Terry towel oracle ebs scoping
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This document provides details about STPL's current Oracle ERP system and their business requirements. STPL operates three business units and currently uses Oracle Apps 11.5.9 in two units. They have requirements to modify COGS splitting, use standard lot functionality, implement scheduling, and modify costing and accounting setups. The proposed solution is to either maintain the current Discrete Manufacturing or implement Process Manufacturing while upgrading to 11.5.10.2. Specific technical workarounds and standard functionality would be used to address the requirements in a phased approach.
Terry towel oracle ebs scoping
- 1. 1 MGL understanding of STPL 1.1 Organization structure STPL, the flagship company of Coimbatore based KG group is organized into three different business units as given below. The unit 1 & 2 operates out from Mettupalayam and the third unit operates out from Annur. STPL exports its luxury terry towel products to countries like USA, Denmark, UK, Australia, Sweden, Germany and Malaysia. 1.2 Current system STPL has implemented Oracle Apps in Unit-1 & 2. The system went LIVE on 01-Apr-2005 with 11.5.9 version. The following modules were implemented in Unit-1&2, ♦ Oracle Financials – GL, AP, AR, FA, CM ♦ Oracle Inventory ♦ Oracle Purchase ♦ Oracle Order Mgmt ♦ Oracle Discrete Manufacturing ■ MRP/MPS ■ BOM ■ WIP ■ Capacity ■ Costing ■ Quality ♦ Custom developed application for HR Oracle Applications Implementation - Confidential - 1 - STPL Unit 1 Unit 2 Unit 3
- 2. Mark eting 1.3 Business Flow Diagram STPL is a 100% EOU and follows MTO (Make–to-Order) process. Oracle Applications Implementation - Confidential - 2 -
- 3. 1.4 Process Flow Diagram Oracle Applications Implementation - Confidential - 3 -
- 4. 1.5 Process Description of Unit 1 & 2 1.5.1 Marketing Marketing dept handles the following activities, ♦ Customer management ♦ Order Booking & Tracking ♦ MIS The average lead-time of Order-to-Delivery is 30 to 45 days. The tact time is 6 days when the raw materials are available and the resources are free. Only MTO order type is followed, No Internal Sales Order or Inter Company Transactions are made. STPL receives the sample and specification from the customer for feasibility study and confirmation. The design department will analyze the sample and prepares the data sheet for manufacturing such as GSM (Grams per square meter), weaving pattern and color. Order Management follows the standard functionality of Order entry and shipping. Marketing dept receives production related data from Weaving, Processing, Confection, FG stores, Quality control and other relevant departments. 1.5.2 Planning Planning department handles the Planning and Scheduling activities, Master Demand Schedule (MDS) and Material Requirement Planning (MRP) are run for each Order. The sub-inventory netting functionality (will consider the current on-hand stock while arriving the requirement) is currently not used in Unit-1&2. 1.5.3 Purchasing Purchase department handles the following activities, ♦ Supplier management ♦ Sourcing ♦ Ordering and Tracking Purchase department receives the Purchase Requisitions from Planning and other departments. Request for Quote, Quote Analysis and approval processes are done manually. Standard Purchase Orders are released for rare purchasing and expense items. Blanket Purchase Agreement (BPA) is made with Suppliers for regular and recurring items. Dyes, Chemicals and Carton boxes are covered under BPA. Oracle Applications Implementation - Confidential - 4 -
- 5. STPL uses the following position hierarchy for Document Approval, The Chairman approves Capital Goods purchases and other items follow the above hierarchy. 1.5.4 Inventory The stores department has Raw Materials and Finished Goods wings. The Purchased items are stored in RM sub-inventories. The FG has many sub- inventories as per the Quality Grade such as, ♦ A: Customer Specifications ♦ AS: Surplus ♦ B1: Weaving fault ♦ B2: Handling stain ♦ B3: Oil stain ♦ B4: Shearing fault ♦ C: Looks like a Towel ♦ S: Not a Towel Locator control is used for FG sub-inventories. Min-Max Planning method is used for Dyes, Chemicals and Yarn. Other Planning methods in Oracle are not used. The Inventory Accuracy is monitored by Cycle count and verified physically (manual). ♦ Purchase Items: Cycle count is done for all the raw materials and the frequency is 6 months. ♦ Work in Process: Manual Physical verification is done weekly and adjustment is passed in the system. Oracle Applications Implementation - Confidential - 5 - DGM Limit 50,000 Whole Time Director PM Limit 10,000 Chairman (Capital Goods)
- 6. Currently Lot and Serial control are not used in the Unit-1&2. Only Intra Org transactions such as Sub-inventory transfer, Move Order transfer, WIP and miscellaneous transactions are performed. 1.5.5 Manufacturing Discrete Job Orders are released for each process. Manufacturing department is the ultimate responsibility for the process sub-inventories. The process sub- inventories are created in such a way that the output of the previous process is stored in the next process sub-inventory such as WIP-WPD, WIP-WVG, WIP- PROC, and WIP-CONF. ♦ Outside Processing: The Spinning process is always done through Outside Processing (OSP). When there is bottleneck in the In-house capacity then that process is done through OSP. ♦ Invisible Waste: Currently it’s an arrived one. It is calculated by subtracting the Output Yarn and Visible waste with Input cotton. ♦ Weight Gain/Loss: The Output will gain weight from the sizing process and lose from the processing. Model BOM (Bills of Material): FG Towel (U121I00RF0101A01) Semi Finished Towel (U121I00RF0101SF) Dyed Towel Roll (U121I00RF0101) Weaved Towel Roll (U121I00) Ground Beam (G2068E1010) Yarn Cotton Sizing Chemicals Pile Beam (P2068E22G) Yarn Cotton Sizing Chemicals Weft Yarn Chemicals Dyes Bar code Label Sewing thread Poly Bags Corrugated Boxes Stickers Oracle Applications Implementation - Confidential - 6 -
- 7. 2 Key Requirements STPL’s requirements are broadly classified into three and are as following ♦ Requirement 1 – Incorporate the requirements listed in section 3.1 in the existing version 11.5.9 running at Unit 1 and 2 ♦ Requirement 2 - Upgrade the existing Oracle system from 11.5.9 to 11.5.10.2 for unit 1 & 2 ♦ Requirement 3 - Configure unit 3 in 11.5.10.2 2.1 MGL understanding of the requirements STPL has following requirements to be incorporated in the existing system to meet the business needs: 1. Cost of Goods Sold value needs to be split with respect to Raw Material (Yarn, Dyes & Chemicals, etc.). 2. Standard Oracle Lot number functionality must be used. 3. Oracle Scheduling to be put into use. 4. WIP cost needs to be split with respect to raw materials (yarn, dyes & chemicals). 5. Central Excise Deposit accounting to be verified and modified. 6. VAT set-up need to be done. 7. Exchange rate differences - setup need to be checked and modified. 8. B-Grade, C-Grade, S-Grade Items that are in stock need to be valued at the price at which they can be sold. 9. Costing needs to be verified and modified for any changes. Oracle Applications Implementation - Confidential - 7 -
- 8. 3 Proposed Solution MGL proposes to offer the solution “with options” to address all the requirements mentioned in the previous section. ♦ Option 1 – Maintaining Oracle Discrete Manufacturing ♦ Option 2 – Implementing Oracle Process Manufacturing and retiring Oracle Discrete Manufacturing. Please refer to the Annexure - Option 2. Irrespective of the option, the proposed solution would be delivered in a phased manner and in a sequence as detailed below: 3.1 Option 1 Maintaining Oracle Discrete Manufacturing 3.1.1 Reconfigure and develop workaround solution to address requirement 1 MGL proposes technical workaround to implement the above requirements as per the following table. Oracle Applications Implementation - Confidential - 8 -
- 9. Oracle Applications Implementation - Confidential - 9 - Sl no Requirements Solution 1 Cost of Goods Sold value needs to be split with respect to Raw material (Yarn, Dyes & Chemicals, etc.). Custom, technical workaround 2 Standard Oracle Lot number functionality must be used Enable standard Oracle functionality and migrate data from the existing lot table 3 Oracle Scheduling to be put into use Enable standard Oracle functionality 4 WIP cost needs to be split with respect to raw materials (yarn, dyes & chemicals) Custom, technical workaround 5 Central Excise Deposit accounting to be verified and modified Enable Standard Oracle functionality 6 VAT set-up need to be done Enable standard Oracle functionality 7 Exchange rate differences - setup need to be checked and modified Standard setups will be checked and modified 8 B-Grade, C-Grade, S-Grade Items that are in stock need to be valued at the price at which they can be sold. Custom technical workaround 9 Costing needs to be verified and modified for any changes Standard setups will be checked and modified 10 Lot trace ability to be enabled for certain areas in production Standard functionality 11 Quality control collection plan to be implemented based on the requirements in each stage of inspection Standard functionality 12 Alternate/Substitute items need to be defined Standard functionality 13 Weight needs to be captured at all levels of production Flexfields will be used to capture actual weight. 14 Raw material on hand quantity report based on specific format from Finance department Custom report will be developed. 15 Change of a finished item from one to another. This is required when selling grades other than ‘A’. After detailed study, it’ll be decided whether standard functionality could be used or not. Otherwise it’ll be done using customizations
- 10. The above requirement will be implemented by: ♦ Conducting a detailed study of the business requirements of STPL ♦ Mapping the applications to the business requirements ♦ Identifying the gaps if any in the system ♦ Agreeing upon work around solutions with the end users ♦ Performing User Acceptance Testing (UAT) ♦ Transitioning to production instance 3.1.2 Upgrade from 11.5.9 to 11.10.2 to address requirement 2 The following section contains the list of activities that would be performed for the Upgrade Process. ♦ Detailed system study will be done on the current instance of Oracle Applications 11.5.9 to gather all the required information for an upgrade process (Technical/Functional/DBA Group will be involved in this process) ♦ The current database patch set versions and the module wise patch set versions will be collected. ♦ The required information relating to operating system patch level will be collected. ♦ A detailed plan will be prepared based on the above, which will become the base plan for the first test upgrade. ♦ All the necessary information regarding the patches/software, which need to be downloaded/licensed/installed during the upgrade process, will be provided to the customer. ♦ Two test upgrades will be conducted on a separate test instance, which should be the clone of the production instance. ♦ All the issues encountered while performing the first test upgrade process will be resolved and documented for the next test upgrade. ♦ The complete software and patch requirements will be recorded during the first test upgrade. ♦ After successful completion of the first test upgrade, second test upgrade will be done on a test instance, which is a clone of the production instance. ♦ The timing will be recorded during the second test upgrade process, which will determine the downtime required for the production upgrade. ♦ During the upgrade process, backup of the instance being upgraded will be taken on a regular basis. ♦ Sign-off by the respective customer personnel is required on the acceptance of the completion of work at different stages. ♦ Production upgrade will be performed on the production instance. ♦ A clone will be taken from production and copied to test server. ♦ Post Production upgrade support will be provided for 2 weeks. ♦ Oracle Applications Implementation - Confidential - 10 -
- 11. 3.1.3 Proposed Upgrade Path: ♦ TUMS utility will be used to analyze the upgradeable components ♦ The database will be upgraded to 9.2.0.8 ♦ Latest AD.I and Autoconfig patch sets will be applied. ♦ Application server (iAS) components will be upgraded. ♦ Developer 6i patch set will be upgraded to 6.0.8.27.0 ♦ JDK will be upgraded to 1.4 ♦ Jinitiator will be upgraded to 1.3.1.29 ♦ Existing table spaces will be converted to OAM ♦ All pre-requisite patches for 11.5.10.2 Maintenance Pack will be applied. ♦ Maintenance Pack will be applied for 11.5.10.2 on each Apps/Web/CM node ♦ Post patch installation steps will be completed Assumptions ♦ The above scope of work is designed based on the available information. The final scope of work will be defined after the careful study of the current Oracle Application instance and architecture. ♦ Backup of Oracle Application instance is required during different stages of upgrade process. STPL is responsible for the backup process. ♦ STPL is responsible for identifying and migrating all the current customizations developed by STPL team. ♦ Changes to the final scope of work can be made only through change requests, after mutual agreement between STPL and MGL. ♦ Proposed timeline for the upgrade is based on the past experience of similar upgrades. This may change in the event of unexpected issues during the upgrade process. ♦ Licenses and patches required for upgrade should be provided by STPL ♦ Metalink access should be provided to the MGL team during the entire duration of the upgrade project. 3.1.4 The existing Oracle Applications (11.5.9) Instance will be upgraded to latest patch set by applying all the required patches to the application and Database (E.g. Applying Latest AD.I/CU2/Autoconfig patches) 3.1.5 3.1.6 3.1.7 Implement Unit 3 under Oracle 11.5.10.2 MGL will configure Unit 3 under 11.5.10.2 for the Oracle modules listed below. Oracle Applications Implementation - Confidential - 11 -
- 12. ♦ Oracle Financials – Accounts Payable, Accounts Receivable, General Ledger, Cash Management, Fixed Assets ♦ Oracle Inventory ♦ Oracle Purchase ♦ Oracle Order Management ♦ Oracle Discrete Manufacturing ■ MRP/MPS ■ BOM ■ WIP ■ Capacity ■ Costing ■ Quality Before configuration, MGL will conduct a detailed study of the business requirements of unit 3 and review the requirements and obtain approval from STPL. MGL will map the business requirement with the Oracle modules and list down the gaps, which requires customization. MGL will configure the system for unit 3 in such a way that they align with the business process in the best possible way with the required standard functionality available in the application and incorporating the customizations of other 2 units. If any customization requirement arises specific to unit 3, MGL will handle the same using the change management process and will charge STPL separately. Upon setting up the application, MGL will conduct Conference Room Pilot (CRP) to review the functionality fitment and obtain user input for any minor modification required in the setup. Any functionality changes during CRP will be considered as change request and will be charged separately. MGL will provide an instance for final User Acceptance Test (UAT) after loading valid master data prepared in the templates provided by MGL. After UAT, MGL will set up the production instance and get the system ready for unit 3 go live Modules not mentioned in the above list do not constitute inclusion in scope or acceptance of responsibility by MGL. Configuration of any other Oracle modules other than listed above shall be discussed with STPL and an offer for the same will be made separately. Oracle Applications Implementation - Confidential - 12 -