Sep 29, 2012

Best Practices in Inventory Item Coding in Oracle....

Recently I attended a presentation on Oracle Apps implementation in one company. I was fascinated by the way they had designed their inventory item code.

This company runs Oracle R12 suite with OPM.

The inventory item code optimally uses the four elements of an item vis, code, description, Item type and category to optimally handle all the necessary information relating to an item.

In any ERP, there are three aspects to be considered while creating an item code. One, Simplicity, Two, reporting requirements and three, accounting requirements.

Those who know OPM know that the multiple KFFs available for Item master is not available if you are using OPM. In the OPM scenario, an item code can have only one segment.

How they have managed here is as follows.

The inventory code consists of 8 Characters, first three characters show the Product Details and the next three characters show the sub-product details. The remaining two characters are running serial numbers. This means that for a given combination of product and sub-product, they are expecting a maximum of 99 item codes including raw materials, which anyways have a different product and sub-product value. This simplifies the item code.

Next comes the reporting requirements. This is handled through product description. The description consists  of Product, sub-product,brand,geography and other information each separated by 'underscore'. So, it is very easy for you to create reports since the key information is separated by 'underscore' symbol.

For every finished product there are two key accounts that you should link to. One is the 'Revenue' account, which is linked through a category called 'Item GL Class'. The associated cost information is handled through the category called 'Item Cost Class' which is a category available in Oracle when you use OPM.

Some of the challenges includes LOV based queries, which has been handled through the use of Item Descriptions.

I thought this was a  very good solution to inventory coding. The key decisions were related to naming conventions which were taken much earlier in the project cycle.

Any suggestions and queries and comments? I would be very happy to hear from you.

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