Oracle Applications uses multiple types of organizations to build the business
execution structure. At the top of the structure is the accounting set of books
SOB), defined in the General Ledger. Next, different types of organizations are
used to further define the organization structure and relationships. All
organizations are defined and updated with the Define Organization form.
Set of Books: A General Ledger SOB, linked to the inventory organization,
controls the financial accounting of inventory transactions. A SOB is made up
of a chart of accounts, a financial calendar, and a currency. The general
ledger secures transactions (journal entries, balances) by SOB.
Legal Entity. A legal entity organization defines the tax and fiscal reporting
level. The legal entity represents the legal company.
Operating Unit: An operating unit organization defines the Purchasing, Order
Entry, Accounts Payable and Accounts Receivable level of operation. An operating
unit may span multiple manufacturing facilities, distribution points and sales
offices, or it may be limited to a single site.
Inventory Organization: Two flavors of inventory organizations are found in
Oracle Applications. They are defined the same, and both are assigned a set
of books, a legal entity organization, an operating unit organization, and a
location. An item master organization is used for item number maintenance and
validation. This master organization serves as a data repository storing items
and item attributes, master level categories and category sets, master level
cross references, and numerous data defaults. On-hand balances, inventory
movements, and other on-going inventory activities are not performed in an item
master organization. Generally, the master organization is used as the
validation organization for Purchasing and Order Entry. It is recommended
that a single item master organization be defined, even in multiple organization,
multiple sets of books environments.
In addition to the item master organization there are one or more non-master
inventory organizations. Like the item master inventory organization, the
non-master organizations are assigned a set of books, a legal entity organization
and an operating unit organization. The non-master inventory organization points
to a master organization and looks to the master organization for master level
item attributes, master level categories, and other master level controlled data.
Note that each organization has its own set of books/legal entity/operating unit
relationship, so inventory organizations with differing SOB’s or operating units
may share the same master organization.
These non-master inventory organizations are the execution level organizations.
They hold on-hand balances and transaction history. Here is where inventory
users execute their daily activities, such as receiving and issuing material,
performing cycle counts, and viewing material availability and transaction
history. A single organization therefore generally represents a single
manufacturing site or distribution center.
Locations: A location code is an address. Each inventory organization must
be assigned at least one location code.
Subinventories: A subinventory is used as a holding point for on-hand
inventory and generally represents a stockroom, stocking area or cage used
for storing material. Subinventories are defined within inventory
organizations. An inventory organization may have any number of
subinventories, and an asset account is assigned to each subinventory.
Since the subinventory entity is logical, as there is not an address or
physical location description associated with it, clients may define
subinventories for any physical or logical grouping of inventory
Stock Locators: Stock locators are an optional entity that may be used to
represent physical locations within a subinventory. You may choose to use
stock locators for selected subinventories or selected items within selected
subinventories. If locators are used, subinventory and locator track on-hand
balances. Therefore, if locators are defined to represent a shelf within a
stockroom, on-hand balances on the system would show the item and quantity
down to the physical location within the facility.
Oracle Inventory uses a key flexfield for stock locators. This presents a few
limitations for its use. Only one locator flexfield definition is allowed per
install. Therefore, if the stockroom (subinventory) wants to track material
by row, bin and shelf, it will likely define a three-segment flexfield with
segments for row, bin, and shelf. If locators are desired for another
subinventory, even in another organization, the structure will again be 3
segments for row, bin and shelf. In addition to this limitation, locators
must be unique within an organization; you cannot use the same locator in
different subinventories within an organization, but you can use the same
locator in subinventories in a different organization.