Multi Org Structure in Oracle Apps: Part 1

Where do we begin with the multi org structure in oracle apps?

As they say, "Well begun is half done"! 
This is so true when implementing a multi org structure in oracle apps.

The 64 million dollar question is – "Where do we begin", when creating a multi org structure setup? Should we start with setting up the Legal Entities? Or, should we begin with the Set of Books, or Primary Ledgers as they are now called in R12?

With a multi org setup, the place to begin is… the whiteboard! 
We need to have a clear picture of the multi org structure, and so a chart or drawing of the organization structure is the ideal starting point.

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Designing the Organization Structure – Implementation Considerations

A blueprint of the multi org structure that we intend to create, would reflect the organization structure that the business maintains, in executing its day-to-day operations. Questions to be asked are

  • Is there a Business Group? If yes, is there one or more of these, how many?
  • How many countries does the enterprise structure cover? Typically, as many countries, so many government regulations and currencies. There will need to be that many Legal Entities and Primary Ledgers.
  • How many operating units? Where do the Purchase Orders and Sales Orders originate, in the business process? There may be more than one such point, beneath each Legal Entity and Primary Ledger. Well, then we have that many operating units to construct.
  • Inventory organizations or warehouses, subinventories and stock locators are the last building blocks, which can be accommodated with relative ease, once the other entities are put in place.Each operating unit would have one or more inventory organizations beneath it. An inventory organization is either a manufacturing facility or an independent warehouse. Therefore, inventory organizations need to have an address or location.
  • Subinventories are storage areas within an inventory organization. For example, an inventory organization, which is a manufacturing facility may have a section on the shopfloor designated as raw materials, another section is designated as work in process (this area would typically store subassemblies), and an area called QA inspection. So, we have identified 3 subinventories within this inventory organization. We will deal with subinventories in a separate section.

So, we have performed a top-down analysis that should help us draw our organization structure with the clarity that is required for a successful implementation.

The Organization Structure for Office Smart

How Office Smart Implemented their R12 Multi Org Setup...

(Based on a Real Implementation)

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Identifying non-dependent entities in the multi org setup

There are some entities in the creation of the multi org structure in oracle apps that do not depend on the existence of other entities. So, these entities do not have any dependencies. Inventory Locations are a typical example. It is the shipping or the mailing address associated to an organization. Legal Entities and Inventory Organizations need to have locations assigned to them.

Once we have the Organization Structure drawn out on a whiteboard before us, we come to know how many Inventory organizations are involved. We can begin, by defining a Location for each of these.

The address for Legal Entities is created, when defining the Legal Entity, in the Accounting Setup Manager.

The Multi Org Setup for Office Smart

Office Smart has 5 inventory organizations in its multi org setup.

These inventory organizations are located across 3 countries.
We begin our multi org structure in oracle apps by defining the locations for these organizations.

Next: Multi Org Setup: Part 2 

Previous: Multi Org Structure in R12: An Overview

Return to Oracle Apps Special Topics from Multi Org Structure in Oracle Apps: Part 1 

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