MFG CST Advisor Webcast 2014 0923

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Upcoming: Work In Process and Outside Processing Transactions in Discrete Manufacturing

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Upcoming: Work In Process and Outside Processing Transactions in Discrete Manufacturing

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Oracle Advisor Webcast

Work In Process and Outside Processing
Transactions in Discrete Manufacturing
Suhas Basidoni
Suraj Patil
Sathish Kumar
September 23, 2014
Objectives
Key WIP, OSP and related
Accounting setup
Overview of accounting in WIP
and OSP
Form Navigation and table-level
flow
Cost calculation logic
Agenda
1
Introduction to Work In Process Flow in Discrete Mfg
Work In Process and related Accounting set up
Brief introduction on accounting aspect of selective WIP

transactions
Understanding Job Cost Calculation with the help of

Reports
Table level information on accounting distributions

Agenda (cont.)
6
Introduction to OSP Flow in Discrete manufacturing
OSP and related Accounting set up
Brief introduction on accounting aspect of selective OSP

transactions
Cost calculation
10
Table level information on accounting distributions

Introduction to Work In Process Flow

What is Work In Process (WIP)?
Work In Process implies, material that has entered the production process
but is not yet a finished product.
It therefore refers to all materials and partly finished products that are at
various stages of production processes.
WIP excludes inventory of raw materials at the start of the production cycle
and finished products at the end of the production cycle.
For accounting purposes, WIP is considered as a current asset on the
Balance Sheet.
Introduction to Work In Process Flow Key Concepts

BOM
A comprehensive list of raw materials, components and assemblies required to build or manufacture a
product. A BOM "explosion" displays an assembly or sub-assembly broken down into its individual
components and parts with respect to job.
Routing :
The routing shows the flow of required work for the job, that needs to be achieved and determines what work
is to be performed and where and how it will be done.
Department :
A department is an area within an organization that consists of one or more people, machines, or suppliers,
where costs are collected and overhead are applied on the job.
Resource:
A resource is anything viz., employees, machines, outside processing services , which are required to
perform an operation on the job.
WIP Accounting Class :
WIP Accounting class is a set of accounts defined to assign valuation and variance accounts for jobs.
10
Flow Chart for Bill of Material

Bill of Material for Car (Product Family)
Product Family
Assembly
WIP_Car
Component
WIP_Engine
WIP_Wheel_Buy
WIP_Tyre
WIP_Rim
Steering
WIP_Rear_Assy
WIP_Body
WIP_Front_Axle
WIP_Rear_Axle
WIP_Wheel_Buy
WIP_Bolt_Half
11

Navigation: Mfg (Resp.) Bill of Materials Bills - Bills
12

Navigation: Mfg (Resp.) Bill of Materials Routings - Resources
13

Navigation: Mfg (Resp.) Bill of Materials Routings - Departments
14

Navigation: Mfg (Resp.) Bill of Materials Routings - Routings
15

Navigation: Mfg (Resp) WIP Setup WIP Accounting Classes
To be entered by the
user
16
Brief introduction on accounting aspect of selective WIP transactions
Transactions Covered
Defining a Discrete Job

WIP Component Issue
WIP Component Return
WIP Assembly Completion
WIP Assembly Return
WIP Negative Component Issue
WIP Negative Component Return
17
Navigation: Mfg (Resp.) WIP Discrete Discrete Jobs

Defining Discrete Job for
Product Family
18
Navigation: Mfg (Resp.) WIP Material Trans WIP MTL Trans
Component
Issue Txn
19
Accounting Distribution for WIP Component Issue Transaction

Debit WIP Valuation
Credit Inventory
Job Name
20

WIP Issue
Costing and Table Info WIP Issue Transaction

Select * from mtl_material_transactions where transaction_type_id = 35
Select * from from mtl_transaction_accounts where transaction_id in (25914137, 25914138)
Select code_combination_id, concatenated_segments from gl_code_combinations_kfv where

code_combination_id in (13401, 371053)
WIP Valuation
Inventory Valuation
21
Navigation: Mfg (Resp.) WIP Material Trans Compl Trans
Completion Txn
22
Accounting Distribution for WIP Assembly Completion Transaction

Debit Inventory
Credit WIP Valuation
Job Name
23

WIP Completion
Costing and Table Info WIP Completion Transaction

Select * from from mtl_transaction_accounts where transaction_id = 25914136

WIP Valuation
Inventory Valuation
24
Navigation: Mfg (Resp.) WIP Move Transactions Move Trans
Select the Move

option under
Transaction Type
25
Navigation: Mfg (Resp.) WIP Move Transactions Move Trans

(Return)
WIP Assembly return

transaction returns
component as well as
sub-assemblies/
Resources
26
Accounting Distribution for WIP Component return Transaction

Debit Inventory
WIP Component return transactions accounting

generated along with assembly completion returns
accounting
Job Name
27

WIP Component Return
Costing and Table Info Wip Component Return

Select * from from mtl_transaction_accounts where transaction_id in (25914150, 25914151)

WIP Valuation
Inventory Valuation
28
Accounting Distribution for WIP Assembly return Transaction

Debit WIP Valuation
Credit Inventory
WIP Assembly Completion return transactions accounting

generated along with Component return accounting
Job Name
29

WIP Assembly Return
Costing and Table Info Wip Assembly Return


WIP Valuation
Inventory Valuation
30
Navigation: Mfg (Resp.) WIP Mtl Trans WIP Mtl Trans
31

Accounting Distribution for WIP Negative Component Issue Transaction
Debit Inventory
Job Name
32

WIP Negative Issue
Costing and Table Info Wip Negative Issue


WIP Valuation
Inventory Valuation
33
Navigation: Mfg (Resp.) WIP Mtl Trans WIP Mtl Trans
34

Accounting Distribution for WIP Negative Component Return Transaction
Debit WIP Valuation

Credit Inventory
Job Name
35

WIP Negative Return
Costing and Table Info Wip Negative Return


WIP Valuation
Inventory Valuation
36
WIP Value Summary -After Job Completion and before Assembly

Cost-element wise breakup of
Return
Job WIP_DJ_31
Costs Incurred: Costs

associated with material
issues/returns, resource, and
overhead transactions of a job
Costs Relieved: Actual costs
relieved by cost element
when assemblies from a job
are completed
37
WIP Value Summary after WIP assembly return Transaction
Post return of 1 Qty, cost of

material and resource have
been re-averaged and the
corresponding effect is shown
in Net Activity
Movement of material
cost can be seen in Item
cost history form
38
Cost calculation
Item Cost Changes after WIP Assembly Return Transaction
39
Introduction to Outside Processing (OSP)

What is Outside Processing?
OSP is used whenever all or part of the manufacturing operations are performed by a
outside supplier. More than one operation on a routing can be performed by such supplier.
In Oracle EBS, there is an integration to automate the process of creating a purchase
order to the vendor who will perform the OSP.
OSP is integrated out of the box with following modules of Oracle EBS:
Oracle Purchasing
Oracle Inventory
Oracle Cost Management
Oracle Work in Process
Oracle Bill of Material
40
Flow Chart for Outside Processing
41

OSP- Checklist
Inventory Item attribute only PO flags checked

When we use an OSP resource then the charge type for the
resource has to be "PO Move" or "PO Receipt". Only then the
Purchase Reqs are created.
42

Navigation: Inventory- Items- Master Items
Enable Outside Processing check box
Unit Type is
Resource
Sourced from Org

Parameter Costing tab
43

Navigation: Inventory- Items- Master Items
When OSP unit type is Assembly then OSP Resource
charges based on the Work Order Quantity
When OSP unit type is Resource then OSP Resource

charges based on the Work Order Quantity multiplied by
resource run rate.
Price to be entered
by the user
44

Navigation : Bill of Materials- Routings- Resources
Charge Type, Outside

Processing and
Account details to be
specified
45

Navigation : WIP- Setup Parameters - Outside Processing
Value defaulted from Shop floor statuses form
(WIP-Move transactions)
46
Cost calculation
WIP value summary (OSP) Before completion
If the Job is not completed,

Cost Relieved will be zero
Accounts are derived from

WIP Accounting classes
defined for the WIP class
47
Cost calculation
WIP OSP Distribution
Debit WIP Valuation
Credit Resource Absorption
Resource Absorption account is derived

from resources set up (Routings
Resources-Costed block)
Operation Seq and

Dept of OSP
48

Costing and Table Info WIP Outside Processing
Select * from from wip_transaction_accounts where transaction_id = 32948680

WIP Valuation
Resource Absorption
49
Cost calculation
WIP value summary (OSP) After completion
If the Job is completed, Cost Relieved
will be equal to Cost Incurred
Accounts are derived from

WIP Accounting classes
defined for the WIP class
50
Report
Discrete Job Value Report Detail (Sub Assembly - WIP Engine)
51
Report
Discrete Job Value Report Detail (Sub Assembly Rear Assembly)
52
Cost calculation
WIP Value Summary Product Family Car
Cost element wise break up of product
family Car after Job completion
On Job completion cost

relieved is equal to cost
incurred
53
Report
Discrete Job Value Report Detail (Product Family Car)
WIP Rear
Assembly
includes OSP
54
Summary
What we covered today

Overview of accounting in WIP and
OSP transactions
Table Level Data flow
Cost Calculation before and after
transactions in perpetual costing
Interpretation and usage of reports
55
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ATTENTION AUDIO Options

Option 1: Voice Streaming Audio Broadcast

Option 2: Teleconference (Dial In)

No need to dial in on a telephone

Requires telephone to dial in

Upcoming: Work In Process and Outside Processing Transactions in Discrete Manufacturing

Upcoming Advisor Webcast Schedule

Check out Note ID : 740966.1

Upcoming: Work In Process and Outside Processing Transactions in Discrete Manufacturing

Safe Harbor Statement

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Oracle Advisor Webcast

Introduction to Work In Process Flow in Discrete Mfg

Work In Process and related Accounting set up

Brief introduction on accounting aspect of selective WIP

Understanding Job Cost Calculation with the help of

Table level information on accounting distributions

Introduction to OSP Flow in Discrete manufacturing

OSP and related Accounting set up

Brief introduction on accounting aspect of selective OSP

Table level information on accounting distributions

Introduction to Work In Process Flow

Introduction to Work In Process Flow Key Concepts

Flow Chart for Bill of Material

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Work In Process and related Accounting set up

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Work In Process and related Accounting set up

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Work In Process and related Accounting set up

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Work In Process and related Accounting set up

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Work In Process and related Accounting set up

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Brief introduction on accounting aspect of selective WIP transactions

Defining a Discrete Job

WIP Component Return

WIP Assembly Completion

WIP Assembly Return

WIP Negative Component Issue

WIP Negative Component Return

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Brief introduction on accounting aspect of selective WIP transactions

Navigation: Mfg (Resp.) WIP Discrete Discrete Jobs

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Brief introduction on accounting aspect of selective WIP transactions

Navigation: Mfg (Resp.) WIP Material Trans WIP MTL Trans

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Brief introduction on accounting aspect of selective WIP transactions

Accounting Distribution for WIP Component Issue Transaction

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Brief introduction on accounting aspect of selective WIP transactions

Costing and Table Info WIP Issue Transaction

Select * from from mtl_transaction_accounts where transaction_id in (25914137, 25914138)

Select code_combination_id, concatenated_segments from gl_code_combinations_kfv where

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Brief introduction on accounting aspect of selective WIP transactions

Navigation: Mfg (Resp.) WIP Material Trans Compl Trans

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |

Brief introduction on accounting aspect of selective WIP transactions

Accounting Distribution for WIP Assembly Completion Transaction

Copyright 2014 Oracle and/or its affiliates. All rights reserved. |