Copyright © 2006, Oracle. All rights reserved. BuySell Subcontracting Overview Frederic Dubois Group Manager Supply Chain Globalizations Oracle Corporation

Copyright © 2006, Oracle. All rights reserved. 2 Purpose: This document provides an overview of features and enhancements included in Release xx. It is intended solely to help you assess the business benefits of upgrading to Release xx. This document in any form, software or printed matter, contains proprietary information that is the exclusive property of Oracle. Your access to and use of this confidential material is subject to the terms and conditions of your Oracle Software License and Service Agreement, which has been executed and with which you agree to comply. This document and information contained herein may not be disclosed, copied, reproduced or distributed to anyone outside Oracle without prior written consent of Oracle. This document is not part of your license agreement nor can it be incorporated into any contractual agreement with Oracle or its subsidiaries or affiliates. This document is for informational purposes only and is intended solely to assist you in planning for the implementation and upgrade of the product features described. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described in this document remains at the sole discretion of Oracle. Due to the nature of the product architecture, it may not be possible to safely include all features described in this document without risking significant destabilization of the code. Disclaimer:

Copyright © 2006, Oracle. All rights reserved. 3 Place Order for Outsourced Assembly A MP added value = $5 RMS: Raw Material Supplier OEM : Original Equipment Manufacturer MP: Manufacturing Partner 1 Ea B A C 2 Ea Ship B-$4, C-$6 BC Place Order for B&C OEM Pays $19 to MP for assembly A BuySell Subcontracting Business Process OEM RMS MP B -$2, C-$3 BC Buy Assembly $ 19 (including $14) A MP Pays $14 to OEM for Components B&C

Copyright © 2006, Oracle. All rights reserved. 4 BuySell Subcontracting Glossary Of Terms 1 Original Equipment Manufacturer(OEM): Equipment Manufacturer, who outsource the production of assembly to third party. Manufacturing Partner(MP): Third party, manufacturing the Assembly using the components supplied by OEM Outsourced Assembly(OSA): Assembly Item, designed by OEM and Manufactured by MP at MP’s site using OEM supplied Components Subcontracting Components: Components sent by OEM to MP for the Manufacturing of Outsourced assembly Synchronized : Components are sent by the OEM at the placement of the Subcontract Order and are dedicated to the assembly of the OSA Item in the Subcontract order

Copyright © 2006, Oracle. All rights reserved. 5 BuySell Subcontracting Glossary Of Terms 2 Pre-Positioned : Components are sent ahead of time by the OEM to the MP using normal planning functionality. Allocation of the components to the Subcontract orders are automatically made Subcontracting Order: Purchase order (Standard or Release) created by OEM to procure Outsourced assemblies from MP Replenishment PO: Purchase Order created by MP in the Chargeable Subcontracting Process to procure Subcontracting Components from OEM. Replenishment PO is closed for invoicing Replenishment SO: Sales Order created in the Chargeable Subcontracting Process to ship Subcontracting Components to MP

Copyright © 2006, Oracle. All rights reserved. 6 BuySell Subcontracting Glossary Of Terms 2 Allocations: Hard pegging of Replenishment SO’s created in the OEM organizations with the Component requirements for the Manufacturing of outsourced assemblies at MP Site Interlock : one of the background processes used to automatically create the Demand at the MP (PO) and Supply at the OEM (Sales Orders) for the components to be sent by the OEM to the MP. This process also creates the component allocation to the Subcontract orders Auto Receive Components: Background process that automatically receives components at the MP based on in transit lead times Process Subcontracting Order Receipts: Background process that, at OSA receipt in the OEM, completes the simulated WIP job at the MP and issues out assembly to adjust for on hand quantity

Copyright © 2006, Oracle. All rights reserved. Component Receipts and Assembly Completions are done by automatic processes B A C 1 Ea2 Ea BuySell Subcontracting Solution Overview OEM Ship Components by Replenishment SO B C OEM Procure Assembly by Subcontract Order A OEM A Manufacturing MP Manufacturing is simulated by Discrete job Inventory Organizations

Copyright © 2006, Oracle. All rights reserved. 8 OEM OrganizationMP Organization B A C 1 Ea2 Ea B A C 1 Ea2 Ea Organization Roles OrganizationCustomerSupplier MP√√ OEM√ ItemMake/ Buy Outsourced Assembly Supply Source ABuyYesBuy From MP BBuyNoBuy from RMS CBuyNoBuy from RMS Shipping Networks From OrgTo Org OEMMP OEM Transfer to GL : NO Transfer to GL : Yes BuySell Subcontracting Setup – Overview ItemMake/ Buy Outsourced Assembly Supply Source ABuyYesMake at MP BBuyNoBuy from OEM CBuyNoBuy from OEM

Copyright © 2006, Oracle. All rights reserved. 9 BuySell Subcontracting Process – Planning Synchronized Components OEM OrganizationMP Organization Forecast Planned Orders Descrete Job / Purchase Order Planning run Net requirement of A as a demand to MPNet requirement of B as a demand to OEM Net requirement of C as a demand to OEM A Buy B Buy C Buy A Make B Buy C Buy None AAA 2 Ea A is a Buy Item, No BOM Explosion A is a Make Item, BOM is exploded B A C B A C 1 Ea B&C are Synchronized Components A Buy from TP B Buy from RMS C Buy from RMS ××× In Organization Items, Release Time fence = “Don’t release Auto or Manual” for Items A,B & C, Planned orders can’t be released

Copyright © 2006, Oracle. All rights reserved. OEM (Standard Cost Org)MP (Zero Cost Organization) Replenishment SO Item : C, QTY:10Ea Customer : MP Replenishment SO Item : B, QTY:20Ea Customer: MP Discrete Job Assembly : A QTY :10Ea Interlock Receive Subcontracting Order Assembly : A, 10Ea Supplier : MP ASCP AP InvoiceAR InvoiceSHIP Auto receive Components Receive No Manual Transactions in MP Org Replenishment PO Item : C, QTY:10Ea Supplier : OEM Replenishment PO Item : B, QTY:20Ea Supplier : OEM B A C 1 Ea2 Ea BuySell Subcontracting Process – Execution Synchronized Components B&C are Synchronized Components Process Subcontracting Order Receipts Complete Misc Issue A Receive from MP Payment to MP

Copyright © 2006, Oracle. All rights reserved. 11 BuySell Subcontracting Key Features 1 Supports All Costing Methods Supports Pre-positioned and Sync ship Components Fully Integrated with Planning Interlock triggers sales orders for selling components to MP Peg Component shipments in OEM with Assembly requirements in MP Workbench to track the components sales and allocation to the subcontracting order

Copyright © 2006, Oracle. All rights reserved. 12 BuySell Subcontracting Key Features 2 Workbench to track estimated component consumption by outsource assembly and adjust for over / under consumption at the MP Full automation / simulation of the MP actives ( receiving, WIP job start and completion, …..) through batch programs run in the OEM Drop ship Components to MP Reconcile Subcontracting Order changes

Copyright © 2006, Oracle. All rights reserved. 13 BuySell Subcontracting Setup – MP Organizations Select Check box for Manufacturing Partner Organization MP organization is simulation organization, Accounting transactions in this organization should not be transferred to GL

Copyright © 2006, Oracle. All rights reserved. 14 OEM Organization OEM supply components to MP and acts as supplier BuySell Subcontracting Setup – Customer/Supplier Association MP Organization MP supply Assemblies, Procure Components from OEM and acts as both supplier and Customer ASCP use this definition along with sourcing rules to plan outsourced assemblies and components in OEM and MP Organizations

Copyright © 2006, Oracle. All rights reserved. 15 BuySell Subcontracting Setup – Outsourced Assemblies in OEM Check this for outsourced assembly, allowed only if the Profile JMF:Enable Chargeable Subcontracting is Yes OEM Organization Outsourced Assembly should be defined as Buy item for planning. Release Time Fence should be left blank. ASCP releases buy planned orders of outsourced assembly to Purchasing as Purchase orders/ Releases Routing can be defined for outsourced assembly in OEM

Copyright © 2006, Oracle. All rights reserved. 16 MP Organization Check this for outsourced assembly, allowed only if the Profile JMF:Enable Chargeable Subcontracting is Yes Outsourced assemblies should be defined as Make items for planning BuySell Subcontracting Setup – Outsourced Assemblies in MP Release Time Fence should be “Do not Release Auto Or Manual”. ASCP should not release make planned orders in MP. Routing should not be defined for outsourced assembly in MP

Copyright © 2006, Oracle. All rights reserved. 17 BuySell Subcontracting Setup – Subcontracting Components in OEM Subcontracting Component should be defined as either “Synchronized” or “Pre positioned” OEM Organization Release Time Fence can be left blank. Planning releases buy planned orders to Purchasing as Purchase orders/ Releases

Copyright © 2006, Oracle. All rights reserved. 18 BuySell Subcontracting Setup – Subcontracting Components in MP Subcontracting Component should be defined as either “Synchronized” or “Pre positioned” MP Organization Release Time Fence should be set as, “Do not Release Auto or Manual” for Synchronized components and Blank for Pre-positioned Components:

Copyright © 2006, Oracle. All rights reserved. 19 BuySell Subcontracting Setup – Shipping Networks Select BuySell to establish Buysell Relationship between OEM and MP

Copyright © 2006, Oracle. All rights reserved. 20 On the Workbench User can search subcontracting Orders and verify the receipts BuySell Subcontracting Process – Workbench-Subcontracting Orders Subcontracting Order headers of Outsourced Assembly Subcontracting order line shipment or releases Details of the Components to be shipped to MP

Copyright © 2006, Oracle. All rights reserved. 21 BuySell Subcontracting Process – Workbench_-Components Components to be shipped to MP for making assembly of a specific subcontracting order. You can see the components requirement quantity and date for manufacturing the assembly at MP site To drilldown to the BOM components of the assembly

Copyright © 2006, Oracle. All rights reserved. 22 BuySell Subcontracting Process – Workbench-Replenishment Orders View Component Pegging information On the Workbench User can search Replenishment SO Replenishment Sales Order Headers Replenishment Sales Order Lines

Copyright © 2006, Oracle. All rights reserved. 23 BuySell Subcontracting Process – Workbench-Allocations Allocation details of a specific Replenishment SO Details of the Subcontracting Orders hard pegged Existing Allocations tab Allocations is hard pegging of replenishment Sales order quantity in OEM with discrete job component requirements in MP Allocations indicates components shipments to MP organization for Manufacturing specific subcontracting Order

Copyright © 2006, Oracle. All rights reserved. 24 BuySell Subcontracting Process – Workbench_Allocations Replenishment SO component pegging summary Available Subcontracting Orders tab List of Subcontracting Orders needing component allocations Enter the quantity and create Manual allocations

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