Oracle Purchasing Configuration

Oracle Purchasing

Oracle Purchasing gives us the concept of centralized procurement using Oracle applications. Using Oracle Purchasing, we can create various purchasing documents and keep track of previous purchases. On the basis of previous purchases we can forecast our future requirement’s costs, and carry out supplier management, product trend analysis, spend analysis, and so on.
Purchase requisition is normally the point of initiation of the procurement process in Oracle applications and after physical receipt of the goods from the supplier or vendor, the procurement process ends. In between these processes, there are various steps of capturing business processes. The documents that are generated by Oracle Purchasing are called the procurement documents.
Oracle Purchasing is the application for professional buyers that streamlines purchase order processing while strengthening policy compliance. According to independent experts the key to achieving world class procurement performance lies in using technology to automate routine tasks. This frees procurement professionals to work on more strategic tasks related to sourcing and supplier management.
As the heart of the Oracle Advanced Procurement suite, Oracle Purchasing provides a rich store of policy and supplier information, an enterprise class automation platform, and a robust workbench for buying professionals.

Configuration Steps

1. Define Position Flexfield

In Oracle HRMS there are six user definable Key Flexfields, for each of which you can define up to 30 segments:
• Position
• Job
• Grade
• People Group
• Personal Analysis
• Cost Allocation
Three out of these six Key Flexfields are related to Oracle Purchasing which are:
• Position
• Job
• Grade
First of all Position Flexfield is defined. Using this Key Flexfield, you determine the number of segments in your position names or codes, and the valid values for each segment.
As this is a Key Flexfield so we have to follow these 6 steps:
i. Create Key Flexfield Structure
ii. Assign qualifiers if required
iii. Create Value Set for each segment of Flexfield
iv. Assign Value Set to each segment
v. Add Values in each Value Set
vi. Create combinations for all segments in each structure
Navigation path: Purchasing>Setup>Flexfields>Key>Segments

2. Define Job Flexfield

Using this Key Flexfield, you determine the number of segments in your job names or codes and the valid values for each segment.
As this is a Key Flexfield so we have to follow these 6 steps:
i. Create Key Flexfield Structure
ii. Assign qualifiers if required
iii. Create Value Set for each segment of Flexfield
iv. Assign Value Set to each segment
v. Add Values in each Value Set
vi. Create combinations for all segments in each structure
Navigation path: Purchasing>Setup>Flexfields>Key>Segments

3. Define Grade Flexfield

Using this Key Flexfield you may want to use simple, single-segment grade names or more complex grade names.
As this is a Key Flexfield so we have to follow these 6 steps:
i. Create Key Flexfield Structure
ii. Assign qualifiers if required
iii. Create Value Set for each segment of Flexfield
iv. Assign Value Set to each segment
v. Add Values in each Value Set
vi. Create combinations for all segments in each structure
Navigation path: Purchasing>Setup>Flexfields>Key>Segments

4. Open Position Flexfield Values

When we have created the value sets for each segment then the next step is to open values for each segment.
Navigation path: Inventory>Setup>Flexfields>Key>Values

5. Open Job Flexfield Values

When we have created the value sets for each segment then the next step is to open values for each segment.
Navigation path: Inventory>Flexfields>Key>Values

6. Open Grade Flexfield Values

When we have created the value sets for each segment then the next step is to open values for each segment.
Navigation path: Inventory>Flexfields>Key>Values

7. Define Purchasing Options

The Purchasing Options Form sets the basis for multiple activities that affect the creation and capture of data for purchase orders. The Purchase Order print Output Format can be pdf or text. We can also control the size of attachment size and the attachment file name. The following options assist with managing business rules as part of our business process.
• Allow Item Description Update
• Enforce Supplier Hold
• Buyer Name
Document defaults control how Purchase Requisitions and Purchase Orders get their default values. The important ones to note are as follows:
• Line Type for a Purchase Order E-Business Suite provides some defaults, such as goods, expense or an additional one that can be defined. The important thing to note is that we can default some information from the line type to control how the purchase order is processed. The Goods Line Type signifies that it is an inventory item as long as we use an Item Code and not a description on the PO Line.
• AP Invoice creation and matching levels can be managed to reflect our business rules in the transactional flow. A 3-Way math option means that an AP invoice needs a purchase order, and a Receipt for appropriate matching and to allow payment. The various matching options in E-Business Suite are:
• 2 Way PO and AP Invoice
• 3 Way PO, Receipt and AP Invoice
• 4 Way PO, Receipt, Inspection Acceptance and AP Invoices
Receipt Accounting options allow the accrual options to be set for inventory and expense items. Ideally the inventory accruals are online at receipt and the expense accruals are at period end. This is the default and the way most companies manage the accruals. This region also allows us to specify the expense accrual account and if we use multiple balancing segment values in one ledger we can choose to use Automatic Offsets.
We also control the Numbering for our procurement transactions in this form.
NOTE: These Purchasing Options are set at Operating Unit level we have set them for each Operating Unit one-by-one.
Navigation path: Purchasing>Setup>Organizations>Purchasing Options

8. Set HR: User Type Profile Option

“HR: User Type” profile option is set to give a user the access to HR, Payroll or HR with Payroll User responsibility(s).
Navigation Path: System Administrator>Profile>System

9. Define Job Group

You can define all roles in an enterprise as jobs. Such roles include those associated with the main business of the enterprise, such as sales manager or clerk, as well as those considered supplementary, such as fire warden or safety representative.
Oracle HRMS organizes jobs into job groups. (Some statutory reports require job group as an input value.) For each business group, there is a default job group to which standard HRMS jobs must belong. Supplementary roles, however, must not belong to the default job group. You can define additional job groups for these supplementary roles and for use in Oracle Projects. Job groups you define can apply globally or within a single business group.
Navigation path: Global HRMS Manager>Work Structures>Job>Job Group

10. Define Positions

You use the Position window to define positions within your organizations and to add them to position hierarchies. Position is a Flexfield and here we are doing the sixth step i.e. creating combination of a flexfield.
Navigation path: Global HRMS Manager>Work Structures>Position>Description

11. Define Employees

Enter Person form is used to define employee in Oracle. At this form we enter basic personal information, addresses and work assignment details for employees.
Navigation path: Global HRMS Manger>People>Enter and Maintain

12. Define Buyers

We use the Buyers window to define and maintain your buyers. Only those employees who are defined as buyers can enter all purchasing documents.
Navigation path: Purchasing>Setup>Personnel>Buyers

13. Define Position Hierarchy

Use the Positions window to create each of the positions in your organization which we have already shown above. This step is required if you plan to use approval hierarchies. All the positions you want to include in your hierarchies must be included in the Business Group. A position can be added to multiple hierarchies. Use the Position Hierarchy window to build and administer your position hierarchies. There are two distinct uses for position hierarchies in Purchasing i.e. Document Approval Routing and Document Security Control. You can use a single position hierarchy for both purposes.
When you build your hierarchies, always begin with the most senior position and work down. Use your organization charts and predefined special approval paths to facilitate this process.
While you can include a position in many hierarchies, it can appear only once within a single hierarchy.
If you want to use the document Security Level of Hierarchy for any or all of your document types, the hierarchy you specify in the Purchasing Options window must include all the positions in your organization that should have access to these documents.
NOTE 1: The Security Hierarchy Field will only be enabled when the hierarchy option is selected for the Security Level on the Document Types form.
NOTE 2: Position Hierarchy is defined at Operating Unit level
CAUTION: If you build multiple hierarchies for use in the approval process, it is useful to give them meaningful names. This helps employees quickly choose the appropriate approval path when moving documents from one approval hierarchy to another.
Navigation path: Purchasing>Setup>Personnel>Position Hierarchy

14. Define Approval Group(s)

Approval groups are defined to set approval limits for your employees to whom Positions and Jobs are assigned. These approval limits are defined for Purchasing Documents like Requisitions, Purchase Orders and Releases. Once you have defined an approval group, you can then use it to assign approval functions to jobs or positions in the Approval Assignments window. You cannot delete an approval group that is used in an active assignment. You can enable or disable the entire approval group, or you can enter inactive dates for individual approval rules.
Navigation path: Purchasing>Setup>Approvals>Approval Groups

15. Define Approval Assignment

Approval Group is assigned to each Position to give it the approving authority as per the required hierarchy. This Approval Group is assigned for each Purchasing Document (i.e. Requisitions, Purchase Orders and Releases).
Navigation path: Purchasing>Setup>Approvals>Approval Assignments

16. Define Document Type

Use the Document Types window to define access, security and control specifications for all Purchasing documents. You cannot enter new document types except new document subtypes can be created for RFQs and quotations.
Navigation path: Purchasing>Setup>Purchasing>Document Types

17. Define Document Style

Use the Document Styles window to create and update purchase order styles. Purchase order document styles allow organizations to control the look and feel of the application to match the usage of the purchasing document. Through reusable document styles, organizations can turn on or off various Oracle Purchasing features thereby simplifying the user interface.
In addition, document styles provide the ability to define purchasing document names that align more closely with the naming conventions of your organization’s business.
When a purchasing document is created using a document style, disabled features are hidden.
For example, you can create a document style for a specific commodity, such as temporary labor.
This document style optimizes field labels and presentation for that commodity, thereby simplifying purchase order entry.
Generally we create new document style for the usage of Complex Purchase Order.
Navigation path: Purchasing>Setup>Purchasing>Document Styles

18. Set Complex PO Profile Options

Set two Profile Options for Complex PO i.e.:
• PO: Enable Service Procurement as “Yes” at Site level
• POR: Amount Based Services Line Type as “Fixed Price Services” at Site level
Navigation path: System Administrator>Profile>System

19. Run HRI Load All Generic Hierarchy Versions

The concurrent program HRI Load All Generic Hierarchy Versions calculates the required data and stores it in the Generic Hierarchy Summary table ready for use by the workbooks. These workbooks will only work if you have set up these generic hierarchies and run this concurrent program.
Navigation path: Global HRMS Manager

20. Run Fill Employee Hierarchy

Use the Fill Employee Hierarchy process to create a direct mapping between the defined position hierarchies and the employees holding positions in each hierarchy. When you run this process it checks each position hierarchy and updates each employee, his supervisor, the level of supervision, the employee’s position and the supervisor’s position. The process creates an error log which lists all positions to which no employee is assigned.
Navigation path: Purchasing

21. Open Purchasing Control Period

The purchasing period must be open to process Purchase Orders and Receipts (if you need to deliver PO to Inventory, the transaction date must fall within the Inventory Accounting Periods as well). If Budgetary Control/Encumbrance Accounting is enabled, Purchasing verifies that the GL Dates you provide on Purchase. If Centralized Procurement is being implemented, it must be ensured that the Purchasing periods remain Open in all Operating Units that you are likely to process Purchase Orders and Receipts.
Navigation path: Purchasing>Setup>Financials>Accounting>Control Purchasing Periods

After the configuration of these steps we are able to make entries in Oracle Purchasing.

Please contact me for any kind of detail and screeshots related to the understanding of Oracle Purchasing Configuration at:
Email: raheelirshadkhan@gmail; Facebook: Raheel Irshad Khan or raheel.i.khan.14@facebook.com
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