Advanced Supply Chain Planning (ASCP)

Five Options When Using Oracle Project Manufacturing

By Jag - August 01, 2012
Oracle Apps Tutorial | Five Options When Using Oracle Project Manufacturing
 Each option uses different modules to capture cost, generated revenue, and invoice the customer.   The basic options are:
  1. Using Seiban Projects
  2. Using Indirect Projects
  3. Using Contract projects to recognize revenue
  4. Using Contract projects to recognize revenue and to invoice the customer
  5. Using Contract projects with Project Management or Project Contracts deliverables

Option 1: Using Seiban Projects with Oracle Project Manufacturing

Seiban comes from the Japanese word meaning “manufacturing number”.  Seiban projects require the least amount of setup because you do not need to implement the Projects module to create a Seiban number.  Seiban projects allow you to perform the following at a project level: supply chain planning, create inventory purchase orders, track on-hand inventory, and enter sales order lines.  Since this project number is not integrated with the Projects module, you cannot interface manufacturing cost or capture non-manufacturing cost like engineering labor.  This is a good option if you do not want to implement Projects and need a way to group and track sales orders by project or contract.

Option 2: Using Indirect Projects with Oracle Project Manufacturing

This option requires you to implement the Project Costing module and setup project parameters in the Project Manufacturing module.  Once this is complete you will be able to perform project-level supply chain planning, create project inventory purchase orders, track on-hand inventory by project, and associate projects with sales order lines.  When you purchase inventory or manufacture items in WIP, the cost can be interfaced to the Projects module.  You have the option of using the default inventory accounting (this interfaces the cost with GL accounts) or using the AutoAccounting in Projects (this interfaces the costs without GL accounts).  With is option you can capture non-manufacturing labor and material cost to see your total cost.  If this project represents a contract with a customer, you can use Order Management to invoice the customer when the item is shipped.

Option 3:  Using Contracts Projects to Recognize Revenue with Oracle Project Manufacturing

This option requires you to implement both the Project Costing and Project Billing modules.  Like the indirect project will be able to perform all the supply chain functions by project:  MRP/ASCP planning by project, create project inventory purchase orders, track on-hand inventory by project, associate projects with sales order lines, and capture non-manufacturing labor and material cost.  To recognize revenue in the Project Billing, you will need to setup an agreement and your project budgets.  Since revenue is being recognized in the Projects module and billing is happening when you ship the product in OM, you will need to make sure the accounting in the Receivables module books its revenue to an unbilled receivables account.  This option works well if you need to recognize revenue using the percent complete method but want to bill your customer when the product ships.

Option 4: Using Contracts Projects to Recognize Revenue and Invoice the Customer with Project Manufacturing

This option is very similar to the option above, but instead of billing the customer from OM you will bill the customer from the Projects Billing module.  This works well when the contract with the customer requires you to bill based on milestones not on delivery of product.  This option also eliminates the need to make sure the accounting in the Receivables module books its revenue to an unbilled receivables account because Project Billing does this automatically.

Option 5: Using Contracts Projects and Deliverables with Project Manufacturing

This option requires you setup a contract project (using the Project Costing and Project Billing modules) and to setup deliverables in either the Project Management module or the Project Contracts module.  The deliverable is used to place demand on the Supply Chain planning modules.  So, you will not need a sales order because the deliverable performs the same function.  Once the product is purchased or manufactured, you can ship the item using the Project Contracts source.   The deliverable can also be used to create billing events in the Project Billing module for invoicing the client.
Here’s a summary of the options in this post:
Option\ Feature Seiban Project Indirect Project Contract Project (Revenue Only) Contract Project (Revenue and Billing) Contract Project with Deliverables
Supply Chain Plan (MRP/ASCP) by Project
Yes
Yes
Yes
Yes
Yes
Inventory Purchase Order by Project
Yes
Yes
Yes
Yes
Yes
Inventory by Project
Yes
Yes
Yes
Yes
Yes
Work Orders by Project
Yes
Yes
Yes
Yes
Yes
Sales Order Lines by Project
Yes
Yes
Yes
Yes
Capture Non-Manufacturing Cost
Yes
Yes
Yes
Yes
Recognize Revenue in the Projects Module (Percent Complete)
Yes
Yes
Yes
Invoice when Product Ships
Yes
Yes
Yes
Yes
Recognize Revenue and Bill in the Projects
Yes
Yes
Ship by Project
Yes
  • Share:

You Might Also Like

1 comments

  1. Gene BerniceAugust 8, 2012 at 9:37 PM

    This article is more beneficial to our company because we are using oracle project manufacturing.


     Engineer Invoice Template 

    ReplyDelete