Enhancing Oracle Outside Processing Functionality

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Enhancing Oracle Outside Processing Functionality

  1. 1. Enhancing Oracle Outside Processing functionality Presenter: Mayuresh Atre Representing: KPIT Infosystems, Inc. mayuresh.atre@kpitcummins.com Session ID: 9125
  2. 2. About Presenter Mayuresh AtreOracle Apps Lead Functional ConsultantA Mechanical Engineer having 15+ years of experience inManufacturing and IT in supply chain domain withspecialization in purchasing, production planning, inventoryand warehouse management in auto components & DieselEngine Manufacturing IndustriesMayuresh has implemented oracle 11i EBS suite at varioussites across geographies for a leading diesel enginemanufacturing company and leading a team of 15 OracleApps functional consultants for KPIT Cummins infosystem ltd
  3. 3. Contents Introduction to Oracle Outside Processing (OSP) Enhanced OSP (E-OSP) Process Oracle Setups Features Case Study Business Benefits Q&A
  4. 4. Traditional Flow Total cost =Raw Material (RM) $10+$2+ OSPSupplier Overheads PO for RM Item OEM PO for OSP Buy @ $ 10 Supply RM Item Item Supply RM Item Supply FG Item, buy @ $2 OSP Supplier
  5. 5. What is OSP ?• Is a means of providing supplier-sourced process and components as an integral part of the manufacturing process• OSP refers to the process of entering into a contractual agreement with a Supplier to perform a certain amount of work, optionally performed with contractor material• In practice most Outsourcing arrangements are based on the potential to save costs and address capacity issues as suppliers are likely to have lower overheads, variable costs and spare capacity• Oracle Apps provides OSP functionality through which such Business process can be mapped
  6. 6. Traditional Scenario OEM PO for OSP Receipt of Receiving PO For item, Supply of OSP item RM item RM item RM item OSP Supplier RM Supplier• This is a typical Business Scenario where RM items are bought from RM Supplier only to be processed by OSP Supplier to convert them into FG items• OEM creates WIP Job for FG Item which triggers purchase of OSP Item from OSP Supplier• Once RM items are bought, ownership stays with OEM though material is processed by OSP Supplier
  7. 7. Oracle OSP ProcessRaise PO for RM Dispatch RM Receive OSP Item on RM Item to OSP Item from OSP Supplier Supplier SupplierReceive RM Item Create PO for Move & at OEM OSP Item on Complete WIP premises OSP Supplier Job Create WIP Job Move WIP Job Inventorize &for FG Assembly to OSP Process Costing
  8. 8. Oracle IntegrationOracle Inventory Oracle Bills of MaterialOracle Cost Mgmt Oracle Mobile Supply Chain Oracle Outside ProcessingOracle Work in Process Oracle Purchasing
  9. 9. Oracle OSP Functionality• Consists of the use of OSP items in resources to model supplier- sourced services• OSP resources are used to schedule and cost supplier-sourced services within manufacturing routings• OSP allows for routing operation steps to be converted into purchase requisitions where the required line item is the OSP item• WIP automatically requisitions material and purchase orders are charged directly to work orders• Fully integrated and closed loop solution
  10. 10. Challenges• Too many setups involved – Work In Process, Bills Of Materials, Purchasing• OSP is predominantly a Purchasing process however most controls are in WIP• Additional transactions in order to receive material twice• Material delivery to OSP Supplier is manually controlled• No visibility of OSP item requirements to Supplier until Work Order is generated• Additional material handling due to Receiving and Shipping of RM items incase there are no operations being carried out at OEM
  11. 11. Enhanced OSP Flow Total cost =Raw Material $10+$2+OSPSupplier Overheads PO for RM Item OEM Supply FG PO for OSP Item, buy @ Item $2 Buy @ $ 10 Supply RM Item OSP Supplier
  12. 12. Enhanced OSP Process OEM Receipt of PO For service item, PO For OSP item Supply of RM item RM item Supply & Receipt OSP Supplier RM Supplier RM item• Modified BOM structure compared to seeded OSP process• System generates visibility for OSP & RM Item through planning process• Ability to receive RM Items at OSP Supplier• OEM creates WIP Job for FG Item once OSP Item is received and get auto-completed
  13. 13. E-OSP Process PO for RM, OSP1 Items on Suppliers (Scheduling) Receive RM Item Inventory &2 5 at OSP Supplier Costing Receive OSP Item Create and3 from OSP Supplier Complete WIP Job 4 at OEM Premise for FG Item
  14. 14. E-OSP Integration Oracle PlanningOracle Inventory Oracle Bills of MaterialOracle Cost Mgmt E - OSP Oracle MSCAOracle Work in Process Oracle Purchasing Oracle QualitySolution framework within Oracle supported processes
  15. 15. Required Setups• Items, BoM, Lead times setups• Multiple Locations to deliver RM Items on PO• Multiple Supplier sites for RM Supplier• Quality Plans to control : – Relationship between RM & OSP Suppliers – Defaulting Deliver-to location at OSP Supplier & OEM performing PO Receipt – Maintaining setup data for automatic WIP transactions – Control Deliver-to location for non-conforming products• Customization for Receiving at OSP Supplier• Customization for WIP Job creation & Completion for FG Item
  16. 16. Key Setups Sample BOM • OSP Items are setups as Inventory Items • Drive visibility to OSP SupplierKey Highlights • Use of other features of BOM viz. Backflushing, Alternates, costing simulation etc.
  17. 17. Key Setups Quality PlanPARENT Quality Plan maintains setup/defaultinginformation related to RM Item Receiving process atOSP Supplier & WIP Job creation of FG Item CHILD Quality Plan maintains relation between RM & OSP Supplier used to control Receiving of RM Items at OSP Supplier
  18. 18. Customization for Receiving• Use of Custom/Personalize restricting access to Subcontractor Built in Security• Restricting display of sensitive information to Subcontractor• Using Security Attributes to allow access to Subcontractor in case of Form Receiving or Receiving through i-Supplier
  19. 19. Customization for WIPCustom Program converts OSP to FG Items through the WIP process – OSP Items can be segregated based on criteria like User Item Type, Item Category, Item Catalog , Naming Convention – Program checks for Deliver transaction of OSP Items at OEM – OSP Items are grouped and parent assembly (FG Item) for each OSP Item is derived from BOM definitions – WIP Jobs are created, completed & closed for grouped FG Item quantities automatically – Job details are defaulted from PARENT quality plan
  20. 20. E-OSP Features1. Supplier Scheduling (RM & OSP Supplier)– Integrated solution using Oracle Planning engines like MRP, ASCP– Visibility to OSP Supplier for requirements through Purchase Orders and Forecast– Orders on RM & OSP Suppliers are controlled by lead time– Creating multiple Supplier sites incase single RM Suppliers supports multiple OSP Suppliers supplying same or different RM Items– OSP Supplier Capacity mapping incase of Constraint Planning– Integrated with advance Supplier communication methods like i- Supplier, e-Commerce gateway etc.
  21. 21. E-OSP Features2. Receipt of RM Items at OSP Supplier– Restricted access to Oracle Receiving to allow manual PO Receipt of RM Items at OSP Supplier– Maintain relationship of OSP Supplier & RM Supplier– Maintain and default Deliver-to location at OSP Supplier– Real time Inventory visibility– Automate PO Receiving by 3rd party integration with OSP Supplier system– Customize i-Supplier functionality to view ASN from OSP Supplier and perform PO Receipts
  22. 22. E-OSP Features3. Receipt of OSP Item at OEM– Use of seeded PO Receipt form– Receiving Location defaulting logic for OSP Items– Controlling Deliver-To location based on Inspection results– For WMS enabled Org, configure Putaway rule to control Deliver- To location
  23. 23. E-OSP Features4. Automated WIP completion of FG Item – Trigger or schedule based automated WIP Completion process on Deliver transaction of OSP Item at OEM – Maintain unique WIP related information for OSP supplier – Online transactions and real time Inventory visibility – Auto-Segregation of Accepted and Rejected FG Items
  24. 24. Applicable Scenarios• OSP operation is at the start of Manufacturing process• Outsource Assembly operation to OSP Supplier• Multi-level Subcontracting eg. Machinist sending components to Heat treatment Subcontractor for further processing
  25. 25. Case StudySolution is implemented at a Major Auto ComponentManufacturing Company in UKBusiness Scenario – Supply Chain scenario covers 2 OSP Machinist Suppliers supported by 5 different foundries – OSP Suppliers situated in proximity of OEM – 1000+ OSP Items supported by this processBusiness Benefits Overall Lead time to tune of 5 days – Reduction of – Reduced transaction load in Warehouse – OSP requirements visibility to OSP Supplier – Auto-Segregation of Accepted and Rejected FG Items – Overall TCO reductionEfficient, responsive and dependable Supply Chain
  26. 26. Benefits of E-OSPVisibility of OSP requirements over planning horizonReal time Inventory trackingReduction Material handlingReduced Supply Chain lead timeReduced process steps resulting in reduced efforts tomanage the Supply ChainTCO reduction
  27. 27. Any Questions
  28. 28. T h a n k Y o u !!!Please write to Mayuresh Atre for anyqueries or questions that you may haveEmail : mayuresh.atre@kpitcummins.comPhone Easy ReachDesk Phone: +91 20 6652 5000 ext 2195Cell Phone: +91 960 417 5715

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