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Global Users. Global Solutions.
Achieving Inventory Optimization and
Distribution Controls with Cycle Count
Raza Haider
Global Users. Global Solutions.
Who is DataRoad?
• DataRoad is…
•an Oracle Certified Partner
providing consulting services using the Oracle 11i E-Business Suite.
DataRoad has nationally-recognized expertise in providing Oracle-based E-Business solutions
for clients in a wide range of industries.
About…
Global Users. Global Solutions.
DataRoad provides…
• 11i E-Business Suite Implementations• 11i E-Business Suite Upgrades• Managed Services of Applications and Technologies• Oracle Database and Applications Server Services• Oracle Professional Staffing• Customized Oracle Training• Oracle Software Development• Hardware and Software for Oracle Infrastructure• Headquarter located in Jacksonville, FL
About…
Global Users. Global Solutions.
Presenter’s Qualifications
Raza Haider
• Sr. Independent Consultant, specializing in Oracle 11i E-Business Suite
• 7+ years of experience in Financials 11i, Supply Chain, and Self-Service including iProcurement, iExpense, and development of APPS web inquiry systems
• Successfully completed many multi-org / multi-currency implementations and upgrades under tight schedules and deadlines
Global Users. Global Solutions.
Presentation Agenda
• Objective• Inventory Optimization – Why?• Oracle Solutions• Concepts and Procedures
– Identify Phases• ABC Analysis• Workday Calendar• Cycle Count
– Supporting Reports• When to perform Cycle Counting?• Conclusion• Q&A
Global Users. Global Solutions.
Objective
• The purpose of this presentation is to demonstrate the steps involved in building a Cycle Counting system using Oracle 11.5.10
• Use the paper and this presentation together
Global Users. Global Solutions.
Inventory Optimization – Why?
• Inventory accuracy in manufacturing, distribution, and fulfillment operations is critical
• Without accurate stock level information in your system, effective inventory management is impossible
• Accurate inventory contributes to improved customer service• Procuring the right quantities to replenish your inventory is
crucial • Up-to-date stock levels will positively impact business
performance and mission results (ROI)• Organizations must ensure inventory accuracy for
procurement controls, auditing and financial reporting
Global Users. Global Solutions.
Oracle Solutions
• Oracle meets all challenges and demands to achieve accurate stock levels with methods like Physical Inventory and Cycle Counting
– Physical Inventory• Takes a snapshot of inventory quantities • Material transactions are frozen until after you have performed
your adjustments• May not be suitable for those operations that verify stock
balances more than once a year
– Cycle Counting• Cycle counting can be utilized to achieve accuracy with a great
degree of flexibility• Available in a number of Oracle modules
Global Users. Global Solutions.
Cycle Count Concepts and Procedures
• Cycle counting is the periodic counting of individual items throughout the year
• Items of higher value are counted more frequently than items of lower value
• Cycle count initiates counts to be scheduled as often as desired (daily, weekly, monthly, etc)
• Ensures that no items will be skipped, or counted more often than necessary
• It can replace the traditional year-end physical inventory
Global Users. Global Solutions.
Concepts and Procedures
• The presentation will identify the main components of building a practical cycle counting system
• Screen prints are presented to illustrate the steps • Cycle Count can be divided into 3 primary phases:
– ABC Analysis – Inventory Calendar– Cycle Count
• Each can be configured and tailored to fit any business requirements
• Oracle Inventory responsibility
Global Users. Global Solutions.
Concepts and ProceduresOracle Inventory Responsibility
Global Users. Global Solutions.
• ABC Analysis– Determines the values of items by ranking them in a
criterion and then grouping them into classes– ABC Analysis is divided into four main sub-tasks
• ABC Compile• ABC Classes• ABC Assignment Groups• Assign Items
Concepts and ProceduresABC Analysis – Phase 1
Global Users. Global Solutions.
• Navigate to Inventory ABC Codes ABC Complies New
• Choose one of 15 compilation criteria for performing an ABC analysis
• Can be defined and complied for the entire organization or a specific sub-inventory
Concepts and Procedures
ABC Compile
Global Users. Global Solutions.
Concepts and ProceduresABC Compile
Global Users. Global Solutions.
Concepts and Procedures
ABC Compile - Criterion
Global Users. Global Solutions.
Concepts and Procedures
ABC Compile
• Analyze your results with “ABC Descending Value Report”
• Use it as a guide in assigning your items to ABC classes
• Tools menu will allow you to:View, Purge and Print compile
Global Users. Global Solutions.
Concepts and Procedures
ABC Compile
Global Users. Global Solutions.
• ABC classes are used to identify the value groupings to which your items belong
• Use your own terminology for ABC classes • For example, if you select criterion “Historical number of
transactions” in your compile, you can define classes A, B, C and D where:– Class A for High Moving Items– Class B for Medium Moving Items– Class C for Slow Moving Items– Class D for Obsolete Items
• Navigate to Inventory ABC Codes ABC Classes
Concepts and Procedures
ABC Classes
Global Users. Global Solutions.
Concepts and Procedures
ABC Classes
Global Users. Global Solutions.
• Before you assign items to ABC classes, you must define an ABC group
• Groups link a particular ABC compile with a valid set of ABC classes
• Inventory ABC Codes ABC Assignment Groups
Concepts and Procedures
ABC Assignment Groups
Global Users. Global Solutions.
Concepts and Procedures
ABC Assignment Groups
Global Users. Global Solutions.
Concepts and Procedures
ABC Assignment Groups
Global Users. Global Solutions.
• Choose the sequence number that corresponds to the last item in each class
• You can base your assignment on the percentage of items or the cumulative inventory value that corresponds to the last item in each class
• For example, if you assign 55% of your items to class A, then you must choose a value between 0% and 45% for the next class
• To define assignments, click ‘Assign Items’ button in the group window. Alternatively you can navigate to Inventory ABC Codes ABC Assign
Concepts and Procedures
Assign Items
Global Users. Global Solutions.
Concepts and Procedures
Assign Items
Global Users. Global Solutions.
ABC Analysis:
Use the following reports to verify ABC analysis information – ABC Descending Value Report can be used to analyze your
result. Oracle Inventory ranks all the items in your ABC compile in descending order to produce the ABC Descending Value Report. This report can be utilized as a guide in assigning your items to ABC classes.
– ABC Assignments Report lists items and the ABC classes of the items
Forms Inquiry – Update ABC Assignments window checks class assignment of
items within an ABC group
Concepts and ProceduresABC Analysis
Global Users. Global Solutions.
Concepts and Procedures
Workday Calendar – Phase 2
• Workday Calendar is required in cycle counting
• Can have exceptions • On/Off day follows workday patterns• Build the Calendar from Tools menu• Navigate to Inventory Setup
Organizations Calendar
Global Users. Global Solutions.
Concepts and Procedures
Workday Calendar – Phase 2
Global Users. Global Solutions.
• Cycle counting has multiple components – Cycle Count (Definition)– Perform full cycle count– Cycle Count Entries– Approve Counts
• Cycle count can be manual or automatic– Manual process requests counts for any item at any time– Automatic scheduling chooses the specific item to count in a
time interval• Both are very similar to set up; however the following
sections discuss the automatic scheduling scenario
Concepts and ProceduresCycle Counting – Phase 3
Global Users. Global Solutions.
• Divided into multiple tasks and each task can have additional subtasks
• Header– Cycle count name Description– Calendar– GL adjustment account
• Adjustments/discrepancies are posted to this default account but it can be overridden when entering the actual counts
Concepts and ProceduresCycle Count (Definition)
Global Users. Global Solutions.
• Detail Regions– ‘Scope and Control’– ‘Serial and Schedule’– ‘Adjustment and ABC’
• Cycle Count Classes
Concepts and ProceduresCycle Count (Definition)
Global Users. Global Solutions.
• Detail Block
– ‘Scope and Control’ region has:• Count Controls parameters• Count Subinventories
– To include organization or sub-inventory level cycle counting information
• Automatic Recounts
• Navigate to Inventory Counting Cycle Counting Cycle Count New
Concepts and ProceduresCycle Count (Definition)
Global Users. Global Solutions.
Concepts and ProceduresScope and Control
Global Users. Global Solutions.
• Detail Block
– ‘Serial and Schedule’ region has:• Serial control options
– Optional
• Auto scheduler parameters– Must select ‘Auto Schedule’ to initiate counts to be
scheduled as often as desired (daily, weekly, monthly, etc)
Concepts and ProceduresCycle Count (Definition)
Global Users. Global Solutions.
Concepts and ProceduresSerial and Schedule
Global Users. Global Solutions.
• Detail Block
– ‘Adjustment and ABC’ region has:• Approval - tolerances parameter for
– Qty variances– Adjustment value– Hit/Miss analysis
• ABC Initialization– Compile Group – (Re)initialize option
Concepts and ProceduresCycle Count (Definition)
Global Users. Global Solutions.
Concepts and ProceduresAdjustment and ABC
Global Users. Global Solutions.
• Click on ‘Classes’ button– Select the name of the ABC class for your cycle
count– The number of times per year you want to count
each item in this class• Close Classes window and Save• Oracle will submit a concurrent request
–Classes will be assigned to items
Concepts and ProceduresCycle Count Classes
Global Users. Global Solutions.
Concepts and ProceduresCycle Count Classes
Global Users. Global Solutions.
Concepts and ProceduresPerform full cycle count
Global Users. Global Solutions.
Concepts and ProceduresPerform full cycle count
• Enter all parameters for each program • Make sure to check ‘Save output’ before
submitting the job • Cycle count listing has the detailed
information on items • The report provides blank space to write
down actual counts
Global Users. Global Solutions.
Concepts and ProceduresPerform full cycle count
Global Users. Global Solutions.
Concepts and ProceduresCycle count listing
Global Users. Global Solutions.
• Navigate to Inventory Counting Cycle Counting Cycle Count Entries
• Header level you can find your cycle count, adjustment account, and other defaults
• Details level will show all open count requests • Enter all required and optional information for
each line• Use listing report to make adjustments
Concepts and ProceduresCycle Count Entries
Global Users. Global Solutions.
Concepts and ProceduresCycle Count Entries
Global Users. Global Solutions.
Concepts and ProceduresCycle Count Entries
Global Users. Global Solutions.
Concepts and ProceduresCycle Count Entries
Global Users. Global Solutions.
Concepts and ProceduresCycle Count Entries
Global Users. Global Solutions.
• Navigate to Inventory Counting Cycle Counting Approve Count
• At the header level you can find your cycle count, adjustment account and other defaults
• The detail level will query pending counts • Approve cycle count adjustments held for:
– approval, to recount an item, or to reject the adjustment• Inventory determines which counts need approval by
using the approval tolerances you enter while defining your cycle count.
• Once an item is approved, qty-on-hand is adjusted and the material adjustment value is posted to GL - once transferred
Concepts and ProceduresApprove Count
Global Users. Global Solutions.
Concepts and ProceduresApprove Count
Global Users. Global Solutions.
• ABC Assignments Report• ABC Descending Value Report• Cycle Count Entries and Adjustments Report• Cycle Count Hit/Miss Analysis• Cycle Count Listing• Cycle Count Open Requests Listing• Cycle Count Unscheduled Items Report• Cycle Counts Pending Approval Report• Cycle Count Schedule Requests Report
Concepts and Procedures
Supporting Reports
Global Users. Global Solutions.
• This completes the cycle counting initial process• Based on the frequency and the scheduled date, you would ‘Perform
full cycle count’ as described above
Concepts and Procedures
Global Users. Global Solutions.
• When to perform Cycle Counting?– During the time when material transactions
are not moving– Typically this is just before or after normal
peak working hours – Consider counting for one hour each morning
before your warehouse opens for business or – Each afternoon, after the last order has been
filled
Concepts and Procedures
Global Users. Global Solutions.
• Time is money; Oracle Cycle Counting will save a tremendous amount of time
• Significantly reduces overtime costs associated with performing the counts while reducing the plant shutdowns
• Ultimately, cycle count adjustments are posted to General Ledger facilitating accurate financial system and reports
Concepts and ProceduresConclusion