An Introduction About Procure To Pay Cycle

             Purchase-to-pay, often abbreviated to P2P and also called req to cheque, refers to the business processes that cover activities of requesting (requisitioning), purchasing, receiving, paying for and accounting for goods and services.

          Purchase-to-pay systems automate the full purchase-to-payment process, connecting procurement and invoicing operations through an intertwined business flow that automates the process from identification of a need, planning and budgeting, through to procurement and payment.

              Procure-to-pay is a term used in the software industry to designate a specific subdivision of the Procurement process.

              Procure-to-pay systems are designed to provide organizations with control and visibility over the entire life-cycle of a transaction – from the way an item is ordered to the way that the final invoice is processed – providing full insight into cash-flow and financial commitments. 

          Most of the companies using these systems look for a Centralization of their procurement department, or to set up a Shared Services organization for the same purpose.

Procure To Pay Cycle

Oracle Procure To Pay Process

Processing Constraint

Processing constraints are rules that control

1.who can change

2.What Can be Changed

3.when they can change

              Processing constraints can prevent certain changes, but can also be set up to perform actions based on those changes.

               They can define actions that can result from these changes, such as requiring a reason for the change, triggering an action in Audit Trail or Versioning, or raising an Integration Event.

Who can make changes

               Based on responsibility. A constraint (rule) may apply to all responsibilities, to only a list of constrained responsibilities or to all except a list of authorized responsibilities. 

What Can be Changed

• Order Header
• Order Line
• Order Sales Credit
• Line Sales Credit
• Order Price Adjustment
• Line Price Adjustment
• Order Payment
• Line Payment
• Sales Agreement Header
• Sales Agreement Line.

When they can change 

             The conditions must be collectively true for the constraint to Allow or prevent the changes. The conditions may be based on either the state of a workflow activity (where the entity is in the flow) or a value in a table.

             A condition may also be based on a custom API, which means that you can call your own PL/SQL code to evaluate the condition.

             

             Multiple conditions can be combined using either AND logic (all the conditions must be true) or OR logic (at least one of the conditions must be true.)

Usage of Processing Constraint:

      Any Action Such as Update , Split , Cancel ,Delete or Create Will be Evaluated by Order Management against the Entity for Constraint 

Item Orderability

Item Orderability

         This is new feature introduced in Oracle R12.1.1.This is rule that user can define to restrict the items that can be ordered from the Sales Order form. 

       For example, you may want to take an order only for a set of products for Customer A, which may not be applicable to Customer B. In addition, orderable products are useful for business flows such as private labeling, franchises, licensing / certification, product suitability etc.

       The Ordered Item List of Values (LOV) is populated by listing all the items available in the item validation organization of the current operating unit.

Item Orderability rules are defined at Operating Unit Level.

The Item Category and Items LOV are always displayed based on the Master Organization or the Item Validation Organization attached to the operating unit

Profile Option and application

         If the value of the profile option OM: Use Materialized View for Items LoV (Honours Item Orderability Rules) is set to No, then the Ordered Items LOV lists all the items of the item validation organization of the current operating unit. 

          This doesn’t consider the defined item orderability rules, however if there is a defined rule that prevents the item from being ordered, then an error message is displayed during the saving of the order. You will not be able to save the order.

                If the value of the profile option OM: Use Materialized View for Items LOV (Honours Item Orderability Rules) is set to Yes, then the Ordered Item LOV displays only those items which are based on the rules defined. The Ordered Item LOV is then dynamically populated based on Item Orderability Rules and the current attribute values on the line.

         The rules state that an item or item category will be generally available (if the Generally Available box is selected) except for the conditions set up at the Rule Level. The conditions are based on the following line attributes:

• Customer
• Customer Class
• Customer Category
• Region
• Order Type
• Ship To
• Bill To
• Deliver To
• Sales Channel
• Sales Representative
• End Customer

Setting Up Item Orderability Rules

Navigation: Setup > Rules > Item Orderability.


Sample Scenario:

Item :CM-CRS-SD5

Should Not be Orderable for Customer A.C. Networks

When OM: Use Materialized View for Items LOV is No

Item Order-ability Rule:

Sale Order Creation Which Has Item On LOV , But Prevents the Saving of Order With Error Note.

If the Profile Option OM: Use Materialized View for Items LOV is Yes , Ordered Item LOV Wont List the Item Which We Specified in Rule.

Concurrent 

Refresh OM Materialized Views periodically

This Concurrent Refreshes the materialized view OE_ITEMS_MV

       If  any data is Changed in Inventory, it is advisable to run this concurrent program so that the data in Inventory and Order Management stay synchronized.

REPORTS

           The Item Orderability Rules Listing Report lists item orderability rules based on different user inputs like Item Level, Item, Item category and enabled flag.

           Item Orderability Rules in Order Management are applicable to all orders accepted in Order Management. Hence, orders coming from other order capturing applications such as Quoting, iStore or third party applications will not be accepted in Order Management if the incoming orders do not comply with item orderability rules.

Supply Chain Management Overview

Supply Chain Process Overview

A supply chain is a network of suppliers, manufacturers, assembly, distribution and logistic facilities that perform the function of procurement of materials, transformational of material into intermediate and finished products and the distribution of these products to customer.

SCM is a systematic approach to manage the flow of information, material and services from raw material supplier through manufacturer and warehouse and finally to the end customer.

SCM has three primary goals: Reduce Inventory, increase the transaction speed by exchanging data in real-time and increasing sales by implementing customer requirements more efficiently.

Supply Chain Stages/Entities

A typical supply chain involves following stages

• Customer
• Retailer
• Distributor
• Manufacturer
• Vendors

In this network, finished goods or components move from vendor to manufacturers to distributors and to finally end customer.Cash flow happens exactly in the revers order, from the customer to the vendor through manufacturer.

Supply Chain Cycles

1. Customer Order Cycle
The customer order cycle occurs at the customer interface and includes following processes

• Customer Arrival
• Customer Order entry
• Customer Order fulfillment
• Customer order receiving and paying for the goods or services

2. Replenishment Cycle
The replenishment cycle occurs at the retailer/distributor interface, which is similar to the  customer order cycle except that the retailer is now the customer.

3. Procurement Cycle
This cycle occurs at manufacturer/supplier interface which includes the following processes

• Manufacturer orders component from the supplier
• Supplier ships the component
• Manufacturer receives the goods and pay for this

4. Manufacturing Cycle
This cycle typically occurs at manufacturer/distributor interface and includes following processes

• Order consolidation from the warehouse, distributor, customer and retailers
• Supply chain planning
• Production scheduling
• Manufacturing and stocking