Use the Inter-Organization Shipping Network window to define accounting information and the relationships that exist between shipping and destination organizations. You can specify whether an organization is a shipping organization, a destination organization, or both.

For each organization relationship you create, you must indicate what type of shipment is used. If you choose to use intransit inventory, Oracle Inventory moves material to intransit inventory before it reaches the destination organization when you perform an inter-organization transfer. Typically, you transfer material through intransit inventory when transportation time is significant. If you do not choose intransit inventory, Oracle Inventory moves your material directly to the destination organization when you perform an inter-organization transfer. You must also specify whether internal orders are required from the destination organization to perform inter-organization transfers. Oracle Inventory does not allow you to perform inter-organization transfers using the Transfer Between Organizations window to an organization that requires internal requisitions. See Overview of Internal Requisitions.

If you choose to use intransit inventory, you must specify which organization has ownership of the inventory while intransit. You must also specify the primary receiving routing: Standard receipt to a receiving location, standard receipt with inspection, or direct receipt to the final destination.

Regardless of the intransit type, you must define an inter-organization transfer charge type. You can choose to add a predefined percentage of the transaction value, to enter a discrete percentage of the transfer value, to enter a discrete value to add when you perform the inter-organization transfer, or not to add transfer charges at all.

Also, you must provide general ledger accounts to record debits and credits involved in an inter-organization transfer.

Finally, you can optionally define shipping methods in the Ship Method QuickCodes window and then enter lead times for these shipping methods in the Inter-org Shipping Methods window. These lead times are used by MRP. See Defining Bills of Distribution, Oracle Master Scheduling / MRP and Oracle Supply Chain Planning User's Guide.

Oracle Inventory defaults the shipping information you entered in the Organization Parameters window when you create new organization relationships in the Inter-Organization Shipping Network window.

Inter-organization shipping network information describes the relationships and accounting information that exists between a shipping (from) organization that ships inventory to a destination (to) organization.

Depending on the function security assigned to your responsibility, you can define a shipping network between the current organization and another organization or between any two organizations. The function security assigned to your responsibility determines whether you have the ability to define shipping networks for all organizations or just the current organization. See Overview of Function Security.

Chargeable Subcontracting

Chargeable Subcontracting is a consignment of components by an original equipment maker to a manufacturing partner or trading partner. You can use chargeable subcontracting is support only for Japan, Taiwan, and Korea. When an original equipment manufacturer ships consigned material to a manufacturing partner, the original equipment manufacturer treats the transaction as if the consigned materials are sold. When the original equipment manufacturer receives an assembly item, or out-sourced service from the manufacturing partner, the original equipment manufacturer considers the receipt as a return from consigned. For more information about Chargeable Subcontracting, see the Chargeable Subcontracting Process guide.

   To define shipping network basic information:

1. Navigate to the Shipping Networks window.

2. Determine if the organization displayed is the To Organization, From Organization, or the From or To Organization.

   Note: If your function security allows multiple organization access, you can enter any organization. Otherwise, the Organization field is display only.

3. To define a new shipping network for the current organization choose New Record from the Edit menu. To enter a new record in a single-row window choose the New button.

   To find existing shipping network information for the current organization choose Find.

4. Select the Main tabbed region.

5. Enter the shipping or From organization.

6. Enter the destination or To organization.

7. Enter the transfer type:

   Direct: Inter-organization transfers move inventory directly from the shipping organization to the destination organization.

   Intransit: Inter-organization transfers move inventory to intransit inventory first. You can track this inventory until it arrives at the destination organization.

8. If you selected Intransit in the Transfer Type field, select the FOB terms:

   Receipt: The shipping organization owns the shipment until the destination organization receives it.

   Shipment: The destination organization owns the shipment when the from organization ships it (and while the shipment is in transit).

9. If you selected Intransit in the Transfer Type field, select a receipt routing option:

   Standard: Receive this item first, then deliver without inspection.

   Direct: At receipt, deliver this item directly to its location.

   Inspection: Receive this item first, inspect it, then deliver.

10. Indicate whether an internal order is required for each transfer.

11. Save your work.

   To define transfer charge information:

1. Select the Transfer, Distance tabbed region.

2. Select the inter-organization transfer charge type for calculating transfer charges:

   None: Do not add transfer charges.

   Predefined Percent: Automatically add a predefined percent of the transaction value.

   Requested Value: Enter a discrete value to add.

   Requested Percent: Enter a discrete percentage of the transfer value to add.

   The default value is the value you defined in the Organization Parameters window for the shipping organization. See Defining Organization Parameters.

3. If you selected Predefined Percent in the Transfer Charge Type field, enter the percentage value to add to a material transfer. For example, a value of 10 equals a transaction value of 10%.

   The default value is the value you defined in the Organization Parameters window for the shipping organization. See Defining Organization Parameters.

4. Optionally, you can define the following:

   • Enter the unit of measure for the distance from the shipping organization to the destination organization.

   • Enter the distance value (in the unit of measure) from the shipping organization to the destination organization.

   To define account information:

1. Select the Primary Accounts tabbed region.

2. Enter the general ledger transfer credit account used to collect transfer charges for the shipping organization

   The default value is the value you defined in the Organization Parameters window for the shipping organization. See Defining Organization Parameters.

3. Enter the general ledger account used to collect the purchase price variance for inter-organization receipts into standard cost organizations. You must enter an account if your receiving organization is using standard costing.

   To enter additional account information:

1. Select the Secondary Accounts tabbed region.

   Note: The default values for the following fields are the values you defined in the Organization Parameters window for the shipping and destination organizations. See Defining Organization Parameters.

2. Enter the general ledger receivables account used as an inter-organization clearing account for the shipping organization. The inter-organization receivable account for the shipping organization should equal the inter-organization payables account for the receiving organization.

3. Enter the general ledger payables account used as an inter-organization clearing account for the receiving organization. The inter-organization receivable account for the shipping organization should equal the inter-organization payables account for the receiving organization.

   To enter intransit account information:

1. Select the Intransit Account tabbed region.

2. Enter the general ledger account used to hold the intransit inventory value.

   To enter intransit lead time for shipping methods:

1. Select Shipping Methods on the Tools menu to open the Inter-org Shipping Methods window.

2. Enter the shipping method for which you want to associate an intransit lead time for the displayed from and to organizations. See Defining Shipping Methods.

3. Enter the intransit lead time in days.

4. Save your work.

   To add Subcontracting information:

1. Select the Subcontracting tab.

2. Select a Subcontracting Type to enable a subcontracting relationship for this shipping network:

   • Null

   • Buy/Sell

     Note: Selling components and buying assembly items are independent business transactions in buy/sell subcontracting.

   • Chargeable

3. Enter the Variance account.

4. Enter the Offset account. The manufacturing partner organization uses this account.

5. Enter the default order type. You can enter the default order type only if you enable Chargeable Subcontracting. This field determines the Order Management Order type that is used for Replenishment Sales Order for Chargeable Subcontracting components.

6. Save your work.

Other Sources

• Defining Sourcing Rules, Oracle Master Scheduling / MRP and Oracle Supply Chain Planning User's Guide