Purchasing Setup In Oracle R12
Setting up purchasing in Oracle R12 involves several key steps to configure the Purchasing module correctly. Below is a step-by-step guide to help you with the setup:
1. Define Financial Options
- Navigation: Purchasing → Setup → Organizations → Financial Options
- Steps:
- Specify defaults for Accounts Payable, Purchasing, and Assets.
- Set up options for payables, invoice, and supplier entry, including tax, currency, and cash management.
2. Define Purchasing Options
- Navigation: Purchasing → Setup → Organizations → Purchasing Options
- Steps:
- Set up defaults for requisition, purchase order, receiving, and supplier parameters.
- Configure document control, approval hierarchies, and tolerance levels.
3. Define Approval Hierarchies
- Navigation: Purchasing → Setup → Approvals → Approval Groups
- Steps:
- Define approval groups and assign them to approval hierarchies.
- Set up approval limits, positions, and approval rules to control purchasing document approvals.
4. Define Document Types
- Navigation: Purchasing → Setup → Purchasing → Document Types
- Steps:
- Set up different document types like Standard Purchase Order, Blanket Purchase Agreement, and Contract Purchase Agreement.
- Define numbering, approval, and closure rules for each document type.
5. Define Item Categories and Category Sets
- Navigation: Inventory → Setup → Items → Categories → Category Sets
- Steps:
- Define purchasing-related item categories and assign them to category sets.
- Associate items with categories for better classification and reporting.
6. Define Suppliers and Supplier Sites
- Navigation: Purchasing → Supply Base → Suppliers
- Steps:
- Create supplier records and define supplier sites.
- Set up supplier contact information, payment terms, and tax information.
- Assign supplier sites to operating units and define site uses such as purchasing and payment.
7. Define Sourcing Rules and Approved Supplier Lists (ASL)
- Navigation: Purchasing → Supply Base → Approved Supplier List
- Steps:
- Set up sourcing rules to determine preferred suppliers for items.
- Create approved supplier lists (ASLs) to enforce supplier compliance.
8. Define Purchase Order (PO) Matching and Tolerances
- Navigation: Purchasing → Setup → Tolerances and Routings → Purchasing Tolerances
- Steps:
- Set up matching and tolerances for price, quantity, and delivery.
- Define match approval level (2-way, 3-way, or 4-way) and configure over-receipt and under-receipt tolerances.
9. Define Buyers and Buyer Assignments
- Navigation: Purchasing → Setup → Personnel → Buyers
- Steps:
- Create buyer records and assign them to specific items, categories, or suppliers.
- Configure default buyers for requisitions and purchase orders.
10. Define Requisition Templates
- Navigation: Purchasing → Setup → Requisitions → Templates
- Steps:
- Create requisition templates to streamline the requisition process for frequently purchased items.
- Set up default items, quantities, and delivery locations in templates.
11. Set Up Document Security
- Navigation: Purchasing → Setup → Document Security → Define Document Security Levels
- Steps:
- Define document security rules to control access to purchasing documents based on roles and responsibilities.
- Assign document security levels to users.
12. Define Freight Carriers and Freight Terms
- Navigation: Purchasing → Setup → Freight Carriers
- Steps:
- Define freight carriers and assign them to suppliers or purchase orders.
- Set up freight terms like FOB (Free on Board) and Prepaid.
13. Set Up Receiving Options
- Navigation: Purchasing → Setup → Receiving → Receiving Options
- Steps:
- Configure receiving options for each inventory organization, including receipt routing, default receipt tolerances, and inspection requirements.
- Define receiving controls, such as serial and lot control, and enforce specific receiving policies.
14. Set Up Purchasing Lookups and Value Sets
- Navigation: Purchasing → Setup → Purchasing Lookups
- Steps:
- Customize purchasing lookups, such as document types, approval status, and item types.
- Create value sets to enforce valid data entry in purchasing fields.
15. Set Up Workflow for Purchase Requisitions and Orders
- Navigation: Purchasing → Setup → Workflow → Define Workflow Options
- Steps:
- Set up workflows to automate the approval process for requisitions and purchase orders.
- Configure notifications, approval routing, and escalations within the workflow.
16. Define Terms and Conditions
- Navigation: Purchasing → Setup → Terms and Conditions
- Steps:
- Set up standard terms and conditions to be included in purchasing documents.
- Customize terms for specific suppliers, items, or contracts.
17. Configure Tax Setup (If Required)
- Navigation: Purchasing → Setup → Tax → Tax Codes
- Steps:
- Set up tax codes and assign them to suppliers, items, or purchasing documents.
- Define tax rules for calculating and applying taxes on purchases.
18. Set Up Supplier Item Catalogs
- Navigation: Purchasing → Supply Base → Supplier Item Catalogs
- Steps:
- Create supplier item catalogs to store supplier-specific item information.
- Assign catalogs to requisition templates or purchase orders for easy item selection.
19. Define Blanket Purchase Agreements and Contract Purchase Agreements
- Navigation: Purchasing → Purchase Orders → Purchase Agreements
- Steps:
- Set up blanket purchase agreements (BPAs) and contract purchase agreements (CPAs) for long-term supplier commitments.
- Define pricing, terms, and release rules for agreements.
20. Set Up Purchasing Reports and Alerts
- Navigation: Purchasing → Setup → Reports → Define Reports
- Steps:
- Configure purchasing reports, such as supplier performance, purchase order status, and spend analysis.
- Set up alerts to notify users of purchasing document status changes, approvals, or exceptions.
Once the purchasing setup is complete, you can begin processing purchase requisitions, purchase orders, and managing supplier relationships effectively in Oracle R12.
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