Oracle ebs opm refernce guide for gulf oil

Oracle Application
Configuration Guide
Oracle Process Manufacturing
Thirubalamurugan (Functional Consultant)

Oracle Process Manufacturing Configuration
Revised 12/31/13
BAPCO LUBRICANTS BUSINESSS UNIT 2
TABLE OF CONTENTS
Business Flow – Lubricants Business Unit.............................................................................................................................................................................. 3
Enterprise Organization Structure – Lubricants Business Unit ............................................................................................................................................... 4
Configuration Requirement – Stock Transfer from Dubai Blending Plant to Bahrain Distribution Centre ............................................................................... 5
Preliminary Setup Overview ................................................................................................................................................................................................. 6
Business assumptions made in Configuring OPM for Lubricant Business Unit ....................................................................................................................... 7
Application Setup Control Sheet – Oracle Process Manufacturing......................................................................................................................................... 8
Application Profile Options................................................................................................................................................................................................... 9
Application Setup Sheet ......................................................................................................................................................................................................11
Glossary ..............................................................................................................................................................................................................................43

Revised 12/31/13
Business Flow – Lubricants Business Unit
The Business Outline for the Lubricants is illustrated given below
DUBAI
BAPCO-LBU Business Flow Outline (Manufacturing)
Sales
Order
OFF-LINE
MFG
DUBAI
Release
Production
Schedule
Purchase
Order Work
Order
Receive Raw
Materials
Step 1
Blending
Step 2
Filling &
Packing
Shipment -OLWS
Raw Material Store
Customers
(B2B, B2C)
B2B
1. Automotive
2. Industrial
B2C
1. Retail
Forecast
Shipment
W/House
BAHRAIN
W/House
DUBAI
Heading
B.P Vendor -I
1. Base Oil
2. Additive
Vendors -II
3. Packing
Product
Formulation -
LAB
Product
Formulation -
LBU
Product
Costing
Blending Fee
R/M Cost
Product Information
Demand
Cost
Supply
Export-Sea Freight
Domestic
Actual time to manufacture
finished goods
FG Store
Staging
Defective

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Enterprise Organization Structure – Lubricants Business Unit
The ERP Structure Modelled for the Lubricants is illustrated given below
Lab org
HR Business
Group
Legal
Entity
Primary
Ledger
MO:
Operating
Unit
LBU
ORACLE EBS LINE OF BUSINESS – LUBRICANT BUSINESS UNIT (BAPCO)
ORGANIZATION MODEL
W/House
BAHRAIN
OFF-LINE
MFG
DUBAI
Ledger
BAPCO
BAPCO
BAPCO LBU- BAHRAIN
(Location)
BAPCO LBU - DUBAI
(Location)
BAPCO - BG
BAPCO - LEDGER
- Chart of Accounts
- Currency (USD)
- Calendar (Jan-Dec)
- Standard Accrual
BAPCO – LE
BAPCO - Lubricant Business Unit
INVENTORY
ORGANIZATION
- Dubai Plant
- Dubai Warehouse
- Bahrain Warehouse
SUBINVENTORY
FG RM FG
BAHRAIN
PROPOSED
EXISTING
Effective From CRP III
W/House
DUBAI
FG
Out of
System

Revised 12/31/13
Configuration Requirement – Stock Transfer from Dubai Blending Plant to Bahrain Distribution Centre
The Stock Transfer between the Process Organizations for the Lubricants is illustrated given below
DUBAI – WAREHOUSE
[ DISTRIBUTION ORG ]
BAHRAIN WAREHOUSE
[DISTRIBUTION ORG]
DUBAI –
MANUFACTURING
[ MFG ORG ]
Distribution
Organization
LOGISTICS SERVICE
(L.S)
[BAHRAIN]
Distribution Organization
[Ware House]
WAREHOUSE
[BAHRAIN]
FIN.GOOD -FG
(LUB OIL)
SUBINV
STAGING -FG
(LUB OIL)
SUBINV
Indicates Material Movement from Blending Plant Organization [Dubai] to Bahrain Warehouse
WAREHOUSE
[DUBAI]
FIN.GOOD -FG
(LUB OIL)
SUBINV
Blending Process
Plant [B.P]
BLENDING PLANT
[B.P]
FIN.GOOD -FG
(LUB OIL)
SUBINV
RAW MATERIALS
(BASEOIL &
ADDITIVES)
STAGING -FG
(LUB OIL)
SUBINV
Oracle Inventory allows two types of material transfers between two inventory organizations:
• Direct: Materials are considered to have been transferred immediately, and the quantities are decremented and incremented in the source and destination
Organization respectively at the same time.
• In-Transit: There is a time lag between when the material leaves the source organization, and when it is received at the destination organization.

Revised 12/31/13
Preliminary Setup Overview
The Preliminary Setup requirement for the Lubricants is illustrated given below

Revised 12/31/13
Business assumptions made in Configuring OPM for Lubricant Business Unit
Product Development formulation will be done in the Dubai Lubricants Blending Plant Organization (defined as Plant) for which the formulation parameters such as filling
temperature (29.5’c), Blend density are assumed. Formulation and Packaging components are separately defined in the Custom Formula BOM and integrated as a single
level Bills of Material into the Oracle Formulator using Formula Class.
Process Execution batch creation and completion follows lot based production, (Blending reference refers to Lot contains multiple work orders) which is an offline
manufacturing. Batch production orders are created in the system for the completed work orders. Batch Material Variances are reported for the components periodically.
OPM Financials considers Actual Costing is used to calculate and set the product cost for BAPCO Lubricants. Periodic Moving Average Cost (PMAC) Type is used to
calculate Raw Material Cost and Product Calculation Cost. Costing is reported at Legal Entity Level.
OPM Financials considers Cost Component Class (element) used are Material (Base oil, additives, Packaging) and Overhead (Blend cost) the two elements used. Cost
Category is used to associate the Items to the Cost component class.
OPM Financials considers Outside production, set up Overheads to reflect the amount of resources other than the production or ingredients used in the product; you can
then include overhead costs in the cost of producing the product. For BAPCO Lubricants, Blend Cost incurred at Blending Plant is assumed as Overhead cost component
class and is included in product cost.
OPM Inventory considers, for Stock Transfer between Dubai Lubricants Blending Plant and Bahrain Lubricants Distribution Centre. “Within Same Legal entity, transfer
between process organizations “.Actual Cost will consider the inventory transfers between process inventory organizations within the same Legal Entity at the source
organization cost.
Configuration Aspects Source Organization (From) Destination Organization (To)
(1)
Organizations Dubai Lubricants Blending Plant Dubai Lubricants Distribution Centre
Shipping Network – Type of Transfer Inter – Org Transfer Inter- Org Transfer
Shipping Network – Receipt Routing Direct Direct
Shipping Network - FOB At Receipt At Receipt
Shipping Network - Transfer Price Not Required Not Required
Shipping Network - Transfer Charges Not Applicable Not Applicable
Shipping Network - Document Reference No Supporting Documents No Supporting Documents
(2)
Organizations Dubai Lubricants Distribution Centre Bahrain Lubricants Distribution Centre
Shipping Network – Type of Transfer Internal Order Internal Order
Shipping Network – Receipt Routing In transit In transit
Shipping Network - FOB At Receipt At Receipt
Shipping Network - Transfer Price Required Required
Shipping Network - Transfer Charges Applicable Applicable
Shipping Network - Document Reference Supporting Documents Supporting Documents

Revised 12/31/13
Application Setup Control Sheet – Oracle Process Manufacturing
Setup Application Responsibility
Profile Values Common System Administrator
Item Cost Category Flex field Structure Inventory System Administrator
Define Inventory Organization Parameter (OPM Specific) Inventory LUBE Inventory Super User
Define Item Templates (OPM) Inventory LUBE Inventory Super User
Cost Category Inventory LUBE Inventory Super User
Assign Item to Item Cost Category Inventory LUBE Inventory Super User
Product Development Security Parameters Oracle Process Manufacturing LUBE Product Development Security Manager
Process Execution Parameters Oracle Process Manufacturing LUBE Production Supervisor
Setup Formula Class Oracle Process Manufacturing LUBE Formulator
Cost Analysis Code Oracle Process Manufacturing LUBE OPM Financials
Cost Types Oracle Process Manufacturing LUBE OPM Financials
Cost Calendars Oracle Process Manufacturing LUBE OPM Financials
Cost Calendar to Legal Entity Oracle Process Manufacturing LUBE OPM Financials
Cost Calendar Period Status Oracle Process Manufacturing LUBE OPM Financials
Cost Component Class Oracle Process Manufacturing LUBE OPM Financials
Material Cost Component Class Oracle Process Manufacturing LUBE OPM Financials
Define Cost Factors Oracle Process Manufacturing LUBE OPM Financials
Fiscal Policies Oracle Process Manufacturing LUBE OPM Financials
Event Fiscal Policies Oracle Process Manufacturing LUBE OPM Financials
Assigning Ledgers Oracle Process Manufacturing LUBE OPM Financials
Define Blending Plant Resource Oracle Process Manufacturing LUBE Process Engineer
Resource Costs Oracle Process Manufacturing LUBE OPM Financials
Fixed Overheads Oracle Process Manufacturing LUBE OPM Financials

Revised 12/31/13
Application Profile Options
Profile Option Name Profile Level Profile Level Value Profile Value
GL Ledger Name Responsibility LUBE-Cost Management - SLA Bapco
HR: Security Profile Responsibility LUBE-Cost Management - SLA Bapco
HR:Business Group Responsibility LUBE-Cost Management - SLA Bapco
HR:User Type Responsibility LUBE-Cost Management - SLA HR User
MO: Default Operating Unit Responsibility LUBE-Cost Management - SLA Lubricants Business Unit
MO: Operating Unit Responsibility LUBE-Cost Management - SLA Lubricants Business Unit
GL Ledger Name Responsibility LUBE-Formulator Bapco
HR: Security Profile Responsibility LUBE-Formulator Bapco
HR:Business Group Responsibility LUBE-Formulator Bapco
HR:User Type Responsibility LUBE-Formulator HR User
MO: Default Operating Unit Responsibility LUBE-Formulator Lubricants Business Unit
MO: Operating Unit Responsibility LUBE-Formulator Lubricants Business Unit
GL Ledger Name Responsibility LUBE-OPM Financials Bapco
HR: Security Profile Responsibility LUBE-OPM Financials Bapco
HR:Business Group Responsibility LUBE-OPM Financials Bapco
HR:User Type Responsibility LUBE-OPM Financials HR User
MO: Default Operating Unit Responsibility LUBE-OPM Financials Lubricants Business Unit
MO: Operating Unit Responsibility LUBE-OPM Financials Lubricants Business Unit
GL Ledger Name Responsibility LUBE-OPM Product Development Bapco
HR: Security Profile Responsibility LUBE-OPM Product Development Bapco
HR:Business Group Responsibility LUBE-OPM Product Development Bapco
HR:User Type Responsibility LUBE-OPM Product Development HR User

Revised 12/31/13
MO: Default Operating Unit Responsibility LUBE-OPM Product Development Lubricants Business Unit
MO: Operating Unit Responsibility LUBE-OPM Product Development Lubricants Business Unit
BOM: Hour UOM Site Site PCS
GMF: Cost Allocation Factor Calculation Site Site Dynamic
GMF: Landed Cost Adjustments Transfer
Method to Inventory In Actual Costing Site Site Apply LC Adjustment based on the Period Opening Balance

Revised 12/31/13
Application Setup Sheet
Step Navigation Path Setup Tasks Setup Explanation
OPM-01 LUBE Product
development Security
Manager >
Organization
Parameter
Setup Procedure
1. Navigate to the Product Development Parameters window.
2. Enter Organization as the context inventory organization
(T03- Dubai Plant)
3. Organization Type is: (Plant- Enabled)
4. Formula (T) > Default Consumption Type (Automatic)
5. Formula (T) > Enter Yield UOM as: (Process)
6. Formula (T) > Automatic Product Quantity Calculation:
(No)
7. Formula (T) > Enter Byproduct Active as: (No)
8. Formula (T) > Default Formula Status as: (Approved for
General Use)
9. Formula (T) > Version Control as: (Optional)
10. Formula (T) > Mass UOM as: (Process)
11. Formula (T) > Volume UOM as: (Process)
12. Formula (T) > Volume UOM as: (Process)
13. Operation (T) > Default Operation Status as: (Approved
for General Use)
14. Operation (T) > Default Operation Status as: (Optional)
15. Routing (T) > Default Routing Status as: (Approved for
General Use)
16. Routing (T) > Default Routing Status as: (Optional)
17. Recipe (T) > Default Recipe Status as:
(Approved for General Use)
18. Recipe (T) > Default Validity Rule Status as:
(Approved for General Use)
19. Recipe (T) > Default Recipe Type as:
(General)
20. Recipe (T) > Default Version Control as:
Define Product development Security Parameter :
Pre-requisites:
1. Inventory > Setup Inventory Organizations (OPM
Enabled- T03-Dubai Lubricants Blending Plant.
2. Inventory > Setup > Sub inventory
3. Inventory > Setup Unit of Measures (Mass UOM,
Volume UOM)
Product Parameters
Set up Oracle Process Manufacturing (OPM) Product
Development parameters in the Product Development Security
Manager responsibility.
You can set up parameters for new organizations, or query and
modify parameters for existing organizations.
Parameter values can vary by organization. These parameters
control various functions in the Product Development
application.
For example, if version control for formulas is enabled for
organization ORG1, then at the point of saving a formula, the
application checks the formula organization to determine
whether or not to apply version control rules. Organization
ORG2 can have a different setting for formula version control
Organization defined as “Plant” (Blending Plant)
The Inventory Organization defined as OPM enabled will be
available to the product development. This organization may be
process manufacturing plant or laboratory (R&D) organization.
Note: For BAPCO, Blending Plant(Dubai) is defined as “Plant”

Revised 12/31/13
Organization Parameter > Formula (T)
Organization Parameter > Operation (T)
organization which will do the Manufacturing of lubricants.
Laboratory is in-applicable which is out of scope for the BAPCO
Consumption Type:
Default Material Consumption Type as “Automatic” refers to the
Automatic issue of Blending batch materials such as additives,
base oils, packaging from the supply sub inventory RMS.
By Product Active :
By Product Active disables this function while creating formulas
and batch work orders in the OPM Application.
Note: By products are In-applicable for BAPCO Lubricants
Formula Status :
Setting up a default status “Approved for General Use” approves
automatically for all formulas created in the OPM Formulator
and it sets the status to Approved for General Use.
Note: The default status is used for integrating the Create
formula and BOM Custom Application with the Oracle OPM
formulator application.
Mass UOM, Yield UOM , Volume UOM:
MASS to specify use of the mass unit of measure type when item
quantities are converted to a common unit of measure for
scaling, theoretical yield, and total
output quantity.
VOL to specify use of the volume unit of measure type when
item quantities are converted to a common unit of measure for
scaling, theoretical yield, and
total output quantity.

Revised 12/31/13
Organization Parameter > Routing (T)
Organization Parameter > Recipe (T)
Organization Parameter > Substitution (T) - N/A
Organization Parameter > Laboratory (T) – N/A
Operation and Routing
Routing is Inapplicable for BAPCO Lubricants since it is an
Off-Line Manufacturing practiced currently. Hence it is not
configured.
Version Control
For BAPCO Lubricants, Version Control is set as Optional one
for all Formulas created in the OPM Application.

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OPM-02 LUBE Formulator >
Setup Formula Class Setup Procedure
1. Define Formula in the Custom Application “Create
Formula” with a Formulation Code, Approve it.
2. Query in the Oracle formulator, against the formula class
for the list of formulation code integrated from the custom
application (Setup > Formula Class)
3. Assign the Formula Class to the Oracle Formula (Formula >
Formula Class)
Define Formula Class
Formula Class is defined in the custom application “Create
Formula” for the blending plant organization and the formula is
defined. This will get integrated with the Oracle Formulator
while approving the Create formula in the custom application.
(Automatic Integration).
Pre-requisites:
1. Change Organization > Dubai Blending Plant (T03)
2. Create Formula > Setup Formulation Code
Formula Class
Formula code identifies formula with similar characteristics
such as having a fixed percentage by weight for its components
base oil and additives. Thus they are grouped and given a unique
name as formulation code. This way formula creation is
simplified and makes it easier for use.
Note:-
Class – Should be alphanumeric with a Maximum length of 8
Characters only.
Description – Should not include any special characters such as
*, x and scientific symbols in its description. Example Pack Size
24 x 7 should not use Multiplication operator.

Revised 12/31/13
OPM-03 LUBE Production
Supervisor > Setup >
Parameters
Setup Procedure
1. Enter the Name of the organization
(Dubai Lubricants Blending Plant)
2. Enable the Plant to for the Organization (Plant-Enabled)
3. Batch Setup (T) > Display Unconsumed/Un yielded
Materials (Enabled)
4. Batch Setup (T) > Allow Material deletion (Pending)
5. Batch Setup (T) > Validate Plan Dates (Validate planned
Start dates only)
6. Create Batch (T) > Create Shortages (Enabled)
7. Create Batch (T) > Copy Formula Text (Enabled)
8. Create Batch (T) > Create Routing Text (Enabled)
9. Batch Steps (T) > Default Actual Resource Usage
(Enabled)
10. Batch Steps (T) > Display Non Working Days (Enabled)
11. Document Numbering (T) > Batch Numbering
(Automatic)
12. Document Numbering (T) > Batch Last assigned (00)
13. Inventory Transactions (T) > Auto Consume from Supply
Sub inventory Only (Enabled)
14. Inventory Transactions (T) > Auto Consume from Supply
Sub inventory Only (Enabled)
15. Inventory Transactions (T) > Supply Sub inventory (RMS)
16. Inventory Transactions (T) > Yield Sub inventory (FGS)
Setup Process Execution Parameters
Pre-requisites:
1. Set up organizations in the Oracle Inventory
application.
2. Complete setting up in OPM Product Development.
3. Change Organization > Dubai Blending Plant (T03)
Parameter
The Oracle Process Manufacturing (OPM) Process Execution
parameters are defined at the organization level. The OPM
Product Development and Oracle Inventory Organization
Parameters must be defined to set up OPM Process Execution
parameters.
This is setup to create batches in the Oracle Process
Manufacturing application.

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Parameters > Batch Setup (T)
Parameters > Batch Setup (T)
Material Shortage Check:
Select Check Shortages to check inventory shortages during
batch creation. The shortages are checked at the inventory
organization level

Revised 12/31/13
Parameters > Batch Steps (T)
Parameters > Document Numbering (T)
Batch Steps inapplicable for BAPCO Lubricants
since it is an offline manufacturing. (Not required)
Document Numbering:
Set Batch Numbering as: Automatic to generate the batch
numbers automatically. Manual to enter a batch number
manually.

Revised 12/31/13
Parameters > Inventory Transactions (T)
Inventory Transactions:
Setup Defaulting sources of sub inventory for batch material
consumptions since the automatic consumption is setup for the
batch material consumption.
Supply Sub inventory : RM Raw Materials
Yield Sub inventory : FG Products

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OPM-04 LUBE OPM
Financials > Setup >
Analysis Codes
Setup Procedure
1. Enter Analysis Code (DIR)
2. Enter Description (Direct Cost)
Define Cost Analysis Code
Pre-requisite :- NIL
Cost Analysis Code
An individual component cost identified by a particular cost
component class can be further broken down using cost analysis
codes for more granular tracking of costs.
The cost analysis codes are used to group component costs from
multiple cost component class types to provide an alternate
view of the total cost. For example, you can define direct or
indirect analysis codes for each cost component.
Component Analysis Value ($)
MATERIAL DIR 18.76595
PACKAGING DIR 5.76598
EQUIPMENT IND 13.5024
Total Item Cost 38.03433

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OPM-05 LUBE OPM
Cost Types
Setup Procedure
1. Enter Cost Type (PMAC)
2. Enter Description (PMAC)
3. Choose Cost Method (Actual Cost)
4. Choose Raw Material Calculation Type (Periodic Moving
Average Cost)
5. Choose Product Calculation Type (Periodic Moving
Average Cost)
Actual Costing Method Raw Materials Finished
Products
Period Moving Average Cost (PMAC) Yes Yes
Period Weighted Average Cost (PWAC) x x
Perpetual Weighted Average (PPAC) x x
Last Transaction (LSTT) x x
Last Invoice (LSTI) x x
Define Cost Type
Pre-requisite :-
1. Setup Legal Entity
2. Setup Cost Calendar
Cost Type: (Periodic Moving Average with Cost Method
Actual Costing)
Cost Method
Actual Costs of items are developed using the actual business
transactions. The product costs are not based on the formula,
routing and recipe details but rather based on actual
consumptions of materials and resource usage recorded in the
production batches.
The costs are calculated using one of several weighted average
or last cost methods by aggregating transactions recorded over a
cost period.
The cost calculation method selected for raw materials need not
have to be the same as the one selected for products. You can
mix and match various methods and decide on a
Combination that best suits your needs.
With actual costing, items for which there are no transactions in
a calendar period will have cost components moved and carried
over from the previous period to the current period. This insures
that all cost items have an actual cost within the period
processed
Note: For BAPCO Lubricants, Actual Cost method is preferred
since Blend Material (base oil) Raw material price is a dynamic
and fluctuating one.

Revised 12/31/13
Periodic Moving Average Cost (PMAC):
OPM calculates the average cost for the period while moving
PREVIOUS PERIOD'S COST with LAST PERIOD'S inventory balance and
cost:
PMAC is calculated by DIVIDING the result of -- the quantity of the
PRIOR PERIOD inventory balance MULTIPLIED by the prior period
cost, plus the SUM of the transaction quantity MULTIPLIED by price --
by the prior period inventory balance PLUS the SUM of transaction
quantity, as shown in the following illustration.
Where:
 Prior Period Inv Balance - This is the prior period inventory
balance captured from the inventory period ending balances.
 Prior Period Cost - The prior period actual cost component
from the cost component details table.
 Trans Qty - Receipt Transaction Quantities or AP Interfaced
Quantities within the costing period.
 Price - Receipt estimated prices or AP invoice final prices
within the costing period.
Cost Calculations
You can use three different time frames to develop actual Cost
averages:
• Current period data only
• Current period data with the beginning inventory balance
• Current period data averaged with actual cost data from the
beginning of the cost calendar.
Raw Materials
(a) Purchase Order Receipts: The raw material estimate price
established on a PO is used as the price for receipts
(b)Invoices Recorded in Accounts Payable:
The estimated price on a PO can be different from the actual
amount paid to the Supplier when an invoice is received. OPM
captures the actual, final prices paid for raw materials on the
invoices and the price on the invoice overrides the price recorded
on the receipt.
Note: For BAPCO Lubricants,
All Raw Materials (Base Oil and Additives) are procured from
the external supplier and received into the Dubai Blending
Plant. The PO Receipt is considered for Raw material cost
calculations.
Finished Goods
(c) Production Batches
OPM calculates the actual cost for a finished product based on
actual ingredient consumption and resource usages recorded in
production batches.
The product material costs are based on the actual raw material
usages in batches and the cost calculated for the raw materials.
Product Cost

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Example : Item Cost (Calculated by PMAC)
Raw Materials (Blendable)
Raw Materials (Non-Blendable)
= Cost of Raw Materials (Base Oil, Additives, Packaging )
+ Cost of Blending Fee
Batch unit cost is calculated by DIVIDING -- the SUM of
ingredient quantity, MULTIPLIED by the ingredient actual cost,
PLUS the SUM of resource use MULTIPLIED resource rate – by the
batch item quantity, as shown in the following illustration:
Period Product Unit Cost is calculated by DIVIDING -- the SUM
of the period batch quantity MULTIPLIED by batch unit cost, PLUS
the SUM of allocations MULTIPLIED by the SUM of adjustments --
by the SUM of all period batch quantity, as shown in the
following illustration
(d) Overheads
You can assign and apply overhead costs to either raw materials
or finished goods.
Blending Cost (offline manufacturing) is defined as Overhead.
For Raw Materials (Non-Blendable) Items landed cost overhead
is considered.
Overhead Unit Cost is calculated by DIVIDING the Item
Quantity into the SUM of Overhead Usage, MULTIPLIED by
Overhead Quantity, MULTIPLIED by Resource Cost, as shown
in the following illustration.

Revised 12/31/13
FG Products
Overhead Cost displays the calculated overhead cost. The cost
equals the resource cost MULTIPLIED by the quantity of the
resource used for this overhead, DIVIDED by the item quantity.
Note:
Outside production, set up overheads to reflect the amount of
resources other than the production or ingredients used in the
product; you can then include overhead costs in the cost of
producing the product.
(e) Inventory Transfers
Inventory can be transferred from one organization to another
using a simple Inter-Organization Transfer or using Internal
Orders where necessary supporting Documents are required.
* Actual Cost will consider the inventory transfers between
process inventory organizations within the same Legal Entity at
the source organization cost.
(Case is taken for BAPCO Lubricants)
For transfers that go across Legal Entities, transfer price is used.
For transfers that originate from a discrete inventory
organization to a process inventory organization, transfer price
is used regardless of whether the transfer is within or across
Legal Entities.
In the Cost Component Class, Product Cost Calculation
indicator lets you flag those component costs to be excluded

Revised 12/31/13
from the Cost Rollup process. Certain identifiable costs (for
example, transfer costs) are for specific ingredient items, and
are not required to be rolled up into the products.
In the Fiscal Policies, internal orders consider PPV during its
item transfers.
Note: For BAPCO Lubricants, it is assumed Stock Transfer
happens “within Same Legal entity, transfer between process
organization “
Example:
T01 – Bahrain Lubricants Distribution Centre
(OPM Enabled)
T02 – Dubai Lubricants Distribution Centre
(OPM Enabled)
T03 – Dubai Lubricants Blending Plant
(OPM Enabled)
Shipping network is established between T03 (Source) to T02
(Destination) as Inter Org Transfer with a direct receipt.
Shipping network is established between T02 (Source) to T01
(Destination) as Inter Org Transfer or Internal Order with a
receipt type as In transit.
Note:
If you are using the Period Moving Average Cost, then use the
same start and end dates for the period as the fiscal financial
calendar defined for your Legal Entity's Primary Ledger in GL

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OPM-06 LUBE OPM
Cost Calendars
Setup Procedure
1. Enter Calendar (LUBECAL)
2. Enter Description (Lubricants Process Calendar)
3. Choose Start Date (01-JAN-2013)
4. Enter the Period ( 1-2013)
5. Enter the Description (January 2013)
6. Choose the Start Date ( 01-JAN-2013)
7. Choose the End Date (31-JAN-2013)
8. Repeat the Steps 4 to Steps 7 for adding more records and
Save
9. Navigate to the Assignments , Enter Legal Entity
(Lubricants business unit)
10. Navigate to the Assignments , Enter Cost Type (PMAC)
11. Navigate to the Assignments, Period Status, set the period
status open for the current period. (Open)
Define Cost Calendars
Pre-requisites
1. Legal Entity
2. Cost Types
Cost Calendar
You maintain costs by defining the costing calendars.
A cost calendar can be shared across multiple cost types and
legal entities.
A cost calendar can span multiple years.
For each costing calendar, you can define an unlimited number
of costing periods.

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Cost Calendars > Assign Cost Calendar
Cost Calendars > Assign Cost Calendar > Period Status > Open
Cost Calendar to Legal Entity
You cannot assign two calendars to the same legal entity and
cost type combination for the same time period
Cost Calendars support multiple legal entities and cost type.
Period Status
Each period is assigned a period status to indicate costing
activity that is permitted.
• Never Opened - the period was never opened. You cannot
establish costs or run any cost processes in a never opened
period.
• Open - all activity is allowed.
• Frozen - no updates can be made for existing items (however,
new item costs can be entered or calculated and their costs
updated).
• Closed - no activity is performed in a closed period. Periods
cannot be reopened for costing activity once they are closed.
The costing calendar is completely separate from the fiscal
calendar and the periods therein.

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Note: (Do’s and Don’ts)
If you are using the Period Moving Average Cost, then use the same
start and end dates for the period as the fiscal financial calendar
defined for your Legal Entity's Primary Ledger in GL.
You cannot assign two calendars to the same legal entity and cost
type combination for the same time period
Cost Calendars support multiple legal entities and cost type.

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OPM-07 LUBE OPM
Financials >
Setup > Cost
Component Class
Setup Procedure
1. Enter Component Class (ADDDITIVES)
2. Enter Description (ADDITIVES)
3. Enter Primary Component Class (ADDITIVES) Defaulted
4. Choose Usage (Material/Overhead)
5. Enter Sort Sequence (1,2,3..)
6. Choose Product Cost Calculation (Include in Product Cost
Calculation)
7. Choose Purchase Price Variance Calculation ( Include in
Purchase Price Variance Calculation)
8. Choose Valuation Options (will not be used for Inventory
Valuation)
Define Cost Component Class
Pre-requisites:- NIL
Cost Component Class
The unit cost of an item is usually broken down into several
buckets that can be attributed to the various sources that form
the basis of the cost, for detailed tracking and analysis
purposes.
Cost Component Classes are used to identify the individual
buckets or component costs that make up the total cost,
for example, direct material costs, freight costs, labor costs, and
production or conversion costs and so on.
Any number of cost component classes can be defined and used
to break down the item costs.

Revised 12/31/13
Cost
Component
Class
Sort
Sequence
Usage Include
Product
Cost
Inventory
Valuation
PPV
BASEOIL 1 Material Yes Yes Yes
ADDITIVE 2 Material Yes Yes Yes
PACKAGING 3 Material Yes Yes Yes
BLENDINGFEE 4 Overhead Yes No No
Usage
The cost component classes are classified into 5 different
elements or usages:
Material - Used
Resource - Not Used
Overhead - Used
Expense Allocation – Not Used
Standard Cost Adjustment types Costs – Not Used from several
ingredients, routings, overheads, and allocations can be
summarized into one or more component classes.

Revised 12/31/13
Cost Component class displayed in Item Costs
Do’s and Don’ts
Once you set the usage indicator for a component class, it cannot be
changed after costs have been defined using this component class.
Once costs have been created or calculated using a component class,
the usage cannot be changed.
Sort Sequence
Enter the Sort Sequence for the component class. It indicates the
order in which component classes displays on forms and reports.
1 is the first or top line and 2 indicate the second line, and so
on. A zero (0) lets the application to determine the sort order
1-BASEOIL,2-ADDITIVES,3-PACKAGING,4-BLENDCOST
Product Cost Calculation
Product Cost Calculation indicator lets you flag those component
costs to be excluded from the Cost Rollup process. Certain
identifiable costs (for example, transfer costs) are for specific
ingredient items, and are not required to be rolled up
into the products.
Select Exclude From Product Cost Calculation if this is a non-
product cost component class.
The default, Include in Product Cost Calculation, applies if the
component class must be included. This flag is not applicable for
Lot Cost.

Revised 12/31/13
Inventory Valuation
Cost component Class must be used in inventory valuation or not
will be defined in this setup.
Select the Include in Purchase Price Variance Calculation option
(default), if the cost for this component class is used in
calculating the inventory valuation for purchase price variance
(PPV). Select the Exclude from Purchase Price Variance
Calculation option, if the component class must not be used in
PPV calculations.

Revised 12/31/13
OPM-08 LUBE OPM
Fiscal Policies
Setup Procedure
1. Choose Legal Entity (Lubricants Business Unit)
2. Choose Ledger (BAPCO)
3. Choose Base Currency (USD)
4. Choose Valuation Method (PMAC)
5. In the Default Material Component, Choose Component
Class (BASEOIL)
6. In the Default Material Component, Choose Analysis Code
(DIR)
7. In the Default Overhead Component, Choose Component
Class (BLENDCOST)
8. In the Default Overhead Component, Choose Analysis Code
(IND)
9. In the Event Fiscal Policy, for the purchase price variance-
purchase orders, choose Book INV at receipt price (No
PPV)
10. In the Event Fiscal Policy, for the purchase price variance-
Internal Orders, choose Book INV at Item Cost (PPV)
11. In the Event Fiscal Policy, for the landed cost charges,
choose Accrued to Item A/P Account
12. In the Assign Valuation Methods, Choose the Ledger
(Bapco) and Cost Type (PMAC)
Define Fiscal Policies
Pre-requisites:
1- Setup Ledger
2- Setup Legal Entity
3- Setup Cost Calendar
4- Setup Cost Type
5- Setup Cost Component Class
6- Setup Cost Analysis Code
Fiscal Policies
The Fiscal Policy options define the Legal Entity-wide
parameters that determine the cost type that will be used for
inventory valuation, the default material and overhead
cost components and analysis codes for actual cost processing,
additional cost types used for costing simulations.
Cost Basis (Create SLA Distributions, Actual Costing)
On the OPM Fiscal Policy window, you can use an option to
specify by legal entity whether the current period or prior
period's cost must be used for creating Distributions. By default
this option creates distributions using the current period's cost.
However, if you are using Actual Costing you can choose to use
the prior period's cost for building journal entries. Since this
option is set at the legal entity level, all of the transactions in
that legal entity use the same cost basis.

Revised 12/31/13
Fiscal Policies defined for the Legal Entity
Setup Event Fiscal Policies
PPV Recognitions
Indicate whether purchase price variance is to be recognized for
booking inventory at standard cost or at the PO Unit Price in
Purchase Price Variance.
For Actual Costing, it is recommended that you set the option to
Book at Receipt Price for easier reconciliation at month end.
Freight and Special Charges
Freight and Special Charges indicate whether freight and
special charges accrue to the item's AP account or if it has its
own accrual account. The valid options are:
• Accrued to Item A/P Account
• Accrued to Accrual Account

Revised 12/31/13
Assign Valuation Methods

Revised 12/31/13
OPM-09 LUBE Process
Engineer > Setup >
Generic Resources
Setup Process Engineer
1. Enter Resource (BLENDCOST)
2. Enter Description (BLENDCOST)
3. Choose Usage UOM (USD)
4. Choose Cost Component Class (BLENDCOST)
Define Generic Resource
Pre-requisites:-
1. Setup Inventory Organization (OPM Enabled)
2. Setup Unit of Measures
3. Setup Cost Component Class
Define Blending Plant as Generic Resource
Resources are the assets you use to produce batches, including
production equipment and employee labor. Enter a Usage UOM
(usually in hours) by which you measure the amount of time
used for processing this resource. For planning and scheduling,
you must define the UOM to be type Time
Costing
For each resource, you must assign a component classification
code for costing purposes.
Note: For BAPCO Lubricants, Blending Plant is a Offline
Manufacturing, hence this resources are used only for costing
but not for scheduling.
There are 2 resources defined for BAPCO Lubricants
1. Blend cost – Blendable Manufacturing definition
2. Pack cost – Non-blendable manufacturing definition

Revised 12/31/13
OPM-10 LUBE OPM
Financials >
Resource Costs
Setup Procedure
1. Enter Legal Entity (Bapco)
2. Choose Organization (T03 Dubai Lubricants Blending
Plant)
3. Choose Resource (BLENDCOST)
4. Choose Calendar (LUBECAL)
5. Choose Period (1-2013)
6. Choose Component Class (BLENDCOST)
7. Choose Base Currency (USD)
8. In the Cost Details, Choose the Cost Type (PMAC)
9. In the Cost Details, Enter the Cost (1.000)
10. In the Cost Details, Choose the UOM (USD)
11. Repeat Steps 1 to Steps 10 to add more records for different
Periods (Step 5)
Defining Resource Costs
Pre-requisites
1. Define Resources
3. Setup Cost Type
5. Setup Cost Analysis Codes
Resource Costs
Define your resources with appropriate units of measure,
component classes, and cost analysis codes.
To reflect resource costs incurred during production in the
product cost, set up routings and define the amount or number of
resources used.
Outside production, set up overheads to reflect the amount of
resources other than the production or ingredients used in the
product; you can then include overhead costs in the cost of
producing the product.
In either case, you must first define nominal usage costs
associated with the resources.
You define resource costs for a legal entity and calendar and
period basis. The cost component class assigned to the resource,
and the currency associated with the Organization, are displayed
on this window.
Prior to defining resource costs, define the resource code
identifying the resource.

Revised 12/31/13
Overheads
or finished goods.
Note: For BAPCO Lubricants, Blending Cost (offline
manufacturing) is defined as Overhead. For Raw Materials
(Non-Blendable) Items landed cost overhead is considered.

Revised 12/31/13
OPM-11 LUBE OPM
Financials > Fixed
Overheads
Setup Procedures
1. Enter Item (LF.QUM00001)
2. Enter Calendar (LUBECAL)
3. Enter Period (1-2013)
4. Choose Cost Type (PMAC)
5. Enter Base Currency (USD)
6. In the Overhead details, Enter Resource (BLENDCOST)
7. In the Overhead details, Enter Component Class Code
(BLENDCOST)
8. Choose Analysis Code (IND)
9. Enter Resource Count (1)
10. Enter Resource Usage (2.208000000)
11. Enter Resource Usage UOM (USD)
12. Enter Item Qty (1)
13. Enter Item UOM (CTN)
14. Repeat the Steps 1 to Steps 13 to add more records for
different items and periods.
Calculate Overhead Unit Cost
Define Fixed Overheads
Pre-Requisites:
1. Set up Organizations (OPM Enabled)
2. Define Items
3. Setup Resources
5. Setup Cost Type
Fixed Overheads
A overhead is a cost associated with a resource other than the
resource usage assigned in the routing.
Overheads
or finished goods.
Note: For BAPCO Lubricants, Blending Cost (offline
manufacturing) is defined as Overhead. For Raw Materials
(Non-Blendable) Items landed cost overhead is considered

Revised 12/31/13
Resource Usage (1.77504 USD) x Resource Count (1) x Resource Cost (1USD)
Item Quantity (1 CTN)
= 1. 77504 USD/CTN
Resource Count
Enter the number of this resource used in the production of the
item in Resource Count. This number is multiplied by the
Resource Usage to calculate the Total resource usage.
For BAPCO Lubricants, Only 1 Blending Plant is used. Hence
count is assumed as 1.
Resource Usage
Enter the amount of the resource used for this overhead in
Resource Usage. Enter the unit of measure in which this
resource is yielded in Resource UOM.

Revised 12/31/13
For BAPCO Lubricants, Resource Usage (Blend Cost USD) is
calculated for the pack sizes as given below for 6 x 4 Pack Size
of 24 Litres
Qty/ Pack
Size Litres
Eq Mass
(Kg)
Eq Mass
(MT)
6 24 20.64 0.0206
1 0.86000 0.0009
Qty/ Pack
Size
Pack
Type Min (Lit)
Max
(Lit)
Blending
Rate
(USD/MT)
Blend Cost
(USD)
Bottle 0.25 1 92
Bottle 4 5 86 1.7716
Pail 20 25 76
Drum 205 210 60
Resource Usage
= Blending Rate (USD/MT) x Eq. Mass (MetricTonnes MT)
= 86 (USD/MT) x 0.0206 (MT)
= 1.7716 USD
Item Quantity
Enter the amount of the item yielded in this production process.
It is assumed that charges are calculated for 1 Unit of Product.

Revised 12/31/13
OPM-12 LUBE OPM
Cost Factors
Setup Procedures
1. Enter Code (CUSTOMS DUTY)
2. Enter the Cost Factor Name (CUSTOMS DUTY)
3. Enter Description (Customs Duty)
4. Choose the Status (Active)
5. Choose the Pricing Basis (Per-Unit)
6. In the Cost Management, Choose the Allocation Basis
(Value)
7. In the Cost Management, Choose the Cost Component Class
(CUSTOMSDUTY)
8. In the Cost Management, Choose the Cost Analysis Code
(DIR)
9. In the Cost Management, Choose the Acquisition Cost
Indicator (Inventory)
10. In the Billing, Choose the Invoice Line Type (Freight)
11. Repeat Step 1 to Step 10 to define additional types
Define Cost Factors for Freight and Special Charges
Pre-requisites
1. Cost Component Class
2. Cost Analysis Code
This is used to Setup Landed Cost management application in
Oracle Purchasing.
For BAPCO Lubricants, Non-Blendable Item cost calculation
use this functionality to incur costs on freight and special
charges.

Revised 12/31/13
OPM-13 LUBE OPM
Financials > Set up >
Actual Costs >
Material Cost
Component Class
Setup Procedures
1. Enter Legal Entity (Bapco)
2. Choose Organization (T03 Dubai Blending Plant)
3. Choose the Item Cost Category (LP)
4. In the Material Components, Choose the Cost Component
class code (PACKAGING)
5. In the Material Components, Choose the Cost Analysis code
(DIR)
6. In the Material Components, Choose the Start Date (Date)
7. In the Material Components, Choose the End Date (Date)
8. Repeat the Steps 1 to Steps 7 to add more records for
different Item Cost Category assignments
Define Material Cost Component Class (Actual Costing)
Pre-Requisites
1. Setup Item Cost Category
If you want to track the entire batch from the individual raw
material to intermediary and end product, then setup a unique
component class and analysis code for the raw material and
ingredient calculation.
Item costs are defined using the component classes and analysis
codes.
You setup the component class and analysis code while
calculating raw material cost for purchases and transfers.
For BAPCO Lubricants, following association is done
Cost Component Class Cost Category
ADDITIVES LA
BASEOIL LB
PACKAGING LP
NONBLENDABLES LN

Revised 12/31/13
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