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Internal Orders / Requisitions

Internal Orders ship Inventory Items between Inventory Organizations. To create a paper trail and Shipping documents this Inventory transaction uses the capabilities of Purchasing and Order Management. Internal Orders (or requisitions) can be performed across Operating Units and even across Set of Books with different accounting structures.

The flow starts with an Internal Requisition in Purchasing that is converted into an Internal Sales Order (it never becomes a PO). This Internal Sales order is released and shipped in the normal way. Depending on the relation that is defined between the Organizations it is also required to receive the goods.

Internal requisitions can be created manually in Purchasing or they can be raised by planning (MRP and Inventory planning). From Iprocurement Family pack H (11i8) it is also possible to create Internal Requisitions from within Internet Procurement.

This process is performed agains Cost with features in place to adapt for cost- and currency differences. Only with Family Pack H (11i8) it will become possible to use a transfer price and to create Intercompany Invoices in Receivables and Payables.

Note: Internal Orders work the same as the Inter-organization transfer in Inventory. But Freight Charges cannot be charged on Internal requisitions. On the other hand it is possible to move goods to and from the same Organization (to not confuse Planning this can only be done from a non-nettable source subinventory).

Lab 1: Basic flow internal requisiton


This practice shows the complete internal order flow without setup. Responsibility: Order Management Super User, Vision Operations (USA)

A: Create an Internal requisition for an existing item. If you have not set up your own item xx1000 in the Vision use the existing Inventory item AS54888. Note that this item should have stock in M1 and that it is Internal Ordered N: Purchasing ->Requisitions ->Requisition Summary, B: New Type is Internal requisition. Description is xx Ship goods from M1 to M2 (xx is your terminalnumber). Item is xx1000 When you enter this the source below should shift from Supplier to Inventory. Do this manually otherwise. This can trigger the Customer Association warning when the (destination) Location is not linked to an Internal Customer. Confirm with OK. Note: the fields in the details on the left are all about the Destination of the item. The fields on the

right are all about the Source that delivers the item. Enter a required quantity of 2 Each. Enter a Need-by date of Today also when it is not required. Order Management requires this later-on as the scheduled date for the Sales Order. Change the Destination Organization to Boston Manufacturing. Ignore the Warning and enter Location M2-Boston as the destination location. Enter Stores as the destination subinventory (this is not required but often done). Assign Seattle Manufacturing as the (Source) Organization. Do not assign a Subinventory unless you want to pick from there. Order Management will pick a subinventory automatically when this is left blank. Save and take note of the requisition number _____________ Note: the price is the Cost price of the item in the Source Organization. Approve the Internal Requisition via B: Approve The Form will get blank (it only shows incomplete requsitions). Close the window. Query the requisition to check if it is approved.

B: Create the internal Sales Order via the request Create internal Sales Orders. This has no parameters and shows no information. It picks up all approved internal requisitions and puts them as Internal Sales Orders into the open Interface for Sales Orders. N: Purchasing ->reports ->Run (Create Internal Sales Orders)

C: Import the created Internal Sales Order into Order Management. N: Orders, Returns ->Import Orders ->Order Import Request Order Source is Internal (given the setup in the Purchasing options) Order reference is your own requisition Number (via Ctrl-L). If your requisition is not shown there is no requistion is created yet - OR! - someone has imported all requisitions already (so check this first). Validate only is No - otherwise no import will take place. Look at the output of the Import Order request (actually at the output of the Child request it should have triggered) to see the result.

D: Take a look at the created Internal Sales Order. N: Orders, Returns -> Order Organizer Look the Order up via the Requisition Number (use for Requisitions from other Operating Units Order Source Internal with the source being the Requisition Number). Open the Order via B: Open. Note that it is already booked. Also take note of the customer and the Ship-to address. This is the Internal customer and ship-to address that needs to be defined for the requesting Inventory Organization. Open the Order Line via T: Line Items. The price on the Line is again taken from the Cost price. The request date is taken from the requisitions Need-by date. The source Organization is shown as the Warehouse in T: Shipping. Optionally look at the Internal requisition details via the Additional Line information (under B: Actions or use the right mouse button). Take note of the Sales Order Number _____________

Note: if an Internal Sales Order is changed there is no synchronization with the internal requisition (an approved Requisition cannot be changed). Order Management enforces

restrictions and more can be added via the security constraints. Differences can be reported via the Internal Order and Purchasing Requisition Discrepancy Report

E: Pick release the Internal Sales Order with all steps automated. N: Shipping -> Release Sales Orders -> Release Sales Orders Order number is your ordernumber Erase Scheduled Ship Dates en Requested Dates Warehouse is M1 Auto Allocate and Pick Confirm are set to Yes Default Stage Subinventory is Staging1 Autocreate Delivery is Yes Press B : Concurrent Check the Request and view the Pick Slip Report (T: Order) (T: Inventory) (T: Shipping)

F: Ship Confirm the Internal Sales Order N: Shipping -> Transactions Press the Find-icon and select Lines; enter your ordernumber and press B : Find. The delivery line(s) appear now. The Pick Status should be Staged. Now select the Delivery Tab (T: Delivery) underneath. A delivery number as autocreated through pick release should be visible. Ship Confirm the Delivery via B : Action -> Ship Confirm -> Go. - The Trip should be set in-transit and completely closed - Enter Ship Method DHL and create a Bill of Lading - Print the Ship Confirm Document Set - Do not defer the Inventory Interface. Press the button OK (B : OK). A message should appear that the Inventory Interface is triggered. This will take the requested items out of M1. Optionally take a look at the created documents (Commercial Invoice, Bill of lading).

G: Change Organization to M2 - Boston Manufacturing to be able to receive the items. N: Change Organization

H: Receive the items in M2 (this is required given the fact that the Shipping Network between M1 and M2 dictates an Intransit relation with a Standard receipt). N: Purchasing ->Receiving ->Receipts Requisition is your requisition number - and press B: Find. Close the Receipt Header with the x in the corner. Look at the information shown. The Order number is the Delivery number! Receive the line(s) by selecting them via the checkbox in the front. The quantity should be visible. Otherwise make it 2 Each. Save.

I: Deliver the Items to their final destinaton in Inventory Organization M2. Optionally inspect them here first (and then deliver them).

N: Purchasing ->Receiving ->Receiving Transactions Select the line(s) again via the checkbox. If no destination Subinventory was defined on the original Internal Requisition a final destination needs to be chosen here. Use subinventory Stores then. Note: a default subinventory can be defined for items in inventory via the Material Transaction Defaults. If available this default will be used here. Save.

Note: it is not possible to return an internal order. To send items back they need to be received fully and then shipped back the same way they came (or if allowed via an interorg transfer).

J: If the cost manager is running the accounting part of this transaction can be looked at in the Material Transactions form in Inventory in M2 (the receiving Organization). N: Inventory ->Transactions ->Material Transactions Find Source Type Internal requisition and Source is your requisition number. In T: Reason, Reference look up if the transactions are Costed. If costed look at the created Journal via M: Tools ->View Accounting. A T-Accounts view is also available there if you like.

Lab 2: Setup internal Order (across Operating Units)


To be able to use internal requisitions things have to be set up. In this lab we are looking at and partly performing this setup. To make it more interesting we make it possible to create an internal requisition across set of books. Within one operating unit things tend to be easier.

In this practice Vision Netherlands is the other operating Unit we are going to use. This has a different Set of Books with a four segment Accounting flexfield and the Euro as the currency (Operations used the Dollar). In the present version of the Vision (11i6) Vision Netherlands is not set up for Internal requisitions. Note that the set up part has to be performed by the trainer or one of the attendees because this can only be done once!

Note: From 11i onwards when working across operating Units the Internal Sales Order is created in the Shipping Operating Unit. Before 11i all was done in the Receiving Operating Unit. This applies to where you should run the Order Import, where you can find the created internal Order and where the Internal Customer address should be available. Also the Customer-Location association has to be created in every Shipping Operating Unit now.

The situation is as follows:

SOB Vision NL = EURO = four segments

SOB Vision operations = USD = five segments

OU Vision Netherlands = Ordertype NL_Mixed

OU Vision Operations = Ordertype Mixed

Inventory Org E4

<Shipping Network> Inventory org M1 Intransit = Location M1-Seattle

= Location E4-Vision NL = Customer Vision Address AMSTERDAM

= Customer Vision Address SEATTLE

To Work in Vision Netherlands we have to log in as user NETHERLANDS with password welcome. User OPERATIONS gives access to Vision operations.

A: Log in as User NETHERLANDS. Use responsibilty Inventory Vision Netherlands and make E4 (Vision Netherlands) the active organization.

B: Set up the relation between the two Organizations in the Shipping network (Intransit) N: (Inventory) ->Setup ->Organizations ->Shipping networks Enter Organization E4 (Vision Netherlands) in the header and press B: Find. Note that E4 has no relation defined yet with M1. Create a new relation from E4 to M1 of type Intransit. The FOB Receipt, receipt Routing Standard predefined transfer charge of 10% and the applicable Accounts should default from the Inventory Organizations parameters. - Tick Internal order required to disallow the use of the interorg transfer. Create a new relation from M1 to E4. - Tick Internal order required to disallow the use of the interorg transfer.

Note that the use of the Intransit option is officially unsupported. But although there were some Currency rate problems in 11i10 it actually works.

C: Because of the different currencies involved the system needs to have currency rates when crossing Set of Books. For Internal requisitions it is prescribed to use the seeded Corporate rate type. This has to be entered als the rate type in profile INV: Inter-Organization Currency Conversion (at the site level). Check if this has been set via M: Edit->Preferences ->Profiles

D: In the Purchasing options for OU Vision Netherlands we have to set which Order Type and Order Source should be used by Order Management for Internal Orders that are created within this Operating Unit. Note that this should be set up also in Vision Operations, but that has already been done. N: (purchasing NL) -> Setup -> Organizations -> Purchasing Option Go to Tab Internal Requisitions Enter Order Source Internal (a lookup that is available across OUs) Enter Order Type NL_Mixed (Vision Operations uses Mixed) Note: this is an existing Order Type in this Operating Unit. Often a separate Order Type is created but the generic type wil work without problems.

E: Order management needs to have a Price List on the Internal Sales Order. It can be a normal Price List, but often an empty Price List is created for Internal Orders. It can be empty because the system uses the Cost Price and never creates invoices in Receivables. An easy method is to link a price list to the Internal Order Type. N: (Order management NL) ->Setup ->Transaction Types->Define Query the existing Order Type NL_Mixed. Attach Price List EURO to Order Type NL_Mixed.

F: A Location needs to be defined that can be used for Internal Shipments and that is linked to Inventory Organization E4. Use the Existing location E4-Vision NL. For Seattle manufacturing Location M1-Seattle is already available. N: (Inventory)->Setup ->Organizations ->Locations Give it a name, Address style Netherlands and a valid address. Make sure it is a Ship-to, Receiving and an internal Site. Link Inventory Organization E4 to this Address.

G: Log in as user OPERATIONS via M: File ->Log on as a different user. Use responsibility Order Management Super User, Vision operations.

H: Create a Customer Address in Vision Operations that is Inventory Organization E4 (Vision Netherlands). The Vision demo database already has a Customer defined with the name Vision, but in Vision Operations no adresses are defined that link a customer addres to Organization E4. N: (Order management USA) ->Customers ->Standard Query Customer Vision (otherwise create a new customer Vision NL). Profile Class is Internal/Intercompany T: Classification Type is Internal Create a New Address via B: New T: Addresses Country is Netherlands Addres is Spuistraat 10, 1010 AA, Amsterdam Create a Bill to business Purpose with location AMSTERDAM (OPS). Save. Take note of the Site Number _________ Create a Ship to Business Purpose with Location AMSTERDAM (OPS) Bill to Location is AMSTERDAM (OPS). Open the Ship to bsuiness purpose via B: Open Enter tax Code Exempt Enter Internal Location E4-Vision NL (the customer-location association!)

I: Log in as user NETHERLANDS via M: File ->Log on as a different user. Use responsibility Order Management Super User, Vision Netherlands.

J: Create a Customer Address in Vision Netherlands that is Inventory Organization M1 (Seattle). The Vision demo database already has a Customer defined with the name Vision, but in Vision Operations no adresses are defined at all. N: (Order management NL) ->Customers ->Standard Query Customer Vision. Create a New Address via B: New T: Addresses Country is United States Choose in the field Site Number the already in Vision Operations created address in Seattle via the LOV (Site number is 1145, Addres is 3455 108th Ave., Seattle, King, WA, 98004, United States).

Create a Bill to business Purpose with location SEATTLE (NL) Create a Ship to Business Purpose with Location SEATTLE (NL) Bill to Location is SEATTLE (NL). Open the Ship to busuiness purpose via B: Open Enter tax Code BTW nul Enter Internal Location MI-Seattle (the customer-location association!)

Also enter a new adress with a bill-to and a ship-to business purpose AMSTERDAM (NL) for Vision Netherlands itself. Copy the site like above from the site created in Vision Operations. Link it to Location E4-Vision NL. Use Tax code BTW Hoog.

K: Make your item Internally orderable and assign your items also to Inventory Organization E4 (it should also exist in M1). Note that E4 is the Item Validation master and only Inventory Organization of Operating unit Vision Netherlands. N: (Order management) ->Items ->Master items Make E4 your active Organization if requested. Query your item xx1000 (or AS54888). xx1000 should be an Inventory item (T: Inventory), Internal Ordered, OE Transactable and Shippable (T: Order management). Assign it to E4 (and M1) via M: Tools ->Organization assignment.

Note that the item should also have a Frozen item cost in M1 and E4 to get a complete picture. But this is outside of the scope of this practice. As it is now the item will have a Cost price of zero.

Note: Stock should be available in M1 - Seattle manufacturing.

Lab 3: Internal requisition Flow across operating units.


Now we can create an internal requisition in E4 to get material from M1. Note that this can only be done if the Periods are opened in Inventory Organizations M1 and M2. Als the Purchasing Periods should be open in Vision Operations and Vision Netherlands. To be able to receive goods also the General Ledger periods should be open in Set of Books Vision Netherlands and Vision Operations.

A: Create (as user NETHERLANDS) an internal requisition in Vision Netherlands for your item to be delivered from M1 (Seattle) to E4 (Netherlands). N: (Purchasing NL) ->Requisitions ->Requisition Summary, B: New Type is Internal requisition. Description is xx Ship goods from M1 to E4 (xx is your terminalnumber). Item is xx1000

Enter a required quantity of 2 Each. Enter a Need-by date of Today. The Destination Organization (on the left) should default as Vision Netherlands with Location E4 - NL. Assign Seattle Manufacturing as the (Source) Organization. Save and take note of the Requisition number __________ Approve. Query the requisition back to check if it is approved.

Note that this requires the setup of the internal requisition document type and the approval rights for this employee for this type of document. This is outside the scope of this practice. It is possible via the Profile PO: Legal requisition Type to exclude the creation of internal requisitions or Purchase requisitions for certain users.

B: Create the internal Sales Order via the request Create Internal Sales Orders. N: (Purchasing NL) ->reports ->Run (Create Internal Sales Orders)

C: Import the created Internal Sales Order into Order Management. In 11i this has to be done in the Shipping operating Unit (i.e. Vision Operations). Log in as User Operations Use responsibility Order Management Super user, Vision Operations (USA) N: (OM USA) ->Orders, Returns ->Import Orders ->Order Import Request Order Source is Internal (given the setup in the Purchasing options) Order reference is your own requisition Number (via Ctrl-L). If your requisition is not shown there is no requistion is created yet - OR! - someone has imported all requisitions already (so check this first). Validate only is No - otherwise no import will take place. Look at the output of the Import Order request (actually at the output of the Child request it should have triggered) to see the result.

D: Take a look at the created Internal Sales Order. N: (OM USA) ->Orders, Returns -> Order Organizer Find the Order via Order Source Internal with the Requisition Number as source. Open the Order via B: Open. Take note of the customer and the Ship-to address - this should be AMSTERDAM (OPS). The currency will be USD. Open the Order Line via T: Line Items. The price is converted to USD via the Corporate rate. When you look at the Internal requisition details via the Additional Line information (under B: Actions or use the right mouse button) this will be empty because the requistion exists in another Operating Unit! Take note of the Sales Order Number _____________

E: Pick release the Internal Sales Order with all steps automated. N: Shipping -> Release Sales Orders -> Release Sales Orders Order number is your ordernumber (T: Order)

Warehouse is M1 Auto Allocate and Pick Confirm are set to Yes Default Stage Subinventory is Staging1 Autocreate Delivery is Yes Press B : Concurrent Check the Request and view the Pick Slip Report

(T: Inventory) (T: Shipping)

F: Ship Confirm the Internal Sales Order from M1. N: Shipping -> Transactions Press the Find-icon and select Lines; enter your ordernumber and press B : Find. The delivery line(s) appear now. The Pick Status should be Staged. Now select the Delivery Tab (T: Delivery) underneath. A delivery number as autocreated through pick release should be visible. Ship Confirm the Delivery via B : Action -> Ship Confirm -> Go. - The Trip should be set in-transit and completely closed - Enter Ship Method DHL and create a Bill of Lading - Print the Ship Confirm Document Set - Do not defer the Inventory Interface. Press the button OK (B : OK). A message should appear that the Inventory Trip Stop Interface is triggered. This will take the requested items out of M1. Optionally take a look at the created documents (Commercial Invoice, Bill of lading).

G: Log on as user NETHERLANDS with responsibility Purchasing Vision Netherlands.

H: Receive the items in E4 (this is required given the fact that the Shipping Network between M1 and E4 dictates an Intransit relation with a Standard receipt). N: (Purchasing NL) ->Receiving ->Receipts Make E4 - Vision Netherlands the active Organization when requested Requisition is your requisition number - and press B: Find. Receive the line(s) by selecting them via the checkbox in the front. The quantity should be visible. Otherwise make it 2 Each and Save.

I: Deliver the Items to their final destinaton in Inventory Organization E4. Optionally inspect them here first (and then deliver them). N: (Purchasing NL) ->Receiving ->Receiving Transactions Select the line(s) again via the checkbox. If no destination Subinventory was defined on the Internal Requisition a final destination needs to be chosen here. Use subinventory Stores then and Save.

J: If the cost manager is running the accounting part of this transaction can be looked at in the Material Transactions form in Inventory in E4 (the receiving Organization). N: (Inventory) ->Transactions ->Material Transactions Find Source Type Internal requisition and Source is your requisition number. If costed look at the Journal via B: Distributions (look at T: Currency also).

Lab 2: Internal Requisition across Set of Books (DRAFT!)

Create/ Check Shipping Network (Intransit) Relation in two ways (with internal order required)

Create/ Check currency table (INV Profile and USD <-> EURrate defined) INV: Inter-Organization Currency Conversion INV: Intercompany Currency Conversion (Buy/sell?)

Create/ Check Locations from both Organziations (Internal and linked)

Create/ Check internal Pricelist (Can be empty) Note: after 11i FP H transfer pricing is possible

Create/ Check internal Order Type with link to price list (can also be done at Customer?) NL_Mixed does not have a link with a price list. Linked it to EURO. No Ship method

Create/ Check Purchasing options (Order Type/ Source) Ops: Mixed/ Internal Neth: NL_Mixed (not there!) Internal

Create/ Check Internal Customers with Location association Vision Operations: Internal Customer Vision (1021), Profile internal/intercompany, Pricelist internal -Site 1145 Seattle (OPS) Location M1 Seattle in Ship-to address 3455 108th Ave., Seattle, King, WA, 98004, United States -Site 1147 Boston (OPS) Location M2 Boston in Ship-to (tax code exempt) 393 Berkeley Street, Boston, Suffolk, MA, 02116, United States

Vision Netherlands not available So create for Customer Vision: -Site 4125 De Meern (NL) Location E4 Vision NL in Ship to (+Bill-to) Rijnzathe 4, De Meern, Utrecht, 3454, Netherlands - THIS SITE HAS TO EXIST IN OPS ALS! - Create also a Bill-to in NL (both OUs) - Create Seattle also in NL

Create items and assign to both Organizations (Finished good)

Create Stock in E4 Vision Netherlands + assign costs in M1 and E4

Open periods (GL, PO, INV)

Create/ Check approval set-up in Purchasing for Internal requisitions (Both + limit)

Create Internal req Note: enter/ do not enter subinventory locator is not possible Enter the Need by Date on the requisition in Purchasing From E4 to M1 (picks up Cost price in Source org) From M2 to M1 (picks up Cost price in Source org)

Run Create Internal Sales Order In Vision Operations

Run Order Import (note: after 11i2 in Shipping OU, before that in receiving OU) => in Vision Netherlands

(Change Order)

Pick release and Ship Confirm in Shipping inventory org

Receive and deliver in Receiving inventory org

Run receiving Transaction processor and Cost Manager to see journals

- Expense items are possible - To receive in the same org is possible (to a non-nettable subinventory) - Serial items at SO are possible (has caused a lot of trouble) - Freight charges are not possible - Overreceipts not possible - Returns not possible (sent them back in the same way) - Cancelations possible but Sales orders and Requisitions need to be kept in sync manually.

INV: RC Requisition Approval

Note 144003.1 8. Create an internal requisition under operating unit A. 9. Approve the internal requisition. 10. Run "Create Internal Sales Orders" Records will be created in the sales order interface table for internal orders in operating unit B. 11. Run order import in operating unit B.

Internal orders will be created in operating unit B with "Booked" status.

The customer for the destination operating unit (operating unit A), as well as the internal sales order, must be created in the shipping operating unit, operating unit B. This is antithetical to what the Purchasing User Guide indicates and this documentation will be corrected.