Monday, May 11, 2009

Oracle EBS R12 sourcing rules

When you are deploying a Oracle E-Business Suite instance in a major enterprise, or a company with many different locations you most likely will have to spend some time on sourcing. In cases a company has only 1 or 2 warehouses you will have a simple task. items are purchased from a supplier and shipped to one of the warehouses. However in most cases life is not as simple as that, when you are dealing with a large enterprise which is running operations in several countries or when you for example are working deploying at a company with a lot of locations in a single country you will have to think about how goods are purchased and distributed inside the company.

For a test I was asked to look into the following scenario which I tested on Oracle E-Business Suite Release 12 instance running the Vision demo environment. A company has multiple organizations defined in Oracle (for this example we use the Netherlands and Germany). In The Netherlands there are several regional warehouses defined in Oracle and in Germany (which is a separate organization in the instance) also a warehouse is defined. Only one warehouse is purchasing the item from a supplier.

Some warehouses are sourcing the goods from the warehouse which is sourcing from the supplier and others are sourcing again from them or from a sub-inventory in Germany. In this example we have only setup a single item to be handled like this. to setup the sourcing of a item per subinventory in Oracle E-Business suite your first query the item of the specified organization in the Item Master under the Oracle Inventory responsibility. When you have queried the item you go to "Tools" and "Item Subinventories".

In the above screenshot you can see that there are min-max quantities set, this however is not mandatory. For the purpose of the inventories always having enough stock available I set them so that min-max planning in Oracle e-Business suite will make sure that enough stock will be at every location.

However, the main interest of this test was setting the sourcing rules, as can seen in the below screenshot their is setup a way of distributing the item and making some subinventories source it from a other inventory or subinventory or a supplier site.

As can been seen subinventory "WH Amsterd" is sourcing from the supplier, this means that if the stock is dropping below the minimum min-max quantity it will purchase new goods from the supplier. Subinventories "WH Rotterd" and "WH Eindeho" will source it from the amsterdam warehouse. The warehouses "WH Meppel" and "WH Utrecht" will source from "WH Groning" which in his turn will get the goods from a different organization. As can seen the sourcing rules for "WH Groning" are set to source the goods from organization E1(which is Germany) and inventory (not subinventory) S1.

When you setup this in a correct way you can organize a entire sourcing model per item which can be very beneficial for your organization. However, if you want to do this correct and benefit from it you will have to plan it very carefully.

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