How to Transfer Inventory Directly to a Project and Task in Oracle EBS R12 Project Manufacturing

During a recent engagement with a client using E-Business Suite R12 Project Manufacturing and R12 Inventory applications, we encountered an issue with the handling of their inventory that they used in the production of their products and services to their customers. This company had a split of regular sales of production components that their customers used in the repair and replacements of their end products and in special services that were sold as a project.

Due to this mix of both project related manufacturing and the traditional discrete manufacturing, the customer choose to keep the purchases of the materials segregated within their production facility. Purchases that were made to support a special project and task were received and stored in a separate location in the facility and then shipped to the customer site when all of the project’s product and services were complete.

The dilemma occurred when they needed a specific component for a project and determined that they also had that same component in their regular inventory to support the traditional sales order products.

The question remains: How do we just take the inventory and transfer this to our Project and Task so that we don’t need to create a new purchase order for this project?

How to Transfer Inventory directly to a Project and Task

We will utilize the miscellaneous transaction to issue the material from the inventory location directly to the project accounts. First, you will need to create a new user defined transaction type that will be associated with the miscellaneous transaction. This transaction type will have the Project flag turned on which indicates that it will be associated with a project.

As with all transactions that are project related, you must make sure that the project manufacturing parameters are set for the project to allow these issues and costs to flow over to the project costing. You will assign the organization and the cost group that will be used for the miscellaneous transaction in the project manufacturing parameters form.

Next, we also will create an account alias that we will be able to use for the transaction source when we perform the miscellaneous issue of the material. This will define the account that will be debited when we issue the material.

Now, we are ready to perform the material transaction to remove the material from the regular inventory accounts and transfer the material directly to the project and the project accounts.

Navigate:  Inventory > Transactions > Miscellaneous Transaction

1. Tab from the date field (accept default)
2. In the Transaction Type field, select Inventory Issue to Projects
3. In the Source field, select PROJECT WIP as the source
4. Click on the Transaction Lines button (the Inventory Issue to Projects window will open)

1. Enter the item number that you are transferring to the Project in the Item field
2. Tab to the Subinventory field, select the subinventory where the item is currently located
3. Tab to the Locator field, select the locator for the subinventory
4. Tab to the Quantity field, enter the quantity to be transferred
5. Tab to the Source Project field, select the project number to be charged
6. Tab to the Source Task field, select the task number to be charged
7. Tab to the Expenditure Type field, select the expenditure type (ex. Misc. Charge)
8. Tab to the Expenditure Org field, select the expenditure organization (ex. Milwaukee Service Center)
9. Save the record

This will remove the item from inventory and perform a credit to the inventory account and debit the Project WIP account.

Using this simple transaction, we were able to allow this client the ability to handle a specific exception to their standard rule;

All project related material will be purchased as expense to the project on a separate purchase order.

In some cases, especially where the material might have a longer lead time, the client was able to satisfy the immediate project requirement by using existing material that they already had in their inventory.