Oracle E-Business Suite : Oracle R12 Dual Unit of Measure (UOM)

Using Dual Unit of Measure (UOM) in Oracle EBS Inventory

With the merging of inventory module from process manufacturing into the EBS inventory module, EBS inventory now has the ability to track item in two units of measures (UOM). The EBS inventory module has always been able to convert from the primary UOM to another UOM. But when you viewed your on-hand balance, you only saw the primary UOM. Tracking items in two units of measure is important to certain industries. The food industry normally uses two units of measure throughout the entire supply chain (usually in weight and by piece or each).

What setups and processes are affected when using dual unit of measure?

The setups that are affected are inventory organization parameters, unit of measure conversions, and item UOM attribues. The processes that are affected are receiving items and querying onhand balances. Please note that I could not find a way to run the inventory valuation reports in the secondary UOM. Also note that you can not use dual UOM with items are are BOM enabled.

Inventory Organization Parameters for Dual UOM

You must enable the “Auto Create Lot UOM conversion” parameter at the organization level. You select either “Yes” or “User Confirmation”.

Establish default UOM conversion for Dual UOM

When an item is setup for dual unit of measure tracking, you will need to establish a default conversion from your two units of measure. If there’s a wide fluctuation between the units of measure, you will be able to update the conversion rate at the lot level. A wide fluctuation can happen if food items when growing conditions change. When you buy 500 pounds of lobster, you may have 500 1 lb lobsters or 250 2 lb lobsters. The conversion from pounds to eaches would then be a the lot level

Background on items and units of measure

On the Item Master window, there are four fields that configure your item’s primary and secondary UOM. The fields are “Primary unit of measure”, “Tracking field”, “Pricing field”, and “Defaulting field”.

Primary unit of measure field

In the main attributes tab of the item master you define which a primary unit of measure and, if you have dual unit of measure, you will set up a secondary unit of measure. All items must have a primary UOM. This primary UOM is used as the stocking and selling unit of measure. You can buy and sell this item in other UOM but they must be converted from from the primary UOM.

Tracking field

You can set your tracking control to either primary or primary and secondary. Here’s where your dual UOM is set for your item.

Pricing field

You can set your pricing unit of measure to either primary or secondary.

Defaulting field

This field or item attribute tells the system how to calculate the secondary unit of measure. You have three choices: fixed, default, and no default. The fixed option is used when the conversion between the two units of measures remains constant. We know that a gram of water always equals a milliliter of water. So instead of trying to measure the volume of water we can weigh it.

Receiving items in dual UOM

After you setup your default conversion rate from your primary UOM to your secondary UOM, you can receive items and if necessary update the quantities for your secondary UOM. You can also receive items in your secondary UOM and Oracle will automatically convert them to your primary UOM.

Viewing On-hand quantities

Using the material workbench window, you can see query your on-hand quantity for your item. To see the secondary UOM, you will need to add the field to the form.

Dual UOM Example:

1. Update your organization parameters

In the inventory organization parameters window, ensure the “Auto Crate Lot UOM Conversion” is either Yes or User Confirmation.

Inventory Organization Parameter for Dual UOM

2. Setup your item

There are two steps to setting up your item. You must first ensure that the Bill Of Material settings are correct. The “BOM Allowed” flag must be unchecked and the “BOM Item Type” must be standard. Next you need to setup your unit of measure settings.

Item Bill of Materials Settings for Dual UOM

2.1. Set your primary UOM. This is the stocking and selling unit of measure. Any necessary conversions are based on this unit of measure. It is also the UOM your inventory valuation reports will show. Any necessary conversions are based on this unit of measure. This attribute is not updatable and assigned at the organization level.

2.2. Set your tracking method. You will want to select primary and secondary.

2.3. Set your pricing UOM. This can either be primary or secondary. If you select secondary, Oracle will re-price the item on the sales order.

2.4. Set your secondary UOM. This is the other UOM that you will transact and track in.

2.5. Set your Defaulting method. The available choices are (from Oracle User Guide):

Fixed: The system stores inventory in both the primary and secondary units of measure. You can enter an item quantity in one unit of measure, and the system converts the quantity to the secondary unit of measure and displays both quantities.

Default: The system stores inventory in both the primary and secondary units of measure. You can enter an item quantity in one unit of measure, and the system converts the quantity to the second unit of measure and displays both quantities. You can change the quantity in the secondary unit of measure, without changing the quantity in the primary unit of measure.

No Default: The system stores inventory in both the primary and secondary units of measure. Use this option when the default conversion between the two units of measure is usually not the same. The system does not automatically display in the secondary unit of measure when you specify the quantity for the primary unit of measure. You manually enter the quantity of the secondary unit of measure before you process a transaction. The secondary quantity can fluctuate from the default conversion by the factors that you specify in the Deviation + and Deviation - attributes.

2.6. Set your deviation factors. This will tell the system the allow override range of conversion from the primary to the secondary UOM.

2.7 Set your conversion method. You will want to select item specific or both when you have a conversion rate that is unique to your item.

Item UOM Settings for Dual UOM

3. Assign your item to inventory organizations.

There is nothing special in assigning dual UOM items to inventory organizations.

Assigning Item to Inventory Orgs

4. Setup your item specific UOM converson

This will establish a default conversion rate when the item is received. The user may override the conversion or may enter the secondary UOM to automatically convert into the primary. For my example, I’m using a average of .5 pounds per each.

UOM Conversion Settings for Dual UOM

5. Enter a Misc. Receipt

Here you can see I’m entering a miscellaneous receipt for 20 units. The system defaulted the secondary UOM to 10 lbs. But when I weighed the items, they were actually 12 lbs. I enter 12 in the secondary UOM and click the “No” button so it wouldn’t override the primary UOM.