Oracle Inventory is core module of entire Oracle e-business suite, this module shares the information with almost every other module. Oracle Inventory let you define the Items and it is backbone of all inventory transactions.

Functionality provided by Oracle Inventory

Item Master

Item setup is critical part of Oracle ERP implementation. Item setup is required to place purchase orders, receive & transact inventory, to enter sales orders, ship goods/services to customer. Items are first setup in master inventory organization and same can enabled in every other inventory organization where it needs to transact. Item attributes are different flags that determine the characteristics of items. Item attributes determine whether item is procured item, saleable item, service item etc.

Inventory transactions

Inventory holds the onhand quantities and transactions that can cause onhand changes. Transactions originated from other modules (Shipping - customer shipments, Purchasing - Receiving goods into stock etc) are finally transferred to Inventory. Every transaction is associated with a transaction type, source, Item, quantity, unit of measure and additional attributes. Oracle provides many seeded transaction types and you can add custom transaction types as needed for accurate reporting.

Examples of Inventory transactions

       Subinventory transfers

       Miscellaneous issue/receive

       Account Alias issue/receive

       Move order issue

       Sales order shipment

Serial & Lot control Its provides detail tracking of onhand and related inventory transactions. Lot number and serial number are critical requirements in a regulated environment like pharmacuetical, food processing industries. In case of any recalls lot/serial control provides tracing the current location of goods.

Inventory Planning

Oracle Inventory planning provides good planning methodoligies for indirect item purchases, MRO kinds of items while MRP (Material Requirements Planning) as planning method is still preferred for direct material. MRP functionality is delivered through Oracle MRP/SCP module. Widely known inventory planning methods are Reorder planning & Min-max planning, lets understand little bit more about these methods.

Reorder Point Planning (ROP) ROP uses Supply (onhand + expected receipts) and safety stock information to plan the re-order quantity. When supply falls below safestock a replenishment order is created considering the lead time and economic order quantity.

Min-Max Planning This planning method is bit different from ROP, The replenishment order is created when onhands falls below the minimum level set at the item.

Periodic Inventory verification methods

It is very important to have systematic onhand match with actual physical onhands for data accuracy and efficient planning purpose. Oracle Inventory provides two onhands verification and rconcialiation methods called Physcial Inventory and Cycle counting.

Physical Inventory It is an activity where 100% of onhand is physically verified and reconciled with system onhand. Typically this is done once a year or twice based on business needs. When physical inventory in progress typically all other operations will be on hold. Any differences in physical and systematic onhands are adjusted and approved in system and matched with physical onhand quantity.

Cycle counting It is a periodic counting process instead of onetime process like physical inventory. In cycle couting items are classified into ABC classes (high, medium, low value items). High value items are verified more frequent than low low value items. System generates the schedule of items that need to be counted and verified.

An Enterprise Resource Planning (ERP) system is an information system that is implemented throughout an enterprise with the objective of making information accessible to everyone within the organization in real-time. These systems are designed to integrate all areas of the enterprise including financial accounting, sales, distribution, inventory, and human resources, and thus improve the performance of the organization in terms of resource planning, management control, and operational control.

            

ADVANTAGES

There are many advantages associated with an effectively implemented ERP system. Typical advantages include:

• Significant cost savings
  
• Valuable time savings – speeding up all areas of the business process
  
• Accessible information throughout an enterprise in real-time
  
• Gives managers and senior executives the ability to monitor activity, strategically plan, and make timely decisions, particularly in global organizations
  
• Automates business activities in each area of the enterprise
  
• Improving design and engineering practices
  
• The process of tracking purchase orders and shipping products to customers (what was ordered, what arrived, what the seller invoiced)
  
• Improved finance and accounting activities – by integration of cost, profit, and revenue information and improved presentation of this information [3]
  
• By tracking products and sales, managers can realize which products are successful and which products they need to improve/ redesign
  
• Improved security against employee crimes
  
• Creates a competitive advantage over competitors not using ERP systems
  

 DISADVANTAGES

Although there are many significant advantages of ERP systems which contribute to competitive advantages and great success, there are also many disadvantages or downfalls. The biggest disadvantage of ERP systems is they can be very difficult and costly to implement and integrate into a large organization. Implementing a system requires a considerable amount of time and financial investment due to on-going training for all employees and it can take a long time to effectively integrate the system. Due to high costs ERP systems have been used mainly by very large organizations but with recent improvements in ERP software and trends towards needs based applications ERP is being used more frequently by medium and small sized organizations. [4] Another difficulty is that the success of the system relies on the employees using the system properly and with accurate information. [3] It can be very expensive to train the whole organization to use the ERP system and failure to do so can result in devastating financial losses to the organization. Another disadvantage of ERP is the lack of customization options. When adopting a new system you want to avoid customizing because it is difficult, timely and expensive.

STEPS TO IMPLEMENTATION

Implementing an ERP system can be a difficult and expensive process and unsuccessful attempts have been extremely costly for some organizations in the past. There are many detailed steps required for effective implementation and professional experience is highly recommended. However, the following 6 steps provide a basic framework and starting point for a successful ERP implementation.

Step 1 – Define Success and Planning

This starting point is often the key to success. First you must establish the problem you are trying to solve or what you want to achieve from implementing ERP. Do you want to improve inventory control? Do you want to speed up delivery? Do you want to automate business practices? And will these improvements contribute to increased profits and future growth? You also need to develop an implementation team, plan the project, and establish all the necessary steps to complete the project. A consultant or an ERP professional is highly recommended.

Step 2 – Set Priorities

During ERP implementations there will be countless problems discovered but due to complexity and high costs of ERP you need to set priorities and focus on the most important issues. It is also important to implement new systems step-by-step to prevent overloading managers and users with too much information when learning the ins and outs of the new system. Generally you want to begin the implementation with the core functions of your business and solidify those practices.

Step 3 – Avoid Modifications

This step is easy, avoid modify the source code of your ERP application software. You should be able to choose the right ERP software to fit your organization in terms of size and complexity so that you do not need to modify the code of the software. There may be pressure from employees to change the program to make it easier for them or make it more like the previous system used. However modifications are extremely costly and time consuming and rarely improve functionality.

Step 4 – Prepare for Change

Implementing an ERP system is a big change for your staff, customers, and suppliers. It is necessary to prepare everyone involved for the change, especially the managers and end-users of the product. Employee resistance can be harmful to the new system and your business so it is important to properly train all users with hands-on experience and plan for a smooth transition. Also it is necessary to have good communication and make it clear that the new system will contribute to greater success of the company and can provide better opportunities for them in the future.

Step 5 – Gain Executive Support

Executives support is crucial for adopting an ERP system. Executives need to ensure strategic alignment with the organizations goals and values. They also need to be actively involved in the implementation to motivate employees and reduce employee resistance. To gain executive support it is recommended to conduct a professional analysis of the company and coordination of the ERP system to be implemented in order to clarify the benefits of the new system. 

Step 6 – Budget Dollars and People

An ERP project can be very expensive and a planned budget is necessary. But more importantly having the right people and expertise to guide the project will determine your success. You can find people within your organization that obtain the right skills and knowledge or you can recruit an external project manager to commit to the implementation process. These candidates must be fully committed to the success of the project and they must obtain the right skills and industry knowledge to complete the implementation.

Oracle General Ledger

• Budget Upload
• Importing Journals
• Loading Daily Rates

Oracle Payables

    • Credit Card Transaction Interface Table
    • Invoice Import Interface. This interface is no longer supported for importing invoices.
……..Use the Payables Open Interface instead.
    • Payables Open Interface
    • Purchase Order Matching

Oracle Receivables

    • AutoInvoice
    • AutoLockbox
    • Customer Interface
    • Sales Tax Rate Interface
    • Tax Vendor Extension

Oracle Assets

    • ACE Interface
    • Budget Open Interface
    • Mass Additions Interface
    • Production Interface
    • Physical Inventory

Oracle Cash Management

    • Bank Statement Open Interface
    • Forecasting Open Interface
    • Reconciliation Open Interface

Oracle Purchasing

    • Requisitions Open Interface
    • Purchasing Documents Open Interface
    • Receiving Open Interface

Oracle Inventory

    • Customer Item Interface
    • Open Item Interface
    • Open Replenishment Interface
    • Open Transaction Interface
    • Cycle Count Open Interface
    • Reservations Open Interface
    • Move Orders Open Interface

Oracle Projects

    • Activity Mangement Gateway
    • Client Extensions
    • Transaction Import