import program which creates Invoice for that particular Order
Check the Invoice:
The Invoice created can be seen using the Receivables responsibility
Receivables > Transactions> Transactions
Query with the Order Number as Reference
Create receipt:
Receivables> Receipts> Receipts
Click Apply to apply this to an invoice and then select the invoice in next screen and then apply.
BR100
The BR100 documents the setup for each application, which is arrived at by completing some or all of the other BR (Business Requirements Mapping) and BD (Business Requirements Definition) documents in the Definition, Operational Analysis and Solution Design phases of the implementation project.
Oracle Unified Method (OUM) is the single implementation methodology designed to be used for ALL Oracle product implementations. OUM 6.3 was released in January 2015 to add support for Oracle Cloud Applications (SaaS solutions), you can get more info on new features from OUM 6.3
This Application Setup Documents record the parameters, user-defined codes, and other setups for each module. As requirements definition completes and requirements analysis begins, the components required to complete the configuration fall into place.
We can also extract the setup requirements from existing documentation if you have in place. The main objective is to consolidate the configuration of all modules for centralized maintenance. With the number of separate application databases on the organization’s systems, it becomes a challenge to make sure that the configurations represent the latest mapping decisions.
Item attributes
Item attributes are information about an item, such as order cost, lead time, and revision control.
Item Defining Attributes – An item defining attribute identifies the nature of an item. What designates an item as an “engineering item” is the attribute Engineering Item, but what controls the functionality of the item are the collection of attributes that describe it. You can buy an engineering item if you want to; simply set Engineering Item, Purchased, and Purchasable to Yes.
When you set an item defining attribute to Yes, the item is automatically assigned to the default category set of the corresponding functional area. For example, if you set Inventory Item to Yes, the item is automatically assigned to the default category set for the inventory functional area.
Item Status attributes are item attributes that enable key functionality for each item.
Status attributes enable and disable the functionality of an item over time. Each status attribute allows you to enable the item for a particular use. For example, if you set the status attribute Purchasable to Yes, you can put the item on a purchase order. The status attributes are related to the item defining attributes. You cannot enable a status attribute if you do not set the corresponding item defining attribute to Yes.
An item status Codes is defined by selecting the value check boxes for the status attributes.
Item Status Codes may be used to set or update the default values for certain item attributes. They can be used to control the functionality of an item. When you update the values for a status, all items that use that status will be updated also.
The Item Status Code controls certain item attributes designated as status attributes. Each status attribute has a Status Setting option. The option determines whether a status attribute value is set by the status code and is not updateable, defaulted and updateable, or not used when you define an item.
Inventory Item Attributes
- Assemble To Order
- BOM Item Type
- Customer Ordered Item
- Default Shipping Org
- Invoice Enabled
- Invoiceable Item
- Pick Components
- Primary Unit of Measure
- RMA Inspection Status
- Ship Model Complete
- Tax Code
Shipping Warehouse
The following item attributes are taken from the organization specified in the Warehouse field of a sales order's schedule detail line or the Receiving Warehouse of a return line.
Inventory Item Attributes
- Accounting Rule
- ATP components
- ATP Rule
- Check ATP
- COGS Account
- Customer Orders Enabled
- Invoicing Rule
- OE Transactable
- Lot Control
- Picking Rule
- Reservation Control
- Returnable
- Revision Control
- Sales Account
- Shippable
- Serial Number Control
- Stock Locator Control
- Stockable
- Subinventory Restrictions
- Transactable (Inventory)
Operating Units
In the financial applications of Oracle's E-Business Suite, an Operating Unit (OU) is a system organization that: Stores subledger data separately from the data associated with other OUs that support a particular ledger
An organization that uses Oracle subledgers, such as Oracle Cash Management, Order Management and Shipping Execution, Oracle Payables, Oracle Purchasing, Oracle Receivables, and related products. It may be a sales office, a division, or a department. Operating units are not associated with legal entities
Inland carriers/Frt term
Freight collect means that the person or company that receives goods will pay the cost of transporting the goods at the time they are received. The agent of the shipping company will collect the freight in the port of destination before the goods are made available to the holder of the original Bill of Lading.
Ex Works (EXW)
Ex works (EXW) is an international trade term that describes when a seller makes a product available at a designated location, and the buyer of the product must cover the transport costs. Ex works (EXW) is one of the 11 current Incoterms (International Commercial Terms), a set of standardized international trade terms that are published by the International Chamber of Commerce.
Net 30
Net 30 means that buyer will pay seller in full on or before the 30th calendar day (including weekends and holidays) of when the goods were dispatched by the seller or the services were fully provided.
Accounting Entries for Order to Cash Cycle (O2C)
A quick summary of accounting entries in Order to Cash cycle
Sales order creation – No entries
Pick release:
Inventory Stage A/c…………………Debit
Inventory Finished goods a/c……..Credit
Ship confirm:
Cogs A/c ……………………………Debit
Inventory Organization a/c………Credit
Receviable:
Receviable A/c………………………Debit
Revenue A/c………………………Credit
Tax ………………..…………………Credit
Freight…………..….……………….Credit
Cash:
Cash A/c Dr…………………………Debit
Receivable A/c……………………….Credi
Operating unit
The Ordered Item List of Values (LOV) is populated by listing all the items available in the item validation organization of the current operating unit. Item Orderability rules are defined at Operating Unit Level.
The Item Category and Items LOV are always displayed based on the Master Organization or the Item Validation Organization attached to the operating unit.
However, the Ordered Items LOV will not display all items; the list is populated depending on the Item Orderability Rules you have set up. If you have not set up the Item Orderability Rules, it means that the Item Orderability functionality is disabled or the functionality cannot be used.
If you enter the operating unit in the Operating Unit field or select an operating unit from the LOV, and then search for the rules by pressing Ctrl F11, records will be retrieved for the item and operating unit combination.
If you do not enter anything in the Operating Unit field, or enter a partial search criterion (eg: Vision) or enter an invalid operating unit, the Operating Unit LOV displays and you need to select an operating unit to continue with the search.
Document sequence
Document sequence tables in oracle apps stores the unique sequence for each transaction based on the category and then after that, system refer that sequence number for generating numbers for that category transactions.
Document sequence is defined to automatically generate numbers for your orders or returns as you enter them. Single / multiple document sequences can be defined for different order types.
Order Management validates that the number specified is unique for order type.
Flexfield
The Sales Order Flexfield is a key flexfield used by Oracle Inventory to uniquely identify sales order transactions Oracle Order Management interfaces to Oracle Inventory. Your Sales Order Flexfield should be defined as Order Number, Order Type, and Order Source.
In the Order Management ->Setup -> Transaction Types
Transaction type Window Opens.
Mandatory requirements:
- Operating Unit / Organization must already been defined.
- Defaulting Rules
- Price Rules
- Freight Carriers
- Most important is already we must have defined OM Line Transaction Type so that we can assign this Line Transaction Type to OM Order Transaction Type.
- Credit Check Rules.
- Invoicing Rules & Accounting Rules.
- Currency
What Happens When You Enter an Order?
After you enter an order, the items on the order are validated in Oracle Inventory; a price is calculated for the items using the pricing engine; the availability of the items are checked and may be reserved; the items are then pick released and shipped to the customer.
Defaulting RulesDefaulting Rules enable you to speed up data entry by passing values in the window based on some key values you have entered.
Defaulting rules reduce the amount of information one must enter.
Examples:
In the order header, Ship-To Address and Bill-To Address values default in the window once you enter the customer name or number.
If you enter an item number, the Unit of Measure and Item Description automatically default on the order line.
What Is ASN?
ASN stands for Advanced Shipment Notice. ASN is transmitted via Electronic Data Interchange (EDI) from a supplier to let the receiving organization know that a shipment is coming. The ASN contains details including shipment date, time, and identification number, packing slip data, freight information, and item detail including cumulative received quantities, purchase order number, and returnable container information.
What Are Modifiers and Qualifiers?
Modifiers are discount, surcharge or special charge that may be applied to the base price and may alter the value of the item. It can be applied either at order level or at the line level.
A qualifier helps you define who is eligible for a price list or modifier. A qualifier can be a customer name, a customer class, an order type, or an order amount that can span orders.
What Happens During Ship Confirm?
Ship Confirm indicate that the items are loaded onto the carrier from staging location.
Explain the Order Cycle?
i) Enter the Sales Order
ii) Book the Sales Order (SO will not be processed until booked(Inventory confirmation))
iii) Release sales order (Pickslip Report is generated and Deliveries are created) (Deliveries – details about the delivery.
Belongs to shipping module (wsh_deliveries, wsh_new_deliveries, wsh_delivery_assignments etc) they explain how many items are being shipped and such details.
iv) Transaction Move Order (creates reservations determines the source and transfers the inventory into the staging areas)
v) Launch Pick Release
vi) Ship Confirm (Shipping Documents ( Pickslip report, Performa Invoice, Shipping Lables))
vii) Auto invoice and closed
Process Constraints
- Process Constraints prevent users from adding updating, deleting, splitting lines and canceling order or return information beyond certain points in the order cycle.
- Oracle has provided certain process constraints which prevent data integrity violations.
- Process constraints are defined for entities and attributes.
- Entities include regions on the sales order window such as order, line, order price adjustments, line price adjustments, order sales credits and line sales credits.
- Attributes include individual fields (of a particular entity) such as warehouse, ship to location, or agreement.
Validation Templates
Validation Templates are used to define the validation conditions in process constraints. A validation template names a conditions and defines the semantic of how to validate that condition. These are used in processing constraints framework to specify the constraining conditions for a given constraint. These conditions are based on
1.Where the entity is in its work flow.
2.The state of attributes on an entity.
3.Any other validation condition that cannot be modeled using the above condition.
Order type
An order type is the classification of order. It controls the order work flow activity, order number sequence, credit check point and transaction type. Order Type is associated to a work flow process which drives the processing of the order.
What is pick slip? Types?
It is an internal shipping document that pickers use to locate items to ship for an order. 1 Standard Pick Slip – Each order will have its own pick slip with in each picking batch. 2 Consolidated Pickslip – Pick slip will have all the orders released in the each picking batch.
What is packing slip?
It is an external shipping document that accompanies the shipment itemizing the contents of the shipment.
What are picking rules?
Picking rules define the sources and prioritization of sub inventories, lots, revisions and locators when the item is pick released by order management. They are user defined set of rules to define the priorities order management must use when picking items from finished goods inventory to ship to a customer.
Shipping Parameters:
Shipping Parameter setup is a mandatory setup for Oracle Order Management – Shipping Execution, defined to default values for basic shipping information such as units of measurement, pick release rules, weight and volume calculations, and delivery grouping rules.
Freight carrier
Freight carrier is a commercial company used for internal transfers between organizations, as well as shipments to and from customers and suppliers. You must associate a general ledger account with each carrier to collect costs associated with using this carrier.
Transit Time:
Time required for a shipment to be transported from a point of origin to a destination. This enables you to effectively calculate the initial ship date of the shipment in order for it to arrive at the destination on the planned delivery date.
GRC is one such module from Oracle which caters all such needs. GRC is a solution that manages business processes for greater efficiency, controls user access to reduce risk and track data changes to increase financial integrity.
References:
- https://docs.oracle.com/cd/A60725_05/html/comnls/us/oe/itmatts.htm
- http://www.oraerp.com/thread-146.html
- http://www.shareoracleapps.com/2010/06/item-attributes-in-oracle-inventory-r12.html
- https://www.wisdomjobs.com/e-university/oracle-order-management-interview-questions.html
- https://www.oracleappsguy.com/2014/05/oracle-om-faqs-order-mgmt-intervew-questions-answers.html
- https://www.slideshare.net/ChetanKhanzode/order-to-cash-73282127
- http://www.erpschools.com/articles/order-to-cash-cycle
- https://www.learnoracle.in/2012/09/oracle-r12-order-to-cash-cycle.html
Setups:
http://oraclemasterminds.blogspot.com/2014/12/oracle-order-management-setup-document.html
http://learnoraclecsbscm.blogspot.com/2015/09/oracle-order-management-setup-steps.html