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Oracle Project Manufacturing - A complete solution for Project Manufacturing based industries (Project Procurement)

Guest Post by 
Srushti Gogate, Senior Associate Consultant, Infosys Limited

Now that we have an introduction to Oracle Project Manufacturing (PJM) in the earlier blog and its salient features, we will look at each feature in detail in the forthcoming blogs. In this one, we shall throw some light on project based procurement using Oracle Purchasing and iProcurement.
Procurement on a very basic level can be of 2 types; either purchase of raw material or services provided. To talk in Oracle terminology it can be of destination type 'inventory' or 'expense'. The behavior or method followed in both cases is completely different in Oracle. Whenever we have an expense Purchase Order (referred to as PO further) raised against a project, Oracle Project Costing modules comes into picture. However this modules does not allow processing of inventory POs against project which is a standard functionality provided by Oracle. This is where PJM has a critical role to play.

PJM enables procurement of raw materials i.e. raising of Inventory POs against a Project and receiving the same at project locator to increase on hand quantity. It not only facilitates receipt but also takes care of the accounting.

The primary important setup which enables user to perform inventory purchases is as mentioned below:
  1. PJM Org Parameters: Here we enable the project reference and state whether the PO should be raised against only project or project-task combination. The GL posting option should be "By Project" and the Account option should be "Send Accounts to PA". This ensures that accounted transactions are incurred as cost against project and then posted to GL from Projects. No accounting takes pace in Projects.
  2. Project Parameters: Assign every project that is created to the organization in which Procurement process is to be done i.e. material is to be received.
Mentioned below are the steps to be followed for project based inventory procurement using PJM
  1. Create a Purchase Requisition against project and task number with destination type: Inventory
  2. The charge account will be derived by customized Requisition account generator based on the project entered
  3. Approve the requisition and Auto-Create PO from it 
  4. Enter supplier details. Please note that the project and task reference given in the requisition along with charge account will flow to the PO. Approve the PO
  5. Create receipt and receive the material against specific project locator (Locator is a combination of Project , Task, Row, Rack and Bin number)
  6. This will increase the on hand for the item against the project in inventory.

Thus this section tells us how PJM enables user to perform project based procurement  for Inventory items and track the material against the project along with the necessary mandatory setups

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