Difference between PARTY and CUSTOMER in Oracle EBS?

Difference between PARTY and CUSTOMER?

1. When we create New Customer in ERP, why a PARTY will be created automatically?
2. Can I create a Customer without Party?
3. Can I create a Party without Customer?

Oracle as a company was basically into ERP solutions only. As part of its efforts and vision to branch out into every other application such as SCM, CRM and other domains, it started acquiring smaller companies. It acquired Siebel which was one of the industry leaders in the CRM domain. Just to provide some insight into CRM, it is an acronym for Customer Relationship Management. Any CRM is basically a marketing tool. If you understand the definition of the word “marketing”, you will easily understand the difference between a party and customer.

Marketing is the process of identifying, creating and retaining a customer. CRM tools essentially deal with that process. It is used by companies to identify potential customers, make them buy something from the company, maintain effective relationships with them to retain them for repeat purchases as well. This is what CRM does.

But an ERP like oracle does not have any relationship with a person unless he buys something from the company. A customer is someone who has a buying relationship with the company. So how do we distinguish between a person who has bought something and someone who hasnt purchased anything from you? This is where the party definition comes into picture. A party is anybody that exists. He/She/It does not have to have bought something from the company earlier. In fact, they do not have any relationship whatsoever with the company. So how does the company make them buy something? This is where CRM helps. It helps the company in identifying such people, create some marketing campaigns to make them buy something and convert them into the company’s customers, and keep maintaining relationships with them so that they will keep buying from them in the future as well.

Oracle purchased Siebel CRM to target these companies which require CRM tools to create, maintain and retain new customers. Prior to 11i, Oracle had the customer tables only. It did not have to deal with non-customers. Anyone who purchases becomes a customer and is stored in the ar customer tables. When Oracle bought CRM, it needed to incorporate the concept of a ‘potential” and “repeat” customer into the existing data model. It could not have had separate schemas or databases for CRM tools and ERP tools. Since CRM and ERP have to talk to each other, they wanted one single model to incorporate customers who bought and people who have not purchased. So they created a layer over the customer definition called party and said “Anyone who exists is a party”. Once this party buys something, it becomes a customer. Kindly note that it is still a party. It is both a party and customer as well after the purchase is made. So for a person to become a customer, he has to exist first. Only then he can make the purchase and become a customer.

So the process would be like this. A company wants to create some new customers. So it first uses some CRM tools to identify new people it thinks can be targeted. It uses some CRM modules like marketing, telesales, telemarketing etc… to target the customer and finally convinces the customer to make the purchase. So, this person has entered the oracle database. Remember he has not bought anything yet. He is only a party for now. How does he buy now? CRM does not have any modules to place or process orders and payments. The party has to place an order in the ERP module Order management. Once he places an order, he becomes a customer too. So he is now both a party and customer. I hope this helps in understanding why some companies need CRM and ERP, and why Oracle bought siebel CRM. Oracle can target companies which deal with a lot of customers in its business like retailers (Walmart, Amazon, Target) and can sell them both CRM and ERP packages as part of a wholesome solution. since ERP and CRM are sold together, they need to communicate effectively and easily with each other and hence one single data model for customers called the “Party model”.

AIM Documents

1. RD020 - Requirement Gathering (Definition Phase)
2. BP040 - Current Business Process (Operation Analysis Phase)
3. BP080 - Future Business Process (Operation Analysis Phase)
4. BR100 - Functional Application Set Up (Solution Build)
5. CV040 - Data Conversion (Transition)
6. MD050 - New Customization (Solution Build) for dev to customize
7. TE040 - Test Scripts (Production)

Processing Constraints in Oracle Order Management

Processing constrains are a security framework where we can define rules in oracle order management that validate back-end operations such as Create, Update, Delete and Cancel.

Eg:

We cannot change the order type in the order header once the order is booked.

We cannot delete the line in an order once the order status is closed.

N: OMàSetupàRulesàSecurityàProcessing Constraints

Query the application as Order Management

Create a new line on the constraints region

Operation = Update

Attribute = Order Type

User Action = Not Allowed

Enabled check box = Selected

Create a new line on conditions tab:

Group Number = 101

Scope = Any

Validation Entity = Order Header

Record Set = Order

Validation Template = Booked

Enabled Check box = Selected

User Message = Order is Booked

RMA SO

RMA SO:

1.       Enter SOàBook SOàCreate ReceiptàCreate Credit Memo (Line flow generic return with Receipt Credit only)

2.       Enter SOàBook SOà Create Credit Memo (Line flow generic return Credit only)

3.       Enter SOàBook SOàCreate ReceiptàCreate New LineàPick ReleaseàShip Confirm (Same or Different Item) (Return with receipt only no credit and ship only)

4.       Enter SOàBook SOàCreate ReceiptàCreate Credit Memo

Entered

Booked

Awaiting Return

Drop Ship SO

Drop Ship SO:

Flow:

Enter SO à Book SO à Submit WFBE à Submit Requisition Import à Find Auto Gen PR à Auto Create PO à Create receipt for Logical QTY

Statuses:

Entered

Booked

Awaiting Receipt (Requisition Import àPOàInv Receipt)

Shipped (Submit WFBE)

Setup or Questions:

Source Type is External

Shipments Tab – Drop Ship - Shipping details available

--------------------------------------------------------------------------

Drop Ship Sub inventory:

Status                                   : Unserviceable

Material Status                 : N

Include in ATP                   : N

Allow Reservations         : N

Nettable                              : N

Quantity Tracked             : Unchecked

Back to Back SO

Back to Back SO:

Flow:

Enter SO à Book SO à Progress Order à Submit Requisition Import à Find Auto Gen PR à Auto Create PO à Create receipt for QTY à Pick Release à Ship Confirm à

Statuses:

Entered

Booked

Supply Eligible (Progress Order LineàCreate Supply Order – EligibleàRequest Submitted)

External Requisition Requested (Requisition ImportàSource: CTOàCreate Inv Receipt)

Awaiting Shipping (Pick and Ship)

Shipped (Submit WFBE)

Setup or Questions:

Remove Assignments set from MRP: Default Sourcing Rule Assignment Set

Source: Internal

OM: Assemble to Order

When Source: Internal & ATO check box enabled its back to back line

Reasons:

To avoid customer’s knowing the actual costs of the product.

We may lose the customer.

Some time we need to add accessories to the product from our inventory.

http://oracleapplicationsfunctional.blogspot.in/2011/08/back-to-back-order-flow-in-oracle-r12.html

Bill Only SO

***Authoring not completed***

Bill Only Sales Order:
It is used for non-shippable sales orders.
Here no shipping is involved, order will be booked and closed and will be sent for billing.

Steps Involved:
1. Enter Sales Order
2. Book Sales Order
3. Generate Receivable Invoice

Sometimes shippable items also use bill only sales order, like counter items (Supermarket sales).

Setup:
1. Create Bill Only Line Type
N: Setup>Transaction Types>Define
define billonly line type and save.
2. Assing Bill Only line type to Header Line Type. (we use only mixed)
N: Setup>Transaction Types>Define
Assign Line flows
Select line flow generic, bill only while assigning


Billonly workflows are of two types
1. Lineflow generic bill only (Service Items)
2. Lineflow generic bill only with inventory interface (Stock-able)

(This is used to update the On Hand Qty)

Once the order is
1. Entered
2. Booked
Then line status changes to Fulfilled.
when you will get a status fulfilled for a sales order?
If the line is billonly line.

To get the status to be closed. We need to run Inventory workflow background engine with below parameters.

Process Defined: Yes
Process Timeout: No
Submit.
Once the program is completed the status changes to Closed

Next we need to create a receivable invoice.
Submit Auto Invoice Master Program.
In order management
N:Receivables>Interfaces>AutoInvoice
Single Request
Autoinvoice Mater Program
Prameters:
Number of Instances: 1
Organization: All
Default Date: Order
Sales Order number from and to
Submit

Find autogenerated Receivable Invoice.
OM (can be found in other places, orders returns sales orders)
N:Receivables>Transactions>Transactions


***Authoring not completed***

Pricing for Order Management

To manage pricing for Order Management, we need pricing responsibility.

Define Pricing Responsibility:
Application: Advanced Pricing
Menu: QP_PRICING_MANGER

Request Group:
Name: QP Concurrent Programs

Pricing Responsibility Security Profile Options:

N: System Administrator>Profile>System

Responsibility: Pricing
Profile:	Responsibility:
HR: Business Group	XX Business Group
HR: Security Profile	XX Security Profile
HR: User Type	HR User
QP: Item Validation Organization	XX Item Master Org

Operating Unit is setup only to default currency.

As Pricing is controlled at legal entity level Operating unit security profile is optional

Define Document Assignments

Document Assignments: Document Sequence Assignments is used to assign sequences to order types.

N: Setup>Documents>Assign

Document:
Application: Order Management
Category: XX Sales Order Header Type
Ledger: XX Ledger
Method: Automatic/Manual/Null

Assignment:
Start Date:
Sequence: XX Standard Sales Order Doc Seq

Defining Document Sequence

Document sequence is used for maintaining document numbering.

N: Setup>Documents>Define

Name: XX Standard Sales Order Doc Seq
Application: Order Management
From:
Type: Automatic/Manual/Gapless
Initial Value: 100

Defining Order Type

Order Type:
An order type is used to identify the type of transaction. It is the transaction type that we define based on how we transact, like standard order, return order, mixed order etc.

There are two levels for order types. One is at header level and the second is at line level. This is because, sometimes we may have a scenario where we need to do a transaction with both standard and return lines in the same SO.

Define Transaction Type:
When we want to define a new transaction type, we need to define line type first and then tie it to Order header.

Line:
N: Setup>Transaction Types>Define

PIC

Transaction Type: XX Sales Order Line Type
Sales Document Type: Sales Order/Sales Agreement
Order Category: Order/Return/Mixed
Transaction Type Code: LINE
Effective Dates

Order Header:
N: Setup>Transaction Types>Define

PIC

Transaction Type: XX Sales Order Header Type
Sales Document Type: Sales Order/Sales Agreement
Order Category: Order/Return/Mixed
Transaction Type Code: ORDER
Fulfillment Flow: Order Flow - Generic (It decided the user actions based on the workflow)
Effective Dates
Default Order Line Type: XX Sales Order Line Type (Tie Line to Order)

Assign Line Flows:
Line Type: XX Sales Order Line Type
Process Name: Line Flow - Generic
Start Date:

Order types can defined for return and mixed similarly using the respective workflows.

Defining a customer

To fill a sales order we need the details of the customer for whom we are creating a SO.
Customer details are used for billing, shipping etc.
We may need bill to location to send the bill details and ship to details to ship the item to that location.

N: OM>Customers>Standard

PIC

Click on Create
Fill below mandatory details

Customer Information:
Organization Name

Account Information:
Account Type: External/Internal
External:
Internal: Internal is used for ISO IRS cycles

Account Site Address:
Country
Address Line 1

Account Site Details:
Operating Unit
Category
Territory

Business Purpose:
Bill To
Ship To

Click on Save and Add details to save the customer details.
Click on Apply for saving the details.

OM Security Profile Options

N: System Administrator>Profile>System

Responsibility: Order Management
Profile:	Responsibility:
HR: Business Group	XX Business Group
HR: Security Profile	XX Security Profile
HR: User Type	HR User
MO: Operating Unit	XX Operating Unit
MO: Default Operating Unit	XX Operating Unit

Accounting entries created in Oracle Apps during O2C cycle

Oracle Applications R12.X.X Order Management Implementation

Receivables setup for Oracle Order Management

To start implementing Oracle Order Management in EBS. It is to be noted that prerequisite setups in Receivables needs to be done by Oracle Financial consultant.

Here to go with implementation, we shall do the Receivable setup on our own.

We need a Receivable responsibility.

1.       Create a Receivable responsibility or use if any existing receivable responsibility if available.

2.       Define system options:

N: Receivables->Setup->System->System Options

Setup your Operating unit and other details which are mandatory

Setup your ledger name

Now you will be able to proceed with Oracle Order Management implementation.