Friday, November 07, 2014

Oracle Apps R12 Purchasing New Features

1.    Professional Buyer’s Work Center 

·        Speeds up daily purchasing tasks by providing buyers with a central launch pad from where they can efficiently perform their daily tasks, such as:
v  Viewing and acting upon requisition demand
v  Creating and managing orders and agreements
v  Managing contract deliverables
v  Running negotiation events, including auctions and RFxs
v  Managing supplier information
·        Tightly weaves Oracle Purchasing with other products in the procurement family, such as Oracle Sourcing, Oracle Procurement Contracts, and Oracle Services Procurement. Buyers can now easily navigate from purchasing to sourcing documents, and vice-versa, using a single, friendly user interface.

2.  Demand Workbench

·   Buyers can access the catalog and favorites to find negotiated alternatives to non-catalog requests. While authoring orders and agreements, buyers can use the catalog or favorites to quickly add items, thereby accelerating the document creation process. The enhanced catalog access provides easy access to pre-negotiated items. This reduces spending by leveraging negotiated pricing.

3.  Document Styles

·        It allows buying organizations to control the look and feel of the application to match the needs of different purchasing documents. Through reusable document styles, deploying organizations can enable or disable various Oracle Purchasing features, thereby simplifying the user interface. This helps people to use familiar name to Purchasing documents.
v  When a purchasing document is created using a style, disabled features are hidden to simplify the user interface. For example, organizations can create a document style for a specific commodity, such as temporary labor. This document style optimizes field labels and display for that commodity, simplifying purchase order entry by hiding regions/attributes that are only relevant for goods purchases.

4.  Procurement of Complex Services

·        Is an integrated solution for Oracle Services Procurement used to model complex work contracts that involve advanced payment terms. These contracts tend to have high dollar values, often running into several millions of dollars. They also tend to be long lead time contracts, sometimes extending over multiple years. These contracts are characterized by progress payments that are governed by the complex payment terms, and which are released based on completion of work.
v  The business flow can originate with a services request which the buying organization determines needs complex payment terms to manage and fulfill. The sourcing process allows negotiation of the complex payment terms and these are carried forward to the Contract after the award.
v  The Contract, once approved and signed off by the involved parties is now in a state ready for execution. The Supplier can report progress on the work specified on the Contract, which the buying organization can certify as complete. Subsequently, payments can be processed for the progress made on the contract. The payment terms specified on the contract are used to compute the payment due to the supplier.

5.  Public APIs are modified

·     Support Multi-Org Access Controls (MOAC). Public APIs take Operating Unit as a parameter. Operating Unit is an optional parameter. If it is not provided, the default operating unit from setup is used to set the desired context.
v  PO Change API – POXCHN1B.pls
v  Cancel PO API – POXPDCOB.pls
v  Price Control API – POXPCPRB.pls

6.  Maintain Sourcing Rules/ASLs for Agreement Items
·        Prior to this release, system-generated sourcing rules and ASLs were only created at the time of blanket agreement approval. These rules were enabled for all organizations, which might not have mirrored actual business processes.
·        In this release, you create sourcing rules and ASL entries for a specific inventory organization. You can create these rules for agreements that you manually create, or for agreements that you import through the open interface.
·        In addition, the dependency of rules creation with the approval process has been removed. As a result, you can create rules for existing agreements that have already been approved. This concurrent program allows you to automatically create rules for all of the operating units in which a blanket agreement is enabled.

7.  Support for Contract Purchasing Users

·        In this release, contingent workers can perform the same actions as requesters and buyers who are employees. These actions include creating requisitions, purchase orders, and receipts. In addition, contingent workers can approve both requisitions and purchase orders.
·        Now the question is what the benefit of this:
v  Companies can outsource their procurement functions to third parties, allowing them to focus on their core competencies.
v  For the many companies that utilize the services of contingent workers, these workers can raise requisitions on their own behalf.
v  Companies can meet compliance requirements because they no longer have to define contingent workers as employees for contingent workers to perform their jobs.

8.  Auto-Approval Tolerances for Change Orders

·        (Purchasing : Tolerances and Routing > Change Order) Auto-Approval Tolerances are defined on Setup screen or in Workflow Attributes. Once a Purchasing Document is submitted for approval, in the Approval Workflow a check is done to ensure that all changes are within tolerance. If they are then main approval is bypassed otherwise the document is routed through main approval process in workflow.

9.  Model Complex Pricing for Blanket Line Items

·        R12, Oracle Purchasing provides an additional option to model complex pricing for Blanket line items. In this release Oracle Purchasing has built integration with the Oracle Advanced Pricing product. Oracle Advanced Pricing provides a set of tools in the form of price lists, formulas and modifiers to model complex pricing scenarios. This integration may eliminate the need for existing Oracle Purchasing customers to incorporate custom code into the product in the form of the custom pricing hook.
·        The integration with advanced pricing allows dynamic calculation of prices providing significant additional flexibility to complement the existing blanket agreement functionality. Companies can now accurately price all requests and a purchase, thus reducing their dependence on the supplier’s billing capabilities.

10.      Mass Re-pricing of Purchasing Documents 

·        Was available from 11i, in R12 it is improved a lot. You can now be able to re-price orders in batch using the existing “Retroactive Price Update” concurrent program even if the orders were not sourced from Blankets.
·        This Concurrent Program is now capable of re-pricing transactions based on pricing rules defined:
v  On Oracle Advanced Pricing Price Lists/Modifiers
v  And on Custom Pricing Hooks

11.      Advanced Approval Support for Requisitions:

v  Parallel Approvals
v  Support for Viewers
v  Position Hierarchy Support

Wednesday, November 05, 2014

Difference between expense item and inventory item in Oracle.

Expense Item:

  • Captive consumption of the organization 
  • it will not be transferred (Stockable & Transactable ) to the inventory and
  • hence will not hit the inventory valuation account.

Inventory Item:

  • it will hit the inventory as well as inventory valuation account and
  • it will be used in production of finished goods. 


Difference between expense item and inventory item


Those Item that needs to maintain stock and tracking are inventory Items. Creating unique Item coding for each SKU's

Non-Stock able Items that is direct IN & OUT, are expense items. For such items no need to create Item code for all. Only few codes can be created and in PR & PO description can be change

For example

Inventory items: Machine parts, Raw Materials, Any Trading Items etc

Expenses Items: Assets, services, Projects, consumables (Office Stationery) etc.

You cannot define an item as expense and inventoried at the same time. But you can define the item as inventory item.
And when you want to use it as expense, move it to an expense subinventory.

We need to uncheck the attribute "Asset Subinventory" in the specified subinventory.

You should uncheck the asset flag for that subinventory. Make sure that the subinventory accounts are setup correctly.

The terminology of items is rather confusing from an Purchasing/Inventory point of view:

For easy understanding these will be referred below points.

These Expense Items have attributes checked
a - Purchasable
b - Purchased

These Inventory Expense Items have the following attributes checked
a - inventory item = YES
b - stockable
c - transactable
d - Inventory Asset Value = NO
e - Costing Enabled = No

These Inventory Asset Items have the following attributes checked
a - inventory item = YES
b - stockable.
c - transactable
d - Inventory Asset Value = YES
e - Costing Enabled = YES

As you know "procure to pay" Business Flow start Purchasing requisition till paying to vendors and most important, in all the case the purchase is made for basic element called Items.
As you know there are three types of items:
  • Inventory Expense Item
  • Inventory Asset Item
  • Expense item

Centralized Procurement

Considering your example, you Invoice Customer/Requesting Org in US for Receivables and the Supplier/Shipping Org in AU for Payables. Once you have received the goods:

1) Run 'Create Intercompany AR Invoice' for the Shipping operating unit (AU)
2) Run ' AutoInovice Master' program for the internal order with Invoice Source as "Intercompany" in AU Receivables. This generates the
accounts receivable invoice for the Shipping Operating Unit.
3) Run "Create Intercompany AP Invoice" for the Requesting (US) Operating Unit in the receiving Inventory. This creates the Payable Invoice.
4) Run the Expense Import program with source "Intercompany" in the Requesting (US) Operating Unit.


Centralized Purchasing for Multiple Receiving Organizations

Purchasing provides complete centralized procurement support. You can leverage your purchasing power by consolidating the requirements from different plants, warehouses, and office sites; yet retain receiving support. You can define separate, autonomous receiving organizations for each of these sites.

Use the Change Organization window (See: Changing Your Organization) to choose your receiving organization. With the Receipts window, you can receive goods only for your current organization. The current organization code is displayed in the title bar of the Receipts window. (See: Entering Receipt Lines) For supplier shipments, you specify the receiving organization on the purchase order shipment. For intransit inventory shipments, you specify the receiving organization when you create the intransit shipment. For internal requisitions, you use the destination organization to specify the receiving organization.

All other receiving windows can access receiving only in your current organization. You also must deliver to the same organization in which you received the goods.


Use the Maintain Shipments window to update intransit information to provide accurate expected delivery date information to better plan your production processes. See: Maintaining Shipments.

Global Blanket Purchase Agreement in Oracle

How to create a Global Purchase Agreement that can then be accessed by other Organizations/ Operating Units also?

From Procurement Family Pack 'I', while creating a Blanket Agreement, Global checkbox at the header level can be checked to make the agreement global. This checkbox cannot be deselected once you have saved the document. The BPA can be enabled only for those organizations for which the supplier and the supplier site are defined to be the same as that of the global agreement. Note that you cannot enter an outside processing item in a global agreement, regardless of the item’s defining organization.


Navigation Steps:

==============
The Checkbox for making the Agreement Global comes at the header level for all the Blanket agreements. This has to be checked before we proceed onto the line level details, as one is not allowed to come back and update this checkbox at a later point in time once the line level details have been provided.

To enable the agreement for other organizations:

1. Create the Global agreement
2. Save the agreement
3. Go to Tools ----> Enable Organizations
4. Check the checkbox for all the organizations for which you want this Global Agreement Enabled. The Purchasing responsibility you are in will come as a default organization and cannot be deselected, but the other organizations for which the supplier and supplier site are defined will be allowed to be selected and deselected optionally, by the buyer.
5. Save again
6. Follow the Approval Process for getting this Global agreement approved.

Once this done and the BPA is approved, you can issue a standard purchase order against this global purchase agreement to place the actual order.




How to create a standard Purchase order referencing a Global Purchase Agreement and what is the relevance of the GLOBAL checkbox that we see at the PO Line Level?



You can only create a Standard Purchase Orders against a Global Purchase Agreement and not normal Blanket Releases. To have a Standard Purchase Order that references to the Global Purchase Agreement, it has to be done in the lines section of the Standard PO documents tab :

Navigation Details :

==============
1. Create a Global Purchase Agreement - BPA with the Global check box checked and enabled for other organizations. 
2. Purchasing: Purchase Orders 
3. Fill the headers section for a Standard PO with the same Supplier and Supplier Site as the global agreement
4. Go to the lines block. Enter the item details and click on the 'Catalog' button
5. In the 'Supplier Item Catalog' window, press find. You will find many source documents in the screen. Choose the Global Purchase Agreement (BPA) which you had created earlier
6. Now when you go to the reference documents tab you would find the Global check box checked and also the global source document details therein.

This standard PO line will now be sourced against the Global agreement that is referenced at the line level. 


Another option is to reference the global agreement in the Requisition itself and then autocreate it into a Standard Purchase Order.



How to find Global Blanket Purchase Agreements (BPAs) Source Documents from their Releases - Standard Purchase Orders (SPO:s) or Vice Versa?


Source Document: Global BPA: 5453
Resulting Document ( Releases): SPO 5458 AutoCreated from Purchase Requisition (PR): 13988

1. To find Global BPAs from their SPOs
PO Form
PO responsibility -> Purchase Orders -> Purchase Order Summary ->
Number = 5458 -> Find -> Reference Document section:
Type = Blanket Purchase Agreement, Document = 5453

Also,
Req form
PO responsibility -> Requisitions -> Requisition Summary ->
Requisition Number = 13988 -> Find -> Source Details section:
Document Type=Blanket Purchase Agreement, Document = 5453

2. To find the SPOs from Global BPAs.
PO Form
PO responsibility -> Purchase Orders -> Purchase Order Summary ->
Number = 5453 -> Find -> Reference Document section:
The Fields are protected ( greyed out).
It is a standard functionality. It is for the parent document as shown in step above.
PO Summary Form
PO responsibility -> Purchase Orders -> Purchase Order Summary -> Related Document tab -> Source Document section:
Type = Global Agreement, Number = 5453, Line = 1 or leave null
( All these 3 fields -- enter or choose from LOV)
Find button -> PO 5458 returns
Blanket and Planned PO Status Report

Output of this report shows the Global BPAs and their St PO under a €˜PO/Release €™ column.

PO responsibility -> Reports -> Run: €˜Blanket and Planned PO Status Report€™
With appropriate parameters:
 ( PO #s From: 5433, To:5478  Enter or choose PO#s in the ranges or 5453)


                      Blanket and Planned PO Status Report

PO Number: 5453                                                                                    Amount Agreed: 10,000.00
  Type: Blanket Purchase Agreement (Global)                                               Amount Limit: 10,000.00
                                                                                                            Amount Remaining: 9,980.00
                                                                                                              Amount Released: 20.00
          PO/Release
            5458

( Comment: This report also shows non-Global BPAs.)