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Oracle ERP 11i/R12 Functional/Technical Materials: Configure-to-Order

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Business Units and Shared Service model in Fusion Procurement

Friday, June 28, 2013

Posted by Jagadeesan M

Oracle Applications & Modules

0 comments

Business Units (BU) definition: A business unit is a unit of an enterprise that performs one or many
business functions that can be rolled up in a management hierarchy. A business unit can process
transactions on behalf of many legal entities. Normally, it will have a manager, strategic objectives, a
level of autonomy, and responsibility for its profit and loss. (1)
Prior to Oracle Fusion Applications, operating units in Oracle E-Business Suite were assumed to
perform all business functions, while in PeopleSoft, each business unit had one specific business
function. Oracle Fusion Applications blends these two models and allows defining business units with
one or many business functions. (2)
In Fusion Procurement context we need to understand the function of the following types of BUs
Procurement BU
Requisitioning BU
Sold-To BU
Client BU
Procurement Business units: As the name suggests, Procurement BUs are responsible for the
procurement business function which involves vendor management, negotiation of contracts and
purchase agreements, issue of order and subsequent administration.
Client Business Unit: Any BU that will be serviced by the Procurement BU needs to be set as the Client
BU. In case of Shared Services model where the Procurement services are centralized to one BU, the
Procurement BU will be serving all the requisitions from the Client BUs.
Requisitioning Business Unit: As the name suggests Requisitioning BU is the business unit that raises
the requisition for the goods or services that it needs to the Procurement BU. Sometimes, the
Requisitioning BU may be responsible for the financial impact of the purchase, in which case it will also
be defined as the Sold-To BU. In case there is another BU which takes the financial responsibility of the
purchase then, this Sold-To BU will be different from the Requisitioning BU.
Ill take an example to explain the above concept.
A mobile manufacturing company having global presence has its headquarters based in Norway (XYZ
Norway). Its manufacturing division is based in India (XYZ India). The India operation sources its parts
from the branch based in Singapore (XYZ Singapore) which does the centralized purchase of chips from
different manufacturing companies based in Taiwan and Japan. However, the payment to the supplier is
done by headquarter in Norway. In this case the Requisitioning BU would be XYZ India, Purchasing BU
would be the XYZ Singapore BU and the Sold-To BU would be XYZ Norway
Another example to make this clearer. Ill take the example one of my colleagues Suchismita, uses to
explain the concept;
In a normal family, when the teenage daughter while returning home sees the designer shoe on the
shops display, and promptly she approaches her mother with the request, knowing very well that her
need would be fulfilled. The mother being a simple homemaker approaches the dad, and the dad being a
doting father purchases the shoe and gives to the daughter.
If we take the above example, the daughter is the Procurement BU as she is buying the shoe from the
supplier (shoe store). The mother is the requisitioning BU and the father is the Sold-To BU as he is
taking the financial responsibility of the purchase. (3)
Following is the list of setups to be done to ensure this works in the system.
Select the Procurement Service Providers for the selected BU
Assign either one or many out of the Procurement, Requisitioning and Receiving business functions to
the respective BU
Configure the Procurement Business Function for the BU and Configure the Requisitioning Business
Function for the BU
Select the Procurement BU at the Supplier Address
Select the Client BU and Sold-To BU at the Supplier Site Assignment
In todays scenario, businesses find it beneficial to channel purchases through international subsidiaries
instead of directly dealing with suppliers. The reasons range from country specific legal requirements to

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Oracle ERP 11i/R12 Functional/Technical Materials: Configure-to-Order

favorable tax treatment to having better margins due to economies of scale because of centralizing
procurement. Fusion Procurement provides this feature seamlessly which in hindsight seems quite
intuitive.

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Beginner, C onfigure-to-Order, ERP Questions, Oracle E-Business Suite, Oracle E-Business Tax, Oracle
R12

Configure-to-Order
Wednesday, September 5, 2012

SCM
0 comments

A Configure to Order environment is one in which the product or service is assembled or kitted
on receipt of the sales order. Oracle Applications supports the Configure to Order environment
with a range of features in order entry, demand forecasting, master scheduling, production,
shipping, and financial accounting.
Configure to Order:
Includes Pick-to-Order (PTO) and Assemble-to-Order (ATO) items, ATO models, PTO Models
and hybrids.
Supports building configurations using other configurations as subassemblies (multilevel
configure to order).
Supports internal sourcing of ATO models at any level of Bill of Material (BOM).
Supports purchasing of ATO models and items at any level of the BOM.
Standrad/Option
An optional item component in an option class or model bill of material.
Model (Model Item)
An item whose bill of material lists option classes and options available when you place an
order for the model item.
Option Class
A group of related option items. An option class is orderable only within a model. An option
class can also contain included (standard) items.
An Option Class is a list of choices
AssembletoOrder (ATO)
An environment where you open a final assembly order to assemble items that customers
order.
Assembletoorder is also an item attribute that you can apply to standard, model, and option
class items.
1. AssembletoOrder (ATO) Model
A configuration you make in response to a customer order that includes optional items.
Assemble-to-Order model consists of:
Model bill of material with optional items and option selection rules
Configuration manufactured from mandatory components and selected options

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Purchasing Order
Release R12

Posted by Jagadeesan M

Shippable - NA, Stock able - NA, Transact able NA, Ship Model Complete - Yes.
BOM Allowed : Yes
BOM Item Type : Model
Build in WIP: No
Customer Ordered : Yes
Custmer Order Enabled: Yes
OE Transactable : Yes
Assemble to Order : Yes
Pick Components : No
Planning Method : MPS Planning
Forecast Control : Consume or Consume & Derive
2. AssembletoOrder (ATO) Option classSet of options present in a Model.
Shippable - NA, Stockable - NA, Transactable - NA
BOM Allowed : Yes
BOM Item Type : Option class
Build in WIP: No
Customer Ordered : Yes
Custmer Order Enabled: Yes
OE Transactable : Yes

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Oracle ERP 11i/R12 Functional/Technical Materials: Configure-to-Order

Assemble to Order : Yes

Pick Components : No
Planning Method : MRP Planning
Forecast Control : Consume and derive if manufacturing the model. Null if it belongs to a
purchase model
3. AssembletoOrder (ATO) Item
An item you make in response to a customer order.
Shippable - Yes, Stock able - Yes, Transact able - Yes
Assemble-to-Order item consists of:
Standard bill of material with standard components
Item manufactured from standard components
BOM Allowed : Yes
BOM Item Type : Option class
Build in WIP: Yes, if using the autocreate program to generate supplyeven if it is a buy
item. Otherwise, it depends.
Customer Ordered : Yes
Custmer Order Enabled: Yes
OE Transactable : Yes
Assemble to Order : Yes. This value should be the same in all organizations
Pick Components : No
Planning Method : MRP Planning
Forecast Control : Consume.
There are three types of ATO items:
1. Standard ATO Item s: These are standard items with the ATO flag checked on the OM tab of
the item master.
2. Preconfigured Item s: An item defined by the user with a "Base Model" and a configured
bill of material. These items have the following attributes:
The ATO flag checked on the OM tab of the item master
A Base Model defined on the BOM tab of the item master
3. AutoCreated Configuration Item s: Configuration items created by CTO for a sales order
which was placed for a model and options. These items have the following attributes:
The ATO flag checked on the OM tab of the item master
A Base Model defined on the BOM tab of the item master
The Autocreated Configuration flag is checked
PicktoOrder (PTO)
A configuretoorder environment where the options and included items in a model appear on
pick slips and order pickers gather the options when they ship the order.
Alternative to manufacturing the parent item on a work order and then shipping it.
Picktoorder is also an item attribute that you can apply to standard, model, and option class
items.
PicktoOrder (PTO) Model
An item with an associated bill of material with optional and included items.
At order entry, the configurator is used to choose the optional items to include for the order.
The order picker gets a detailed list of the chosen options and included items to gather as
separately finished items just before the order is shipped.
Shippable - NA, Stock able - NA, Transact able NA & Ship Model Complete - Yes
BOM Allowed : Yes
BOM Item Type : Model
Build in WIP: No
OE Transactable : Yes
Assemble to Order : No
Pick Components : Yes
Planning Method : Not Planned
Forecast Control : Consume
PicktoOrder (PTO) Option class
Set of options present in a PTO Model
Shippable - NA, Stock able - NA & Transact able - NA
BOM Allowed : Yes
BOM Item Type : Option class
Build in WIP: No
OE Transactable : Yes
Assemble to Order : No
Pick Components : Yes
Planning Method : Not Planned
Forecast Control : Consume & Derive

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Oracle ERP 11i/R12 Functional/Technical Materials: Configure-to-Order

PicktoOrder (PTO) Item (Kit)

A predefined configuration order pickers gather as separately finished included items just
before they ship the order. Also known as a kit.
A kit is an item that has a standard list of components (or included items) you ship when you
process an order for that item.
A kit is similar to a picktoorder model because it has shippable components, but it has no
options and you order it directly by its item number, not using the configuration selection
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