Often customers order products that you do not typically stock but that you do not manufacture either. You may want to purchase that item specifically for this order, have the supplier ship it to you, and then combine it with other items you may have purchased or stocked to create one shipment to the customer. This is a common scenario for Wholesale Distributors who use the S3, or Sell-Source-Ship business model as well as for other demand channels. We call this process back-to-back orders or procure-to-order.

Supply-to-order items are either standard items or models that have the assemble-to-order item attribute turned on. It is this attribute that launches the ATO workflows that deliver this feature. PTO models by definition cannot be supply-to-order, since turning on the assemble-to-order attribute would make them an ATO model. But you can fulfill the shippable options of a PTO model with back-to-back orders by checking the assemble-to-order item attribute of those components.

Setup
To setup Back-to-Back Orders in Oracle Order Management:
1.  Use the Inventory Master Items window to define the items that you wish to supply to order. The following item attributes must be specified:

1. Item must be marked as Customer Orderable on the Order Management tab and
2. Item must be marked as Purchasable on the Purchasing tab.
3. Item must be marked as Assemble-to-Order on the Order Management tab.
   Note: The Assemble-to-Order attribute is actually called Replenish to Order in the database. The same flag also controls Procure-to-Order.
4. Item must be marked as Build in WIP on the WIP tab.
5. Item must either have the make/buy flag on the General Planning tab set to Buy, or else have a sourcing rule saying that it is to be sourced from a vendor.
   

2.  If you define a Sourcing Rule for your Supply-to-Order items, then the sourcing rule must be of type Buy From. Also, you may only define one single sourcing rule for your item, or this process will not work.

You must add this sourcing rule to the assignment set which is specified as the MRP default assignment set in the MRP: Default Sourcing Assignment Set profile option.

Note: You may not have a combination of Buy From and Make sourcing rules or more than one sourcing rule in the assignment set for the same item. If you do that, Auto Create Requisition errors out and puts details about the problem in the log file.

Notes
The only difference between B2B item (Creates req) & standard ATO item (creates JOB) is that the B2B itm's make/buy flag on the General Planning tab set to Buy

Process flow of B2B
Sales Order Process
1. Enter the item on the Sales Order line.
When the line is Booked/Scheduled, the Create Supply subprocess of the workflow will put the lines through the Buy ATO Item flow which contains the autocreate purchase requisition activity. AutoCreate Requisition can be run as a concurrent program or can be initiated for an individual order by using the Progress Order action on the sales order if it is in status Create Supply Line – Eligible. As stated above, AutoCreate Requisition takes information from the Sales Order line and loads the Requisition Import interface tables.

2. Requisition Import must be run to create the purchase requisition tied to the sales order line. This can be done by manually submitting the Requisition Import concurrent program, or you can schedule it to run automatically. Requisitions created by this process all have an interface source type of CTO so you can identify and segregate these requisitions as needed. There are also message dictionary entries for CTO Note to Receiver that can be populated with custom text. The requisition column Note to Buyer is populated by the AutoCreate Requisition process with a message Supply for sales order: <order number> that indicates the order number of the line. Add additional custom text to the note by editing the
message dictionary for CTO Note to Buyer.

Sales Order Line Status
The following line statuses help you track where the line is in the process:
PO Req Requested
PO Req Created
PO Created
PO Received
If you want to see the Requisition number or Purchase Order number created by your Sales Order line, you must go to the Reservations Details window to find that information.

Purchasing Process
Once the purchase requisition is created and identified as CTO, the regular purchasing process takes place:
1. A Purchase Order is created and approved and sent to the necessary supplier, or a release of a previously created Sales Agreement is used.
2. Once the PO or release is received, the items are recorded in inventory and a reservation is automatically made to the sales order line.
Note: View the Note to Buyer at any point in this process to find out what sales order generated this PO or release.
3. The sales order can now be pick released, shipped and invoiced just like other stocked items.

Reservations
A key in making this functionality work for you is how the inventory reservation is handled. This happens automatically, and can be traced from the sales order window by using  Tools->Scheduling->Reservation Details as well as by directly using When Req Import processes, the purchase requisition is reserved to the sales order line.

View the Inventory Reservations window supply tab to see the reservation linked to a requisition, and the requisition number and line number. When the requisition becomes a PO or a Sales Agreement release, the reservation moves with it. The Reservations window, supply tab, then shows the reservation is linked to a PO or a Sales Agreement, and you will see the PO number or the PO and release number, as well as the line number.

When the PO is received into inventory, the reservation is automatically transferred into Inventory, and it now looks like any other reservation from a sales order to on-hand stock. Just as in the regular ATO process, if you manually reserve the sales order line to inventory the Create Supply workflow step will not do anything, and the line will progress to Awaiting Shipping without flowing through the requisition process.

Changes or Cancellations
What happens if you need to make changes to the sales order line that is in the back-to-back process? What if the order line is cancelled? What if you need to make changes to the PO or the requisition?

If the sales order line is cancelled or the quantity is reduced, then the reservation is reduced and a notification is automatically sent to the buyer explaining that there is now a PO outstanding for a higher quantity than what is needed for the sales order. The buyer can then decide whether to cancel the PO line, or to buy the product anyway and put it into inventory.

If the schedule date on the sales order line is changed, again a notification is sent to the buyer, who can then decide to either change the date on the PO or cancel it or do nothing. If the buyer decides to cancel the PO, then a new requisition will be created the next time AutoCreate Requisition is run.

If the PO is cancelled or a partial quantity is cancelled, then the reservation is cancelled or reduced appropriately. The next time AutoCreate Requisition is run, it will create another requisition for the unreserved amount on the sales order.