Terry towel oracle ebs scoping

1. 1 MGL understanding of STPL
1.1 Organization structure
STPL, the flagship company of Coimbatore based KG group is organized into
three different business units as given below. The unit 1 & 2 operates out from
Mettupalayam and the third unit operates out from Annur. STPL exports its
luxury terry towel products to countries like USA, Denmark, UK, Australia,
Sweden, Germany and Malaysia.
1.2 Current system
STPL has implemented Oracle Apps in Unit-1 & 2. The system went LIVE on
01-Apr-2005 with 11.5.9 version.
The following modules were implemented in Unit-1&2,
♦ Oracle Financials – GL, AP, AR, FA, CM
♦ Oracle Inventory
♦ Oracle Purchase
♦ Oracle Order Mgmt
♦ Oracle Discrete Manufacturing
■ MRP/MPS
■ BOM
■ WIP
■ Capacity
■ Costing
■ Quality
♦ Custom developed application for HR
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STPL
Unit 1 Unit 2 Unit 3

2. Mark
eting
1.3 Business Flow Diagram
STPL is a 100% EOU and follows MTO (Make–to-Order) process.
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3. 1.4 Process Flow Diagram
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4. 1.5 Process Description of Unit 1 & 2
1.5.1 Marketing
Marketing dept handles the following activities,
♦ Customer management
♦ Order Booking & Tracking
♦ MIS
The average lead-time of Order-to-Delivery is 30 to 45 days. The tact time is 6
days when the raw materials are available and the resources are free. Only
MTO order type is followed, No Internal Sales Order or Inter Company
Transactions are made.
STPL receives the sample and specification from the customer for feasibility
study and confirmation. The design department will analyze the sample and
prepares the data sheet for manufacturing such as GSM (Grams per square
meter), weaving pattern and color.
Order Management follows the standard functionality of Order entry and
shipping. Marketing dept receives production related data from Weaving,
Processing, Confection, FG stores, Quality control and other relevant
departments.
1.5.2 Planning
Planning department handles the Planning and Scheduling activities,
Master Demand Schedule (MDS) and Material Requirement Planning (MRP)
are run for each Order. The sub-inventory netting functionality (will consider the
current on-hand stock while arriving the requirement) is currently not used in
Unit-1&2.
1.5.3 Purchasing
Purchase department handles the following activities,
♦ Supplier management
♦ Sourcing
♦ Ordering and Tracking
Purchase department receives the Purchase Requisitions from Planning and
other departments.
Request for Quote, Quote Analysis and approval processes are done manually.
Standard Purchase Orders are released for rare purchasing and expense items.
Blanket Purchase Agreement (BPA) is made with Suppliers for regular and
recurring items. Dyes, Chemicals and Carton boxes are covered under BPA.
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5. STPL uses the following position hierarchy for Document Approval,
The Chairman approves Capital Goods purchases and other items follow the
above hierarchy.
1.5.4 Inventory
The stores department has Raw Materials and Finished Goods wings. The
Purchased items are stored in RM sub-inventories. The FG has many sub-
inventories as per the Quality Grade such as,
♦ A: Customer Specifications
♦ AS: Surplus
♦ B1: Weaving fault
♦ B2: Handling stain
♦ B3: Oil stain
♦ B4: Shearing fault
♦ C: Looks like a Towel
♦ S: Not a Towel
Locator control is used for FG sub-inventories. Min-Max Planning method is
used for Dyes, Chemicals and Yarn. Other Planning methods in Oracle are not
used.
The Inventory Accuracy is monitored by Cycle count and verified physically
(manual).
♦ Purchase Items: Cycle count is done for all the raw materials and the
frequency is 6 months.
♦ Work in Process: Manual Physical verification is done weekly and
adjustment is passed in the system.
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DGM
Limit 50,000
Whole Time
Director
PM
Limit 10,000
Chairman
(Capital Goods)

6. Currently Lot and Serial control are not used in the Unit-1&2. Only Intra Org
transactions such as Sub-inventory transfer, Move Order transfer, WIP and
miscellaneous transactions are performed.
1.5.5 Manufacturing
Discrete Job Orders are released for each process. Manufacturing department
is the ultimate responsibility for the process sub-inventories. The process sub-
inventories are created in such a way that the output of the previous process is
stored in the next process sub-inventory such as WIP-WPD, WIP-WVG, WIP-
PROC, and WIP-CONF.
♦ Outside Processing: The Spinning process is always done through
Outside Processing (OSP). When there is bottleneck in the In-house
capacity then that process is done through OSP.
♦ Invisible Waste: Currently it’s an arrived one. It is calculated by
subtracting the Output Yarn and Visible waste with Input cotton.
♦ Weight Gain/Loss: The Output will gain weight from the sizing process
and lose from the processing.
Model BOM (Bills of Material):
FG Towel (U121I00RF0101A01)
Semi Finished Towel (U121I00RF0101SF)
Dyed Towel Roll (U121I00RF0101)
Weaved Towel Roll (U121I00)
Ground Beam (G2068E1010)
Yarn
Cotton
Sizing Chemicals
Pile Beam (P2068E22G)
Yarn
Cotton
Sizing Chemicals
Weft Yarn
Chemicals
Dyes
Bar code
Label
Sewing thread
Poly Bags
Corrugated Boxes
Stickers
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7. 2 Key Requirements
STPL’s requirements are broadly classified into three and are as following
♦ Requirement 1 – Incorporate the requirements listed in section 3.1 in the
existing version 11.5.9 running at Unit 1 and 2
♦ Requirement 2 - Upgrade the existing Oracle system from 11.5.9 to
11.5.10.2 for unit 1 & 2
♦ Requirement 3 - Configure unit 3 in 11.5.10.2
2.1 MGL understanding of the requirements
STPL has following requirements to be incorporated in the existing system to
meet the business needs:
1. Cost of Goods Sold value needs to be split with respect to Raw
Material (Yarn, Dyes & Chemicals, etc.).
2. Standard Oracle Lot number functionality must be used.
3. Oracle Scheduling to be put into use.
4. WIP cost needs to be split with respect to raw materials (yarn, dyes &
chemicals).
5. Central Excise Deposit accounting to be verified and modified.
6. VAT set-up need to be done.
7. Exchange rate differences - setup need to be checked and modified.
8. B-Grade, C-Grade, S-Grade Items that are in stock need to be valued at
the price at which they can be sold.
9. Costing needs to be verified and modified for any changes.
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8. 3 Proposed Solution
MGL proposes to offer the solution “with options” to address all the
requirements mentioned in the previous section.
♦ Option 1 – Maintaining Oracle Discrete Manufacturing
♦ Option 2 – Implementing Oracle Process Manufacturing and retiring
Oracle Discrete Manufacturing. Please refer to the Annexure - Option 2.
Irrespective of the option, the proposed solution would be delivered in a phased
manner and in a sequence as detailed below:
3.1 Option 1
Maintaining Oracle Discrete Manufacturing
3.1.1 Reconfigure and develop workaround solution to address requirement 1
MGL proposes technical workaround to implement the above requirements as
per the following table.
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9. Oracle Applications Implementation - Confidential - 9 -
Sl
no
Requirements Solution
1 Cost of Goods Sold value needs to be
split with respect to Raw material (Yarn,
Dyes & Chemicals, etc.).
Custom, technical
workaround
2 Standard Oracle Lot number functionality
must be used
Enable standard Oracle
functionality and migrate
data from the existing lot
table
3 Oracle Scheduling to be put into use Enable standard Oracle
functionality
4 WIP cost needs to be split with respect to
raw materials (yarn, dyes & chemicals)
Custom, technical
workaround
5 Central Excise Deposit accounting to be
verified and modified
Enable Standard Oracle
functionality
6 VAT set-up need to be done Enable standard Oracle
functionality
7 Exchange rate differences - setup need to
be checked and modified
Standard setups will be
checked and modified
8 B-Grade, C-Grade, S-Grade Items that
are in stock need to be valued at the price
at which they can be sold.
Custom technical
workaround
9 Costing needs to be verified and modified
for any changes
Standard setups will be
checked and modified
10 Lot trace ability to be enabled for certain
areas in production
Standard functionality
11 Quality control collection plan to be
implemented based on the requirements
in each stage of inspection
Standard functionality
12 Alternate/Substitute items need to be
defined
Standard functionality
13 Weight needs to be captured at all levels
of production
Flexfields will be used to
capture actual weight.
14 Raw material on hand quantity report
based on specific format from Finance
department
Custom report will be
developed.
15 Change of a finished item from one to
another. This is required when selling
grades other than ‘A’.
After detailed study, it’ll
be decided whether
standard functionality
could be used or not.
Otherwise it’ll be done
using customizations

10. The above requirement will be implemented by:
♦ Conducting a detailed study of the business requirements of STPL
♦ Mapping the applications to the business requirements
♦ Identifying the gaps if any in the system
♦ Agreeing upon work around solutions with the end users
♦ Performing User Acceptance Testing (UAT)
♦ Transitioning to production instance
3.1.2 Upgrade from 11.5.9 to 11.10.2 to address requirement 2
The following section contains the list of activities that would be performed
for the Upgrade Process.
♦ Detailed system study will be done on the current instance of Oracle
Applications 11.5.9 to gather all the required information for an upgrade
process (Technical/Functional/DBA Group will be involved in this process)
♦ The current database patch set versions and the module wise patch set
versions will be collected.
♦ The required information relating to operating system patch level will be
collected.
♦ A detailed plan will be prepared based on the above, which will become
the base plan for the first test upgrade.
♦ All the necessary information regarding the patches/software, which need
to be downloaded/licensed/installed during the upgrade process, will be
provided to the customer.
♦ Two test upgrades will be conducted on a separate test instance, which
should be the clone of the production instance.
♦ All the issues encountered while performing the first test upgrade process
will be resolved and documented for the next test upgrade.
♦ The complete software and patch requirements will be recorded during
the first test upgrade.
♦ After successful completion of the first test upgrade, second test upgrade
will be done on a test instance, which is a clone of the production
instance.
♦ The timing will be recorded during the second test upgrade process,
which will determine the downtime required for the production upgrade.
♦ During the upgrade process, backup of the instance being upgraded will
be taken on a regular basis.
♦ Sign-off by the respective customer personnel is required on the
acceptance of the completion of work at different stages.
♦ Production upgrade will be performed on the production instance.
♦ A clone will be taken from production and copied to test server.
♦ Post Production upgrade support will be provided for 2 weeks.
♦
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11. 3.1.3 Proposed Upgrade Path:
♦ TUMS utility will be used to analyze the upgradeable components
♦ The database will be upgraded to 9.2.0.8
♦ Latest AD.I and Autoconfig patch sets will be applied.
♦ Application server (iAS) components will be upgraded.
♦ Developer 6i patch set will be upgraded to 6.0.8.27.0
♦ JDK will be upgraded to 1.4
♦ Jinitiator will be upgraded to 1.3.1.29
♦ Existing table spaces will be converted to OAM
♦ All pre-requisite patches for 11.5.10.2 Maintenance Pack will be applied.
♦ Maintenance Pack will be applied for 11.5.10.2 on each Apps/Web/CM
node
♦ Post patch installation steps will be completed
Assumptions
♦ The above scope of work is designed based on the available information.
The final scope of work will be defined after the careful study of the
current Oracle Application instance and architecture.
♦ Backup of Oracle Application instance is required during different stages
of upgrade process. STPL is responsible for the backup process.
♦ STPL is responsible for identifying and migrating all the current
customizations developed by STPL team.
♦ Changes to the final scope of work can be made only through change
requests, after mutual agreement between STPL and MGL.
♦ Proposed timeline for the upgrade is based on the past experience of
similar upgrades. This may change in the event of unexpected issues
during the upgrade process.
♦ Licenses and patches required for upgrade should be provided by STPL
♦ Metalink access should be provided to the MGL team during the entire
duration of the upgrade project.
3.1.4 The existing Oracle Applications (11.5.9) Instance will be upgraded to latest
patch set by applying all the required patches to the application and
Database (E.g. Applying Latest AD.I/CU2/Autoconfig patches)
3.1.5
3.1.6
3.1.7 Implement Unit 3 under Oracle 11.5.10.2
MGL will configure Unit 3 under 11.5.10.2 for the Oracle modules listed below.
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12. ♦ Oracle Financials – Accounts Payable, Accounts Receivable, General
Ledger, Cash Management, Fixed Assets
♦ Oracle Inventory
♦ Oracle Purchase
♦ Oracle Order Management
♦ Oracle Discrete Manufacturing
■ MRP/MPS
■ BOM
■ WIP
■ Capacity
■ Costing
■ Quality
Before configuration, MGL will conduct a detailed study of the business
requirements of unit 3 and review the requirements and obtain approval from
STPL. MGL will map the business requirement with the Oracle modules and list
down the gaps, which requires customization.
MGL will configure the system for unit 3 in such a way that they align with the
business process in the best possible way with the required standard
functionality available in the application and incorporating the customizations of
other 2 units. If any customization requirement arises specific to unit 3, MGL will
handle the same using the change management process and will charge STPL
separately.
Upon setting up the application, MGL will conduct Conference Room Pilot (CRP)
to review the functionality fitment and obtain user input for any minor
modification required in the setup. Any functionality changes during CRP will be
considered as change request and will be charged separately. MGL will provide
an instance for final User Acceptance Test (UAT) after loading valid master data
prepared in the templates provided by MGL. After UAT, MGL will set up the
production instance and get the system ready for unit 3 go live
Modules not mentioned in the above list do not constitute inclusion in scope or
acceptance of responsibility by MGL. Configuration of any other Oracle modules
other than listed above shall be discussed with STPL and an offer for the same
will be made separately.
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