CHAPTER 12
Order Management

Oracle currently offers an Order Capture product in the CRM applications and an Order Management product in the Enterprise Applications of the E-Business Suite. With Release 11i, Oracle has also offered Advanced Pricing. The Order Management applications cover the order desk and commercial management activities of a company. The Order Capture products manage orders that originate in the Sales Force Automation systems, Web store, and Telesales environments until they are under the responsibility of the commercial management. One piece of terminology that is different in the Order Management applications is Inventory Organization and Warehouse. They are synonyms. The term “warehouse” is used within the Order Management application and is used in this chapter as well.

Basic Order Flows

Order Management supports a wide range of order management processes. Order Types can be configured to process as complex or as simple a sequence of activities as are needed. However, there are some fundamental pieces to the order management flow. Figure 12-1 shows the basic flow through the system for the main outbound order types for demand from customers. With Release 11, Oracle introduced support for drop shipments.

FIGURE 12-1. Basic order flow for external demand

Order Management will also allow you to fulfill demand that has originated internally. This demand can be for internal use, such as samples, destructive testing, or engineering. It may represent replenishment through the supply chain created by the planning systems. Figure 12-2 illustrates the flow of supply and demand for internal requisitions and sales orders.

FIGURE 12-2. Basic flow for internal demand

Setting Up an Efficient Order Desk

The first part of this chapter covers what you need to set up an efficient ordering environment with Oracle Order Management. It covers setting up items and ways to guide customers to those items and how to set up customer information and manage your credit exposure to those customers. This part of the chapter illustrates how to configure the order types and workflows to process orders in the manner you need, manage the exchange of longer-term planning and shipping schedules with your customer through release management, and set up tax information to determine tax liabilities for your orders and invoices.

Defining the Items You Sell

The first part of setting up the ordering environment is establishing the items that you are going to sell. Defining items for Order Management is much more than just the item definition. You need to let order management know the list of items that the order desk is authorized to sell. Order Management has guided selling capabilities through a hierarchy of options presented in a marketing bill of material and through configuration rules in Oracle Configurator.

Identifying the Item Master

With Release 11 i, the Item Validation Organization Profile option has been replaced with an Order Management Parameter. The parameter defines the organization where all of the item definitions for an operating unit are defined. Many operating units can use the same Item Master organization. It is a simple way of authorizing an Order Desk to a set of items. You can find an explanation of the terms organization and operating unit in Chapter 2. To set the Item Master Organization, navigate to the Setup I Parameters form.

Important Item Attributes for Order Management

The following are the important item attributes for Order Management. It decides how to process orders based on the values in these attributes. To set up item information, navigate to the Items I Master Items or Items I Organization Items form, depending on the control level you have selected for each attribute. You can find details on how to use the Items Definitions form in Chapter 2.

Main

On the Main tab the Primary Unit of Measure defines the unit that the item will be stocked and counted in.

Order Management Attributes

On the Order Management tab the following attributes are important:

Bill of Material Attributes

On the Bill of Materials tab, the BOM Item Type determines if the Bill of Material that is constructed for the item will be an option class or a model. An example of an option class for a car might be the sound system. Order Management will not allow the placing of an order for an option class.

Inventory Attributes

On the Inventory Attributes tab, the following attributes are important:

Costing Attributes

The only attribute of significance to Order Management on the Costing Attributes tab is the Cost of Goods Sold Account. It is considered by Flexbuilder and Auto Accounting in its determination of the cost of sales account applied to the shipment.

Physical Attributes

A very important attribute on the Physical Attributes tab is Indivisible. It determines if the primary unit of this item can be transacted in smaller units. For example, if an item’s primary unit is CASES, it may still be transacted as 1.5 Cases. However, if the item’s primary unit is a CAN, it may be transacted only in whole units if the Indivisible flag is set.

Decimal Quantities

Anyone familiar with previous versions of Order Entry will know that the ordering environment had some challenges dealing with decimals. With the Order Management product, standard items can now be ordered in decimal quantities if the Item attribute Indivisible is set to No in the Physical Attributes tab in the Define Items form. It only applies to the primary unit of measure. For example, a manufacturer of breakfast cereal can now create a return for 4.5 cartons of granola. They can also prevent a return of less than one packet.

Defining the Marketing Bills of Material

The hierarchy of options that a customer is guided through is represented in Oracle in a Bill of Material. The top of this hierarchy is a Model. It could be assembled to order or picked to order. Within the model, the lowest level is either options, if you can choose them, or included items, if you get them regardless of whether you choose them. An example of an included item on a PTO model might be the cabling. An example of an option might be the monitor. Between the options and the model, options are grouped into option classes. Figure 12-3 shows the relationships between the various types of order lines.

FIGURE 12-3. Relationships between model and option order lines

Order Entry has some capability to guide the customer. To create the marketing Bills of Material, navigate to the Bill form. You can find details of how to use the Define Bill of Materials form in Chapter 3. A number of types of bills are important to Order Management:

The following are the important Bill of Material attributes, from an Order Management perspective:

Entering Orders Using other Item Numbers

Order Management allows you to enter orders using item numbers other than your own internal item number. Figure 12-4 explains the relationships between the various item identifiers within Oracle Order Management.

FIGURE 12-4. Understanding item number in Order Entry

Supported item identifiers are as follows:

Defining Configuration Rules

Oracle Configurator provides a rules definition environment that will allow a sales engineer to define the rules and relationships between the orderable characteristics of a configurable item. Such rules might be incompatibility rules or options selected automatically because of previously selected options. You can express the rules in terms of both the items and the features of the item. For example, you can state that part number 1001 smoothing unit will not work with part number 1002, a 240-volt power source. You can also state that power consumed by the enhanced speaker reduces the battery life to two hours. It allows a customer to enter their requirements in terms of the features of the products being ordered rather than part numbers. It will reduce the selections based on what has already been chosen.

Oracle Configurator is an extremely flexible and robust product; a full description of its features is unfortunately beyond the scope of this book.

Defining the Customers You Sell To

Order Management shares the definition of customers with Accounts Receivable and with the CRM Applications. Figure 12-5 shows the Order Management information from the Define Customer form.

FIGURE 12-5. Order Management information for customers

Much information is agreed upon with a customer that will affect how an order and return should be processed. The agreement could be made for all sites that you ship and deliver to, or it could be specific to a given site. Hence, the information is defined for the customer and for the customer sites. You will need to understand the defaulting rules to know how your organization defaults this information to an order to control processing. You can define the customer organization as well as create “Accounts” with the customer. Accounts are created between an operating unit and the customer. For more information on operating units, see Chapter 2.

By defaulting the Order Type onto the order for the customer, you can define more of the processing. For example, Neptune has defined an order type for International Customers. These orders will always go through export compliance checking before the order is booked. Neptune has three major price lists: North America and Europe, South America and Middle East, and Rest of World.

NOTE
Order Types are defined for each operating unit. Customers are not defined within an operating unit, but customer sites and site uses are. You need to default the order type for the customer from the site or site use if you have multiple operating units.

The price list reflects the effort in doing business in these areas, and to some extent the AR risk. You can default the price list onto the order from the customer information. Again, this is subject to the defaulting rules.

The Ship Partial flag denotes whether the customer will accept a partial shipment of his order. Some industries consider the management of partial orders too expensive because many costs are tied to the receiving activity. The matching of the invoice also becomes more complex for the customer. By setting this flag to No, scheduling will find the first day that the full quantity for all the lines are available. Scheduling will fail if any of the lines do not have the full quantity available on the requested date.

The Freight Terms define who is responsible for paying the shipper and covering the charges. Freight costs may be prepaid by the shipper and added to the order value, for example. The FOB point determines the point at which the ownership, and therefore responsibility for insurance, passes for goods in-transit. The Ship Method is really a misnomer for the Customer’s preferred carrier.

The GSA flag denotes that the customer can buy goods under a Government Service Agreement. This is very much American functionality. It entitles the customer to legally enforced preferential pricing. Oracle Order Management will test that the price on an order is not lower than an established GSA Price List. It will place the order on GSA hold pending approval. For GSA customers, the order would not be placed on hold. For those outside of the United States, this is an ideal way of setting up minimum pricing. You can let your sales force negotiate, knowing that if you have created a GSA Price List for your minimum prices, you will be alerted to any orders that violate this minimum price.

The Warehouse definition gives you some elementary distribution requirements planning capability. This warehouse may be considered by defaulting rules when defaulting a shipping warehouse for the order line. You may wish to define the closest warehouse or distribution center to the customer location here.

Request Date Type determines if the customer request date should be considered the requested shipment date or the requested arrival date. It is very likely that the date a customer requests will be the requested arrival date.

Ship Sets and Arrival Sets are groups of lines that must be considered together for scheduling. Ship Sets are a group of lines that must leave the warehouse together. For example, if a company is manufacturing kitchen units, that includes cupboard units, doors, and worksurface. The work cannot start unless all components arrive. The Schedule Date for the group of lines will be the latest date of all the lines in the group. The same company will also coordinate the delivery of the door furniture. These are stored and shipped from a separate warehouse. All the lines Cupboard Units, Doors, Worksurface, and Door Furniture must arrive at the same time. The scheduled arrival time considers the travel time between the source and destination. Having an arrival set that has lines from many warehouses will cause one ship set for each warehouse. The scheduled arrival date will be the latest date available at the destination for all ship sets within the arrival set. If a line is added to the order later, you may want to push the group schedule date by setting the flag of the same name.

Earliest Schedule Limit and Latest Schedule Limit affect the scheduling window for items that are defined as being ATP check items. You can set items to be ATP Check Yes or ATP Check No. If the item is set as ATP Check Yes, it is stating to the system that you must have availability to record the schedule date on the order line. This will basically mean that the scheduling attempt will fail, and the order will not progress. You will need to make another attempt to schedule the order. These schedule limits introduce a scheduling window that will allow the Order Schedule attempt to succeed.

The Overshipment Invoice Base determines whether a quantity in excess of the quantity ordered should be invoiced. Over and Under Shipment Tolerances govern when an overshipment quantity shipped in Oracle Shipping will trigger an error message to the operator confirming the shipment. Under Shipment Tolerances govern when the original order line should be considered completely fulfilled from an undershipment as opposed to creating a backordered shipment.

Over and under return tolerances govern if a customer would be allowed to return more than was agreed upon in the return material authorization. You can also set these values on an item-by-item basis for the customer by navigating to Shipping Tolerances.

A couple of properties are important on the Customer Details tab. The Demand Class partitions supply and demand through the supply chain. The demand class can be defaulted from the customer or customer site. It is one of the sources that can be considered by defaulting rules. (Demand classes are discussed further in Chapter 8.)

Customer Profiles

Customer profiles give you some way of defining your credit management policies. A profile class groups customers of like credit profile and the individual customer credit profiles.

Profile Classes

Customer profiles describe some common characteristics of a group of customers that all share a given profile. Most importantly they define whether customers in this profile class will be credit checked. You can also set up credit limits by currency for the profile class. This will be defaulted onto the customer profile.

Customer Profiles

Customer profiles carry much of the same information as the profile class, but are for the specific customer or customer site.

Deciding How to Process Outbound Orders

You can influence how orders are managed within Order Management in a number of ways. Workflow controls the activities in processing the order and when each activity becomes eligible. Defaulting rules determine the defaulting source for fields on the order entry form and for the API. This minimizes the amount of information needed by the person entering the order. Processing constraints prevent changes being made to order information when commitments have been made and communicated.

Order Workflows

Order Management leverages Oracle Workflow to control processing at the header and line. Oracle Workflow is a very broad tool, but the applicability to the ordering environment is very natural, making it easy to understand here. Figure 12-6 shows a standard order header process flow in the Workflow Builder.

FIGURE 12-6. The standard order process in the Workflow Builder

Uses of Workflow

Workflow controls the processing of an order as follows:

Seeded Workflows

Order Management uses the following work item types. The Oracle seeded work items are locked up with low levels of access. It would be very dangerous to change these. These are really the transactions that are managed under workflow. They include the following:

Order header flows include the following:

Line flows include the following:

Line flows for returns and credit requests include the following:

Changing Workflows

If the workflows as seeded do not meet your needs, you can create new ones. Using one of the seeded workflows as a model, you need to copy it to a new process and then change its Internal Name, Display Name, and description in the Workflow Builder. You may wish to construct a new process using existing activities, or you may wish to construct new activities and link them into processes. There are standard functions and lookups available in the Item Type OM Standard-OESTD.

To make the workflow design environment easier to understand, you should follow the Oracle Naming conventions. On function definitions, you should state the execution mode in which the action will be taken. For example, you can book an order from the sales order form with BOOK_PROCESS_SYNCH. You can choose when to book the order and book it manually from the action button with BOOK_ PROCESS_ASYNCH. You can defer booking and let booking pick up the order later with BOOK_PROCESS_DEFER. Activities in the process can be both the active function, as in purchase release, as well as a state, as in purchase release eligible or purchase release complete.

If you need to coordinate different parts of the order, you need the work items in workflow to converse with each other. Workflow provides a wait function, and Order Management creates the continue functions. For example, lines will wait for the header to be booked on a standard order, and the header will wait for the lines to be fulfilled before invoicing if you are doing header level invoicing.

Document Sequences

Order Management leverages the central document numbering systems provided within Applications Object Library (AOL). For the proper creation of an audit trail, some countries require that the order numbers be sequential and unbroken. AOL provides for automatic, gapless number sequences, and Order Management leverages this facility. A document category is created for each order type in Order Management. The document category can be assigned automatic, gapless, or manual order number assignments. For example, you may have an order type for requests for quotes that is manually assigned, an order type for quotes that is automatic, and an order type for standard commercial orders that is gapless.

Order Types and Line Types

Order Management provides for the definition of order types and line types in the Define Transaction Types form. Order types and line types provide certain defaulting and processing controls.

Main Information Tab

You can define the workflow that a line or header goes through. The header workflow is specified on the main window of the form. The workflow assignments are for an order type, a line type, or a combination of line type and item type. These are accessed from the Assign Workflows button. For example, an international order for an outbound Assemble to Order Model would need to go through export approval and release to manufacturing. A domestic request for quote order type for a standard item may go through sales approval.

For orders that you wish to capture a promotion code on for later analysis, you can enforce that an agreement code be entered. (See Chapter 20 for full explanation on how to set up promotions and agreements.) Your company policy may be to ensure that the customer’s purchase order number is quoted on the sales order for easier collections.

You can specify a Price List for this Transaction Type. This is one of the sources for the price list that defaulting rules will consider for defaulting onto the order.

You can specify how to apply your credit policies at both booking and release for shipment.

Assign workflows used to process the order by clicking the Assign Workflows button. The workflows are assigned to a combination of the Line Type and Item Type for an Order Type. For example, you may process a standard line for an Assemble to Order item differently on an international order than you would on a domestic quote.

Shipping Information Tab

To explain what you can do in the Shipping Information tab, it is best to think of a few order types and how you might want them to behave from a pricing and allocation of inventory perspective. Neptune has decided to launch a targeted campaign to increase sales of the older line of laptops before the launch of its successor. To this end, it has set up a Laptop Discount Promotion Order Type. All the older laptops have been moved to the overflow warehouse as production of the new line ramps up. The units themselves will have a lower price if the customer quotes the promotion code, but the shipping priority on the low-margin older laptops will be lower. All the older laptops will ship FedEx ground. If customers order “Maine” external speakers, these will be drop-shipped from “Maine Acoustic Sciences.”

The new line of laptops is available for priority customers only. To this end, Neptune has created a Priority Customer order type. This order type will always reserve inventory. Marketing allocates a portion of the forecast to priority customers so where inventory is not on hand for the Priority Customers, it is partitioned in the Priority demand class.

Financial Information Tab

The Financial Information tab defines how Oracle Receivables will create and process the invoice and cash applications. The Invoicing Rule defines when the invoice is created, and the Accounting Rule defines when the revenue from the sale is recognized.

Receivables may be the billing and collections system for many systems. You may have many Order Management organizations on different instances but have a single billing and collections organization. You can declare the Invoice Source for a given Transaction Type here, which allows you to trace from the invoice back into the system that created the order.

Credit Method Rules determine how credit memos get applied to invoices. This backs revenue out of General Ledger. It does not apply to all invoices, only those with revenue split across many periods. You can back revenue out on a LIFO basis, Prorate across all periods, or back out for the number of units specified on the invoice line being credited.

The Receivables Transaction Type determines if the invoice that is created will be considered open and posted to GL. For example, Neptune creates proforma invoices for customers that have no Credit History with them. These proforma invoices allow the customer to create a payment voucher and deposit with Neptune before Neptune ships the goods.

The Cost of Goods Sold Account (COGS) is one of the accounts that receivable accounting will consider as a source for constructing the COGS account. You need to understand the receivable accounting setup to know how it will be used.

Order Holds

Order holds are a mechanism of stopping the progress of an order pending approval by someone with authority. You can apply holds to the following:

You define a hold source, and those holds are applied to an order line or to all lines in an order. You can define a hold to hold an order or line at a particular activity. For example, in the case of the customer filing for protection, you will want to apply the hold on the order as soon as it is entered. For the early lifecycle product, you will want to allow booking and acknowledgement but prevent the release for shipment.

In the case of the customer hold source, you can have the hold applied automatically. You will also want to apply the hold to all the orders that are on the order backlog to ensure that no product goes out the door to the customer.

In the Neptune case, if the new line of laptops has an overheating problem that was not detected in testing, it could cause unrecoverable disk errors and potential recall and warranty problems. They will also want to apply that hold to all orders currently on the order backlog.

Oracle Order Management provides several holds that are applied automatically for the following:

Speeding Order Entry with Defaulting Rules

Defaulting rules allow you to speed the entry of orders. Defaulting rules are a very flexible tool. They allow the implementor to define a defaulting source for almost every attribute. Defaulting rules use the metadata (data about data) in Order Management. This metadata defines possible sources for the value of a given attribute. For example, the warehouse attribute for the order line exists on the Order Header, Item, Order Type, Customer, and Customer Address. Defaulting rules search through a list of sources for an attribute. Figure 12-7 shows the defaulting rules for defaulting the accounting rule onto the order header. The primary source of default is the accounting rule on the agreement. The secondary source of default is the accounting rule on the order type.

FIGURE 12-7. Setting up defaulting rules

Order Management allows you to define sets of defaulting rules and conditions under which the sets of rules should be invoked. For example, you may choose a set of defaulting rules for all orders that have come from the sales automation system and another set of rules for orders that originate at the order desk. You define a set of conditions and assign the order in which the sets of conditions are evaluated.

NOTE
You should set up a condition called “Always” that has no condition statements associated. It should be last in the list of condition sets so that the other sets of conditions are evaluated.

You also set up a sequence of default sources that should be evaluated. The system marches up this list of default sources until it finds a not null value to source from. You can choose from the following source types:

Applications profiles are the set of constants that you can set at the User, Responsibility, Application, and Site levels.

The PL/SQL API single and multirow are a way of extending the application’s functionality. You can create your own function to provide a default value. It must have the following signature:

function function_name (p_database_object_name VARCHAR2
, p_attribute_code VARCHAR2)
return VARCHAR2

Where function_name is the name of the new defaulting function, p_database_ object_name is the name of the object that the default is being gathered for, and p_attribute_code is the name of the attribute that the value is being provided for.

Web Applications Dictionary (WAD) is the list of attributes and entities that form the data dictionary for the Self-Service Applications. It stores a default value for the attribute and for the attribute when it is part of an entity definition.

Processing Constraints

Processing constraints define whether a change is allowed to an order after certain activities have been completed, as well as the level of responsibility required to make the change. Figure 12-8 shows an example of the processing constraints setup.

FIGURE 12-8. Processing constraints

For example, you might decide that the order entry operator can change the price and promised delivery date right up until the order has been acknowledged to the customer. After the order has been acknowledged to the customer, the order entry clerk can no longer make changes. The order desk administrator can, however, make whatever corrections are needed.

A processing constraint has two main parts. The first is the action that you would like to prevent from happening. The second is the condition or state after which you want to prevent it. You can detect the condition in three ways:

Setting Up Standard Content for Order Documents

Order Management makes great use of the attachments capability of Oracle Applications. It allows you to embed content into the printed forms that move through the organization or to the customer. Figure 12-9 shows the relationships between the content, the forms from where the content is attached, and the forms and reports from where the content can be viewed.

FIGURE 12-9. Understanding document attachments in Order Management

You can make and view these attachments from the Attachments window in the Sales Order form and Sales Order Organizer.

These attachments will get printed on the following report:

You can set up attachments that can be simple text, such as “Thank you for purchasing from Neptune. Please phone our 24-hour hotline if you have any problems setting up;” files that might be graphics files (such as the company logo or customer’s company logo); or URL references. Documents can be templates—for example, if you are going to use the template to record the inspector on the packing slip.

Documents can be one time. For example, you may want to inform the customer on the order acknowledgement that her computer is late due to quality problems on the components and you will ship as soon as components of the highest quality come in.

You can automatically apply attachments to the order or order line by specifying attachment rules. These apply the attachment if the conditions in the attachment rule are met. In the rules, you can state that a given attachment is to be applied to the following:

Rules in the same group number are considered AND conditions. By changing the group number, you introduce an OR condition. The automatic additions work in both online and imported orders. You can also attach the documents through the Tools menu. You will need to set the profile option OM: Apply Automatic Attachments to Yes.

Release Management Setup

Release Management allows you to connect the planning and receiving systems of your customer more directly into the order administration, planning, and shipping systems in your own company. It allows the customer to send you planning, shipping, and sequenced schedules of demand. For planning and shipping schedules, the demand may be forecast or firm demand. Firm demand may be approved to ship. To allow this high degree of automation, you can use a number of rules to identify changes in demand and when to ship that must be set up in advance. These are Release Management processing rules and shipment delivery rules. To set up Release Management rules, navigate to the Release Management I Setup Processing.

Matching Attributes

Oracle Release Management allows you to identify specific attributes used by the Demand Processor for determining if inbound schedules are new demand or changes to existing demand. To set up matching attributes, click the Matching Logic button of the same name in the Setup Processing Rules form.

Release Management Processing Rules

A program called the Demand Stream Processor looks at the incoming picture of demand and applies these rules to determine shipment dates and quantities. The rules themselves can be different for different items that the customer buys or different addresses that the items are delivered to. You can assign these rules at any level. The Demand Stream Processor evaluates the rules at the lowest level and works up to the customer level.

Demand Management Rules

Demand management needs several types of rules to process an inbound demand stream.

The Consume Demand Hierarchy determines the types of schedules that have precedence when different schedules have demand for the same time bucket.

The ATS Prehorizon Disposition/Cutoff Days determines the treatment of past due demand. This is demand that is dated before the horizon of the planning schedules.

Standard Packs Quantity is generally the quantity that is in a shipping unit. Neptune supplies an automotive electronics supplier with global positioning systems in a shockproof box with 24 units. Neptune spends as much time packing 18 as 24. Even if the quantity demanded is 18, a shockproof box of 24 will be packed. Release management will show that Neptune is 6 ahead of requirements.

Demand Tolerances are the limits of a change between any two demand streams. Demand will always be processed, but an exception will be raised

Demand Fences

The Demand Fences tab displays the frozen, firm, and forecast fences to Oracle Planning and forecast fence to Oracle Order Management for planning, shipping, and sequenced schedules. You cannot change demand within the Frozen Time Fence. If a demand stream includes a change within the frozen time fence, a warning is issued. Demand within the Firm Time Fence will be marked as shippable regardless of the status of the transmitted demand. Demand within the Order Management Forecast Fence will be marked as not shippable, regardless of the status of the transmitted demand. Demand within the Planning Forecast Fence will be updated as forecast regardless of the status of the transmitted demand.

Order Management Rules

Demand for Release Management is handled through a specified sales order and purchase order. The agreement between the customer and supplier is generally not in terms of quantities. They are much more likely to have established outline pricing (though shipments can be made and prices agreed and invoiced later). This can be recorded through the customer’s purchase order or a pricing agreement within the Order Management systems.

CUM Management Rules

Cumulative quantities could be recorded at many levels, including by date only, by date and record year, CUM until manual reset, at item by date, and purchase order. The cumulatives could be for all quantities from a facility: for a given bill-to customer, for each ship-to site, for each intermediate ship-to site, or for all ship-to sites.

Shipment Delivery Rules

Shipment and delivery rules are a way of making the link between the days that your warehouses ship (or ship on a particular route) and the days that your customer’s shipping dock will receive. Given that there is an in-transit lead time to be offset between your shipping dock and your customer’s receiving dock, incoming demand must be offset by the in-transit time and pushed into a shipping day for the shipping warehouse. You set up Customer Receiving Calendar in shipping execution. Calendars can be specific to a customer site or shared. Oracle Release Management is seeded with industry-standard ship delivery pattern codes. You can view codes used by the ANSI X12 and EDIFACT standards, and you can modify some on the Maintain Ship/Delivery Pattern Codes form. You can associate a receiving pattern to the customer site or customer item. To set up a delivery pattern for a customer address, navigate to the Release Management Processing Rules form and click Address Terms. On the Demand Management tab of the Terms At Address Level window, clear the Use Customer’s Ship Delivery Pattern Code check box. The Calculate Scheduled Shipment Date program will look first at the Ship-From Customer Item level for a default. If no code is set at the Ship-From Customer Item level, it will look at the Ship-From/Ship-To Processing Rules.

Freight and Special Charges

Oracle Order Management uses the Advanced Pricing module to define charge types to cover freight and special charges. To define a new charge type, navigate to the pricing module and select modifiers. Modifiers are price modifiers—they can change a price up or down. In the case of special charges, they are being increased. Modifiers will be examined in greater detail in Chapter 20. The Modifier list is the schedule of freight charges. A customer, group of customers, or specific order may qualify for a schedule of freight charges through the Header Qualifiers. The lines on the Modifier list are the charges that will be applied to an order header or order lines. Charges can be applied automatically or manually to an order or order line. Charges are applied based on the line qualifications. Line qualifications might include item number, commodity, or customer. You can decide whether the customer is credited for the charge if the order is returned or charged for the freight costs of the return.

If the freight terms are prepay and add, the shipper (person requesting the goods to be shipped) will prepay the shipping costs to the carrier and then add them to the order. When the customer receives the invoice, it will include the shipping costs.

For freight charges that are prepaid and added to the order, pricing formulae can be set up to convert shipping costs to charges. These costs are converted to charges and applied to the order line after the order has been shipped.

Taxation

Explaining the full setup of the tax reporting system is beyond the scope of this book. A few vital things form part of the setup for Order Management. Oracle supports value added tax (VAT) and sales tax. Order Management allows you to credit check against the value of an order including the tax on the order. You can review the tax value for the order line and for the whole order in the order header. The main concepts to understand are

Some important profile options control whether the tax treatment you define for the customer can be overridden at the time of order entry—Tax: Allow Override of TaxCode profile and Tax: Allow Override of Customer Exemption.

Setting Up Tax Codes

Navigate to the Order Management Set Up Tax Codes form. Create a tax code. Define whether you are creating a Value Added Tax, Sales Tax, or location-based tax. Define the tax basis. This defines whether the tax should be applied before of after discounts are considered, based on a previous tax value. Define the tax rate if the tax code is not location-based. Provide effectivity dates. You now have a tax code.

You can enter a tax code at the customer ship-to and bill-to business purpose level, as well as at the customer level. You can also assign tax codes to inventory items. If your tax method is VAT, you can include a tax code in the Tax Defaulting Hierarchy in the System Options window.

Setting Up Locations and Rates

Navigate to the Order Management Set Up Tax Locations. You are presented with the Elements of the Tax Location Flex Structure in the drop-down box. You can select an Address Element (State, County, City) and define the tax rate associated with a range of postal codes. Oracle also uses this table to automatically complete addresses. Postal Code ranges and dates cannot overlap. This is a great deal of data to set up and maintain, so Oracle provides a sales tax rate interface to some common tax providers, such as Vertex.

Setting Up Exemptions

Navigate to the Order Management Set Up Tax Exemptions form. You need to set a few profile options in order to use tax exemptions. They are Use Customer Exemptions and Use Product Exemptions. To create an exemption, enter the tax code that the customer or item (or range of items) is exempt for, and create the reason code and exemption certificate number.

Exemptions created automatically during invoice entry or import are recorded as unapproved. You may change exemptions with this status to any of the statuses listed here.

Setting Up Tax in the System Options

You need to set up a number of options in the Set Up I Customers I System Options form. These include what type of tax you operate under and the Location Flexfield Structure for Tax and Address Validation. It also holds the Tax Identification of your own organization. The Tax Defaulting Tab is where you can define the defaulting sequence for Tax Codes in much the same way as defaulting rules in Order Management.

Enforcing Credit Policies

Order Management provides for credit and risk management for both receivables accounts and credit card transactions. Your credit manager can set your credit policies up for groups of customers identified by a credit profile and assign customers to those profiles. Your risk management is somewhat different if the customer is paying with a credit card. The risk is more credit card fraud. The integration with iPayments means that the buying habits, locations, and amounts of the purchaser are considered before a transaction is authorized.

Credit Checking for Your Accounts Receivable Customers

Credit check may be triggered at booking and releasing for shipment for orders that

NOTE
If the credit profile enforces credit check but there are no credit limits set up in the currency of the order, no credit check will occur. For example, if the customer is a Mexican customer who normally orders and pays in U.S. dollars but requests an order be expressed in Mexican pesos, you need to ensure that there are credit limits in this currency. There are multi-currency credit checking capabilities being delivered in an imminent release.

Credit check rules allow you to configure the open orders and invoices that will be considered against the credit limit for the customer. To define a credit rule, navigate to the Rules I Credit Check Rules form. If the credit limit is exceeded, either for the open balance or single total order amount, a hold is automatically placed on the order. Generally the credit manager will have the authority to remove that hold. You can choose to include uninvoiced orders, open receivables, or both. For open receivables, you can choose to include only receivables over a certain number of days overdue by specifying the open receivables days. If you have received payments that have not cleared through the banking system, you may wish to still regard the payment At Risk. By checking the Include Payments At Risk flag, you will include these values in your exposure calculation. You may wish to exclude orders that are not due to ship for some time. You exclude these by specifying a Scheduled Shipping Horizon Days range. You may wish to exclude orders that you are holding. If the order is on review for export compliance, you might want to exclude it from the exposure calculation. There is an option to exclude tax from the exposure calculation, although customers are liable for the tax on the order in most jurisdictions.

Orders will be placed on hold if the exposure exceeds the credit limit or if the value of a single order exceeds the maximum in the credit profile. Holds can be released manually by people with release authorized responsibilities. Holds can be released automatically if credit is reverified. This will happen every time you attempt to release for shipment. The verification will also happen from Order Entry if the order is revalidated because of date or price movements.

Credit Check for Credit Card Payments through iPayments

For payments with credit cards, Order Management integrates with the iPayments system. This is an authorization and risk management system. The payment server will obtain an authorization for both the amount and nature of the transaction going through the server. Risk factors and rules are set up in Oracle iRisk. If the card holder does not normally purchase at this time, have goods delivered to this address, order this value of transaction, or has a bad payment record, the payment server may flag it as a risky transaction and place a hold on the order. The threshold beyond which the order is placed on hold is OM: Risk Factor Threshold.

NOTE
The privacy of the credit card information is enforced through a profile option, OM: Credit Card Privileges. A value of None means that only the last four digits of the credit card are shown.

Compensating Your Salesforce

Order Management is integrated with the Sales Compensation Systems through sales credits. When you enter an order in Oracle Order Management, you also assign sales credit. The sales credit information can be passed directly to sales compensation if you compensate your salespeople on orders booked. Sales credits can be passed through to receivables if you compensate your sales folks on invoiced sales. Sales credits can be considered against a salespersons’ quota, or they may be compensated without the order being counted against their quota. To set up the Sales Credit Type, navigate to the Sales I Sales Credit Type form. Neptune defines a sales credit type for Quota Sales Commission, Non Quota Sales Commission for its Salesforce, a Sales Credit type for Royalties paid to the supplier of preloaded software, and a Sales Credit Type for Rebates that it pays to its distributors.

Your salespeople are likely to be defined in HR. The Sales I Resource form is where you define salespeople if they are not defined in HR. For example, external distributors or agents would be defined here. Information relevant to the order entry process is in the Receivables and Compensation tabs. In the Receivables tab is a Territory Flexfield that is defaulted onto the order. The territories themselves are set up in the Territory Definitions form under the Sales menu. It governs very little processing, but some AR reports use this Key Flex Structure. It is typically set up to represent geographic regions.

CRM also has the notion of territories. These represent the sales responsibilities of the salespeople and govern a great deal of functionality. The Revenue, Freight, and Receivables accounts are also defined here. This is one of the sources that Auto Accounting in Receivables considers to construct the accounts. Neptune is very interested in customer profitability. It survives in a market where margins are very thin. The cost to serve a particular customer may make the customer unprofitable. Therefore, Neptune drives a Customer segment in its chart of accounts from the Salesperson.

Creating a Global Picture of Availability

Oracle Planning allows you to create a global picture of availability that can be shared by many systems. You can configure different sources of supply and demand to be considered when promising a date to a customer. The dates can be shipment or delivery dates. Both material and resource availability is considered for the promised date.

Global Order Promising

You can use Global ATP Server to support distributed order promising. Multiple Order Entry systems can access a global statement of availability. It is completely Internet-based, allowing low-cost collaborative deployment with only a browser. You can deploy Oracle Global ATP Server either as a component of a complete applications system, or by itself on a separate distributed server. This lets you support any combination of centralized and decentralized order promising. Planning currently collects from prior versions of the ordering systems, back to Release 10.7.

Collecting Supply and Demand Information

Built-in collection programs let you collect data from any Oracle Applications instance and transmit the data to the planning or order promising server. You can also collect data from legacy applications via interface tables. This capability provides high availability and an extremely accurate statement of availability to all customers in your global supply chain. Non-Oracle applications’ order entry systems can access global order promising via APIs. The Global ATP API Signature is as follows:

and the in parameter is

Order Promising Terminology

As Order Promising methodology has evolved, new terms have been coined to describe advanced order promising capabilities:

Oracle Global ATP Server encompasses all of these capabilities.

Configuring Sources of Supply and Demand

You can control the list of potential sources to be considered in the availability check. An organization item, item, item category, or org can be assigned a set of sources through bills of distribution and sourcing rules. A global sourcing rule or bill of distribution may also be defined. Even though planning groups a set of bills of distribution and sourcing rules into an assignment set, ATP considers all available sources.

For example, assume that Factory1 has the following sourcing rule for assembly A. Table 12-1 shows a sample sourcing rule for assembly A.

TABLE 12-1. Sample Sourcing Rule

You can also control the number of levels in your supply chain bill to be considered in your check. The level of checks performed by Global Order Promising is controlled by three flags:

At each level in the supply chain bill, you can specify the key components and bottleneck resources for which to check availability. The possible settings for the ATP_FLAG in the Items form are as follows:

You can also check the group availability of products that must ship together.

Setting Profile Options

You need to set some important profile options in order to get global ATP working. The first is INV: Capable to Promise. This is a site-level profile option. It can have the following values:

The second is a site-level profile option, MRP: ATP Database Link. This is a pointer to the database where the global picture of supply and demand resides.

For supply chain ATP (the consideration of multiple sources of supply), the sources to be considered are listed in an assignment set (see Chapter 11). The purpose of this assignment set is to define the portion of your supply chain from your enterprise outward to your customer; thus the sourcing rules typically use only the Transfer From sourcing option to indicate the plants or distribution centers that can ship material to your customers. Because you can have many assignment sets, you must specify the assignment set you use for Order Management (and for ATP inquiries within your ERP instance) in the profile MRP:ATP Assignment Set.

For multi-instance order promising, you must define your assignment set on the Planning Server and specify it in the profile MSC:ATP Assignment Set. This profile will govern ATP inquiries on the Planning Server; see Chapter 11 for a discussion of the Planning Server.

Entering and Managing Orders

Order Management provides two ways to get at the Order Entry form. One is to use the Order Organizer. You can click the New Order button from the List panel. The other is to navigate to the Orders form directly from the menu.

Using the Order Organizer

Order Management comes with an Order Organizer. It is the main place that a customer service representative would interact with the Order Management system. The Order Organizer gives you a way of

To use the Sales Order Organizer form, navigate to Orders and Returns I Order Organizer. In the Order Organizer form’s Find window, you can construct your search criteria from order header information, order line information, or order hold information. The Advanced tab allows you to expand your search into closed and cancelled orders. Once you have entered your search criteria and clicked the Find button, you will be taken to the search results and see a list of folders on your left. The folders show you today’s orders. These are orders you have entered today. It shows you a folder representing your search results. You can save your search criteria if you think it is one you will use often.

Right-click is enabled in the Folder panel of the search results window. It will allow you to name and save the search. If you have the profile OM: Administer Public Queries set to Yes, you can save the search into the Public folder for others to use. The search results give you two tabbed regions: one for header information and one for line information. You can create a new order, open an existing order, or perform any of the actions available under the Actions button. If you are located on the Header tab, this includes viewing the order information; applying or releasing holds; applying document attachments; booking, canceling, or copying the order, pricing the order; and managing sales credits. The Progress Order option will display the list of workflow activities that are currently eligible. You can select the activity and execute it from the order actions list. You can notify someone, or all people, with a given responsibility about an order. For example, a particular order may need engineering verification. You can choose notification from the action list and notify engineering. The notification is recorded in workflow.

From the line, the list of available actions include all those at the header, as well as horizontal demand, installation details, release workbench for demand received through the demand stream processor, and the ability to split the line. You can see the tax details of a line.

The summary and the lines block are folders. You can choose the fields that are most important to you to place in the first panel.

Entering Sales Orders

Choosing the Orders form gets you to the heart of the Order Management system. From here you can view and modify both outbound orders and returns. You can check availability and schedule shipments, reserve inventory, assign credits to your salespeople, adjust pricing, and record payment information.

Although each field is validated as entered, the “Booking” process validates the completeness of the order information.

Entering Order Header Information

There are two tabs in the header. If you have set up your defaulting rules correctly, you should very rarely be visiting the other tab. You can also tune the folders for the tabs to give exactly the information needed for a given type of entry. For example, you might have a folder for recording quotes that includes the version and expiration date. A sample order header is shown in Figure 12-10.

FIGURE 12-10. Sample order header

Main Tab

The only information that must be entered in the header are the Order Type and the Currency. The customer in the Order Header is the sold-to customer. The trading community architecture allows the definition of a customer with many places of doing business, which Oracle terms customer sites. Each site can have many site uses. Site uses are user-defined, but different applications look for specific site uses. Order Management is interested in ship-to site uses and bill-to site uses. Accounts Receivable is interested in statement addresses and dunning letter addresses. A customer definition may be defined with a primary ship-to address. A ship-to address has an associated bill-to address. This gives the ability for pretty quick order entry; populating the customer can allow the system to populate ship-to and bill-to information. Each customer and customer site can have primary contacts. These can be overridden at order entry, but again the order can be populated with pretty rich information with limited entered data.

NOTE
If you are entering an order for a new customer, Order Management provides a simplified customer entry form called Quick Customer Entry, which is available from the Tools menu.

You can set up an order type to require the entry of a customer purchase order. This gives some protection from AR risk if you can quote the customer’s purchase order to their payables department. The system will alert you to a customer purchase order number that has already been used on another sales order. You can set up an order type to also require an agreement number. If you have set up an order type for promotional orders, you may want to capture the promotion code. For more information on agreements, see Chapter 20.

Other fields worthy of note on the Order Header Main tab are Price List, Salesperson, and Currency. There are many places from which you might default the price list, including; Customer, Customer Site Use, and Order Type, but you can override the defaulted price list here. There is a default salesperson defined for the customer. By default they get 100 percent of the sales credit that is fed to Sales Compensation. You can allocate the percentages to the sales team member in the Sales Credit window.

NOTE
If an order has come through Release Management, it will have customer item information in the order lines. If you change the customer at the order header, you will invalidate the customer items on the line. You must create a new order and cancel the old order.

Others Tab

The Others tab contains payment and freight terms for the order, logistics information to control the flow of the lines through the shipping system, and some tax information to be passed to the invoice.

You can choose a Payment Term for invoices handled through Accounts Receivable or a Payment Type if you are in a Payment with Order environment. Payment types can be cash, check, or credit card. If you select check, you can enter the check number. If you enter credit card, the credit card name, number, and expiration date will default from the primary credit card in the customer information, or you can enter them here. Enter the Approval Code for the credit card authorization.

NOTE
You can define the amount of the payment, but it is not transferred to Oracle Receivables. To enter receipts, deposits, and advances, you need to open the Receipts form in Oracle Receivables.

You define freight terms to define who is responsible for the freight. The F.O.B. point defines at what point ownership passes from the supplier to the customer. Generally, ownership passing will carry with it responsibility for insurance. The shipping methods are generally set up to represent common carrier charging tiers, such as two-day ground, overnight, and so on.

The warehouse can be defaulted onto the order from many sources. It also provides one of the sources of default for the warehouse on the lines. The line set drives some of the timing and reservation logic. You may want the lines to ship in a single shipment. If the lines are sourced from different warehouses, you may wish to have them arrive at the same time. The system ensures that all of the material is available at the same time before placing demand or allocating inventory. You can use shipment priority to allocate scarce inventory to orders during pick release. You can instruct warehouse staff on handling for a particular order by recording shipping instructions in the order header. Shipping instructions are printed on the pick slip—for example, “Pack Monitor in separate box on customer instruction.” Packing instructions are printed on the pack slip. Packing instructions would be visible to the customer. An example might be “Monitor packed in separate box as per your request.”

A bunch of tax handling information is exposed in the order header. Tax processing status declares how a transaction should be treated for tax. You can exempt a transaction that would normally be taxable, require tax for a transaction that is normally not taxable, or declare that the standard existing exemption rules should apply. If the customer has a tax exemption defined, Order Management displays any certificate number and reason for the exemption in the corresponding fields.

If you define the transaction as exempt, you must choose an existing certificate number for the ship-to customer, or enter a new, unapproved exemption certificate number. Unapproved exemption certificate numbers can be approved using the Tax Exemptions window. If you chose Standard in the Tax field, an existing exemption rule may display a certificate number in this field. The certificate and reason code must be supplied before the order can be booked.

The Order Source is for orders that may be imported from other sources or created through copy order. Sales Channel is defined on the customer, and customer site is commonly defined to be things such as Direct Sales, Distributor, and Web Site.

Order Header Actions

The Order Header Actions button allows you to perform many actions on the order that in previous versions of Order Management required you to navigate to other forms. The order header actions are as follows:

Sales Credits Takes you to a window where you can allocate the sales credits that drive your sales compensation. Sales credits can be counted against quota, counted as revenue credit, or be non-quota. For example, if Neptune’s Education sales team needed help from the Industrial Equipment sales team to close a sale into school science laboratories, the Industrial Sales team might be compensated for the sale but still have their own quota to achieve. The quota or revenue credit needs to be completely assigned, so you must allocate 100 percent of the revenue credit. Sales credits can also drive revenue accounting. If you keep profit centers by customers or customer groupings, you may need to assign the revenue accounts to the salespeople. You set up salespeople in the Set Up I Sales I Salespeople menu. You can define Employees or Partners as receivers of commission or royalties.

NOTE
To modify a price in the Adjustments window, you must have the profile option OM: Discounting Privilege set to Yes, and the Order Type must not have the Enforce List Price Flag set to Yes.

Entering Line Information

The line information includes item, shipping, pricing, addresses, returns, service, project, and Release Management. To enter line information, click the Lines tab in either the Order Navigator or the Sales Order form. You can always see the order total as you enter order lines, so you can confirm back the order total to the customer as it is entered. Figure 12-11 shows an example of the Order Items tab.

FIGURE 12-11. Order Items tab in the Order Entry form

Main Item Information

The line number is composed of the line, shipment, option, and service numbers; you can override the values. Select the ordered item for this order line. You can enter item information by using internal item numbers, customer item numbers, or any generic item number set up in Item Cross-References.

NOTE
If you expect to source the item directly from a supplier in a drop shipment, you must set the Purchasable attribute to Yes.

When entering the unit of measure, you can enter only units of measure that the system can convert to its primary unit. The units of measure for models and kits are restricted to the item’s primary unit of measure.

Pricing Information

You can select a price list. It is common to default the price list from the header to the lines. In any case, the price list currency must match the order currency. If you have the profiles option OM: Discounting Privilege set to Yes, you can adjust the price. You can also update payment term information here.

Shipping Information

You can specify information about the requested shipment as well as instructions to the shipping department on how to process the shipping of this order line. You will need to accept or override the default warehouse to be shipped from, and for internal orders, the receiving org or warehouse. The scheduled shipping date is offset by the transit time for the shipping method between the warehouse locations to arrive at the scheduled arrival date. You set up the offsets in the Shipping Networks form. You need to choose Shipping Method from the Tools menu. The dates requested by and promised to the customer are defaulted to the date entered and can be overridden here.

You can choose to source the transaction internally (that is, from your own inventory), or you may choose to have a supplier drop ship the goods directly to the customer. If you are going to ship from your own inventory, you may choose to reserve from inventory that is on hand. You can assign a priority that will be evaluated by planning for inventory allocation. If an order line has been partially shipped, you can see the shipped quantity. The line is “split” on partial shipment, with the lines moving independently through their workflows. The line may have been assigned to a Ship Set (all lines must ship together), Arrival Set (all lines must arrive together), or Fulfillment Set (all lines are considered together for determining the quantity that can be invoiced).

NOTE
Ship Sets will be created automatically when shipping a pick to order model with the Ship Model Complete flag set to Yes. Ship Sets must leave from the same warehouse. Lines within an arrival set can be dispatched from multiple warehouses. An arrival set may contain two or more Ship Sets.

NOTE
Customers familiar with the Release 10.7 Required for Revenue functionality should find the concepts of the fulfillment set easy to understand. The Required for Revenue flag is a component of a model that needs to be shipped in order to recognize revenue for the model or any part thereof.

Shipping method and shipping priority are ways of assigning and prioritizing work in the warehouse, including the allocation of inventory. You may override freight terms here, and you can give special instructions to warehouse staff and carriers through the shipping and packing instructions.

Address Information

You can specify address information by clicking the Addresses tab in the Sales Order form. The validation of the ship-to address is dependent on the value of the OM: Customer Relationships profile. If it is set to Yes, the shipping and billing addresses must be either for the order customer or for a customer that has a relationship defined with them. This might be appropriate if you are modeling a central buying department for a group of companies. If the profile is set to No, the shipping and billing addresses can be for the same customer. The Deliver-to addresses are for situations that do not warrant true “multi-leg” shipment capability but do get delivered to somewhere other than where you, as a supplier, ship them to. This is information for any subsequent carrier of the goods that will “deliver” after you have discharged your responsibility.

Return Information

To specify return information, navigate to the Returns tab. You can specify a reason code from the customer that is returning the goods and the line type to define the workflow for the line. You can specify a reference for the return, including Customer PO Number, Invoice Number, Order Number, or Serial Number. The Reference allows the system to correctly default the pricing and sales credits for the credit memo and commission clawback.

Service Information

To specify information on service items, navigate to the Service tab. Oracle Order Management allows you to order the service of an item at the same time as ordering the serviceable item. You could do this either through online or imported orders. Service coverage for the serviceable part will generally be a nonshippable item that will not need to be scheduled. The service lines will be linked to the serviceable lines. This reference is through the Service Reference Order Number, Line Number, and Shipment Number. They may also be linked to an entry in the install base via the customer product. This is where Oracle keeps a record of the items that are at the customer site and subject to service coverage. You specify the type of association in the service reference type. You could be selling service coverage for a group of items you have sold to the customer. This grouping is the system reference. Oracle pricing allows for pricing as a percentage of the sale of the serviceable line. For example, the service coverage for a $2,000 desktop unit might be 10 percent of the desktop price.

NOTE
The fulfillment of the service lines is generally through the fulfillment of the serviceable lines. This means that you invoice only for the service line when the serviceable product ships. You can also specify a service start delay on the service item when you set it up in Oracle Inventory. This will mean that the service coverage will be started and invoiced for a certain number of days after the serviceable line ships.

Project Information

Oracle Project Manufacturing allows you to capture costs for a specific customer contract. Planning and reservations are also done at a project level to allow you to trace supply for a contract. You can record the project that will capture the costs for the contract in the Project tab. You can specify the project, task, and end item serial number. For example, if Neptune is supplying the flight computers for an aircraft manufacturer, the tail number of the aircraft might be recorded as the end item serial number.

NOTE
It is the warehouse Project reservation flag on the warehouse that defines whether the order line will require task as well as project.

Release Information

Release Management information is used in automotive solutions, or anywhere that planning is highly coordinated between customer and supplier. The customer may give the supplier visibility into demand that is not authorized to ship. The customer will reissue their picture of demand for the same period many times, overlaying the supplier’s picture. The demand may be on different schedule types, including planning schedules, shipping schedules, and sequenced schedules. The supplier needs to be able to determine the net change between transmissions. Deliveries from the supplier need to be in the correct sequence when unloaded at the customers’ receiving dock to marry with the job on the production line. To enable this, the release information includes customer job, customer production line, receiving dock, and intermediate ship-to. The intermediate ship-to gives Oracle some capability to pool shipments. The release information also includes the unit identifier of the end item. For example, if Neptune is shipping onboard diagnostics to a car manufacturer, the diagnostic units will carry the vehicle identification number (VIN) of the car in which they will be fitted.

Line Actions Button

You can do the following from the Actions button on the line:

NOTE
Before you can use the Release Management workbench, you must use the Release Management Processing Rules form to associate ship-from warehouse with the customer locations from which you receive demand transactions and define how parties will track cumulative quantities between them. You will also need to define a pricing agreement that references the customer’s purchase order and the customer items numbers.

The top-right panel has the item shipment information. Companies using Release Management will have coordinated production very closely so that the customer’s manufacturing job is part of the demand stream received from the customer. There are many packing, shipping, and delivery terms that are agreed on an item-by-item basis in Release Management.

The lower-right panel is the shipments as they have been transmitted in the release schedule. The shipments could be firm or forecast for any time bucket: day, week, or month.

If the netting process had problems resolving demand in a given period, it will record exceptions, which you can view by clicking the Exceptions radio button.

Booking Sales Orders

You can book the sales order by clicking the Book Order button, which checks that the order is complete and valid. The validity check includes Credit Check Errors that will be returned in the Messages window. You can enter orders and not book them. Booking an order starts it on its workflow. You can set up the workflow to book the order automatically. Refer to the section “Order Workflows,” earlier in this chapter. You would generally not want to have unbooked orders for too long. These are revenue opportunities that have not been responded to or orders that have validity problems. The workflow for the order will not be progressing. There are reports in the Order Management system to alert you to unbooked orders.

Managing Availability and Delivery Commitments

The management of availability and committing to deliver covers three areas: Available to Promise (ATP) inquiries, scheduling, and reserving supply. You can schedule order lines with multiple ship-to locations and shipping warehouses. You can specify which lines must be shipped together by using Ship Sets. You can specify which lines must arrive at the customer’s dock together, even though they have shipped from different warehouses. You can request ATP and schedule dates for a single order line, a model with options, a ship set, a configuration, or an entire order. You can configure the sources of supply and demand to be considered by ATP. You can have orders scheduled automatically as they are entered.

ATP Inquiries

ATP inquiries will inform you of an available date without committing supply. You can check the availability of an order, order line, configuration, ship set, and arrival set. The ATP inquiry returns the first data after the requested schedule date that the requested quantity is available. For a group of lines, the date returned is the latest date of all the lines in the group. If the ATP flag is set to No in the item master, only the onhand and reservable quantities will be displayed. If the ATP flag is set to Yes, the warehouse, available quantity, available date, and request date are also shown. ATP check will be performed automatically if the OE:AutoSchedule is set to Y. ATP check will also evaluate sourcing rules to determine a warehouse to source the line from if one does not exist on the line. You can invoke the global ATP inquiry and see the approved sources, ship methods, and lead times if you would like to choose a source other than the primary. Table 12-2 shows the ATP behavior for each item type.

TABLE 12-2. Item Type ATP Behavior

NOTE
Although Order Management allows you to specify times for requested and promised dates, ATP nets supply and demand at the day level.

If the Check ATP flag is set to Yes, the line cannot be scheduled unless the schedule date can be met with the current supply. By marking the item as ATP Check Yes, you are stating that the date promised to the order must have planned supply on the date scheduled. If the Check ATP flag is No, you can create unplanned demand in the system.

If you click the Availability button in the order header or select multiple lines, you will get the multirow availability window. From here, you can verify the availability dates for a set of order lines. If the shipping network has been set up in supply chain planning to include the customer site, the arrival date will be offset from the shipping date. If no shipping network is defined, the ship date and arrival date will be the same. You can choose to include or exclude the orders on hold from scheduling with the OM: Schedule Lines on Hold profile.

NOTE
The scheduling actions available on the order are dependent on the order type. You can restrict order types to ATP only, ATP and Scheduling without reservations, or all scheduling actions.

The Available to Promise formula is

ATP = on hand + supply – demand

where on hand = ATP-able quantity on hand; supply = planned orders, scheduled receipts (purchase orders, purchase requisitions, and discrete jobs), and suggested repetitive schedules; and demand = sales orders, component demand from planned orders, discrete jobs, and suggested repetitive schedules.

You can review the available dates down to the scheduled inventory receipt and issue documents. From the Availability window, click the Global Availability button. Choose an ATP source and click View ATP Results. You will see the ATP workbench. The left panel is the list of orders to be checked for availability. This workbench can also be called from the Schedule order backlog form, where many orders can be chosen. Within the order you will see the list of scheduling groupings: Ship Sets, Configurations, and so on, as well as independent lines. Click one of the groups, and the list of items will appear in the right-hand panel. You will see the earliest available dates and any errors encountered in scheduling. You can pick an item in the right-hand panel and see the list of available dates. The available dates are scheduled receipts into inventory. By clicking the Details button, you can see the validation of the available dates, transaction by transaction. Figure 12-12 shows an example of the ATP Details window.

FIGURE 12-12. Horizontal A TP results

If your ability to promise to customers is driven as much by capacity as having inventory, you can set the INV:Capable to Promise profile option. Capable to Promise (CTP) extends Available to Promise by taking into account capacity information. Whereas ATP considers only material availability and assumes infinite capacity resources, CTP considers availability of both materials and capacity.

Scheduling

Scheduling provides a schedule date and warehouse that will fulfill the customers request. If an item has Check ATP enabled, then the supply will be consumed from the pool of available supply for that item. If an item does not have Check ATP enabled, then the supply will not be consumed. Scheduling will behave differently for different types of items. The following table shows item types and scheduling results.

NOTE
PTO Models can be declared as Ship Model Complete. For example, Neptune has a home office package of CPU, speakers, monitor, printer, keyboard, and mouse. It is distributing to computer retailers but only in complete sets. If the PTO model is Ship Model Complete, the model and options will be in a ship set.

Scheduling versus Reservation

Reservations Allocates inventory to a specific order line from a warehouse, subinventory, lot, or revision. Scheduling allocates supply from a date bucket rather than a specific supply. Reserving gives an additional degree of certainty that the supply will be available, but it makes reallocation of supply much more difficult.

Scheduling Orders from the Order Entry Form

You can see the availability of the item ordered in the floating availability window. This window will show the requested and available dates, quantities, and scheduling exception messages for the warehouse on the order line. You can also use the schedule function from the Tools menu. This gives the full array of scheduling functions: scheduling, unscheduling, reserving, unreserving, and viewing schedule results.

Scheduling Orders in a Concurrent Program

You can also schedule orders in batch mode. Navigate to the concurrent program submission. The program will honor the OM: Schedule Orders on Hold profile. It will schedule only order lines that are eligible according to their workflow statues. Parameters include

Acknowledging Customers

Oracle Order Management provides printed acknowledgements and a mechanism to acknowledge customers electronically through the e-commerce gateway. To print acknowledgements, navigate to Reports and Requests concurrent submission form. The customer “sold-to” site must be set up to receive acknowledgements. There are two types of acknowledgment: original and order change. The order acknowledgement process picks up data from Order Management, writes it to acknowledgement tables in e-commerce gateway, and updates Order Management with the acknowledgment code and date. Acknowledgment codes exist at the header and lines level for automated processing of acknowledgements into purchasing systems. An electronic change order acknowledgement will be produced if there is a change to

Or if the PO is cancelled, lines are cancelled and added.

Making Updates to Large Numbers of Orders and Lines

You apply mass changes by selecting the orders or order lines in the Order Organizer. Use the multiselect function to select the orders or order lines you would like to update. Choose Tools I Mass Update. You can select what you would like to set your orders or order lines to and click OK.

Invoicing Orders

Oracle Order Management provides a seeded workflow function to move the fulfilled order line shipments and authorized return lines, freight charges, and discounts to receivables. Receivables provides invoicing, revenue accounting, and collections capability. You can interface full or partial quantity of line shipments and RMA receipts, including PTO configurable items. Eligible priced option classes and options will also be invoiced with their model lines. Freight charges are invoiced as soon as at least one order line associated with the pick slip is interfaced. If associated order lines have been completely interfaced, the freight is interfaced as a separate transaction. Line and header charges and price adjustments, tax treatments, and payment information are interfaced. If customer item information exists, the customer item description is passed rather than the internal item description.

Important Profiles

The following profile options affect the operation of the invoicing interface:

NOTE
Order Management does not currently create invoices for internal orders, even if there is an invoicing activity in the workflow.

Processing Returns and Requests for Credit

Order Management allows for the creation of RMAs and requests for credit in the Order Entry form. Returns could be for order placement or shipping errors, field failures, or return of samples. An RMA acts as an authorization for the receipt. The receipt is transacted in the Receiving form in the purchasing application. Credit may also be given for damaged or low value goods where no physical shipment of the goods will occur, but credit will be issued in AR. You can choose on an item-by-item basis those that you allow to be returned and those that must be inspected before going into inventory.

Setting Up Return Order Flows

We have discussed most of the setup for inbound orders under the “Deciding How to Process Outbound Orders” section, but the following pieces are worth special note.

Credit Transaction Types

Credit order types have an order type category of Return. A Mixed order type category can contain both sales order and return lines. However, you cannot enter return lines into an order with an order type category of Regular.

RMA line types have a line type category of Return. The following are examples of the basic line types:

Return Reasons

Accounts Receivable and Order Management share a set of return and credit reasons. If you generate credits from your RMAs, the return reason is carried through to the credit memo as the reason for the credit to provide a full audit trail. To set up return reasons, navigate to the Set Up Quick Codes Receivables menu.

Item Attributes

Physical items you expect to receive in Oracle Inventory must have the following item attributes: Returnable: Yes; Shippable Item: Yes; Transactable: Yes; and Stockable: Yes. To create credits for return items in Oracle Receivables, the item must have the item attributes Returnable: Yes and Invoice Enabled: Yes. Nonstockable items such as warranties will have the shippable and stockable flags set to No.

Entering Return Information

You can enter an RMA line in the Sales Orders form. You need to supply a line type in the line type category of “Return.” You also need to provide information about the originating transaction, such as the order number, order line number, option number, and shipment number or invoice number and line number. For serial controlled items, you can also reference the serial number. You can choose whether to allow, reject, or warn the operator of mismatches between the RMA items reported by the customer and the related transactions through the profile OM: Return Item Mismatch Action. When you enter the quantity, you can enter positive or negative numbers. The quantity returned is displayed as a negative number and highlighted in red. The extended price of a return line is also displayed as a negative number and highlighted in red.

Pricing of Returns

If you use the copy order function to create a credit order, you can price the order at the current price list value, price the order as at the original pricing date, or create a new price and adjustments for the return.

Receiving and Returning Items under RMA

You can have inbound and outbound lines on the same order. Order Management allows you to enter lines on an order to receive the returned material and dispatch the reworked or replacement items. For example, a customer may make a return under warranty or trade in a prior model. For a lot and/or serial number-controlled item, the Sales Orders window allows you to enter the lot and serial numbers that the customer reports for a return line. This will allow you to verify warranty period, and so on, for the shipped product, but the actual lots and serials are recorded on receipt.

Special Order Flows

As of Release 11, Order Management allows for sourcing of an order directly from a supplier for delivery to a customer. Oracle also supports guided selling of configured products assembled to order. These more specialized order flows are discussed in the following sections.

Drop Shipments

Order Management allows you to define orders for which the default source type will be drop shipment. For this order flow, a purchase order is created “back to back” with the order line. For example, Neptune offers PDAs in its catalog to complement its line of personal desktop computers. However, it does not stock the equipment but instead has the PDAs delivered directly to its customers.

Benefits of Sourcing Externally

Most of the benefits in the drop shipments do not fall to the supplier. The company taking the order will have less inventory to carry and less of the costs that surround inventory: obsolescence risk, insurance, storage packing, and logistics. There are fewer steps in the delivery as the leg from the supplier to the company taking the order is eliminated. This should translate into shorter lead times.

Entering Orders

The transaction type has a default ship source type on it. This will be defaulted to the order line when it is entered. This determines that the line will be sourced by having purchase orders raised to fulfill the order line and not out of your own inventory.

Creating the Purchase Order

The creation of the purchase order goes through the requisition import process. To create requisition information available to purchasing, run the purchase release program. This picks up eligible externally sourced lines and creates entries ready for requisition import. Run Purchasing’s Requisition Import program to create purchase requisitions based on this information. You can set the profile PO: Release During Reqlmport to create releases each time you run the requisition import process. Ideally, you would construct a report set with the Create Purchase Release and Import Requisitions. After Requisition Import completes successfully, you can approve the requisitions to generate purchase orders.

You can verify sales order to purchase order correspondence in the Order Discrepancy Report to note any changes made after purchase release.

Recording the Receipt

When the drop shipment has been sent to the customer, the supplier can confirm the shipment through a phone call, an invoice, or an EDI document, such as an Advance Shipment Notice (ASN). You must process the receipt as if you were receiving into your inventory. This may be simply a ghost booking into inventory on the receipt and out of inventory on the shipment transaction. Navigate to the Receiving form in Oracle Purchasing. Though no physical receipt exists, a transfer of ownership and flow of costs does need to be recorded in your system. Once the order has been receipted, its shipment will be recorded, and it will be invoiced according to its assigned workflow.

Entering Configured Orders

Order Management comes with a graphical environment for the declaration of sales engineering rules and a graphical environment for the guided selection and validation of options. If the item being ordered is an ATO or PTO model, you can click the Configurator button to open the Configurator window and select options. You can view selected options along with their option classes from the Lines tab in the Sales Order form; however, you cannot modify the selections from the Sales Order form. To see (or hide) the configuration detail in the Sales Order form, click the Line Detail check box in the Tools menu.

Finding an Existing Item that Matches the Ordered Configuration

The default behavior of the system is to create a new configuration item for each model ordered. You can, however, search the system for an existing item that matches the ordered configuration. Once a match is found, the system will link the matched item to the sales order line. The order must be booked and scheduled, and a configuration item must not have been created for the order line. You need to set the profile BOM: Match to Existing Configuration to Yes. Oracle finds matching items using the descriptive elements in the item definition. If the way that you find existing configurations is different, you can set the profile BOM: Use Custom Match Function to the name of a PL/SQL function.

You can perform the match in a number of ways: From the sales order form, you can click the Actions button and choose Match or Create Configuration from the list of actions. Or, you can run the AutoCreate Configurations concurrent program.

If a match is found, the system links the matched item to the order line.

Processing Configured Orders

Processing a configured order goes through some additional steps. The configuration may be a unique specification, and the item information and supply need to be created. Functions needed in the configured order workflow are the following:

These are all supported in the seeded workflow Line Flow – Generic. Appropriate subsets of the functions are supported in Line Flow – ATO Model and Line Flow – ATO Item.

Once a configuration item is created for an ATO model order line, Order Management creates a new order line for the configuration item. The configuration item line goes through manufacturing and shipping processes while the ATO model line waits for the completion of those processes.

Making Changes to Orders for Configured Items

When you order a configured item, the item and the work order to assemble the item are linked to the order. The work order is reserved to supply the sales order, and the configuration item is added to the order as a new line. Any changes that apply to an order that may have a unique item being assembled to order are going to be difficult to process automatically. There are questions of whether the changes can be applied to the existing work order, disposition of work in progress, and whether the changes affect a BOM unique to the order. Oracle requires you to remove the link between the order and the item before making changes to the order line.

Oracle has recently introduced capability for some of the changes to be handled automatically by the Configure to Order (CTO) products. When making changes for a configured order, CTO is notified and, depending on the type of change, they are either handled or the configuration item is de-linked automatically.

Delink Configuration Item

In Oracle parlance, when you remove the association between the sales order line and the configured item, you de-link the item. Once the item is de-linked, you can make adjustments to the supply and re-link if you choose. You can de-link a configuration item from an ATO model line through the Sales Order form Action button - Delink Config Item. Clicking Delink Configuration Item will automatically unreserve the supply to the sales order if any exists.

If discrete jobs exist for the configuration item, they may be put on hold automatically, based on the setting of the WIP parameter Respond to Sales Order Changes. This allows you to take whatever corrective action you want for those jobs—you may want to cancel the job, modify it, or continue to build the original configuration.

Link Configuration Item

You can manually link a configuration item to an ATO model line through the Sales Order form Action Button – Link Config Item. This is useful when you want to ship a near match item or need to relink a configuration item back to the original model line after you de-link the configuration item.

Order Management E-Commerce Capability

Order Management supports integration, both through well-defined PL/SQL APIs and through the e-commerce gateway. You can use these capabilities in application-to-application integration and in business-to-business integrations. There are a range of technologies further down the technology stack that are relevant to the integration problem. Workflow has been extended to include a business event definition. Applications can publish events, and consumers of the events can subscribe to them. Transformation and messaging services exist within the application server.

E-Commerce Gateway and Order Import

Transactions that are handled as standard through the e-commerce gateway include

Transactions are handled for X12 and EDIFACT formats. The e-commerce gateway will load the order interface. To import orders, navigate to the import orders request and choose an appropriate order source to import. You can import orders in final or validate mode. You can review and correct orders in the import tables by navigating to the Orders, Import, Corrections form. If orders will not book, they can still be imported. You can correct booking errors in the Enter Orders form.

Order Management APIs

Order Management was one of the first users of the PL/SQL API standards. The user interfaces talk to the same API that the import program uses. The logic is centralized through three APIs: Get_Order, Process_Order, and Lock_Order. The Sales Order business object is comprised of several entities:

These entities are passed to the API as a set of PL/SQL tables of records. It is not only the import action that can be performed through the process order API. Any action that you can perform in the user interface you can perform through the API. For example, you could book an order. One of the parameters to the OE_ORDER_ PUB.PROCESS_ORDER. API is

p_action_request_tbl IN PL/SQL Table default G_MISS_REQUEST_TBL

request_type := OE_GLOBALS.G_BOOK_ORDER
entity_code := OE_GLOBALS.G_ENTITY_HEADER as booking is an
order level action.
entity_id := Header ID of the order to be booked. If the order
is also being created in the same call to process order, then
the user does not need to provide this value.

Summary

This chapter discussed the management of orders through the sales administration department in a company. It covered the main capabilities to enter and schedule orders. This chapter covered the ordering environment extending from manual entry of orders, to processing orders through EDI transactions, to tying together the planning systems of your customer into your ordering environments with Release Management.

The chapter reviewed how to manage delivery commitments. It reviewed how different types of items are treated by the promising systems and how Order Management works in a global ordering environment to give accurate available dates.

The multitude of systems that the ordering systems touch and feed, including the receivables and sales compensation systems, were examined. The chapter reviewed some special ordering flows to cover drop shipments and configurations. Finally, it reviewed the APIs that are the core of how Order Management works.