ORACLE MASTERMINDS: IR & ISO - Internal Sales Order Cycle with Setup Steps in R12.2

Thursday, 18 December 2014

IR & ISO - Internal Sales Order Cycle with Setup Steps in R12.2

Definition:

Internal Requisition/Internal Sales Order provide the mechanism for requesting and transferring material from one inventory organization to other inventory organization.
Below is the process flow which has to be followed in each module in order to execute Internal Sales Order:

Mandatory Setups:

Inventory Setups:

Create two different Locations
Create two Inventory Organizations
Link the Inventory Organizations into Internal Locations
Create at least one Sub-inventory in each of the Inventory Organizations
Define Shipping Networks
Create Internal Item - Enable the Attributes "Internal Ordered" and "Internal Order Enabled"

Purchasing Setups:

Attach the Internal Order Type in Purchasing Options
Define Document Types for Internal Requisitions
Define Approval Hierarchies for Internal Requisitions
Define Approval Groups and Approval Assignments
Define the Receiving Options for the Destination Organization

Order Management Setups:

Create Internal Transaction Type
Define the Document Sequence / Assignments
Create Internal Customer

Attach the Order Type, Internal Location and Organization into Customer Ship To site

Define Shipping Parameters

Let’s see each step in detail,

STEP 1: INVENTORY MODULE

Let’s create two Inventory Organizations and two different Locations first.
(You can also perform copy org from previously created org by invoking Inventory → Setup → Organization → Organization Copy → Maintain Interface)
Or create a new inventory from Inventory → Setup → Organization → Organization
Here we have created 2 Inventory Organizations

First Inventory Org Name : FIRST INVENTORY Sub-Inventory Name: Good Down
Second Inventory Org Name : SECOND INVENTORY Sub-Inventory Name: Store Room

If you are creating new inventory organization then make sure you are providing all the details in Receiving Information, Inventory information, Accounting Information and Shipping Networks. If you copy the Inventory Organization from an existing Organization then system will copy all these details automatically as like as the model organization.
Open the Periods in Inventory, Purchasing, and General Ledger for the current month.

Now let’s add the inventory to the location created by clicking on other details as below.

Invoking: Inventory → Setup → Organization → Location

Item Creation

Invoking: Inventory → Items → Master Items

Name: ITEM 1
Unit Price: $15
Purchasing template applied
Internal Ordered Check box enabled in Order Management.
Assigned to all inventory

Shipping Networks

Inventory → Setup → Organization → Shipping Networks

Now let’s input the Source and Destination Inventories to transfer the items.

Prerequisites:

From & To inventories to be mentioned
Internal Order Required Checked
Primary Accounts number

Save and exit the dialog box, now switch to Order Management Responsibility.

STEP 2: ORDER MANAGEMENT MODULE

Here let’s create a separate transaction type
Invoking: Order Management → Setup → Transaction Type → Define
Sales Document Type: Sales Order
Fulfillment Flow: Order Flow generic
Here I have attached Line Type from the one I previously created and assigned (Int_Sales_Transac_Line).
Validate the Workflow

Document Sequence & Assign

Let’s create a new document sequence by Invoking: Order Management → Setup → Documents →Define

Here Sequence name is New SEQ and Sales Order # will be generated starting from 3600.
And assign the sequence by selecting Order Management → Setup → Documents →Assign

CUSTOMER Creation

Create a new Customer by selecting Order Management → Customers → Standard
I have created a new customer as PAYPAL below by filling up the Legal Address.
Make sure you create the customer type as Internal not External
Query again the customer and follow the below steps.

Click on details from below.

Click on details again,

Select Business Purpose tab

Click on details which indicate both Ship to & Bill to Option you created before.

Now under here in order type select the transaction type you created and fill in the Internal Location and Internal Organization respectively as below.

Save the page and switch the responsibility to Purchasing.

STEP 3: PURCHASING MODULE

Document Types:

Before proceeding further let’s make sure the document type is perfect.
Invoking: Purchasing → Setup → Purchasing →Document Types
Select the line Requisition Internal

And enter the below information correspondingly.

The default Hierarchy is the one which you created before for purchasing setup.

Creating Requisition:

Let’s create a REQ, Invoking: Purchasing → Requisition → Requisitions
Enter the item which we created before
ITEM 1
Quantity # 6
Fill up the Source and Destination inventory as below.
Req # generated 4019

Approve the Requisition and query the REQ in Requisition Summary as above, after making sure the REQ has been approved run the report

Create Internal Orders from View → Request → Submit a New Request → Create Internal Orders.

STEP 4: Order Import & Perform O2C Cycle

Now let’s switch the responsibility to Order Management and perform Order Import

Invoking: Order Management →Orders, Returns → Import Orders → Order Import Request

Select the respective Operating Unit
Order Source as Internal
Order Reference # 4019 (Req created before)
This process will run two concurrent programs and we have to make sure if the program "Order Import Child Req 1" is completed successfully by viewing the output.
Here No of orders found is 1, Imported 1, Failed 0

Now query the Internal Sales Order number in Order organizer with Order Source as Internal and Order Source Reference as "Internal Requisition Number" from Orders, Returns > Order Organizer as below.

Below the order number is generated with sequence 3600, as we updated while Document Sequencing.

In case, if error emerges and unable to pull the order number through order organizer do correction by
Invoking: Order Management →Orders, Returns → Import Orders → Correction
Mention the request ID from which the program ran and select find, the dialog box will prompt the error and follow the instruction for solution.

Now query the order number in sales order and perform O2C cycle.

Now if you check the On hand quantity for the First Inventory it will be displayed as below.

After performing receiving in Purchasing or Inventory responsibility, if you check the On hand quantity in SECOND INVENTORY it will be displayed as below.

Conclusion:

Hence the item from the First Inventory has been transferred to the Second Inventory respectively.
The other method of transferring is use of "Inter Organization Transfer" Feature & the reason why we are using this is,

IR and ISO provide us with a way to transfer material where we can introduce an approval mechanism for ordering material, and also track the transaction through documents. These features are not available in the Inter Organization Transfer utility.

Thank you ||Raja||