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Release 11 is the first production release for Oracle Project Manufacturing and includes:

• Project and task references on supply and demand entities

• Project group netting

• Project full pegging (hard, soft)

• Project manufacturing costing

• Project sales management

• Project procurement

• Project shop floor management

• Project inventory tracking

• Supply chain projects

• Project drop shipments

• Project quality collection and analysis

• Project support for ATO/PTO environments

Oracle Project Manufacturing Integration

It should be noted that for this release, this manual addresses only the setup and features of Oracle Project Manufacturing.

Note: For further information, the user should consult other Oracle product documentation.

Project Manufacturing Flow

A complete project cycle requires the steps shown in the diagram. A project cycle begins with a response to a customer request for quotation by Sales and Engineering. After the quotation is accepted by the customer, and the budgeting and reporting requirements are defined, the project Work Breakdown Structure (WBS) is defined. The WBS represents all project activities (tasks, sub-tasks, work packages, activities, milestones).

After definition, which can be an iterative process, the project is scheduled using advanced project scheduling techniques. The manufacturing system tracks project materials and creates planned orders for each project. These planned orders are executed as shop floor orders (WIP Jobs) or purchase orders.

Standard material, project specific material, manufacturing labor, non-manufacturing labor, and overhead/burden are tracked at actual.

Based on actuals you can perform earned value analysis, progress billing and revenue recognition. During the execution phase quality data are collected and analyzed by project.

After the project has been shipped and installed at the customer site, final billing, reconciliation, and close-out are executed.

Project Manufacturing Features

In this scenario Oracle Projects provides the following main features:

• Project Work Breakdown Structure definition

• Project Management System integration

• Project budgeting

• Project cost tracking and control

• Project billing

• Project sales management

• Project manufacturing costing

• Project manufacturing planning

• Project manufacturing execution

• Project quality management

Project Definition

1. Define the project structure in a 3^rd party Project Management System and transfer the structure (on-line) into Oracle Projects. You can use basic setup data from Oracle Projects (like project resources, project calendars, and project templates) directly in your 3^rd party Project Management System. You need the Oracle Projects Connect or Oracle Projects Activity Management Gateway product to accomplish this.

2. Define the project structure directly in Oracle Projects.

Before releasing the project to collect manufacturing costs, you need to define the project related manufacturing parameters for costing and planning purposes. For example, decide to allow netting of materials within a project group across multiple projects, and decide to track manufacturing costs separately by project or for a group of projects.

Project Budgeting

• Multiple Budget Versions: You can use Oracle Projects to create multiple budget versions that include all of the costs for your project, such as engineering costs, item costs, manufacturing costs, and overheads. Multiple budget versions allow you to revise your estimate to complete many times during a project. Each project can compare the current or "baseline" budget with earlier versions for analytical reporting.

• Unlimited Budget Types: You can create different kind of budgets. You can create cost budgets, revenue budgets, forecasted revenue budget, approved cost budget, and more.

• Time Phased Budgeting: You can create user defined time periods or use existing calendars in Oracle General Ledger or Oracle Projects to establish multiple budgeting periods.

• Budget Extensions: You can use budget extensions to accommodate your company's budgeting needs.

• Budget Baselining and Approval: You can baseline a budget and use a workflow supported approval process for approving your budget.

After your project structure and budgeting has been defined in Oracle Projects you need to define the Manufacturing parameters for your project. These include:

• WIP Accounting Class Defaulting

• Cost Group information

• Planning Group information

• Task Auto-Assignment parameters (optional)

• Project Manufacturing costing information (link Projects expenditure types to Manufacturing cost elements and cost sub-elements; link Manufacturing departments to Projects expenditure organizations)

Project Sales Management

Oracle Project Manufacturing supports:

• Project Quotations and Sales Orders: Order Entry allows you to specify quotation and sales order cycles. A quotation can be easily copied to a sales order. Quotation and sales order lines can be linked to projects and project tasks.

• Project Assemble-To-Order (ATO) and Pick-To-Order (PTO): Oracle Project Manufacturing allows you to use the Oracle Product Configurator with Oracle Order Entry with propagation of project and task on the configured model, options, and included items. For ATO, the Final Assembly Schedule process will create a WIP Job with the model's project and task.

• Project Drop Shipments: You can specify a project and task on a sales order line and automatically create a project purchase requisition using drop shipment functionality. Drop shipped materials are directly shipped from supplier to customer.

• Project Fulfillment: Order Entry supports delivery based shipping with user definable picking rules for order fulfillment. After manufacturing is complete, finished goods are automatically picked from the project inventory upon pick release.

• Project Order Import: If you use external systems to capture order information you can use Order Import to import external sales orders or quotations, including project and task references.

Project Manufacturing Planning

1. Forecasts: You can enter a forecast and link a forecast entry to a project and task

2. Sales Orders: You can enter a sales order and link a sales order line to a project and task. This can also be accomplished using Order Import functionality.

3. Master Demand/Master Production Schedule: You can enter a master schedule and link a master schedule entry to a project and task. Forecasts and Sales Orders can be sources for a master schedule.

To successfully plan material for project execution, you must be able to separate all sources of supply and demand by project, identify components as shared or project specific, track existing inventories by project, and provide visibility to all supply and demand associated with a project. Oracle Project Manufacturing provides:

• Hard Pegging (Project MRP): You can plan material requirements while respecting hard pegs on all supply orders and generate planned orders with project/task references. Each item can be hard or soft pegged, thereby allowing various pegging methods within a bill of material.

• Soft Pegging (Full Pegging): You can plan materials and soft peg them to the demand.

• Project Group Netting: You can net within a planning group (multiple projects) and you can soft peg items to the projects within the project group.

• Graphical Pegging to Project: You can use the object navigator to graphically view your pegging information, like project, task and sales order.

• Project Planner Workbench: You can use the Planner Workbench to view project exceptions, a project horizontal plan, supply and demand per project, simulate new or existing project demand, and release planned orders by project.

• Forecast by Project/Task: You can link a project WBS to a forecast entry and run the forecast demand through the planning system. This enables you to plan long term capacity and procurement for your projects.

• MDS/MPS by Project/Task: You can load the MDS/MPS from a project forecast with project sales orders or manually link a project WBS to a schedule entry. You can have project and non-project demand in one schedule

• Project Exception Messages: The planning system will generate project related exception messages including: Item Allocated Across Projects, Project Excess, and Project Shortage.

• Single Planning Run for All Projects: You can run a single plan for multiple projects at once, thereby eliminating the need to run planning project by project. Oracle Application's fast memory based planner allows you to execute planning much faster than traditional planning systems.

• Project Planning Simulation: You can enter new entries for new project/tasks or change existing due dates directly in the Planner Workbench. On-line net-change simulation lets you view the results of your changes in minutes. This allows you to easily respond to scenarios of fluctuating and unexpected demand, or to Project Management System rescheduling results.

• Multi-Organization/Multi-Plant and Supply Chain Projects: Using Oracle Project Manufacturing you can manufacture products for the same project in multiple plants while consolidating all costs in Oracle Projects. You can use Oracle Supply Chain Planning to plan projects across a supply chain with appropriate propagation of project and tasks on internal orders and demand and supply entities.

• Single Planning Run for All Projects: The memory-based planning system allows you to execute a fast single planning run for all projects, instead of executing planning run for each individual project.

Project Manufacturing Execution

• Internal orders driven by inter-company supply

• WIP Jobs for make items (Project Work In Process)

• Purchase Requisitions or Blanket Releases for buy items (Project Procurement)

Project Work In Process

• Project WIP Jobs: You can create WIP Jobs (work orders) with project/task references. Both standard and non-standard WIP Jobs are supported. Project WIP Jobs can automatically be created and released from the Planner Workbench.

• Project Outside Processing and Subcontracting: You can use existing outside processing functionality to support Project Outside Processing and Subcontracting. The project/task on the work order will be transferred upon generating the outside processed purchase requisition.

• Project Repair Orders: You can use non-standard WIP Jobs to capture project repair, by linking this work order to a project/task.

• Project Flow Schedules: You can use flow schedules in a workorder-less production environment (Flow Manufacturing)

Project Procurement

• Project Requisitions: You can create requisitions with project/task references Project requisitions can be defined for inventory and expense destination types. Project requisitions can automatically be implemented from the Planner Workbench.

• Project Purchase Orders: You can create purchase orders with project/task references. Project purchase orders can be defined for inventory and expense destination types.

• Project Blanket Releases: You can create purchase blanket releases with project/task references. Project blanket releases can be automatically implemented from the Planner Workbench.

• Project RFQs: You can create purchase Request For Quotations (RFQ) manually or auto-create a RFQ from a requisition. You can request multiple quotes within one vendor RFQ.

• Project Supplier Quotes: You can create purchase vendor quotes manually or create a quote from an RFQ.

Project Inventory

• Project Inventory: You can segregate inventory by project using project locators. You can reference a project/task in the locator flexfield and can dynamically create project locators upon receipt. The issue, back-flush, and completion locators are automatically validated for project WIP Jobs and their associated material.

• Project Material Transactions: You can use the existing material transactions such as Miscellaneous Issue/Receipt, Subinventory Transfer, PO Receipt, WIP Issue, WIP Return, and WIP Completion to handle all your project material transaction needs.

• Project to Project Transfers: You can transfer material from one project to another with appropriate transfer of inventory value.

• Common-to-Project and Project-to-Common Transfers: You can transfer material from common inventory to project inventory and vice versa, with appropriate transfer of inventory value.

Project Manufacturing Costing

1. Import of costs from external systems directly into Oracle Projects' Transaction Import

2. Entry of direct labor and expenses directly into Oracle Projects, optionally using Personal Time & Expense disconnected entry.

3. Collection of manufacturing labor, material, and manufacturing overhead in Oracle Cost Management as a result of Work In Process and Inventory transactions.

4. Import of manufacturing costs from external systems using Oracle Manufacturing Transaction Import.

Oracle Project Manufacturing supports project costing as follows:

• Cost Groups: You can create cost groups and link cost groups to projects to identify and separate costs by item by projects. Costs are tracked using perpetual weighted average costing. You can use one cost group for multiple projects if you want to establish a weighted average costs by item for a group of projects.

• Linking Project Expense Organizations to Manufacturing Departments: You can link project expense organizations to manufacturing departments to allow departmental cost visibility and analysis for a project.

• Linking Project Cost Elements To Manufacturing Cost Elements: You can create user defined project cost elements (Oracle Projects expenditure types), and manufacturing cost sub-elements. Project cost elements (material, material overhead, resource, overhead, outside processing) can be mapped into user definable categories and you are able to specify which project cost elements you will use on an individual project. Oracle Project Manufacturing allows you to link manufacturing cost elements (labor, material, overhead, outside processing), resources, and departments to project cost elements. This allows you to track all costs within a project, whether it's source is purchasing, project direct labor and expenses, shop floor activity or external

• Manufacturing Cost Collector: Oracle Project Manufacturing's Cost Collector allows you to transfer manufacturing costs to Oracle Projects. The engine intelligently derives all required information like expenditure organization, expenditure date, and project cost element, automatically. All manufacturing costs are transferred to Oracle Project's Transaction Import for project cost distribution.

• Project Inventory Valuation: You can use the full functionality of Weighted Average Actual Costing in a Project Manufacturing environment. Project inventory material costs will be maintained by project on a perpetual weighted average basis. Common inventory material costs will be maintained by item. All costs are maintained per organization on elemental detail.

• Project Status Inquiry (PSI): You have the power to discover all the facts about your project at your fingertips. You can go up and down on your project WBS and obtain project summary information, and drill down to detail transaction information. You can also obtain project commitments, revenue, invoices, unbilled costs, backlog and receivable information. The PSI Extension allows you to pull project information from anywhere. You can easily export data in on-line queries to your desktop spreadsheet and reporting tools, to easily meet the requirements of your company.

• Project Comparison: Oracle Projects and most Project Management Systems allow you to compare multiple project versions. You can use Oracle Projects to compare baseline and current project budgets.

• Project Status Reporting: Both Oracle Projects and a third party Project Management System generate a wealth of project status reports to analyze your project financial status.

• Project Cost Elements: You can create user defined project cost elements (expenditure types) and group these elements into categories.

Project Billing

Within the Project Manufacturing solution there are three ways to accomplish billing:

1. Drive billing from Oracle Order Entry using order cycles that interface to Oracle Receivables

2. Drive billing from Oracle Project Billing using billing schedules that interface to Oracle Receivables

3. Use a combination of 1 and 2 (for example: drive project billing from Oracle Project Billing and spare part billing from Oracle Order Entry). If you use Oracle Order Entry to ship your project-related assemblies, but not to bill for them through Order Enttry, then you need to make sure that you use order cycles that don't interface to Oracle Receivables to avoid double billing.

The diagram lists some additional boxes and lines that have not been discussed. If you are implementing an Oracle Projects functionality called Capital Projects you will generate asset lines for Oracle Assets. All journals from all subsystems will be posted to Oracle General Ledger. Oracle General Ledger is also the place holder for the chart of accounts used throughout the entire system.

Project Quality Management

• Project Quality Collection Elements: You can use project and task as quality collection elements.

• Specify Project on Quality Collection Plan: You can specify a project on a quality collection plan.

• Project Quality Data Collection: You can collect project and task related quality information using manual entry or Oracle Quality's Data Collection Open Interface.

• Project Quality Analysis: You can use project and task as selection criteria for quality analysis.