Complex Shipment of Manufactured Goods

August 17th, 2006 |   Send this article to a friend!

There’s nothing that Oracle Shipping Execution can’t handle.  Well, almost nothing…

Take for example the following situation.  As a manufacturing company on Oracle, you sell extremely large manufactured goods that usually are disassembled and shipped across multiple carriers.  Typically when an order is placed for this good it’s represented as one line item on a sales order (and invoiced as one line item).  This item could be a configured model or a standard finished good with a complex bill of material. 

When the order is booked, demand is instantly sent to planning for this item.  Once the work order is issued, this item is then manufactured and placed into finished goods where the shipper can now pick release and stage the item in preparation for shipping.  The preparation process for this extremely large, manufactured good begins with final testing to ensure the good is operational as a whole.  Once the testing requirements have been fulfilled and documented, the good is then ready to be disassembled and shipped.

While this may sound simple, the disassembly process is quite involved and is conducted in a non-uniform fashion.  Essentially, the shipping crew is to disassemble this gigantic item so that:

1.) All disassembled parts can fit unto a typical truck.
2.) Disassembled parts and materials are tagged with identification prior to placement in the container and are listed on the packing list specific to that container. 
3.) Along with the packing list, instructions for reassembly are included which reference the identification tags.  Once all of the shipments arrive at the client site, this document is referenced by the assembly crew who then reassembles the components.

To accomplish these tasks there are a few pieces of information that need to be handy within the shipping dock.  Most of this information such as the destination, intended carrier, weights & dimensions of parts, freight costs, etc. can be referenced or collected using standard Shipping Execution functionality. 

But some of the information required to execute this process resides outside of the Shipping Execution module.  For instance, the bill of

material for the manufactured good needs to be accessible so that parts can be easily identified when containerized.  We must keep in mind that the individuals within the shipping dock were not involved in the engineering and manufacturing processes of this good and will need this information for reference.  It is also vital that the shipping crew have this information to accurately identify, label, and containerize the parts properly considering the liabilities involved with shipping this high dollar item.

And because of the liability risks involved with this large item, all shipment information resulting from the disassembly process needs to be tracked in detail - this is where a major functionality disconnect occurs. 

As I mentioned earlier, the final good is placed into inventory as a single item once manufacturing is complete.  The pick release process within Shipping Execution then transfers this good to the staging area; which results in a single delivery detail line.  However, the requirement asks for all information related to this shipment line to be tracked - this includes all of the disassembled parts, containers, and carriers used.  Several questions are to be asked of this process:

1.) How do we split apart this single delivery line to represent the multiple shipments resulting from the disassembly process?
2.) And how do we track the disassembled components in each of these shipments?

Let’s first investigate the issue of splitting a single delivery detail line.  Functionality exists within Shipping Execution that allows the user to split the delivery line into fractional quantities if the “OM Divisible” flag for the manufactured item is enabled within the Item Master.  However, this leads to several issues:

1.) Though the delivery line can be split, the fractional quantities may not accurately represent the percentage of the item that was pulled a part from the main assembly.
2.) Depending on your client’s requirements, there may be a need to perform this action on a serial controlled item.  If this is the case, Oracle will not allow an item to be “OM Divisible” if serial control is enabled, thus preventing delivery line splitting.
3.) If your client is implementing Installed Base, several records are interfaced to the module for each of the split delivery lines vs. a single interfaced record that represents the entire manufactured good.
4.) And most importantly, no manual or automatic functionality exists in Shipping Execution that allows the user to assign disassembled parts of the bill of material to a split delivery line.

Depending on how flexible your requirements are regarding order entry, you may be able to alter the order entry process so that line items could be entered that represent each of the major components that will need to be disassembled and shipped.  However, this is also making some radical assumptions:

1.) Presentation of the invoice is not an issue (4 line items vs. 1)
2.) Either Installed Base is out of scope, or interfacing several “partial” Installed Base records is not an issue.
3.) Breakdown of the manufactured good for shipment is know at the time the order is placed.

Placing the disassembled components as separate line items on the sales order also creates a major side affect within manufacturing.  Demand is no longer sent for the good as a whole, but is now sent for the components of that good.  This means that work orders are issued for each component, manufactured, and placed into inventory as separate finished goods.  Oracle then has no knowledge that in reality this is actually a single manufactured good that was sold to the customer.  And in the case that I described above, it also doesn’t show that the unit was actually assembled completely for testing prior to the disassembly process.

Another approach would be to create the good as a PTO item, where each of the options within the PTO model resembles the major shippable components.  But again, this is making the same assumptions as the previous solution.  And this also has the same side affect on manufacturing.

Regardless, neither of the approaches address the requirement that the disassembled components need to be tracked and assigned on a per shipment basis.  This requirement would most definitely require a customization that would allow the user to “drill” into the shipment and assign the disassembled parts to an LPN/container item.

Additionally, to be able to reliably split apart the delivery line that represents the large item, and in order to avoid any adverse affects on manufacturing and Installed Base, a customization would be needed to enhance the delivery line splitting functionality.  Essentially the delivery line would need to be taken to another level of detail that would be stored outside of the standard Shipping Execution application to track the multiple container shipments associated with a single delivery line in standard tables.  In affect, this would allow manufacturing to produce this good as a single item (as intended) and would interface to Installed Base as single record upon ship confirmation.

As you can see, this situation could potentially be very challenging to implement.  And while most consultants refrain from customizing the application as much as possible, there doesn’t appear to be a solution that would completely avoid altering the Shipping Execution module while fulfilling all of the requirements described.

Got a better solution?  Let’s hear it!

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Mr. Thompson is a Senior Oracle Applications Consultant with Lexerd Group Consulting. Visit www.LexerdGroup.com to find out more about our firm.

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Entry Filed under: Order Management, Shipping Execution, Order to Cash