Surviving Assemble-To-Order With Outside Processing InOracle E-Business Suite<br />Eric Guether<br />eguether@gmail.com<br />
Objectives<br />Explain the business case that led us to replace a Finished Goods Buy turnkey solution with an Assemble-To...
Scope<br />Release Scope:<br />EBS 11i functionality via 11.5.10.2 examples<br />Should be completely applicable to EBS Re...
Opnext Lasers: From Chip to Consumer<br />Datacom<br />Telecom<br />Industrial<br />Applications<br />
Business Case<br />Redesign the outsourced manufacturing process for families of lasers [finished good] using common subas...
1st PO: Order Subassemblies on Forecast<br />Issue a Standard PO to the CM for the common subassembly 12 weeks in advance ...
Clarification<br />In this specific business case, the subassembly and the finished good are made by the same 3rd party co...
2nd PO: Assembly of Ordered FG Items<br />Issue a PO to the CM to assemble the FG item once a firm customer SO is booked<b...
System Solution for FG Assembly<br />ATO Make Functionality<br />Set up the FG item as an ATO Make item<br />OM Assemble t...
SO – WIP Job – OSP PO Relationship<br />
SO Workflow Controls ATO Functionality<br />Seeded Order Mgmt. sales order (SO) workflow (WF) initiates the creation of th...
SO Line Workflow Assignment<br />
ATO Sub-Process Added to SO WF<br />
More on OSP Functionality<br />WIP module functionality to ship out parts (example: SA999) for assembly services typically...
Standard Costing<br />Standard Cost of ATO Make FG item =<br />Material Cost of Subassembly<br />+ Outside Processing Reso...
Transaction Walkthrough<br />Manual Process or Automated Interface<br />Automated Process<br />Optional: Manual or Automat...
Step 1: OM Sales Order Booked<br />OM WF changes the SO line status from ‘BOOKED’ to ‘SUPPLY_ELIGIBLE’<br />
Step 2: Discrete WIP Job Created<br />Changes the SO line status to ‘PRODUCTION_OPEN’<br />
Sales Order Reservation via WIP Job<br />
Sales Order Reservation via SO Line Actions<br />
Step 3: OSP Step Generates Requisition<br />
Step 4: AutoCreated OSP PO<br />
Step 4: Distribution on AutoCreated OSP PO<br />
Step 5: OSP PO Receipt Transaction<br />
Step 6: WIP Job Automatically Completed<br />
Step 7: ATO Item Added to Inventory as Reserved / Subassembly Consumed<br />Changes the SO line status to ‘AWAITING_SHIPPI...
Step 8: WIP Job Closed by Request<br />
Issue # 1: OSP Functionality<br />PO Confusion<br />The OSP PO under the typical EBS OSP set-up showed a 'fake' OSP servic...
Issue # 1 Solution: ATO Item = OSP Item<br />Set up the ATO Make FG item also as the outside processing item in lieu of us...
Setting the ATO Make Item as an OSP Item<br />
Linking the OSP Item to the Resource<br />
Linking the Resource to the Routing<br />
Issue # 2: Insufficient Component QOH<br />OSP PO receipt recorded even when insufficient SA component qty existed in the ...
Issue # 2  (continued)<br />Impact:<br />WIP job never completed (remained ‘Released’)<br />ATO Make FG item never added t...
Issue # 2 Solution: Personalization Control<br />Created a Forms Personalization to check for sufficient SA component quan...
Issue # 3: Synching Up SO Changes<br />If the quantity or date on an ATO Make SO line changed, or the line was cancelled, ...
Issue # 3 Solution: SO Change WF E-Mail<br />Enable a seeded EBS OM WF notification that is  triggered whenever an ATO Mak...
Issue # 3 Solution: Planners Setup<br />
Issue # 3 Solution: Seeded WF Notification<br />
Conclusion<br />ATO Make with Outside Processing is a cost-effective, cross-module solution that addressed our business is...
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Oracle EBS: ATO with Outside Processing

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Oracle EBS ERP user group presentation. Originally presented in April 2008 at the COLLABORATE 08 conference in Denver. Addresses EBS 11i but relevant to R12!

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Oracle EBS: ATO with Outside Processing

  1. 1. Surviving Assemble-To-Order With Outside Processing InOracle E-Business Suite<br />Eric Guether<br />eguether@gmail.com<br />
  2. 2. Objectives<br />Explain the business case that led us to replace a Finished Goods Buy turnkey solution with an Assemble-To-Order (ATO) Make process<br />Walk through the process that combines discrete WIP jobs – created by ATO – with outside processing (OSP) in the E-Business Suite (EBS)<br />Share lessons learned, including forms personalizations and workflow notifications<br />
  3. 3. Scope<br />Release Scope:<br />EBS 11i functionality via 11.5.10.2 examples<br />Should be completely applicable to EBS Release 12<br />Not Covered in this Presentation:<br />Step-by-step configuration<br />ATO Buy scenarios<br />Also called Procure-To-Order or back-to-back orders<br />Configure-To-Order (CTO) using Oracle Configurator<br />Usage of Internal Requisitions / Internal Orders<br />Impact on planning [MRP / Master Scheduling / ASCP]<br />
  4. 4. Opnext Lasers: From Chip to Consumer<br />Datacom<br />Telecom<br />Industrial<br />Applications<br />
  5. 5. Business Case<br />Redesign the outsourced manufacturing process for families of lasers [finished good] using common subassembly (SA) components<br />Designed SA could be used as the key component for all lasers within a product family<br />Configuration lead time to convert the SA into a finished good (FG) = 2 weeks<br />Common subassembly represented 90% of the total manufacturing time and cost of the finished good<br />Based on assumption that we could forecast product family demand better than specific products<br />
  6. 6. 1st PO: Order Subassemblies on Forecast<br />Issue a Standard PO to the CM for the common subassembly 12 weeks in advance based on product family forecasts<br />Has nothing to do with ATO functionality<br />PO creation driven by MRP planning<br />The 3rd party contract manufacturer (CM) would build the subassembly (SA) and bill us, then hold the SA on consignment until it is needed to configure the FG<br />The SA would be added to our Oracle Inventory when built even though it was physically at the 3rd party CM location<br />
  7. 7. Clarification<br />In this specific business case, the subassembly and the finished good are made by the same 3rd party contract manufacturer.<br />The solution presented, however, is equally applicable to scenarios where:<br />You ship the part / subassembly from your own warehouse (whether you made that part or not), or<br />You have the part / subassembly made by one 3rd party firm and then shipped directly to another 3rd party contract manufacturer to perform the final assembly<br />
  8. 8. 2nd PO: Assembly of Ordered FG Items<br />Issue a PO to the CM to assemble the FG item once a firm customer SO is booked<br />Should be triggered, directly or indirectly, by the booking of a customer SO<br />Like Assemble-to-Order (ATO) functionality!<br />Completion of assembly services needs to consume the SA (previously ordered & built) from our Oracle Inventory<br />Like Outside Processing (OSP) functionality!<br />
  9. 9. System Solution for FG Assembly<br />ATO Make Functionality<br />Set up the FG item as an ATO Make item<br />OM Assemble to Order flag = ‘Yes’ [checked ON]<br />General Planning Make or Buy flag = ‘Make’<br />Build in WIP flag = ‘Yes’ [checked ON]<br />Booking of a SO triggers creation of a discrete WIP job<br />Outside Processing<br />Routing on the WIP job will have an OSP step<br />Creates a PO (“the 2nd PO”) for the FG assembly via an OSP purchase requisition<br />Causes the WIP job to consume the SA<br />
  10. 10. SO – WIP Job – OSP PO Relationship<br />
  11. 11. SO Workflow Controls ATO Functionality<br />Seeded Order Mgmt. sales order (SO) workflow (WF) initiates the creation of the discrete WIP job<br />WF links the SO line to the discrete WIP job<br />Completion of the WIP job creates a reservation against the FG inventory for the SO line that spawned the WIP job<br />
  12. 12. SO Line Workflow Assignment<br />
  13. 13. ATO Sub-Process Added to SO WF<br />
  14. 14. More on OSP Functionality<br />WIP module functionality to ship out parts (example: SA999) for assembly services typically to a 3rd party<br />Expect to receive back an assembled item (LASER123) and incur an OSP resource charge<br />Ultimately consumes the parts (SA999) shipped out<br />Creates PO reqs that generate OSP POs<br />OSP POs typically sent to supplier providing services<br />Item on PO is a 'fake' (non-physical) OSP services item in your item master, not the assembled item received back<br />PO unit price is the price for OSP services, not the full value of the assembled item<br />
  15. 15. Standard Costing<br />Standard Cost of ATO Make FG item =<br />Material Cost of Subassembly<br />+ Outside Processing Resource Charge<br />Example: Standard Cost of LASER123 =<br /> $900 Material Cost of Subassembly (SA999)<br />+ $100 OSP Resource Charge<br />$1,000 Rolled-up Std. Cost of LASER123<br />
  16. 16. Transaction Walkthrough<br />Manual Process or Automated Interface<br />Automated Process<br />Optional: Manual or Automated<br />
  17. 17. Step 1: OM Sales Order Booked<br />OM WF changes the SO line status from ‘BOOKED’ to ‘SUPPLY_ELIGIBLE’<br />
  18. 18. Step 2: Discrete WIP Job Created<br />Changes the SO line status to ‘PRODUCTION_OPEN’<br />
  19. 19. Sales Order Reservation via WIP Job<br />
  20. 20. Sales Order Reservation via SO Line Actions<br />
  21. 21. Step 3: OSP Step Generates Requisition<br />
  22. 22. Step 4: AutoCreated OSP PO<br />
  23. 23. Step 4: Distribution on AutoCreated OSP PO<br />
  24. 24. Step 5: OSP PO Receipt Transaction<br />
  25. 25. Step 6: WIP Job Automatically Completed<br />
  26. 26. Step 7: ATO Item Added to Inventory as Reserved / Subassembly Consumed<br />Changes the SO line status to ‘AWAITING_SHIPPING’<br />
  27. 27. Step 8: WIP Job Closed by Request<br />
  28. 28. Issue # 1: OSP Functionality<br />PO Confusion<br />The OSP PO under the typical EBS OSP set-up showed a 'fake' OSP services item as the ordered item, not the item number of the ATO Make FG item<br />Example: The PO showed an ordered item number of ‘OSP_SERVICES’ for services to build item LASER123<br />How would the CM know which FG item to assemble based on ordered item ‘OSP_SERVICES’?<br />Receiving Confusion<br />Receipts against an OSP PO were recorded against the 'fake' OSP item despite physically receiving the FG item<br />
  29. 29. Issue # 1 Solution: ATO Item = OSP Item<br />Set up the ATO Make FG item also as the outside processing item in lieu of using a 'fake' OSP services item<br />Allowed the OSP PO to show the assembled item (LASER123) as the ordered item<br />Receipts for the OSP PO were made against the physically-received item (LASER123)<br />Suggested by our consultant from Colibri<br />No Oracle documentation addressed this alternative <br />
  30. 30. Setting the ATO Make Item as an OSP Item<br />
  31. 31. Linking the OSP Item to the Resource<br />
  32. 32. Linking the Resource to the Routing<br />
  33. 33. Issue # 2: Insufficient Component QOH<br />OSP PO receipt recorded even when insufficient SA component qty existed in the supply subinv.<br />An issue for Opnext only because we did not push the SA component to the WIP job<br />SA supply type = ‘Assembly Pull’ for 2 reasons:<br />Typically, we wanted the WIP job to pull the SA component automatically without user interaction<br />WIP user occasionally needed to substitute the SA<br />
  34. 34. Issue # 2 (continued)<br />Impact:<br />WIP job never completed (remained ‘Released’)<br />ATO Make FG item never added to Inventory<br />No notification of error on the WIP_MOVE_TXN_INTERFACE table<br />OSP PO was closed for receiving if fully received<br />
  35. 35. Issue # 2 Solution: Personalization Control<br />Created a Forms Personalization to check for sufficient SA component quantity<br />Error condition prevented the recording of the PO Receipt<br />
  36. 36. Issue # 3: Synching Up SO Changes<br />If the quantity or date on an ATO Make SO line changed, or the line was cancelled, the change was not automatically made to the WIP job nor the OSP PO<br />Relied on a user to manually synch up the WIP job and OSP PO to the modified ATO SO line<br />How an a user detect the need to synch up?<br />
  37. 37. Issue # 3 Solution: SO Change WF E-Mail<br />Enable a seeded EBS OM WF notification that is triggered whenever an ATO Make SO line changes or had been cancelled<br />Designed to alert the planner<br />The ATO Make FG item had to be assigned a Planner code in the ship-from org (warehouse)<br />Assigned Planner code needed to be linked to an employee<br />
  38. 38. Issue # 3 Solution: Planners Setup<br />
  39. 39. Issue # 3 Solution: Seeded WF Notification<br />
  40. 40. Conclusion<br />ATO Make with Outside Processing is a cost-effective, cross-module solution that addressed our business issues<br />The solution can be implemented in an existing EBS 11i or R12 instance using mostly, if not exclusively, in-house resources<br />Forms Personalizations, workflow notifications, and custom Discoverer queries were needed to assist users in monitoring this solution<br />

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