ORACLE INVENTORY SETUPS
What is Inventory?
Inventory can be defined as the following: Finished Goods, Services, Consigned Inventory, Spare Parts, and Raw Materials.
Finished Goods is the end product you may sell to your customers. Services are not physical products, but rather a service (knowledge, instruction, etc.) that you may sell to your customers. Spare Parts may be for maintenance for products that you may sell to you customers. Raw Materials are used in the manufacturing of a Finished Good. Consigned Inventory is Inventory you can purchase from a supplier.
What is Oracle Inventory?
The Oracle Inventory module in EBS is actually a key component in the Order Management process. There are 3 main components to Order Management, which are: Pricing, Shipping Execution and Inventory. Although considered a subset of the Order to Cash flow, Inventory is a very key stand-alone piece, and without Inventory, the Order to Cash process will fail. Let us see why.
In order to sell a product or service, you need some kind of inventory. Without a tangible or intangible product, there is no way to market a product/service to a customer, and ultimately have that customer buy anything from you. There is no sales order that will get generated, no order to be booked, no price to charge a customer, and ultimately no payment to be collected and settled with the bank. So, as you can see, without Inventory, the entire Order to Cash process in the Oracle e-Business Suite will not work, thus affecting the bottom line of any company that wishes to do business with external customers.
With that being said, it is very important to understand some key Inventory setups within the Oracle Suite. Some are required, many are optional, but in order to start piecing the Order to Cash flow together and have Oracle working in the most efficient manner for your business, there are some very mandatory and important setups that must be done. The purpose of this article is to guide you along on how to perform these key setups, and hopefully also be an educational tool as well. The screenshots should provide some visual assistance. I hope you find this document informative and helpful.