Overpicking and Overshipping

Overpicking:-

Overpicking is using the pick confirm transaction to pick more than the requested quantity of a delivery line, up to the overshipment tolerance. you can prevent LPNs and lots from breaking into small amounts only because delivery detail and lot quantities do not match.
You must pick release with the Auto-pick Confirm parameter set to No, then Pick Confirm manually using the Oracle Inventory Transact Move Order form.
A delivery line with zero requested quantity is created for over picked quantities. Delivery lines with zero requested quantity cannot be ship confirmed alone or left behind by ship confirmation of the last delivery lines with non-zero requested quantities.
Error: WSH_REQ_ZERO_INSIDE_ERROR will be generated if the total requested quantity of delivery details inside the delivery, for one source line, is zero.
Ans: The solution to this error is to assign the delivery detail with a non-zero requested quantity for that source line, to the delivery.
Error: WSH_REQ_ZERO_OUTSIDE_ERROR will be generated if the total requested quantity of delivery details outside of the delivery for one source line is zero.
Ans: There are three possible actions that you can take to avoid this error, including the following:

• Assign all of the delivery details for the source line to the delivery
  
• Unassign at least one delivery detail for the source line from the delivery
  
• Completely back order or cycle count all of the delivery details for the source line outside of the delivery
  

Overpicking Processing

The overpicking process calculates the following quantities and uses zero when the calculation results in a negative number:

• Excess Pick Quantity = Picked Qty - Shipped Qty - Backordered Qty - Staged Qty
  
• Backordered Quantity = Requested Qty - Shipped Qty - Staged Qty
  
• Staged Quantity = Requested Qty - Shipped Qty - Backordered Qty You cannot stage in excess of this quantity.
• Quantity to Backorder = Requested Qty - Shipped Qty You cannot backorder in excess of this quantity.

After you pick confirm, Oracle Inventory passes the following information to Oracle Shipping Execution:

• Quantity pick confirmed.
  
• Quantity of allocations pending pick confirm:
  The sum of quantities of allocations pending pick confirm transactions. You cannot create allocations in the pick confirm transaction.
  
• After pick confirm, Picked Quantity is the same as or more then Requested Quantity.
  

If you pick less than the Requested Quantity, pick confirm splits the delivery line:

• The original line quantity is the detailed quantity. Its released status progresses to Staged/Pick Confirmed.
  
• The new line quantity is the difference between the requested quantity and the detailed quantity. Its released status is Backorder.
  

When there is a pending quantity, Oracle Shipping Execution processes the delivery detail differently, depending on whether the overpick:

• Satisfies the delivery line requested quantity: It creates an overpick-pending delivery line with Requested Quantity of zero and Picked Quantity of the quantity that remains to be pick confirmed.
  
• Results in a pending quantity: It creates a normal delivery line to await subsequent pick confirm transactions. It has status Released to Warehouse and has a Requested Quantity.
  

When either the Picked Quantity or the Pending Quantity is blank, pick confirm:

• Backorders the delivery line if its Picked Quantity is null and the Requested Quantity is greater than zero.
  
• Delete the delivery line if its Requested Quantity is null and the Picked Quantity is greater than zero.
  

If there is at least one allocation pending, there will be a delivery line with status Released to Warehouse that may be pending overpick. If a delivery line is fulfilled by the Picked Quantity and there is a Pending Quantity, pick confirm creates a new delivery line pending overpick.

The unshipped, picked quantity in excess of the requested quantity is removed at ship confirm; it cannot be staged or backordered.

If a move order line quantity is reduced because the order line quantity is reduced, you cannot overpick the move order line in excess of the original allocated quantity.

• When you overpick, the requested quantity not yet staged is reduced accordingly. The move order line can be partially canceled. Although you sometimes have to overpick, you do not have to overship.
  

You can find the following fields that pertain to overpicking on the Shipping Transactions form, Lines/LPN tab:

• Picked Quantity
  
• Secondary Picked Quantity
  
• Pending Overpick check box
  

Overshipping:-

1. Setup with Item Master --> Order management tab

 2. Setup Customer --> Sites (Ship To, Bill To) --> Business purpose --> Details

3. Ship To site 

 4. Set Defaulting Rule --> Header and Line Enable the Ship Tolerance Above or Below

 5.

If you pick the requested quantity of a delivery detail, you can overship within the overship tolerance.

If you overpick the requested quantity of a delivery detail, you cannot overship that delivery detail but you can overship the cumulative line (the sum of all the split lines) within the overship tolerance. you cannot ship confirm a greater quantity than the quantity that you picked, regardless of the overship tolerance.

You can overpick a ship set and you can overship items in the ship set as long as the amount shipped does not break the ship set.

The shipped quantity validation is executed at Ship Confirmation, enabling you to overship based on your overship tolerance. You can overship one delivery line or split the overshipment between delivery lines.

In the following example, assume all three lines were split from the same delivery line. If the overship tolerance is 50%, then the maximum total quantity that can be shipped for these three lines together is 15. Since lines two and three have a total shipped quantity of 5, then line one can have an overshipment of quantity 5. The table illustrates the outcome of the overship based on the three delivery lines:

Overshipping i.e (Same Delivery with 3 lines)

Consigned Inventory (CI) Vs Vendor Managed Inventory (VMI)

Consignment and Vendor Managed Inventory Module

Consignment Inventory is inventory that is in the possession of the customer,but is still owned by the supplier. In other words, the supplier places some inventory at the customer’s location. The customer purchases the inventory only after he has resold or consumed it. The liability of loss, damage, obsolescence and theft remains with the supplier.

As a manufacturer you may have consignment inventory at your customers and you may also have to contend with consignments from your Vendors. Most ERP systems have difficulty with consignment inventory. With consignment inventory the invoicing is not tied to the shipment or receipt transaction. This requires companies to manage consignment inventory with cumbersome time consuming and error prone processes. Typically both the Customer and Vendor maintaining separate spreadsheets. There are several trigger points to the actual ownership transfer and billing transaction:

• Invoice when product is actually used or sold
• Invoice after a pre-defined period is offered
• Invoice when used or after a pre-defined period -which ever comes first
• Invoice when next consignment order is placed,previous is billed
  

Consignment Inventory sent to your Customers

Now you can gain complete visibility into your customers' inventory. The consignment inventory feature is offered as an enhancement to the standard Premises inventory module. With the Premises inventory consignment module, you’ll know what is on hand in your customers' inventory and have the ability to easily transfer the inventory to different locations. Consignment inventory is fully integrated into sales,shipping, accounting and scheduling functions within Premises.

Customer Consignment Inventory lets you plan, order, ship, track and report customer-consigned material, while at the same time deferring invoicing and accounts receivable (AR) transactions.

• Ship products to your customer and retain ownership until the product has been consumed
• Maintain accurate financial physical inventory records from shipment through consumption
• Transfer consignment inventory from warehouse location to Customer Bill Bill to or Customer Ship To (For Dealers or Reps)
• Include Serial or Lot numbers on Packing Slips and Invoices
• Create Transfer packing Slips for all consignments shipped and transferred
• Get online view of consignment inventory on hand a for each customer bill to and ship to
• Relieve the consignment inventory at invoicing
• Obtain consignment reports for valuation,insurance and collateral purposes
• Issue RMA's so customers can return consignment inventory
• Get automatic notification when pre-defined billing date arrives to submit invoice
  

Consignment Inventory received from your Vendors

Now you can gain complete visibility into vendor's consignment inventory located on your premises. Vendor consignment inventory is fully integrated into purchasing,receiving, accounting and scheduling functions within Premises.

Vendor Consignment Inventory lets you plan, order, ship, track and report vendor-consigned material, while at the same time deferring payment and accounts payable (AR) transactions.

• Receive products from your supplier and without transferring ownership until the product has been consumed
• Maintain accurate financial physical inventory records from receipt through consumption
• Include serial or Lot Numbers on all consigned inventory
• Create Receiving Logs for all arriving consignments
• Get online view of consignment inventory on hand and for each vendor
• Create Payment Authorization when product is consumed
• Integrated to Electronic Kanban for re supply triggers
• Create Vendor Return to return consignment inventory
• Get automatic notification when pre-defined billing date arrives to approve payment
• Flexible payment triggers
  

(1) Transferring items from a consignment inventory location
(2) Sending consignment material for outside processing
(3) An adjustment triggered by a Physical Count
(4) When back flushing product from production
(5) When creating the next reorder

Attach Consignment Terms and Conditions Document

It is important when engaging in Consignment practices to accurately document all terms and conditions. There will likely be thousands or tens of thousands of dollars at risk and disagreements can be expensive to resolve.

Ensure the following issues are covered in the terms and conditions:

• Who manages security and access?
• Who pays for damage, loss, shrinkage or theft?
• What activity triggers the transfer of ownership and invoicing of consigned inventory?
• What physical access frequency does the vendor have to inspect inventory on hand?
• Who maintains insurance coverage?
• Steps vendors will take to protect consigned product from customer’s creditors or bankruptcy
  

Vendor Managed Inventory programs have the potential to deliver huge benefits to both the supplier and vendor by improving material availability while decreasing overall inventory levels across the supply chain.