Inventory Organization Creation in R12

Step#1 - Creating Location

Inventory - Navigation: Setup/Organizations/Locations

Define location with address

Check the shipping tab 

Step#2 - Creating Inventory Organization

Inventory - Navigation: Setup/Organizations

Create new organization

Enter name, Type, from date, Location – assign above created location

Save

Select name field under organization classification as Inventory organization

Select enabled check box

Save

Step#3 – Operating Unit Assignment

Click on others

In the additional organization information select Accounting Information

Click ok and then click in the accounting information field

Enter below values, This mean we are assigning the inventory organization to vision operations 

Click ok and save the changes.

Step#4 – Master Organization Assignment

Now click others and select Inventory Information

This will open the inventory parameter window (same screen can be accessible from Setup/Organizations/parameters)

Step#5 – Costing Information

Enter account number as shown

Step#6 – Other Accounts 

Enter account number as shown

Save the information.

Step#7 – Receiving information 

Close the inventory parameters window and come back on organization screen

Click on others and select receiving information

In this window you can enter various receiving parameters

Step#8 – Cross check

You can check form the backend the master organization is rightly assigned.

Also if you change the organization you can see the newly created organization is available

Step#9 – Shipping parameters

Inventory - Navigation: Setup/Organizations/Shipping parameters

Enter the shipping parameters

 Step#10 – WHS and Freight association 

Order Management super user - Navigation: Setup/Shipping/Freight Carrier and cost type

I am assigning the shipping method to the newly created whs. For example DHL

Click on organization assignments and query the warehouse you created above, click the checkbox assigned and and done and save the work.

Step#11– Order creation 

Order Management super user - Navigation: orders returns/Sales order

Assign the item you to the organization you have created.

Add the item in the pricelist

Create order

Assign the whs you created with the order

Also on order lines and finally book the order.

Oracle Inventory: Inventory Organizations

An inventory organization is a facility where you store and transact items. Before you can use Oracle Inventory, you must define one or more inventory organizations. Inventory organizations represent distinct entities in your enterprise and can be one of the following:

•        A physical entity such as a manufacturing facility, warehouse, or distribution centre.

•        A logical entity such as an item master organization, which you use to define items.

·         An inventory organization may have the following attributes: An inventory organization can have its own location, ledger, costing method, workday calendar, and items.

·         An inventory organization can share one or more of these characteristics with other organizations.

Inventory Organization Structure

An inventory organization, where you store and transact items can have one or more subinventories. Subinventories are unique physical or logical separations of material inventory, such as raw material inventory, finished goods inventory, or defective goods inventory. In Oracle Inventory, all material within an organization is held in a subinventory. You must define at least one subinventory for every organization. You can track item quantities by subinventory as well as restrict items to specific subinventories. The subinventories in an inventory organization may be made up of one or more locators. You use locators to identify physical areas where you store inventory items. You can track items by locator and restrict items to a specific locator. Locator control is optional in Oracle Inventory.

Sample Inventory Organization

•        Receiving Subinventory

•        Raw material subinventory

•        Manufacturing subinventory

•        Finished goods subinventory

•        Inspection subinventory

•        Defective goods subinventory

•        Shipping Subinventory

Multi-Organization Structure

Multi-Organization structure enables you to model multiple business units in an enterprise

using a single installation of Oracle applications. In a multi-organization architecture you can

keep data secure and separate from each business unit.

The following are the benefits of multi-organization structure:

•        You can use a single installation of any Oracle Applications product to support any number of business units, even if those business units use a different ledger.

•        Secure access to data so users can access only relevant information.

•        You can define a organizational model that best suits your business requirements.

•        In Oracle Inventory, you can fulfil any sales order or purchase order regardless of them being booked from any Inventory organization. You can also determine if any intercompany invoicing needs to occur based on if the Sales Order or Purchase Order was booked in a different Operating Unit other than the one to which the Inventory organization is assigned.

Setting Up Locations

•        Define information describing the physical locations of employees and organizations.

•        Locations are shared between Oracle Inventory, Oracle Purchasing, and Oracle Human Resource Management Systems. Locations flagged as global locations are available to all business groups. You can associate each organization with only one location; however, you can associate more than one organization with the same location.

•        Physical locations are defined in Oracle Human Resource Management Systems.

Defining Organizations

 

Classify the Organization

•        Choose an organization classification to describe the general purpose of your organization.

•        Examples of organization classifications are inventory organization, legal company, and HR organization.

•        Choose inventory organization as your organization classification to use your organization for inventory management

Ledger

Tie each inventory organization to an operating unit. Each operating unit is associated to a legal entity and a primary ledger.

Inventory Parameters

Organization Features

You must enter organization information such as the organization code, and the item master organization. The system defaults this field to the current organization. You must change this for any organization that is not an item master organization. The item master organization should be the first inventory organization you create.

Note: The Manufacturing Partner Organization functionality is only available in Japan, Taiwan and Korea.

Products and Features

You can enable specific products on the Inventory Parameters tab. These include Oracle Warehouse Management, Oracle Process Execution, and Oracle Enterprise Asset Management. If you have Oracle Warehouse Management installed, then you can enable the Warehouse Control System.

Costing Parameters

Standard costing: A costing method where a predetermined standard cost is used for charging material, resource, overhead, period close, job close, and cost update transactions and valuing inventory. Any deviation in actual costs from the predetermined standard is recorded as a variance.

Average costing: A costing method which can be used to cost transactions in both inventory only and manufacturing (inventory and work in process) environments. As you perform transactions, the system uses the transaction price or cost and automatically recalculates the average unit cost of your items.

LIFO costing: Costing method where it is assumed that items that were received most recently are transacted first.

FIFO costing: Costing method where it is assumed that items that were received earliest are transacted first.

Revision, Lot, Serial, and License Plate Number (LPN) Parameters

You determine the starting revision for all items in the organization when you define your inventory organization. You can also choose to set lot control and serial control parameters at the organization level. Revision control is discussed in the Defining and Maintaining Items module. Lot control and serial control is discussed in the Lot and Serial Control module.

LPN Generation Options

If you have Oracle Warehouse Management installed, and you are working with a Warehouse Management enabled organization, you can define License Plate Number (LPN) Generating Options. LPNs must be unique across organizations. Setting the parameters on the Revision, Lot, Serial, and LPN tab enables the system to generate LPNs on demand, or through a concurrent request. As long as the number is unique, Oracle Warehouse Management also enables you to generate your own LPNs.

ATP, Pick, Item-Sourcing Parameters

This enables to

•        Set the available to Promise (ATP) default rule for the organization

•        Set the picking default for the organization

•        Set the item sourcing default for the organization

Inter-organization Parameters

This enables to determine the parameters the organization uses when it transfer the material between organization.

Other Account Parameters

This enables to setup receiving information, profit and loss account information, and other additional account details.

Warehouse Management Parameters

This is specifically needed for the organization which implemented Oracle Warehouse Management System