Know more about Oracle outside processing functionality by visiting this presentation.

1. Enhancing Oracle Outside
Processing functionality
Presenter: Mayuresh Atre
Representing: KPIT Infosystems, Inc.
mayuresh.atre@kpitcummins.com
Session ID: 9125

3. About Presenter
Mayuresh Atre
Oracle Apps Lead Functional Consultant
A Mechanical Engineer having 15+ years of experience in
Manufacturing and IT in supply chain domain with
specialization in purchasing, production planning, inventory
and warehouse management in auto components & Diesel
Engine Manufacturing Industries
Mayuresh has implemented oracle 11i EBS suite at various
sites across geographies for a leading diesel engine
manufacturing company and leading a team of 15 Oracle
Apps functional consultants for KPIT Cummins infosystem ltd

4. Contents
Introduction to Oracle Outside
Processing (OSP)
Enhanced OSP (E-OSP) Process
Oracle Setups
Features
Case Study
Business Benefits
Q&A

5. Traditional Flow
Total cost =
Raw Material (RM) $10+$2+ OSP
Supplier Overheads
PO for RM Item
OEM
PO for OSP
Buy @ $ 10 Supply RM Item
Item
Supply RM
Item Supply FG
Item, buy @
$2
OSP Supplier

6. What is OSP ?
• Is a means of providing supplier-sourced process and components
as an integral part of the manufacturing process
• OSP refers to the process of entering into a contractual agreement
with a Supplier to perform a certain amount of work, optionally
performed with contractor material
• In practice most Outsourcing arrangements are based on the
potential to save costs and address capacity issues as suppliers are
likely to have lower overheads, variable costs and spare capacity
• Oracle Apps provides OSP functionality through which such
Business process can be mapped

7. Traditional Scenario
OEM
PO for OSP
Receipt of Receiving PO For
item, Supply of
OSP item RM item RM item
RM item
OSP Supplier RM Supplier
• This is a typical Business Scenario where RM items are bought from
RM Supplier only to be processed by OSP Supplier to convert them
into FG items
• OEM creates WIP Job for FG Item which triggers purchase of OSP
Item from OSP Supplier
• Once RM items are bought, ownership stays with OEM though
material is processed by OSP Supplier

8. Oracle OSP Process
Raise PO for RM Dispatch RM Receive OSP
Item on RM Item to OSP Item from OSP
Supplier Supplier Supplier
Receive RM Item Create PO for Move &
at OEM OSP Item on Complete WIP
premises OSP Supplier Job
Create WIP Job Move WIP Job Inventorize &
for FG Assembly to OSP Process Costing

9. Oracle Integration
Oracle Inventory Oracle Bills of Material
Oracle Cost Mgmt Oracle Mobile Supply Chain
Oracle
Outside
Processing
Oracle Work in Process Oracle Purchasing

10. Oracle OSP Functionality
• Consists of the use of OSP items in resources to model supplier-
sourced services
• OSP resources are used to schedule and cost supplier-sourced
services within manufacturing routings
• OSP allows for routing operation steps to be converted into
purchase requisitions where the required line item is the OSP item
• WIP automatically requisitions material and purchase orders are
charged directly to work orders
• Fully integrated and closed loop solution

11. Challenges
• Too many setups involved – Work In Process, Bills Of Materials,
Purchasing
• OSP is predominantly a Purchasing process however most
controls are in WIP
• Additional transactions in order to receive material twice
• Material delivery to OSP Supplier is manually controlled
• No visibility of OSP item requirements to Supplier until Work
Order is generated
• Additional material handling due to Receiving and Shipping of
RM items incase there are no operations being carried out at
OEM

12. Enhanced OSP Flow
Total cost =
Raw Material $10+$2+OSP
Supplier Overheads
PO for RM Item OEM
Supply FG PO for OSP
Item, buy @ Item
$2
Buy @ $ 10
Supply RM
Item
OSP Supplier

13. Enhanced OSP Process
OEM
Receipt of PO For service item, PO For
OSP item Supply of RM item RM item
Supply & Receipt
OSP Supplier RM Supplier
RM item
• Modified BOM structure compared to seeded OSP process
• System generates visibility for OSP & RM Item through planning
process
• Ability to receive RM Items at OSP Supplier
• OEM creates WIP Job for FG Item once OSP Item is received and get
auto-completed

14. E-OSP Process
PO for RM, OSP
1 Items on Suppliers
(Scheduling)
Receive RM Item Inventory &
2 5
at OSP Supplier Costing
Receive OSP Item Create and
3 from OSP Supplier Complete WIP Job 4
at OEM Premise for FG Item

15. E-OSP Integration
Oracle Planning
Oracle Inventory Oracle Bills of Material
Oracle Cost Mgmt E - OSP Oracle MSCA
Oracle Work in Process Oracle Purchasing
Oracle Quality
Solution framework within Oracle supported processes

16. Required Setups
• Items, BoM, Lead times setups
• Multiple Locations to deliver RM Items on PO
• Multiple Supplier sites for RM Supplier
• Quality Plans to control :
– Relationship between RM & OSP Suppliers
– Defaulting Deliver-to location at OSP Supplier & OEM performing
PO Receipt
– Maintaining setup data for automatic WIP transactions
– Control Deliver-to location for non-conforming products
• Customization for Receiving at OSP Supplier
• Customization for WIP Job creation & Completion for FG Item

17. Key Setups
Sample BOM
• OSP Items are setups as Inventory Items
• Drive visibility to OSP Supplier
Key Highlights • Use of other features of BOM viz.
Backflushing, Alternates, costing simulation
etc.

18. Key Setups
Quality Plan
PARENT Quality Plan maintains setup/defaulting
information related to RM Item Receiving process at
OSP Supplier & WIP Job creation of FG Item
CHILD Quality Plan maintains relation
between RM & OSP Supplier used to control
Receiving of RM Items at OSP Supplier

19. Customization
for Receiving
• Use of Custom/Personalize restricting
access to Subcontractor Built in
Security
• Restricting display of sensitive
information to Subcontractor
• Using Security Attributes to allow access
to Subcontractor in case of Form
Receiving or Receiving through i-Supplier

20. Customization
for WIP
Custom Program converts OSP to FG Items through the WIP process
– OSP Items can be segregated based on criteria like User Item Type,
Item Category, Item Catalog , Naming Convention
– Program checks for Deliver transaction of OSP Items at OEM
– OSP Items are grouped and parent assembly (FG Item) for each OSP
Item is derived from BOM definitions
– WIP Jobs are created, completed & closed for grouped FG Item
quantities automatically
– Job details are defaulted from PARENT quality plan

21. E-OSP Features
1. Supplier Scheduling (RM & OSP Supplier)
– Integrated solution using Oracle Planning engines like MRP, ASCP
– Visibility to OSP Supplier for requirements through Purchase
Orders and Forecast
– Orders on RM & OSP Suppliers are controlled by lead time
– Creating multiple Supplier sites incase single RM Suppliers
supports multiple OSP Suppliers supplying same or different RM
Items
– OSP Supplier Capacity mapping incase of Constraint Planning
– Integrated with advance Supplier communication methods like i-
Supplier, e-Commerce gateway etc.

22. E-OSP Features
2. Receipt of RM Items at OSP Supplier
– Restricted access to Oracle Receiving to allow manual PO Receipt
of RM Items at OSP Supplier
– Maintain relationship of OSP Supplier & RM Supplier
– Maintain and default Deliver-to location at OSP Supplier
– Real time Inventory visibility
– Automate PO Receiving by 3rd party integration with OSP Supplier
system
– Customize i-Supplier functionality to view ASN from OSP Supplier
and perform PO Receipts

23. E-OSP Features
3. Receipt of OSP Item at OEM
– Use of seeded PO Receipt form
– Receiving Location defaulting logic for OSP Items
– Controlling Deliver-To location based on Inspection results
– For WMS enabled Org, configure Putaway rule to control Deliver-
To location

24. E-OSP Features
4. Automated WIP completion of FG Item
– Trigger or schedule based automated WIP Completion process on
Deliver transaction of OSP Item at OEM
– Maintain unique WIP related information for OSP supplier
– Online transactions and real time Inventory visibility
– Auto-Segregation of Accepted and Rejected FG Items

25. Applicable Scenarios
• OSP operation is at the start of Manufacturing process
• Outsource Assembly operation to OSP Supplier
• Multi-level Subcontracting eg. Machinist sending components to
Heat treatment Subcontractor for further processing

26. Case Study
Solution is implemented at a Major Auto Component
Manufacturing Company in UK
Business Scenario
– Supply Chain scenario covers 2 OSP Machinist Suppliers
supported by 5 different foundries
– OSP Suppliers situated in proximity of OEM
– 1000+ OSP Items supported by this process
Business Benefits Overall Lead time to tune of 5 days
– Reduction of
– Reduced transaction load in Warehouse
– OSP requirements visibility to OSP Supplier
– Auto-Segregation of Accepted and Rejected FG Items
– Overall TCO reduction
Efficient, responsive and dependable Supply Chain

27. Benefits of E-OSP
Visibility of OSP requirements over planning horizon
Real time Inventory tracking
Reduction Material handling
Reduced Supply Chain lead time
Reduced process steps resulting in reduced efforts to
manage the Supply Chain
TCO reduction

28. Any Questions

29. T h a n k Y o u !!!
Please write to Mayuresh Atre for any
queries or questions that you may have
Email : mayuresh.atre@kpitcummins.com
Phone Easy Reach
Desk Phone: +91 20 6652 5000 ext 2195
Cell Phone: +91 960 417 5715