Receipt Routing: Understanding the Functionality and Its Impact

In Oracle Fusion, receipt routing defines how the receiving process is done once the goods arrive at the receiving location. The routing selected not only impacts warehouse operations but also drives accounting, costing, and inventory visibility. Understanding its implications helps organizations streamline operations and ensure accurate financial reporting.

The receiving process in Oracle Fusion plays a significant role in supply chain operations. It supports the receipt of purchase orders (POs), return material authorizations (RMAs), and interorganization shipments.

• Purchase Orders (POs): When goods are procured from suppliers, the receiving process ensures accurate tracking, inspection (if required), and delivery into inventory or directly to the requester (expense purchases).
• Return Material Authorizations (RMAs): In case of product returns from customers, the receiving process manages the return transactions, ensuring items are accounted for properly before they are either sent back to suppliers, scrapped, or restocked.
• Interorganization Shipments: For material transfers between inventory organizations, the receiving process validates and records the movement, ensuring visibility and accuracy of on-hand balances across locations.

By managing these different types of receipt routings, Oracle Fusion ensures that inventory accuracy, costing, and accounting remain aligned with operational transactions.

·       Types of Receipt Routing

1. Standard Receipt
• This is a 2-step process.
• Goods are received into receiving area.
• Receipt Accounting entries are triggered after the Receive step.
• Quantities and other details are confirmed by the receiving team and delivered to Inventory location through Putaway transaction.
• Cost and accounting entries are triggered after Putaway.
2. Inspection Required
• Items are first received into a receiving area.
• Receipt Accounting entries are triggered after the Receive step.
• They are subjected to quality checks in the inspection location.
• No accounting entries are triggered after the inspection step.
• Accepted quantities move into inventory, while rejected ones can be returned to supplier.
• Useful for quality control but adds an extra step in material flow.
• Cost and accounting entries are triggered after Putaway.
3. Direct Delivery
• Goods are received and delivered directly to the requester or the inventory location.
• Skips inspection, reducing handling.
• Commonly used for consumables or project-related purchases.

For Purchase Orders, the defaulting of Receipt Routing happens from below mentioned places.

1. Item Setup

o   The Receipt Routing defined at the Item level in the Ship-to Organization from PO schedule.

2. Supplier Site

o   The Receipt Routing defined at the supplier site level.

3. Receiving Parameters of the Ship-to Organization

o   The Receipt Routing defined in the Receiving Parameters of Ship-to Organization from PO schedule.

Setting up the Receipt Routing at different levels:

1. Item Level

 2. Organization Level

 3. Supplier Site Level

4. Inter-Organization Parameters Level – Applicable For Transfer Orders

The Receipt Routing needs to be selected if the Transfer Type is In Transit.

For transfer type as Direct, the receipt routing is not applicable because the material is transferred immediately and received in the destination organization once the shipment is completed from source org.

                 

Key Notes:

·       If the Receipt Routing is defined at Item level, then it will get defaulted in the PO. If not setup at item level, then system will check it from the supplier site. If the receipt routing is not available in supplier site also, then finally it will check the receipt routing from Receiving Parameters and default the value on PO.

·       For Transfer Order, one of the mandatory setups is to define Interorganization Parameter between two Inventory orgs. there you can define the Receipt Routing also.

·       You can override the receipt routing option at receipt time by changing the destination type for specific suppliers, items, and orders if the receiving user profile for the Allow Routing Override option is enabled.

·       Use the 'Manage Interorganization Parameters' task to set up Inventory destination 'Receipt routing' for in-transit inventory destination transfer types. This will only impact new orders created after the set-up change.

·       The receiving parameter “RMA - Receipt Routing” is the only value considered when determining the RMA document in Fusion receiving.

·       The RMA inspection required PIM parameter is not used.

·       The PIM attribute just specifies whether the inspection is required or not. It does not specify whether it should be standard or direct deliver or inspection required.

·       There is no provision for sub-inventory level receipt routing at the moment.

·       The Purchase Order with line type Fixed Price Services is always received through Self-Service Receiving.

·       For transactions to appear on the My Receipts pages in Self-Service Receiving, the purchase orders must have their Receipt Routing value set to Direct Delivery.

·       To receive a purchase order with a Standard Delivery receipt routing, you must use the Receive Expected Shipments page in Oracle Receiving.

·       Hence when creating new PO line using the line type Rate Based Service, the system defaults the receipt routing as "Direct Delivery".