Oracle Inventory R12 New Features

Features

Deferred COGS Recognition

Note: This change is in support of a feature in another product. For more information, please refer to the Oracle Cost Management section of this document. Revenue managers are increasingly insisting on complying with International Accounting Standards (IAS- 18), which prescribes the accounting treatment for revenue arising from certain types of transactions and events. IAS18.14 in particular states that revenue arising from the sale of goods should be recognized when all of the following criteria have been satisfied:

• The seller has transferred to the buyer the significant risks and rewards of ownership;

• The seller retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits associated with the transaction will flow to the seller; and

• The costs incurred or to be incurred in respect of the transaction can be measured reliably.

It is critical, therefore, to de-couple the shipment of product and the recognition of COGS. Revenue should be recognized only when customer accepts the ownership of the goods.

With this enhancement, you have the flexibility to model the de-coupling the physical event of shipping goods from the recognition of COGS. Oracle Inventory can now defer the recognition of cost of goods sold until all contract contingencies have been fulfilled and revenue has been recognized in Oracle Receivables. In this manner both COGS and revenue are recorded in the same accounting period. This feature aids organizations where strict revenue recognition policies are in place.

Depot Repair Enhancements

Note: This change is in support of a feature in another product. For more information, please refer to the Depot Repair section of this document.

Different applications use Inventory's "move order" capability to create, update, allocate, and transact move orders. In certain business processes, it is required to invoke the "transact move order" screen to complete move orders and minimizing key strokes is key to a great user experience. With this release, different applications can invoke "transact move order" screen by passing the Inventory organization and Sales order information, and the system will directly show the results of the search criteria by completely  bypassing the 'find' screen and taking the user to the 'detail' screen.

Genealogy Enhancements

In many industries – due to predominant outsourcing, complex manufacturing of assemblies and regulatory requirements on product trace ability it may be necessary to identify and build a genealogy for each end assembly. This genealogy links the final assembly to the various Lot and/or serialized components manufactured or procured from suppliers, so that rejects/product defects can be traced back to the root cause. This trace ability can improve the handling customer complaints, streamline product recalls, retrace the source of any quality problems, etc. In order to support increased product composition visibility in Oracle Inventory, the lot and serial genealogy inquiries have been consolidated. Users now have a combined view of lot and serial genealogy in one inquiry. In addition, for Oracle Discrete manufacturing users, operators performing the WIP issue transactions can tie their component lot and/ or serial numbers with a parent assembly. If this data is entered, a user in the genealogy form can see the direct genealogy construct between the parent assembly lot and child component lots rather than using the WIP job as the connection between the products. As an additional failsafe measure, in order to preserve the integrity of the genealogy, Oracle Inventory will ensure that only the lots that were issued to the work order can be returned from the work order into inventory when performing a component return for a lot controlled item. Through a new tab on the genealogy form, users can now directly access Oracle Discrete or OPM Quality’s inspection results. For complex genealogies (or those of significant transaction volume), the same information available in the genealogy window is also available in a report.

Asset Tracking Transaction Attributes

Note: This change is in support of a feature in another product. For more information, please refer to the Asset Tracking section of this document. In order to enable Oracle Asset Tracking users to better track assets that are issued to or received from various field locations, users can now mandate entry of the location field while defining transaction types in Oracle Inventory. When users perform miscellaneous transactions for these transaction types, they are required to specify a field location from/to where the asset is being received or deployed.

Intercompany Invoicing of CTO on Internal Orders

In today’s business environment, customers are demanding products that are tailored to their unique specifications. Successful companies must provide customized versions of products, at any volume and ship them from/to anywhere in the world. The Oracle Configure to Order Solution can also be leveraged for customer orders as well as internal orders, thus enabling users to configure products required for internal transfers. For customers using Oracle's Configure to Order functionality on internal orders, Inventory's

Intercompany invoicing can now determine the invoice price for an internal order based on the model and the options chosen. This eliminates the need to pre-define the configuration on a price list and can leverage Oracle Advanced Pricing's capabilities to determine a more intelligent invoice price.

Ledger Architecture Support

Note: This change is in support of a feature in another product. For more information, please refer to the Oracle Financials section of this document. In order to support the new Ledger architecture in Oracle Financial Applications, Oracle Inventory now limits the accounts identified with an Inventory Organization, in the Organization Parameters form to be those accounts associated with the legal entity to which the inventory organization is assigned. An inventory organization still belongs to only one legal entity, however the transactions performed in that organization may use distribution accounts that are assigned to a different legal entity.

Legal Entity Support

Note: This change is in support of a feature in another product. For more information, please refer to the Oracle Financials section of this document. In today’s global economy, many multi-national corporations are pursuing shared service center and single instance initiatives to combine and consolidate business operations for multiple legal entities into one or fewer instances for efficiency and economies of scale. Currently, many of these legal entity attributes are defined at the operating unit, set of books, or some other level which makes it challenging and cumbersome to effectively perform accounting and reporting for an establishment (legal entity).With this Legal entity uptake, Oracle Inventory provides a mechanism whereby all transactions and accounting are based and validated from the new ledger–legal entity instantiated through the accounting flow setup.

This integrated approach facilitates further consolidation of data at an establishment (legal entity) level and eases financial accounting and reporting.

Material Workbench Enhancements

Viewing material in the facility is one of the most important tasks in a warehouse. Having a quick and accurate picture of inventory levels across organizations can allow warehouse managers to make informed decisions regarding the routing of inventory supply and demand.

In order to allow advanced viewing capabilities, the Material Workbench now lets a user see material across organizations categorized into three "buckets":

• Inbound Intransit

• Receiving

• On-hand

Visibility to Purchase Orders, Advanced Shipment Notices, and Internal Orders through one form greatly increases the information available and facilitates better decision making. In addition to the summary view, the Workbench allows the user to drill down into each of the individual "buckets" to see detailed information about all material represented. Availability information is calculated according to the material location of relevant material for Inbound Intransit, Receiving, and Onhand material. Finally, users can save their queries and allow others to reuse common inquiries. These changes allow the business to have better information related to their inventory levels that is grouped in such a way as to maximize the ability to make effective decisions.

Multi Org Access Control

Note: This change is in support of a feature in another product. For more information, please refer to the Oracle Manufacturing section of this document. In order to support the new operating unit access control flexibility within the e-Business suite which allows a user to view data across a set of operating units, Oracle Inventory now allows users to perform project issue and receipt transactions for any project defined in the set of operating units to which the user has access.

OPM Convergence

Over 40% of the world's manufacturing companies are process manufacturers. Companies that produce metals, paper, chemicals and foods face unique challenges in inventory and product quality and attribute tracking. Historically, customers in these industries have leveraged the Inventory Management module of Oracle Process Manufacturing. With this release, Oracle Inventory can now be used by customers of Oracle's Process Manufacturing modules in addition to the users of Oracle Discrete Manufacturing, Service, Logistics and all other applications modules. This integration provides the Oracle Process Manufacturing user seamless integration with the rest of the E-Business Suite. In order to support the needs of process manufacturing organizations, several additional features have been added to Oracle Inventory as described below (namely dual unit of measure control, advanced lot tracking, enhanced picking rules and enhanced material allocation processing). These features will be available for all users of Oracle Inventory, regardless of their manufacturing orientation. Note, however that not all modules in the e-Business Suite will support all of the features below (for example dual unit of measure control). To determine if a new Oracle Inventory feature will be supported by another Oracle application, please refer to that application’s section of this document.

Dual Unit of Measure Control

In the meat, poultry, metals or chemicals industry, "catch weight" is a term used to track inventory simultaneously in two different units of measure. To run their businesses, these industries need to know both the number of cases, bars or drums of product stored as well as the weight or potency of that product. Prices are calculated based on the shipment weight of the product not on the number of cases or units shipped. Oracle Inventory's Dual Unit of Measure Control enables users to transact inventory in two unrelated units of measure where the conversion between the measures vary from lot to lot or from one transaction to the next. If an item is dual unit of measure control enabled, during transactions, users will be prompted to enter the transaction quantity in both units and will be able to query on-hand balances, availability and reservations in both units for full supply chain visibility to all required handling units of measure. Note that dual unit of measure control is available in Oracle Inventory, Purchasing & Receiving and Order Management and Shipping. To determine if other modules in the Oracle e-Business Suite support this functionality, please refer to each product’s Release Content Document.

Material Status Control

Quality Control and product lifecycle issues may require that certain material, although stored in a ready to use state in the warehouse or production facility, may not be usable for certain applications. A lot that has not yet passed inspection should not be shipped to

a customer or consumed in production. A warehouse location that has been discovered to have erroneous inventory balances should not be included in available to promise calculations. The functionality previously only available to Oracle Warehouse Management users that enable users to assign a material status to the material in an inventory lot, serial, subinventory or locator and to use that status to restrict transactions is now available to all Oracle Inventory users. Those material statuses will dictate which transactions can be performed on the lot, the serial or the material that is stored in the subinventory or locator. In addition, Oracle's planning applications and Inventory's availability calculations can now take the material status into consideration when determining availability. Users can determine whether or not product of a particular status can be reservable, included in ATP calculations or netted in production planning. Using material status warehouse employees, materials managers, production planners and customer service representatives will be provided with a more granular and accurate picture of the inventory that is available for them to use for each business purpose. Note that not all Oracle Applications will support the material status restrictions. To determine if an individual module in the e-Business Suite will support this functionality, please refer to that product’s section of this document.

Advanced Lot Control

Getting fast answers to certain questions may determine whether your company will survive a crisis. Questions such as'Which lots were delivered to which customers’? Which other lots were produced from that production line during that shift? What was the quality of the components or ingredients and which suppliers sent them?' To enable better visibility to a lot, its genealogy and attributes, significant enhancements have been made to the lot tracking capabilities within Oracle Inventory. Sub-lot control allows users to track the parent lot from which multiple lots were created. The parent lot may refer to the production batch that spawned the lot but, if the output of that batch varied in term of grade or other QC attributes, multiple sub-lots might be received into inventory. Users can query lots in by their parent lot and view the parent lot in the lot genealogy form.

Users can also now grade control their lot controlled items. The product can be queried by grade and the grade can be changed as required. Users can also track retest dates, expiration and retest actions among other lot attributes. In addition, a new concurrent request in Oracle Inventory can initiate a workflow if a lot or serial approaches any key milestone dates such as expiration, retest or best-by date. The genealogy form has also been enhanced to allow users to view quality inspection results, material status and grade change history and other information about the lot. These features and more will provide materials managers with the tools they need to enable faster turn around on quality, customer care and production issues.

Picking Rules Enhancements

Providing optimum customer service in an order fulfillment operation often requires that

a warehouse or manufacturing facility be able to capture each customer’s individual product quality or material characteristics preferences. For example, a customer may require premium grade material while another, more price sensitive client, may have no such restrictions. Some customers may mandate a certain number of usable days left on product that is to be shipped to them. To manage these customer restrictions, the Oracle inventory picking rules engine has been enhanced to incorporate certain restrictions on allocation logic in addition to the sort criteria for acceptable material. These restrictions are available for both sales order and work order allocation processes. With this functionality, a customer service representative can now guarantee that unacceptable product will not be shipped to a customer based on each customer’s individual product preferences.

Enhanced Manual Material Allocations

Often, in smaller warehouses or facilities, inventory managers or material pickers enjoy the flexibility of selecting, for themselves, the inventory that should be picked for a given customer, work order or material transfer. The material picked should still honor customer restrictions but may not be the product that the system would have selected first. This product may be physically more accessible or more desirable for other reasons not visible to Oracle Inventory. In order to better facilitate manual allocation processes, the transact move order form can now present all allocation options to a user and allows the user to choose the allocations that he or she wishes to commit. This ensures that the allocations made honor the customer restrictions but still allows the warehouse operator the flexibility to choose the material that is most accessible for picking.

Material Aging Workflow

A significant aspect to any materials management business process that involves product with a limited shelf life is the management of expired or near expired material. In the simplest case, this product requires disposition and disposal. In some product categories, rework or refurbishment could further extend the usable life of the product. In all of these cases, however, the product must be located, isolated and proactively managed.

In order to better support these business processes, Oracle Inventory has introduced a new material aging workflow. This workflow can be leveraged to create work orders, send notifications to planners, update material status or request a movement of expired product to a quarantine or inspection area. This functionality is offered in a new con-current request in Oracle Inventory which can search for any date attribute of a lot or serial (including flex fields) and will initiate the workflow for the lot or serial if the date attribute is within a user specified range around the current date. For example, the request could initiate the workflow for all lots that will expire in the next 5 days. Using this material aging functionality, materials managers can set up proactive handling procedures for date sensitive material.

Support for Indivisible Lots

In many industries, a single lot of product cannot or should not be physically broken into pieces for material movements. Examples might include lengths of metal pipe, reams of paper or rolls of carpet. In some cases, it would not be physically possible for a warehouse picker to break the product into two pieces, as in the case of metal sheets, coils or bars, to meet the exact customer order quantity. In other cases, color, potency or other attributes of lots may vary slightly such that there would be a noticeable variation in product and, hence, a warehouse might prefer to over or under ship on product rather than breaking a lot into partial quantities and being forced to ship a remnant with another order. In order to support items that fall into this profile, Oracle Inventory has introduced the concept of lot indivisibility. This item attribute will indicate to the system that, during reservations and allocation, the system must allocate the entire lot quantity in a given location or none at all. In order to meet this requirement, over and under allocation, within tolerances, will be supported automatically at pick release for indivisible lots. but Oracle Inventory will not suggest these splits during allocation and any reservation created will have to specify the lot to be reserved and will have to reserve the full lot quantity.

Enhanced Lot Transactions

Companies who leverage Oracle Shop Floor Manufacturing to manage their semiconductor or other high technology assembly and fabrication processes have traditionally used lot control tracking on their finished goods and components. Some may choose to also serial control their finished goods. In order to support both lot and serial controlled items in typical high tech business processes, Oracle Inventory's lot split, merge and translate transactions can now be performed on items that are both lot and serial controlled.

Organization Parameter Changes

Additional inventory organization attributes have been added to the Inventory Organization Parameters form in order to enable new functionality in Oracle Inventory R12 Logistics Release Content Document, Rev. 00 Inventory Management 10 and Oracle Warehouse Management. These new features include labor reporting, locator aliasing, EPC compliance support for RFID tagging, chargeable subcontracting and best fit quantity allocation. For more information on each of these features, please refer to the respective feature descriptions in the Inventory and Warehouse Management sections of this document.

Performance - Pick Release Parallelization

Today, the speed with which a system can release picks to the warehouse floor determines the start time for the order fulfillment process. In high volume order fulfillment operations, the ability to release orders as quickly as possible is of paramount importance to warehouse managers. In order to further support high volume facilities, pick release can now be run in a parallel or multi-threaded manner. This enables each item or ship set in the released batch to be allocated simultaneously so that the entire batch can complete in a more timely manner without sacrificing Oracle's built in comprehensive management for pick slip grouping and document printing, cartonization, ship set validation and other adaptive order fulfillment features.

Enhanced Reservations

In certain business models, specific supply is secured for a given end customer order. In these cases, availability can be guaranteed by creating reservations against on hand inventory or the purchase order or work order that were created to fulfill the customer order. Warehouse managers may want to use a specific lot being built in manufacturing or an item expected on a purchase order for a sales order or any other demand to ensure availability. This feature facilitates planned cross docking in the warehouse and allows it to meet its cross docking objectives by reserving the most appropriate inbound receipts for an outbound shipment  Oracle Inventory's reservations model now supports reservations to expected supplies such as purchase orders, internal requisitions, advanced shipment notices, manufacturing jobs, and process manufacturing's batches. New demand sources, such as parts for CMRO work orders and process manufacturing are also supported for reservations. Users can create these reservations through Inventory forms and public APIs. In addition, users can now reserve a specific serial number and Oracle Inventory will ensure that the reserved serial is allocated at pick release.

Copy Organization Enhancements

The Copy Inventory Organization feature is enhanced for performance, and now allows users to copy the following entities:

• Planning Parameters

• Shipping Parameters

• WIP Parameters

• WIP Accounting Classes

Telco Recurring Charges

Note: This change is in support of a feature in another product. Please see the associated RCD for more details.