Warehouses , storage facilities and distribution centers are configured as inventory organizations in Oracle Fusion. Inventory organizations in Oracle Fusion are:
• Managed by a business unit, with the materials management business function enabled.
• Mapped to a legal entity and a primary ledger.
There are two types of inventory organizations: Storage facilities and Manufacturing facilities.
Storage and manufacturing facilities are related to organization entities through a business unit that manufactures, stores and distributes the goods through one or many factories, warehouses, and distribution centers. To enable movement of material in the organization, the material parameters are set enabled for both type of facilities, . The respective business unit must have the Materials Management business function enabled. Oracle Fusion Applications allows multiple inventory organizations to be assigned to one business unit.
Distribution Center as an Inventory Organization
In Oracle Fusion, an organization distribution center can store items/inventory that is the responsibility of different business units. To make this situation feasible, organization will assign an inventory organization to each business unit to represent items/inventory in the distribution center. The multiple inventory organizations that are representing the items/inventory are mapped to the same location to justify that multiple inventory organization are a part of the same or common distribution center.
Legal Entities Own Inventory Organizations
Though the storage or manufacturing facility are related to organization entities through a business unit, a legal entity owns the inventory located in a storage or manufacturing facility. This ownership is assigned through the relationship of the inventory organization representing the inventory and the legal entity assigned to the inventory organization. The legal entity assigned to the inventory organization shares the same primary ledger as the inventory organization’s business unit.
The inventory is tracked in the inventory organization owned by the legal entity of which the business unit is part. All transactions are accounted for in the primary ledger of the legal entity that owns the inventory.
Facility Schedules Are Associated with Inventory Organizations
A prerequisite to defining an inventory organization is to define a facility schedule. Oracle Fusion Applications allow you to associate an inventory organization with a schedule.
Facility schedules allow creating workday calendars for inventory organizations that are used in the Oracle Fusion Supply Chain Management product family. For example, use workday calendars in the scheduling of cycle counts and calculating transit time.
Note: You cannot change an inventory organization to an item organization.
Item Organization: Explained
Oracle fusion item organization used to defines an item when inventory balances are not stored and inventory storage or inventory movement is not reflected in the Oracle Fusion Applications. For example, a retail organization would use an oracle fusion item organization, just to know the items that are listed by and sold through each retail outlet even though inventory and transactions are recorded in another system. In Oracle Fusion Customer Relationship Management (CRM), item organizations are used to define sales catalogs.
- Items belong to an item organization.
- Item attributes that are associated with financial and accounting information are hidden from the item if it exists within the item organization.
- Item organizations can be changed by administrators to an inventory organization by updating the necessary attributes.
Note: There is no difference in the way items are treated in these two types of organizations except that there cannot be any financial transactions in the downstream applications for items that are assigned to an item organization.
Now, let’s understand to create Item and Inventory Organization in Oracle Fusion.
1. To create Inventory Organization, use following tasks:
Setup and Maintenance > Manage Inventory Organizations
- Usage determines if organizations is item or inventory
Enter parameters required, as needed, for your Inventory organization.
2. To create Item Organization, use following tasks:
Setup and Maintenance > Manage Item Organizations
Usage determines if organizations is item or inventory