1. Release 12 Field Readiness Workshop
Chargeable Subcontracting
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2. Purpose: This document provides an overview of features and enhancements included in Release 12.  It is intended solely to help you assess the business benefits of upgrading to Release 12.
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3. Chargeable Subcontracting
Functional Deep Dive

4. Functional Deep Dive Agenda
Product Review – Business Needs
Demonstration
Implementation Considerations
Customization and Extensibility Options
Integration Considerations
Upgrade Considerations
Global Considerations
Lessons Learned
Wrap Up/Q&A
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5. Review Business Needs – Market Drivers
What are the new features for this product?
Chargeable Subcontracting Solution with Planning and execution capabilities has been introduced
What is the market driver or customer need that caused Oracle to create this functionality?
Chargeable subcontracting is a common business practice in Japan, and is also being adopted by companies in Korea and Taiwan. This is top Priority requirement in Japan and gives oracle big advantage in the market place.
What’s in it for the customer – what are the benefits that correlate directly with the customer pain points or market drivers?
Effectively Manage the outsourcing process by eliminating the difficulties in planning, tracking of the components and also with the simplified financial settlement by AP/AR Netting
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6. Chargeable Subcontracting - Business Process
MP doesn’t pay for the Components
B -$2, C-$3 B C
MP added value = $5
RMS MP
Buy Assembly $ 19 (including $14) A
Ship B-$4, C-$6 B C
1 Ea B A C
2 Ea
Place Order for B&C
Place Order for Outsourced Assembly A
In chargeable subcontracting business practice there are usually 3 parties involved.
The OEM, who Manufactures the final assembly,
The MP an outsourcing partner of OEM to Manufacture Subassemblies/final assembly and
The RMS Supplying Components to OEM.
IN the illustrated example on this slide
A is an assembly made out of components B&C. OEM Buys components B&C from RMS and Outsources the assembly A to MP
OEM places a Purchase order for Components , and buy components B and C from RMS
then OEM Places a Subcontracting Order for outsourced assembly A on MP, and Ship components B&C to MP
But OEM Still owns the materials till they are consumed in the Manufacturing of assembly A, So MP doesn’t explicitly pay for the Components.
MP Produces the assembly A from the components B&C and
Ship the assemblies to OEM. OEM Receives the assembly A , assumes that Components B&C are brought back from MP.
In this practice Purchase price of the Assembly includes components sales price and Value addition , OEM nets the Payables and receivables and pays the value addition to the MP
RMS: Raw Material Supplier
OEM : Original Equipment Manufacturer
MP: Manufacturing Partner
OEM
Pay to MP $5 [$19 – (2*$4 + 1*$6)]
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7. Chargeable Subcontracting – Summary
Feature
Business Value
Planning Integration
Plan component supply and demand in both the OEM and the Manufacturing Partner
Workbench
Online visibility of extended supply chain
Allocations
Track Component allocations to subcontracting orders and corresponding shipments for effective material control
Consumption Adjustments
Record and adjust over/under consumption of components at the Manufacturing partner
AP/AR Netting
Streamline Payments to Manufacturing partners
Change management
Support Subcontracting order changes for greater supply chain agility
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8. Chargeable subcontracting
Demonstration

9. Demonstration – Scenario(s)
Scenario 1: Assembly with Synchronized components
Order execution
Financial Settlement
Scenario 2: Assembly with pre positioned & synchronized components
What is the business reason for this scenario – why would a customer be interested, how does this new feature/process affect their business in a positive way?
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10. Demonstration – Scenario1 Assembly with synchronized components
OEM (Standard Cost Org)
MP (Zero Cost Organization)
AP/AR Netting
Pay to MP $ A
B&C are Synchronized Components
2 Ea
1 Ea
AP Invoice
AR Invoice B C
Auto receive Components
Receive
SHIP
Replenishment SO Item : C, QTY:10Ea Customer : MP
Replenishment SO Item : B , QTY:20Ea Customer: MP
Replenishment PO Item : C, QTY:10Ea Supplier : OEM
Replenishment PO Item : B, QTY:20Ea Supplier : OEM
No Manual Transactions in MP Org
Process Receiving Transactions
Complete
Misc Issue A
ASCP
Discrete Job Assembly : A QTY :10Ea
Interlock
Subcontracting Order Assembly : A , 10Ea Supplier : MP
Changeable subcontracting Process execution starts with the Subcontracting order of Assembly A Created by ASCP. You can also create these Subcontracting Orders Manually
Run interlock Manager for OEM organization. This Batch program picks the Subcontracting order and creates discrete job automatically in MP Organization for simulation.
This Program then calculates the Component requirements and creates approved Replenishment Purchase orders in MP for procuring the components from OEM
Then interlock creates Replenishment Sales orders with status booked in OEM for the corresponding Replenishment Purchase Order in MP. Replenishment Sales order in OEM is created with OM transaction type defined in Shipping networks and have one to one relationship with the replenishment Purchase orders in MP. Finally these replenishment Sales orders are hard pegged to the discrete job requirements in MP and this hard pegging is termed as allocations.
You can then ship Replenishment Sales orders of the components in OEM
Run Auto receive Components Program for MP organization. This Batch program picks up the shipped replenishment Sales orders in OEM Organization, and create Receipts against the corresponding Purchase order in MP .
MP Manufactures and ships the assembly to OEM and OEM receives the assembly against a subcontracting order
Process Receiving Transactions Program picks the Subcontracting order receipts in OEM and completes the corresponding discrete Job and performs backflush components in MP organization. This program also creates a misc issue to reduce the inventory of assembly in MP org to simulate Assembly shipments to OEM
You can run Auto invoice Master program in Receivables to create AR invoice automatically for the shipped components
Run Pay on receipts auto invoice program to create AP invoice for the assemblies received.
These AP and AR invoices are netted in the financials and the payment is made to MP for the value addition
Receive
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Demonstration – Scenario 2 Assembly with pre positioned & synchronized components
OEM (Standard Cost Org)
MP (Zero Cost Organization)
AP/AR Netting
Pay to MP $ A
B is Prepositioned C is Synchronized
2 Ea
1 Ea
ASCP
AP Invoice
AR Invoice B C
Auto receive Components
Receive
SHIP
Replenishment SO Item : B , QTY:100Ea Customer: MP
Interlock
Replenishment PO Item : B, QTY:100Ea Supplier : OEM
No Manual Transactions in MP Org
Replenishment SO Item : C, QTY:10Ea Customer : MP
Replenishment PO Item : C, QTY:10Ea Supplier : OEM
Misc Issue A
Process Receiving Transactions
Complete
ASCP
Subcontracting Order Assembly : A , 10Ea Supplier : MP
Discrete Job Assembly : A QTY :10Ea
In case of Assemblies with Prepositioned components, the Chargeable subcontracting Process execution starts with Replenishment Purchase orders of the pre positioned components. These replenishment orders are created by transferring ASCP Planned orders .
Interlock picks these replenishment Purchase orders in MP and creates corresponding replenishment sales orders in OEM .
Interlock then picks the Subcontracting orders in OEM organization and creates discrete job for assembly , replenishment PO for synchronized components in MP organization .
Interlock then creates corresponding replenishment Sales order for synchronized components in OEM organization and creates component allocations for both pre positioned and synchronized components.
You can then ship Replenishment Sales orders of the components in OEM
Auto receive Components Program receives components automatically in MP organization.
OEM receives the assembly from MP
Process Receiving Transactions Program completes the discrete Job and performs backflush components, and creates a miscellaneous issue of assembly A in MP organization.
You can run Auto invoice Master program to create AR invoice
Run Pay on receipts auto invoice program to create AP invoice for the assemblies
Finally Net AP and AR invoices and make payment to MP.
Receive
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12. Demonstration

13. Demonstration Scenario(s) Summary
Manage outsourcing Process
Allow OEMs to efficiently manage outsourcing Process with better planning and execution
Process Visibility
Workbench provides clear visibility into each stage of the subcontracting Process execution
Purchase order Change Management
Supports change management of the subcontracting order for greater supply chain agility
Inventory Visibility at MP site
OEM has better visibility of Component on hand inventory at Manufacturing partner site
Simplified financial settlement
Payments to the Manufacturing partners are simplified with automatic netting of AP and AR invoices

14. Implementation Considerations – Setup Tasks
Enable Chargeable
Subcontracting Profiles
Define Customers and Suppliers
Define OEM and MP
Organizations
Define Assemblies
and Components
Define Accounting
Setup
Define Shipping
Networks
Define Price Lists
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15. Implementation Considerations Functional Dependencies
Chargeable subcontracting is dependent on the following modules
Oracle Inventory
Oracle ASCP
Oracle Bill of Material
Oracle Work in Process
Oracle Order Management
Oracle Purchasing
Oracle Payables
Oracle Receivables
Oracle Shipping
* Chargeable subcontracting works without ASCP. ASCP is needed only for Planning the components
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16. Customization and Extensibility Options
None

17. Integration Considerations
Chargeable subcontracting integration with other planning products where ASCP is not deployed

18. Upgrade Considerations
None
Request from Support: Example for more details on Scripts: abc.exe is ran and it populates the xxxx table from file yyyy.
If this is not feasible, consider giving access to design documents for the support named users.
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19. Global Considerations
Chargeable subcontracting is enabled only for Japan, Korea and Taiwan
Separate parallel sessions to deal with special globalized sessions that run in parallel to workshop – very country specific
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20. Lessons Learned from Field Testing
Dropship Final assembly from Manufacturing partner to Customer
Dropship Assembly from one manufacturing partner to another
Testing and sandbox – information – may be at different levels.
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21. <Product Name> <TOI Functional> - 21
Wrap Up/ Q&A
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22. Chargeable Subcontracting
Technical Deep Dive

23. Technical Deep Dive Agenda
Data Model Changes / Database Relationships
Workbench
Concurrent Requests
Reports
Performance Considerations
Wrap Up/Q&A
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24. Data Model and Database Relationship Changes Physical Data Model

25. Table Descriptions Name Description JMF_SUBCONTRACT_ORDERS
Stores the subcontracting orders information.
JMF_SHIKYU_COMPONENTS
Stores the components required for the outsourced assembly item.
JMF_SHIKYU_REPLENISHMENTS
Stores the replenishment sales orders information.
JMF_SHIKYU_ALLOCATIONS
Stores the allocations created between the replenishment sales orders and the subcontracting order shipments
JMF_SHIKYU_ADJUSTMENTS
Stores adjustment data to be processed by the consumption adjustment concurrent program.

26. OA Framework Pages
Chargeable Subcontracting Workbench is a new user interface added for this feature. The workbench allows the users to
Track the component shipments and allocations to the subcontracting order
Track the estimated component consumption by outsource assembly, and adjust for over / under consumption at the MP site
Please refer to Technical TOI for the HTML page file name details and descriptions

27. Concurrent Requests
The following new batch programs are created for this feature
Name
Description
Interlock Manager
Main program to load the subcontract orders , create the WIP job, create replenishment orders and to create the allocations.
Reconciliation Manager
Program to reconcile changes made to the subcontracting order
Auto Receive Components
Program to automatically receive the components into the MP organization
Process Receiving Transactions
Program to process the outsourced assembly receipts and corrections

28. Reports The following new reports are created for this feature Name
Description
Subcontracting Order Report
Report to print the subcontracting orders, along with their component requirements and allocation information.
Confirmation Report
Report to print the estimated component on-hand quantities at the manufacturing partner site
Cost Update Analysis Report
Report to print the estimated impact of any proposed standard cost changes to the outsourced assembly or the subcontracting components.

29. Performance Considerations
Consideration for Interlock concurrent program
The optional User Parameters Batch Size and Maximum Number of Workers can be used to facilitate better performance by allowing parallel processing.
By default, the Maximum Number of Workers would be 1 and the Batch Size would be set equal to the number of new Subcontracting Orders that have not yet been loaded.

30. Chargeable Subcontracting
Hands-on Experience

31. Hands-on Experience Objective(s) of Hands-on Experience
Login Details/ Environment Information
Limitations/ Known Issues
Rules of Engagements
Other

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Wrap Up/ Q&A
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Thank You
Thank You
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Wrap Up/ Q&A
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Thank You
Thank You
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