[Oracle Applications] Handling standard wastage (Shrinkage rate) in Oracle

Lets say we have a requirement where in every manufacturing job of 100 quantity ends up producing 80 quantity. You can define a shrinkage rate to describe expected scrap or other loss. Using this factor, the planning process creates additional demand for shrinkage requirements for the item to compensate for the loss and maintain supply.

For example, if you have a demand for 100 quantity and a discrete job of 40 quantity, the planning engine would suggest a planned order of 60 quantity. This would happen when there is no value populated in the "Shrinkage rate" field on Item Master (MPS/MRP planning tab)

Now going back to the business requirement mentioned above where every manufacturing job of 100 quantity ends up producing 80 quantity. If a shrinkage rate of 0.2 is entered in Item master, planning engine assumes that you lose 20% of any current discrete jobs and 20% of any suggested planned orders. 

Demand quantity  = 100

a. Discrete Job = 40

    Shrinkage = 20% of 40 = 8 quantity

    Net supply from Discrete Job = 40 minus 8 = 32 quantity

b. Net requirement balance: Demand qty - Net Supply = 100 minus 32 = 68

    Planning engine suggests a planned order = 68 divided by 0.2 = 85

    

Total Demand = 100 (original demand) + 8 (discrete job shrinkage) + 17 (planned order shrinkage) = 125

Total Supply = 40 (discrete job) + 85 (planned order suggested by planning engine)

Shrinkage is the wastage that happens while manufacturing finished goods.

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Posted By OracleOnDemand to Oracle Applications at 3/01/2011 03:08:00 AM

[Oracle Applications] What is EDI ?

EDI stands for Electronic Data Interchange

To understand the need for EDI, lets take a business flow and transactions involved. Company "C" is a manufacturer and regularly buys raw material from Supplier "S" that would typically involve below transactions for each purchase done. 

1. Buyer at Customer "C" enters a Purchase Order in his computer system
2. Buyer sends the PO through email or fax or mail to Supplier "S"
3. Sales team at Supplier "S" validates the PO to ensure that required information is provided
4. Sales team at Supplier "S" enters a Sales Order in his computer system
5. Sales team at Supplier "S" sends the Sales Order acknowledgment to Customer "C" through email or fax or regular mail

Imagine the cost, cycle time, money and risks of data entry errors involved in the above process. What if computer system at Customer "C" exchanges data with computer system at Supplier "S" using an intermediate communication link ? Yes, that's the idea behind EDI.


Organizations that send or receive documents between each other are referred to as "trading partners" in EDI terminology. Trading partners are free to use any method for the transmission of documents. Few of the transmission mediums used are Value Added Network (VAN), Internet/AS and Web EDI.


EDI translation software, popularly known as Translator, validates the partner and checks if the data received meets the standard formats defined before converting it to a desired file format which can be read and imported by the receiver's computer systems (for e.g. ERP)

EDIFACT & X12 are most widely followed EDI standards. The standards prescribe the formats, character sets, and data elements used in the exchange of business documents and forms. 

Oracle e-Commerce gateway (earlier EDI gateway) module helps organizations meet their EDI requirements with flexibility to use choice of your translator, EDI standard and yet tightly integrates with other modules from Oracle.

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Posted By OracleOnDemand to Oracle Applications at 2/20/2011 12:18:00 PM

[Oracle Applications] Creating warranty contract

When individuals or business buy products or equipments, manufacturers provide free warranty coverage for certain period of time. Oracle Applications provides a functionality to create warranty contracts on each serviceable products shipped from the manufacturer. 

To achieve the above functionality, you need to setup on the below:

1. Define Coverage (Service Contracts)

2. Mark the finished product as Install base trackeable & Enabled contract coverage (Inventory)

3. Define warranty item with warranty period (Inventory)

4. Include warranty item in the Finished Product Bill of Material (BOM)

Once you ship the finished product, it would create an item instance and subsequently create a warranty contract

Related Profile Options

OKS: Consolidate Warranty for Multiple Orders

Determines if an order for products with warranties, sold in Order Management, should be consolidated when the service contract is created. Similar warranties are grouped on a single contract rather than creating separate contracts

OKS: Contracts Validation Source

Allows the user to define the organization information that should be referenced when automatically creating a contract

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Posted By OracleOnDemand to Oracle Applications at 2/02/2011 08:19:00 AM