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Understanding the Physical Flow of Outside Processed Assemblies

Oracle Manufacturing gives you the flexibility you need to control your outside processing flows. This essay highlights some basic outside processing scenarios and discusses all of the options you have to manage your particular outside processing flows. Before you learn the transaction flows of Oracle Manufacturing, you should understand the physical flow assumptions on which they are based. This section covers areas such as consuming material requirements, shipping assemblies to suppliers, tracking assemblies at suppliers, and inspecting outside processed assemblies.

Kitting Options

An outside operation may have material requirements in addition to labor or machine requirements. Further, you may have different methods for satisfying material requirements at an outside operation. For example, you may kit and ship components to your supplier for assembly. Or, you may let your supplier provide the components himself. Regardless, Oracle Manufacturing lets you model and transact to match the way you perform outside processing.

You can use the supply type on your bill to indicate who supplies components and when you record the material transactions in the system. For example, if your supplier provides components in addition to labor, you can include the components on your bill with a Supplier supply type. You can charge a job or repetitive schedule for these components by including their cost in the standard cost of the outside resource on your routing. Or, if your supplier charges you separately for these components, you can add another outside resource specifically for these costs. Master Scheduling/MRP does not plan supplier-sourced components.

If you kit components to send to a supplier for assembly, you can include these components on your bill with a Push supply type. Before shipping the assemblies, you can run a Pick List and issue these components to the job or repetitive schedule using the WIP Material Transactions window in Work in Process. The material cost is charged to the job or repetitive schedule when you issue the components. You can ship the components along with the assemblies to the supplier. Master Scheduling/MRP does recognize this component demand.

If you want to backflush the components at an outside operation, you can identify the components on your bill with either an Operation Pull or Assembly Pull supply type. You must still get the components out of inventory and to the supplier, even if you are delaying the backflush until later in your process. You would typically run a pick list to identify the necessary components and ship these components along with the assemblies to the supplier. You would then backflush the components and charge the material cost to a job or repetitive schedule when you complete the outside operation or complete the assemblies to inventory. Master Scheduling/MRP also recognizes this component demand.

Shipping Options

You have several options for shipping your outside processed assemblies to your supplier. Your supplier may pick up assemblies at your plant based on a regular schedule, or you may ship assemblies to your supplier on an as needed basis. In some cases, you may want your supplier to drop ship assemblies directly to another supplier for additional outside processing.

You can use move transactions in Work in Process to record outside processing shipments to your supplier. You can include the specific costs of shipping as separate resources on your routing. In addition, Purchasing lets you record the FOB point on your purchase orders. And, as discussed in the next section, you can also track assemblies at your supplier using move transactions in Work in Process.

If you have sequential outside processing operations and you have worked out the physical flows between your suppliers, you can use PO Move resources to automatically move outside processed assemblies from one outside operation to the next one on your routing. You must enter a receiving transaction in Purchasing confirming completion by the first supplier and receipt by the second supplier.

Outside Processed Assembly Tracking Options

After your supplier receives and begins work on your assemblies, you can track his progress by entering intraoperation move transactions in Work in Process. For example, when your supplier confirms the start of work you might want to move assemblies from Queue to Run. Later when your supplier notifies you that the completed assemblies are being shipped back, you might want to move the assemblies from Run to To move.

Inspection Options

Oracle Manufacturing provides you with several options for inspecting your supplier work. In general, either you or your supplier can perform inspection.

If your supplier performs inspection (to your specifications), he can then ship the assemblies directly to the next operation on your routing. He can include the inspection fee either in his overall fee or as a separate line item. If he charges you separately, you must define a separate outside resource on your routing for the inspection.

If you perform the inspection internally, you can define an internal inspection resource either at the outside operation or at a separate inspection operation with an inspection resource.

You can also receive the outside processed assemblies into a receiving inspection location in Purchasing and perform your inspection activities in receiving inspection. Then, you can deliver the assemblies to the shop floor and charge the job or repetitive schedule for the outside processing services.

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