Inventory consists
of, mainly
1. Raw material
1. Raw material
2. Work In Process Inventory
3. Finished Goods Functions of
inventory
- Maintaining stock
- Planning
- Forecasting
- Physical control of inventory
- Receipt
- Issues We will discuss these functions as regards with oracle applications
Inventory Flexfields
The flexfields which are used in inventory are:
• Account aliases • Item catalogs • Item categories • Sales orders • Stock locators • System items Depending on your setup inventory can use other modules flexfields like Accounting (General Ledger) & Sales tax location & territory from Accounts Receivables
Account Aliases
Table name : MTL_GENERIC_DISPOSITIONS
An account alias is an easily recognized name or label representing a general ledger account number. You can view, report, and reserve against an account alias. During a transaction, you can use the account alias instead of an account number to refer to the account.
Item catalogs
Table name: MTL_ITEM_CATALOG_GROUPS Unique ID column: ITEM_CATALOG_GROUP_ID
If you make entries for your items in a standard industry catalog or want to group your items according to certain descriptive elements, you need to configure your Item Catalog Group Flexfield.
Even if you do not use item cataloging, you must enable at least one segment and compile this flexfields before you can define items.
These flexfields supports only one structure and dynamic inserts is not allowed.
Item categories
Table name: MTL_CATEGORIES Unique ID Column: CATEGORY_ID
You must define & configure your item categories flexfields before you can start defining items since all items must be assigned to categories. You can define multiple structures fro different category groups. So that you can associate these structures with categories & category sets.
Sales order
Table name: MTL_SALES_ORDERS Unique ID Column: SALES_ORDER_ID Through this flexfield inventory will identify sales order transactions of OM with
inventory. This sales order flexfield should be defined as order number, order type and order source so that each transaction will be unique in inventory.
Stock locators
Table name: MTL_ITEM_LOCATIONS Unique ID Column: INVENTORY_LOCATION_ID
If you keep track of specific locators such as aisle, row, bin indicators for your items, you need to configure your Stock Locators Flexfield and implement locator control in your organization.
You can use stock locators field to capture more information about stock locators in inventory. If you do not have oracle inventory installed any none of items have locator control then it is not necessary to define this flexfield.
And this flexfield supports only one structure.
System items (item flexfield)
Table name: MTL_SYSTEM_ITEMS And unique id column is INVENTORY_ITEM_ID
You can use item flexfield for recording and reporting your item information, and you must define and configure your item flexfield before you can start defining items.
You must plan how Oracle Inventory represents your company’s inventory sites and business units. This includes defining organizations, locations, subinventories, and locators depending on your company structure.
Inventory is consisting of inventory – subinventory -locators as per your organization setup.
ITEM is defined in inventory that is generally first in master organization, so that later it can be assign to multiple organizations. Also item definition can be uploaded by item upload open interface.
ITEM definition
You define items in one organization. To distinguish it from others, we call it the Item Master organization. Other organizations (child organizations) refer to the Item Master for item definition. After you define an item in the Item Master, you can assign it to any number of other organizations.
Item attributes
• inventory attributes like lot control/ serial control
• Purchasing and costing information.
• bill of material/ item category attributes
• Physical attributes like weight, volume
• Receiving attributes
• General planning attributes like min-max qty, order qty.
• Status of item Generally we will group the item attributes in these groups
Main Inventory Bill of material Asset management Costing Purchasing Receiving Physical attributes General planning MPS/MRP planning Lead times Work In Process Order Management Invoicing Service
Now we will discuss main attributes from major group.
Main attribute group
Primary Unit of Measure-
This is the stocking and selling unit of measure. Any necessary conversions are based on this unit of measure. This attribute is not updatable. The default primary unit of measure for new items is defined using the INV: Default Primary Unit of Measure profile option.
User Item Type-
Oracle provides several types by default at installation. These types correspond to the item templates also provided. Select one of these values, or one you defined with the Item Type window.
Different item types are ATO model/ Finished good/ Freight/ Inventory Type etc.
Item Status-
Item status codes set or default the values for attributes under status control. User–defined status codes control certain item attributes designated as status attributes. Item status can be active/engineer/inactive. The default item status for new items is defined using the INV:Default Item Status profile option.
Inventory Attribute Group
Inventory Item-Indicate whether to stock and transact this item in Oracle Inventory.
Stockable-Indicate whether to stock this item in Inventory. You can set this attribute only when you turn on the Inventory Item option.
Transactable – Indicate whether to allow Inventory transactions. You can set this attribute only when you turn on the Stockable option.
Reservable-Indicate whether you can create material reservations. You can reserve an item only when you have sufficient inventory.
Other attribute in this group are Lot control, serial control, locator control.
Bill of Material attribute group
BOM allowed-Allows you to define a bill of material for an item, or to assign the item as a component on a bill.
BOM item type-This attribute is controlled at the Master level only. Select a type to control bill functionality. You must enter a value here if BOM Allowed is turned on.
Asset management attribute group
These are the attributes you have to give for asset management.
Asset item type-This attribute identifies the asset item as an Asset Group, Asset Activity, or Rebuildable item.
Activity type-This is relevant when the Asset Item Type is set to Asset Activity. This indicates the type of maintenance for this asset activity.
Costing attribute group
You have to set these attributes while defining or updating items.
Costing enabled-
Indicate whether to report, value, and account for any item costs. Inventory asset value-Indicate whether to value an item as an asset in inventory. Turning this option off indicates an expense item.
Cost of goods sold account-
This attribute is controlled at the Organization level only. Enter a general ledger account to use as a source for the Cost of Goods Sold Account. The default cost of goods sold account is set when you define organization parameters.
Purchasing attribute group
Purchased-
Indicate whether to purchase and receive an item. Turning this option on allows you to set the Purchasable attribute. Purchasable-Indicate whether to order an item on a purchase order. You can set this only when Purchased is turned on.
Receipt required-
Indicate whether you must receive an item before you can pay the invoice. Leave this field blank if you want Inventory to use the value defined in the Purchasing Options window for transactions involving this item.
i.e. three way invoice matching Inspection required-
Indicate whether to inspect an item upon receipt from the supplier, before paying the corresponding invoice. Leave this field blank if you want Inventory to use the
value defined in the Purchasing Options window for transactions involving this item.
Encumbrance account-
This attribute is controlled at the Organization level only. Enter the default encumbrance account Oracle Purchasing uses when an item is received. If the item encumbrance account does not exist, Oracle Purchasing uses the sub inventory account.
Expense account-
This attribute is controlled at the Organization level only. Enter the default inventory account for expense items. This attribute is used only when Inventory Asset Value is turned off. Oracle Purchasing debits this account when you receive an item into inventory only if the item is being expensed. If you receive into an expense subinventory, Oracle Purchasing uses the expense account you assigned to the subinventory first; if you do not define the account here, Oracle Purchasing uses the expense account assigned to the item.
Receiving attribute group
In this group major attributes are receipt date controls, valid transactions and over-receipt quantity control.
Physical attribute group
The main attributes like weight, volume, dimension are shown below,
General planning attributes
Inventory planning method-Here you can select option for organizational level planning. Like not planned, min-max or recorder point.
For min-max quantity, order quantity and source. For source you can give inventory, subinventory or supplier.
Order Management attribute group
Customer ordered-Indicate whether to allow an item to be ordered by external customers. You can add any customer orderable items to price lists in Oracle Order Management.
Shippable-Indicate whether to ship an item to a customer. Shippable items are released by Oracle Shipping Execution’s Pick Release program, creating confirmable shipping lines, and are printed on the pick slip.
Default shipping organization-Enter the Oracle Shipping Execution primary shipping organization.
Picking rule-Enter the picking rule that defines the order in which subinventories, locators, lots, and revisions are picked.
Invoicing attribute group
Invoicable item-Indicate whether to include an item on an Oracle Receivables invoice.
Accounting rule-Enter an accounting rule to identify special revenue recognition rules for an item, such as recognizing revenue over time.
Invoicing rule-Enter an invoicing rule to determine the period in which you send an invoice when you recognize revenue over time (using accounting rules).
Sales account-This attribute is controlled at the Organization level only. Enter the general ledger account Oracle Receivables uses to record revenue when you bill the customer. If Auto-Accounting is based on items, accounting entries are created at that time.
Item templates
There are two types of templates. Predefined or custom template.
Predefined templates are planning item, purchased, outside processing item, lease item. So that once you assign any template, to new item then all default characters are assign to new item.
Category set & category
Categories are logical grouping of items that have similar characterizes, and a category set is a distinct category grouping scheme and consist of categories. Different category set accordingly to company need and reporting structure.
Use: For forecasting & summarizing history of that category. To keep easy track on that category.
Define category sets
Define categories
Specify default category sets
Assign categories to an item
Tables are related as, for item categories MTL_ITEM_CATEGORIES
MTL_SYSTEM_ITEMS_B
MTL_CATEGORY_SET_VALID_CATS
MTL_CATEGORY_SETS_B
MTL_CATEGORIES_B
Unit of Measure
Oracle Applications products provide powerful methods for defining and manipulating units of measure. You can easily convert between the units you define. This allows you to manufacture, order, or receive items in any unit of measure.
Table is related as:
MTL_UNITS_OF_MEASURE_TL
MTL_UOM_CONVERSIONS
MTL_SYSTEM_ITEMS_B
Item setup
The main tables that are involved in item master set up are with their relation,
MTL_SYSTEM_ITEMS_B
MTL_ITEM_STATUS
MTL_ITEM_TEMPLATES
MTL_PARAMETERS
MTL_ITEM_ATTRIBUTES
Item relationship
You can define item relationship between items. This allows you to search items through these relationships and for maintaining also.
• Item cross reference Use the Customer Item Cross References window to define and update cross references between your inventory items and the customer item numbers defined in the Customer Items Summary/Detail windows.
MTL_ITEM_TEMPL_ATTRIBUTES
• Substitute items In this relationship you can replace the outdated item, still keeping track on it.
• Related items You can relate different items according to your need.
• Manufacturer part no. You can define manufacturer part numbers for items. You can use this information for reporting purposes; and in catalog searches for particular items.
Inventory control
• Locator control You will track item as locator wise, it is a common method of inventory control.
• Revision Control With different revision of items according to your need, revision control can be Implemented.
• Lot Control You will define lot of your items so that you can track that item according to their lot numbers.
• Serial no. Control For expensive or for which you want tight control you will give serial numbers to those items. Item catalog
Used to partition items that share some common characteristics.
Item Transaction
WIP Suppliers INV Inv customers
Inventory can interact or can have transactions with suppliers, customers, work in process and with other sub inventories.
A transaction type is the combination of a transaction source type and a transaction action. It is used to classify a particular transaction for reporting and querying purposes. Oracle Inventory also uses transaction types to identify certain transactions
For example, transaction type is purchase order receipt which is a combination of transaction action i.e. receipt into stores and transaction source type is purchase type.
Major transactions are,
Sub-Inventory transfer
Each subinventory transfer is carried out as two separate transactions, creating two records in MTL_MATERIAL_TRANSACTIONS. The first record represents an issue from the source subinventory and the second record is a receipt from the destination subinventory.
Inter- organization transfer
Use the Inter–Organization Shipping Network window to define accounting information and the relationships that exist between shipping and destination organizations. You can specify whether an organization is a shipping organization, a destination organization, or both.
In these transactions you will need bills, shipping bills and other accounting details.
ABC Analysis & cycle counting
ABC analysis is a method of determining relative value of items in your Inventory sites.
Automatically scheduled or manually scheduled cycle counts You can define your own ABC group like A class, B class, C class.
Now we will go through some of the set up steps, which you will need before setting up inventory.
Setup
• Define item flexfields
• Define item categories flexfields
• Define catalog group flexfields
• Define UOM
• Define subinventories.
• Define locators
• Define organization parameters.
• Define intercompany relationship.
• Define picking rules. Some of the parameters we have to set defaults like item status as active, default primary unit of measure as Each or requisition approval status as approved or unapproved.
Organization parameters
You can define and update default inventory and costing parameters for your current organization in the following areas:
Default inventory parameters Costing information Revision, lot, serial parameters ATP, Pick, Item-sourcing parameters Inter-Organization Information Other account Parameters Define warehouse parameters
Default inventory parameters
Provide organization code and item master organization
In the Move Order Timeout Period field, enter the number of days a move order requisition can wait for approval. For locator control option: Inventory transactions within this organization do not require locator information. Pre-specified only: Inventory transactions within this organization require a valid, predefined locator for each item. Dynamic entry allowed: Inventory transactions within this organization require a locator for each item. You can choose a valid, predefined locator, or define a locator dynamically at the time of transaction. Determined at subinventory level: Inventory transactions use locator control information that you define at the subinventory level.
Costing Information
You have to define costing organization and costing method.
Valuation Accounts:
You choose a default valuation account when you define organization parameters. Under standard costing, these accounts are defaulted when you define subinventories and can be overridden.
• Material An asset account that tracks material cost. For average costing, this account holds your inventory and in transit values. Once you perform transactions, you cannot change this account.
• Material Overhead An asset account that tracks material overhead cost.
• Resource An asset account that tracks resource cost.
• Overhead An asset account that tracks resource and outside processing overheads.
• Outside processing An asset account that tracks outside processing cost.
• Expense The expense account used when tracking a non-asset item. Other accounts
• Sales The profit and loss (income statement) account that tracks the default revenue account.
• Cost of Goods Sold The profit and loss (income statement) account that tracks the default cost of goods sold account.
• Purchase Price Variance The variance account used to record differences between purchase order price and standard cost. This account is not used with the average cost method.
• Inventory A/P Accrual The liability account that represents all inventory purchase order receipts not matched in Accounts Payable, such as the uninvoiced receipts account.
• Invoice Price Variance The variance account used to record differences between purchase order price and invoice price. This account is used by Accounts Payable to record invoice price variance.
• Encumbrance An expense account used to recognize the reservation of funds when a purchase order is approved.
• Project Clearance Account When performing miscellaneous issues to capital projects, the project clearance account is used to post the distributions.
• Average Cost Variance Under average costing with negative quantity balances, this account represents the inventory valuation error caused by issuing your inventory before your receipts. Inter-Organization Transfer Accounts
You define default inter–organization transfer accounts in the Organization Parameters window. These accounts are defaulted when you set up shipping information in the Inter–Organization Shipping
Networks window.
• Transfer Credit The default general ledger account used to collect transfer charges when this organization is the shipping organization. This is usually an expense account. • Purchase Price Variance The default general ledger account used to collect the purchase price variance for inter–organization receipts into standard cost organizations. This is usually an expense account. • Payable The default general ledger account used as an inter–organization clearing account when this organization is the receiving organization. This is usually a liability account. • Receivable The default general ledger account used as an inter–organization clearing account when this organization is the shipping organization. This is usually an asset account. • In-transit Inventory The default general ledger account used to hold in-transit inventory value. This is usually an asset account. For average cost organizations, this account is the default material account. Other information you have to give is,
Revision, Serial and lot control information.
ATP, Pick, Item sourcing rules.
Inventory Planning and replenishment:
Oracle Inventory lets you manage your inventory levels using any combination of the system’s planning and replenishment features, including min–max planning, reorder point planning, kanban replenishment, and a replenishment system for generating orders.
Performing Recorder-Point planning
In this planning method you will take minimum order quantity and time to fulfill the order to decide the level of order. So record point is safety stock + forecast demand during lead time
Performing min-max planning
In this simple method you will decide maximum and minimum level of stock for that item, so that at min level order can be placed and the qty of that item can be full at max level.
Subinventory replishment planning
For some items you will have transactions with other subinventory so that optimum stock can be maintained.
Creating & executing Kanban cards
In this you will use kanban method by deciding some items as kanban cards.
And through requisition interface i.e. after running requisition import, Purchase requisition gets created that turns out to purchase orders. Then through purchase order u can receipt material in inventory.
And that is how purchasing comes into picture.
Before that we will take look at main tables in inventory modules like
Major Tables
• MTL_SYSTEM_ITEMS_B: Base table for item definition.
• MTL_PARAMETERS : This table is consist of ORGANIZATION_ID, PICKING_RULE_ID, RULE_ID for ATP
• MTL_ITEM_CATEGORY_ SETS
• MTL_ITEM_CATEGORIES : These tables will store information about different category sets and categories defined.
• MTL_ITEM _SUB_INVENTORIES
• MTL_ITEM_LOCATIONS
• MTL_SYSTEM_ITEMS_INTERFACE
• MTL_SUPPLY
• MTL_ONHAND_QUANTITIES
• MTL_RESERVATIONS : These table stores information about reserved quantity and on hand quantity with available quantity for picking rules.
• MTL_SALES_ORDERS : Order Management will interact with inventory for order details through this table.
• MTL_ITEM_FLEXFIELDS
• MTL_ITEM_TEMPLATES
• MTL_ITEM_ATTRIBUTES
• MTL_ITEM_REVISIONS
• MTL_MATERIAL TRANSACTION
• MTL_TRANSACTIONS_REASONS Additional terms in inventory
• Accounting close cycle: General ledger transfer Inventory accounting periods
• 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 relocations and quality handling.
Move orders are restricted to transaction within tan organization
& if you are transferring material between organization, you must internal
requisitions.
Three types of move orders:
Move order requisition Replenishment move orders Pick wave move orders
Interfaces
Open Item Interface
You can import items from any source into Oracle Inventory and Oracle Engineering using the Item Interface. With this interface, you can convert inventory items from another inventory system, migrate assembly and component items from a legacy manufacturing system, convert purchased items from a custom purchasing system, and import new items from a Product Data Management package. The Item Interface validates your data, insuring that your imported items contain the same item detail as items you enter manually in the Master Item window.
The Item Interface reads data from three tables for importing items and item details.
MTL_SYSTEMS_ITEM_INTERFACE This table is used for your new item numbers and all item attributes. This is the main item interface table, and may be the only table you choose to use.
MTL_ITEM_REVISIONS_INTERFACE If you are importing revision details for your new items, you can use this table. Which is used only for revision information, and is not required.
MTL_ITEM_CATEGORIES_INTERFACE To import item category assignments, the table is used to store data about item assignments to category sets, and categories to be imported into the Oracle Inventory MTL_ITEM_CATEGORIES table.
MTL_INTERFACE_ERRORS is used for error tracking of all items that the Item Interface fails.
Before you use the Item Interface, you must write and run a custom program that extracts item information from your source system and inserts the records into the MTL_SYSTEM_ITEM_INTERFACE table. And if revision & category details are there upload into respective tables. After you load item, revision, and item category assignment records into these interface tables, you run the Item Interface to import the data. The Item Interface assigns defaults, validates data you include, and then imports the new items.
Customer Item and Customer Item Cross-Reference Open Interface
A number of manufacturing industries are characterized by a multi-tiered, just-intime supply chain structure. Today’s manufacturing environment requires a close working relationship between customers and suppliers along the entire supply chain. Suppliers must be able to react quickly to their customers’ often changing requirements. By cross-referencing customer items with their own inventory items, suppliers can achieve faster order processing and shipments by allowing customers to place orders using customer item numbers.
You can import customer items and customer item cross-references from any legacy system into oracle inventory.
In customer item interface you import customer items into inventory. For each customer item you must define related information such as customer and item definition level.
MTL_CI_INTERFACE
Using this table data is transferred MTL_CUSTOMER_ITEMS table.
In customer item cross reference, you can import cross-references between customer items and exiting inventory items into your master organization. You can create multiple cross-references between customer items and one Oracle Inventory item. You can also create multiple cross-references between Oracle Inventory items and one customer item.
MTL_CI_XREFS_INTERFACE Using this interface table data is uploaded into base table, MTL_CUSTOMER_ITEM_XREFS.
Reports In inventory
Oracle Inventory provides you with a wide variety of reports, intended for different users of the product.
We will have overlook on major reports that you will come across.
Inactive items report
You can use this report to print items that have not had an inventory transaction since the date you specify. You can use this report to isolate items that have become inactive and verify their status.
The parameters are display and break on sub inventory, category set, inactive since i.e. date from which no transactions were occurred for items.
Item categories report
You will use this report to list items and their associated categories. Report can develop output as per category set and for given item range.
Item definition detail
Use the Item Definition Detail report to view comprehensive information for items. Use this report to verify items have been classified in conformance with decisions you have made regarding how the parts are to be planned, coasted, and located.
The report prints the item definition for the organization in which you submit the report.
You can view item attributes as per the category and also depending on your choice which attributes you want to print. Like general item attributes, bill of material item attributes, costing item attributes, inventory item attributes or physical item attributes.
Item definition summary report
Use the Item Definition Summary report to print a limited amount of information about items, such as description, status, and cost.
Item template listing
Use the Item Template Listing to review the template definitions. A template is a way to define a set of attribute values.
Reports parameters are all template flag or item template.
Item statuses report
Use the Item Statuses Report to view the item statuses. For example, You can use the report to review all pending statuses by making the effective date and the report date the same. You can have options like categories from-to, items from –to, and status effective date. And only for particular status.
ABC descending value report
Use the ABC Descending Value Report to view the results of an ABC compile. The report is sorted by descending value or quantity, depending on the compile criterion. Use this report to evaluate the break points for assigning your ABC classes to items.
You can give cumulative display criteria i.e. cumulative by value of cumulative by quantity
.
