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:
  1. Create two different Locations
  2. Create two Inventory Organizations
  3. Link the Inventory Organizations into Internal Locations
  4. Create at least one Sub-inventory in each of the Inventory Organizations
  5. Define Shipping Networks
  6. Create Internal Item - Enable the Attributes "Internal Ordered" and "Internal Order Enabled"

Purchasing Setups:
  1. Attach the Internal Order Type in Purchasing Options
  2. Define Document Types for Internal Requisitions
  3. Define Approval Hierarchies for Internal Requisitions
  4. Define Approval Groups and Approval Assignments
  5. Define the Receiving Options for the Destination Organization

Order Management Setups:
  1. Create Internal Transaction Type
  2. Define the Document Sequence / Assignments
  3. Create Internal Customer
    1. Attach the Order Type, Internal Location and Organization into Customer Ship To site
  4. 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||




42 comments:

  1. Great Article! Thanks for sharing :)

    ReplyDelete
  2. Superb !!!!!!!!!!

    ReplyDelete
  3. Very Good Document which is nicely documented.

    ReplyDelete
  4. Thanks a lot!!!

    ReplyDelete
  5. Very nice document

    ReplyDelete
  6. Excellent Document

    ReplyDelete
  7. Is there any article or configuration document for ISO process for Service/Expense items

    -- thanks

    ReplyDelete
  8. Excellent document , thanks a lot!

    ReplyDelete
  9. in OM, OTC total cycle will not come. only to the extent of ship confirmation, there is no receivable part involved in internal sale order cycle

    ReplyDelete
    Replies
    1. This comment has been removed by the author.

      Delete
  10. If there is a unit price difference between the two inventory organizations, What should be the configuration to handle the difference.

    ReplyDelete
  11. Thanks for sharing such valuable information!!

    ReplyDelete
  12. Good document. It will be very help full if includes accounting events.

    ReplyDelete
  13. Appreciate you for a very good article with excellent way of explanation...Anybody can understand the concept of IR/ISO after going through this article. It was a great help to me as well.

    ReplyDelete
  14. if IR/ISO will return,it's work?

    ReplyDelete
  15. Very good explanation. Easy to follow. Thanks

    ReplyDelete
  16. Very useful & EXCELLENT DOCUMENT . Thanks a lot for sharing your knowledge

    ReplyDelete
  17. Hi, great article. Thank you. I have some questions. Could you give an example of an internal request & its process flow? E.g. Internal Depart request for item (where do they make this request) and what happened after that. Is it PO (to supplier) , then, Receiving , Sales Order? And where the Internal Dept receive the item? So that they can monitor their item level. Tk u.

    ReplyDelete
  18. This comment has been removed by the author.

    ReplyDelete
  19. I ‘d mention that most of us visitors are endowed to exist in a fabulous place with very many wonderful individuals with very helpful things.
    Surya Informatics

    ReplyDelete
  20. I want to share a testimony on how Le_Meridian funding service helped me with loan of 2,000,000.00 USD to finance my marijuana farm project , I'm very grateful and i promised to share this legit funding company to anyone looking for way to expand his or her business project.the company is UK/USA funding company. Anyone seeking for finance support should contact them on lfdsloans@outlook.com Or info@lemeridianfds.com Mr Benjamin is also on whatsapp 1-989-394-3740 to make things easy for any applicant.

    ReplyDelete
  21. Such a nice blog, I really like what you write in this blog, I also have some relevant Information about Best HR Training In Hyderabad | Hr training institute in Hyderabad! if you want more information.
    Oracle Fusion HCM Online Training
    Oracle Fusion SCM Online Training
    Oracle Fusion Financials Online Training
    Big Data and Hadoop Training In Hyderabad

    ReplyDelete
  22. Thanks a lot such a good information to understand ...

    ReplyDelete
  23. Good Job! Nice crisp and composed information,

    ReplyDelete
  24. I believe there are many more pleasurable opportunities ahead for individuals that looked at your site

    ISO 22301 Online Training

    ReplyDelete
  25. I really like your blog and you have shared the whole concept really well. And Very beautifully soulful read, thanks for sharing.

    automotive lead providers

    ReplyDelete
  26. Awesome! Amazing list of blog thanks you so much for sharing this awesome piece I always love to read. this is really helpful to us
    ISO 45001 Migration Lead Auditor Training in Singapore

    ReplyDelete
  27. Great job Raju!!! very nice & detailed information on IR/ISO.

    ReplyDelete