Internal requisitions provide the mechanism for requesting and transferring material from inventory to other inventory or expense locations. To use this functionality, you need to have Purchasing, Order Management, Shipping Execution, and Inventory installed. Internal Requisition (after suitable approval) will directly result in the generation of a sales order in the Order Management system through the Order Import process in Order Management

Setup Steps:

Step 1 – Creating the Item (Navigation: Items/Master Items)
a) On the Purchasing Tab – add a price if the item is to be used in iProcurement.
Uncheck the purchasing checkboxes, if the item is to ONLY be ordered from an internal source.
b) On the Order Management tab, and choose the attributes: Internal Ordered, Internal Orders Enabled & OE Transactable
c) Ensure that the item is assigned to both the Source and Destination Inventory Organizations

Step 2 – Create the Shipping Network (Navigation: Setup/Organizations/Shipping Networks)
a)Enter the Inventory Organization that will be the Source and the scope should be From or To Organizations
b)Choose the Transfer Type
Direct – means that when the Internal Sales Order is shipped the receipt process in the destination organization is done automatically
Intransit – means that when the Internal Sales Order is shipped – the destination inventory organization has to manually do the receiving process in Purchasing
c)Choose Internal Order Required checkbox

Step 3 – Create the Location (Navigation: Setup/Organization/Locations)
Enter a Location Name – for the Internal Location. This is the location that is used as the Destination Location & will eventually be tied to a customer

Step 4 – Conduct a Miscellaneous Receipt (Navigation: Transactions/Miscellaneous Transactions)
This step is being done to satisfy the Internal Sales Order which is created, as it ensures there will be ample quantity On Hand to perform the shipping portion of the Internal Sales Order process.
a)Choose the Inventory Organization that will be the Source Inventory Organization
b)Enter ‘Miscellaneous Receipt’ – Choose ‘Transaction Lines’
c) Enter the Item created and then a sub-inventory, quantity, etc

Step 5 – Create the Internal Customer – Assign the Location
(Navigation: Customers/Standard)

a) Enter the Internal Customer Name – Choose the Find Button
b) If it is a new customer – choose New from the dialog box that appears
c) In this form – choose Open and enter the address details
d) Move to the lower half of the form – enter a usage – of ‘Ship To’
e) Followed by choosing the Open button in the lower right hand corner of the form

In the new form which opened – enter the basic information for Payment Terms, Salesperson, etc.
Important: In the Internal Block – choose the Location which was created in Step 3
This association ties the customer to the location. Move to enter other pertinent information such as price list, etc, save – Close this SUB-FORM ONLY

It is also recommended to create a Bill To Usage record for the new customer.
Add a new record to the usage – and call this Bill To
Hit Open and enter any new information that pertains to the Bill To

Step 6 – Item Price (Navigation: Items/Master Items)
a) Query the item created in Step 1
b) Choose “Tools/Item Costs” from the top text menu. The screen to follow shows the item price that is used when creating the Internal Requisition. This is how purchasing derives the price when creating the Internal Requisition

Procure to Pay Process flow:

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Let’s see the steps involved in performing using Oracle Applications
1. Oracle Purchasing: You enter Suppliers of different materials and products you want to purchase to manufacture a finished good that your organization plans to sell.
2. Oracle Purchasing: You prepare a Request for Quotation (RFQ) and send it to different suppliers to get the best and/or economical price for the product.
3. Oracle Purchasing:Suppliers sends their quotations and you upload those quotations in Oracle Purchasing to get the best three quotes and further to get the one best quote.
4. Oracle Purchasing: You prepare a Purchase Order(PO) against the best RFQ to buy the goods from the supplier who quoted the suitable price and sends the PO to that supplier
5. Oracle Purchasing: The supplier receives the confirmation of purchase from PO and ships the ordered goods. You receive the goods enter a Goods Received Note (GRN) in Oracle Purchasing.
6. Oracle Inventory:It’s up to you whether you want to receive the goods at your head office or you Inventory directly. In either case you move the received goods to your different Raw Material Inventory from Oracle Purchasing to Oracle Inventory and the Item Count increases.
7. Oracle General Ledger: Once you move the goods to Oracle Inventory, it sends the Material Accounting to Oracle General Ledger.
8. Oracle Payables: After that the supplier sends you the invoice for the purchased goods and you Enter or Match the invoice against the PO from Oracle Purchasing in Oracle Payables.
9. Oracle General Ledger: When you enter the invoice it means that you have created a Liability against that supplier.
10. Oracle Payables: You pay the invoice and settle the Liability
11. Oracle General Ledger: The liability is settled, your expense is recorded.

12. Oracle Process Manufacturing(OPM) / Oracle Discrete Manufacturing(ODM):
You start the manufacturing of your final product. Both OPM or ODM requests the different raw materials from you inventory organizations and manufactures a finished good.
13. Oracle Inventory: As the raw materials are issued to OPM and ODM the inventory sends the issuing material accounting to General Ledger and decreases the Item Count from the Raw Material Store. As the finished good is prepared, Oracle Inventory receives the finished good in Finished Good Store and increase the Item Count.
Payable Integration:
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Payables Processes:
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 Overview of Suppliers:
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When you enter a supplier that does business from multiple locations, you enter header information only once, and you enter supplier sites for each location. Most supplier information defaults to supplier sites. However, you can override the values that default if necessary. After you define suppliers, you can use them when you import/enter invoices and create purchasing documents Define how supplier sites can be used with the following options:
• Pay – You can import/enter invoices for and make payments to the site.

• Primary Pay – Default pay site for invoice entry and import.
• Purchasing – You can create purchase orders for the site.
• RFQ Only – You can create request for quotations in Purchasing for the site. You cannot
create purchase orders for an RFQ Only site.
• Procurement Card – You can purchase goods or services using a procurement card.
• Primary Pay – If a supplier has multiple pay sites, one can be designated as the primary.The primary pay site defaults in the Invoices window, helping to speed the invoice entry process. Also, Payables Open Interface Import uses this site when it imports an external invoice with no specified site.

Designate a site as an RFQ Only site during the beginning of negotiations with a supplier. If you decide to use the supplier, designate the supplier site as a Purchasing site by deselecting the RFQ Only option and selecting the Purchasing Site option. For each supplier site, you can enter contact information (name, address, telephone) specific to that site. Contact information is for your reference only.
Flow of Default Values(P2P):
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• Defaults set at higher levels flow down to lower levels where you can override them.
• Defaults reduce data entry by providing default values based on corporate policy.
Optional defaults (especially the higher level ones) should be left blank if you frequently override them.
• Purchase order matched invoices will receive defaults from the purchase order you specify when you match. Note: Changes to default values affect only new records, not existing records. For example, if
payment terms in the Payables Options window are reset to Net 15 from Net 30, new suppliers will have a default of Net 15. Existing suppliers will have terms of Net 30.
Invoice Entry:
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You can enter invoices through:
Manual entry: Manually enter invoices in the Invoice Gateway and Invoices windows.
Import: The Payables Open Interface Import program imports invoices from the Payables Open Interfaces table. This table is loaded by many sources including invoices entered online by suppliers in iSupplier Portal, invoices sent by suppliers in EDI or XML formats, and Oracle applications that load invoices into the Open Interfaces Table such as Oracle Property Manager and Oracle Assets.
Automatically generated: Oracle Payables automatically generates the following invoice
types: withholding ax invoices to pay tax authorities, interest invoices, and payment on receipt invoices.
Recurring invoices: You can set up Oracle Payables to generate regularly scheduled invoices such as rent.
Matching: You can match most invoices to purchase orders or receipts. You can group manually entered and imported invoices in invoice batches.
Invoice import:
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Oracle Internet Expenses expense reports:
Expense reports your employees enter using a Web browser.
Payables expense reports:
Expense reports entered in the Payables Expense reports window by the Payables department.
Credit Card invoices:
Invoices for employee credit card expenses. The credit card company sends you these invoices as a flat file.
Oracle Projects expense reports:
Project–related expense reports entered in Oracle Projects.
EDI invoices:
Electronic invoices transferred from Oracle e–Commerce Gateway.
Invoices from external systems:
Invoices, such as invoices from legacy systems, loaded using SQL*Loader.
Oracle Property Manager invoices:
Lease invoices transferred from Oracle Property Manager.
Oracle Assets lease payments:
Lease payments transferred from Oracle Assets.
Oracle Procure to Pay Accounting:
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As you know “procure to pay” Business Flow start Purchasing requisition till paying to supplier and most important, in all the case the purchase is made for basic element called Items.
There are three types of items:
1. Inventory Asset Item/Inventory item-PO Related
2. Inventory Expense Item/Inventory Expenses – PO Related
3. Expense item/Non-PO Invoice.
1. Inventory Asset Item/Inventory item-PO Related : 2. Inventory Expense Item/ Expense Item-PO Related:

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3. Expenses items/ Non-PO Invoice:
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Inventory:
1.       Items
          The items in the oracle application represent product or services that you sell their components.
2.       Item Master Organization
          It is an Inventory Organization that holds the definition of the item that are
·         Master Level – Single Value across all Child Organization
·         Organization Level – Different values in each of the organization where the item is enabled.
3.       Item Templates
          Templates allow you to define an item easily. A template contains a list of item attributes with pre defined values.
4.       Item Attributes
          A Collection of item attributes are additional Information about an item. Some of the item attributes identify critical item information such as planning method for an item etc…
5.       Item Attribute control
          W can specify the control level for the item in the item attribute control window the two levels are Master and Organization level.
6.        Item Status Attributes
          Status attributes enable and disable the functionality of an item over time. Each status attribute allows you to enable the item for a particular use
          The status attributes are related to the item defining attributes. You cannot enable a status attribute if you do not set the corresponding item defining attribute to Yes
Status Attribute
Item Defining Attribute
Functional Area / Oracle Product
Functionality
Stockable
Inventory Item
Inventory
Allows you to store the item in an asset subinventory.
Transactable
Inventory Item
Inventory, Order Entry, Purchasing, Work in Process
Allows you to transact the item in Oracle Inventory, Oracle Order Entry, Oracle Purchasing and Oracle Work in Process.
Purchasable
Purchased
Purchasing
Allows you to place the item on a purchase order.
Build in WIP
Work in Process
Allows you to build the item on a discrete job, and/or repetitive schedule.
Customer Orders Enabled
Customer Ordered Item
Order Entry
Allows you to place the item on a sales order.
Internal Orders Enabled
Internal Ordered Item
Inventory, Order Entry, Purchasing
Allows you to create an internal sales order for the item
BOM Allowed
Inventory Item
Bills of Material
Allows you to create a bill of material for the item
Invoice enabled
Invoiceable Item
Receivables
Allows you to create an invoice for the item
Process Enabled
Process Items
OPM / INVENTORY
Recipe Enabled
Process Items
OPM / INVENTORY

Interdependences for Status Attributes

Each status attribute is dependent on the value of at least one other attribute. For example, you cannot set Stockable to Yes if you set Inventory Item to No. The interdependences for the status attributes are:
Attribute
Must be set to
If
Stockable
No
Inventory Item is set to No
Transactable
No
Stockable is set to No
Purchasable
No
Purchased is set to No
Build in WIP
No
Inventory Item is set to No OR BOM Item Type is NOT set to Standard
Customer Orders Enabled
No
Customer Ordered Item is set to No
Internal Orders Enabled
No
Internal Ordered Item is set to No
BOM Allowed
No
Inventory Item is set to No
Invoice Enabled
No
Invoiceable Item is set to No
Item Defining Attributes:
                An Item defining attribute describes the nature of an item and identifies the functional areas that all associated with the item. All the item defining attribute except MPR Planning method are check boxes.
                7 Item defining attributes are there.
Column1
Functional Area
Item-Defining Attribute
1)
Inventory
Inventory Item
2)
Procurement
Purchased Item (or) Internally ordered Item
3)
Planning
MRP Planning method
4)
Costing
Costing Enabled
5)
Engineering
Engineering Item
6)
Order Management
Customer Ordered Item
7)
Service
Serviceable Product
ITEM CROSS REFERENCE:
                It refers the item with old legacy item.
ITEM RELATIONSHIP:
                In Item relationship, we can relate two oracle items by related, substitute upsell, cross sell, and superseded.
ITEM REVISIONS:
                When you make slight modification to your item, without changing the form, fpt or function of the item, you may want to define a new revision for that item for tracking purposes. You can define any number of revisions for it.
 ITEM CATALOGS:
                Item catalogs are used to add descriptive information to an item. Use these descriptive elements to search for the items through out the application and to avoid duplicating part that already exists.
UNIT OF MEASURE:
                UOM is used for all material transactions first define class and then define conversions between UOM.
Standard:  Standard conversions define conversions that are not specific to the item.
Intra Class:  Intraclass conversions identify the relationship between the two UOM’s of same class, with respect to an item.
Inter Class: Inter class conversions identify the relationship between the two UOM’s of different classes, with respect to an item.
                While defining an item you specify the conversions * Standard * Item Specific * Both.
                Transactions are performed in the unit of measures we specify –
                Conversion happens automatically and the item quantities are updated in the primary unit of measure of the item.
LOT CONTROL:
                It is one of the inventory control technique for enforcing the use of lot numbers for a specific batch of an item and we can track that batch of items throughout their movement and out of the inventory.
SERIAL CONTROL:
                A serial number is an alphanumeric piece of information you assign to an individual unit of an item, by which we can track that item during material transaction clearly.
LOCATOR CONTROLS:
                It is a physical areal represents by a row, rack and bin. If you turned on the locator control for a sub-inventory, you must specify a locator when transacting any item in and out of that sub-inventory. Also we can turn on at Item level.
       Flexfields – Flexifields are special text fields used by oracle to gather important information set in the enterprise.
– KFF: KFF are intelligent flexfields used to collect important data like Accounts.
MIN-MAX PLANNING
                In Min-Max planning, we can specify the maximum and minimum inventory level for an item and can maintain the on-hand balances between these two levels.
                Any planning method answers two questions
When to Order:
                When the available quantity falls below the minimum Inventory level.
How much to Order:
                The difference between the maximum stockable quantity and current available quantity.
  
Planning Level
Organization Level
Sub-Inventory Level
A) In Item Attributes choose “Inventory Planning Method”  => Min-Max
A) In Item Attributes “Inventory Planning Method” => Min-Max
B) In the Item Attributes give the
B) In the Item/Sub inventory give the
     1) Min & Max Qty
     1) Item
     2) Order Min & Max Qty (If)
     2) Min & Max Qty
     3) Lot Multipliers
     3) Lot Multiplier
     4) Source Type
     4) Order Min & Max Qty (if)
     5) Source Type
C) Run the Concurrent “Min-Max Planning”
C) Run the Concurrent “Min-Max Planning”
Planning Level : Org
Planning Level : Sub-Inventory
Under Item Master Purchasing tab, List price must be defined in the Attribute.
Restock
YES
Demand Cutoff Date
ENABLED
Supply cutoff Date
ENABLED
Allow PO
ENABLED
Allow WIP
ENABLED
                                                               
RE-ORDER POINT PLANNING
When to Order:
                When the available quantity falls below the RE-order point,
 “Re-order Print = Safety stock + Forecast demand during load time”

                                              
How much to order:
                EOQ is calculated i.e., Economic order quantity.
EOQ => √ (2 x Annual demand x Ordering cost ÷ Inventory carrying cost % x Unit Cost).
Planning level is only at Organization Level.
Set up:
1)      In Item Attributes
a)      “Inventory Planning method” : Re-Order Point
b)      Lead Time
c)       Inventory carrying cost
d)      Ordering Cost
e)      Source Type
2)      Define forecast set and forecast name
3)      Define Safety stock
a.       Manual
b.      User-defined percentage
c.       Mean-absolute deviation
4)      Run the concurrent “Re-order point”
“Create requisition” => yes.
                                                                KANBAN
When to Order:
                When the container or bin becomes empty
How much to order:
                The quantity equivalent to kanban size.
                                Kanban is a self regulating pull system that leads to shorter lead time and reduced Inventory.
Stet-ups:
1)      Create an Item “ Release time fence” = Kanban (Do not release)
2)      Define Kanban pull sequence
Item, Kanban source, Kanban location and enable check box Auto request.
3)      Generate cards and give kanban size.
4)      Replenish
Kanban card status
Kanban supply status
1. Active
1. New
2. Hold
2. Full
3. Cancelled
3. Empty
4. Wait
5. In process
6. In transit
7. Exception
Signal
Red:       Empty Transit state
Yellow: Wait
Green:  Full
Replenish Count
In sub-inventory where we are not maintaining perpetual on-hand balances, we can use replenishment counting to plan our inventory. This replenish technique is for expense and non critical     item that we don’t indent to keep track of we can use the replenishment counting only at the sub-inventory level.
Setup
For this we have to specify item/sub-inventory relationship
  In Item sub-inventory to specify
1)      Item
2)      Min-Max Quantity (if)
3)      Enable check box Min-Max (if)
4)      Order Min-Max qty (if)
5)      Lot Multiplier (if)
6)      Source type
  Navigate to replenish count window
1)      Enter the count name
2)      Enter the sub-Inventory in which replenish count is going to performed.
3)      Go to Lines tab, Enter the Item and specify the count type.
  Trigger “ Process replenish Count” and “Item Replenish count report” which will trigger requisition 
Count Type
1)      On-Hand
2)      Order Maximum
3)      Order qty
Receipt types
                Substitute Receipts:
We can receive substitute Item which we define in the Item relationship, While receiving…
Setup:
  Enable check box – Allow substitute receipt In Purchase order
  Enable check box – Allow substitute receipt in Supplier for
  Enable check box – Allow substitute receipt in receiving Option
Blind receipt:
After raising a purchase order if we need extra quantity against purchase order we go for Blind receipts.
  Enable check box – Allow substitute receipt in Receiving Option
Navigate to Receiving transaction à Receipts
We can change the quantity here if Blind receipt is checked
Note:  PO match should be “3-Way”