Points to be consider while "Asset Group" Design process in eAM implementation

Generally Asset Group is new concept to most of companies switching over from legacy plant maintenance system to Oracle Enterprise Asset Management system, as in most of the legacy system it does not exists, they have Asset/Equipment numbers without Asset Groups, in Oracle eAM assets are created from Asset Groups only, so Asset Group is mandatory in Oracle eAM. This blog would explain the impact of Asset Groups in various places of the eAM application and help to expedite the Asset Group design process

Following factors would help in designing the Asset Grouping "Asset Group"

1)      Grouping by  Similar Type of Assets :- Asset Grouping should be based on Similar Type of Assets

e.g.  CNC Lathe, Conventional Lathe (Manual), based on specific application/usage i.e. Vertical Lathe (VTL), Horizontal Lathe etc and its Manufacturer.
 2)       Similar Asset Specifications/ Technical Details (Attributes) :- Asset Grouping should be based on  similar  Technical Details of an asset (Attributes) ,
Asset Attributes are linked to the Asset Groups only and gets defaulted from the Asset Group to Asset Number.
                e.g.    CNC Lathe Group will have following asset Attributes

a)      Make of CNC system
b)      Type of Scale
c)       Type of Ball Screw
d)      Make of DC/AC Servo motor
e)      Tachometer Type/Make

So whenever an Asset is created out of above asset group (CNC Lathe) all the above attributes would automatically get copied to the new Asset Number which got created out of "CNC Lathe"  Group.
                e.g.    Conventional Lathe Group will have following asset Attributes

a)      Make of PLC system
b)      Type of Guide ways (e.g. linear)
c)       Make of lead screw
d)      Make of Induction motor

 So whenever an Asset is created out of above asset group (Conventional Lathe) all the above attributes will automatically copied to the new Asset Number which got created out of Conventional Lathe Group.
Same is applicable in Case of Asset Categories, all the Asset Categories are initially associated/configured at the Asset Group level only and then it gets defaulted to respective Asset Number of Particular Asset Group.
 3)      Asset BOM  :-In Asset BOM  you can just mention  " From effective"  to  "To affectivity"  as  "0"  so that the Spare part once defined for a particular Asset Group will be applicable to All the Assets belonging to a that particular Asset Group. So Asset Group is important consideration from Asset BOM designs point of view and its maintenance.
 4)       Searching of Asset Number:- Searching of Asset Number becomes easy as assets are grouped in proper logical  Asset Group   , e.g. If  you want to search Asset and you are not

To Capture Labor Cost In Work Order Through OTL (Oracle Time & Labour) With Multiple Rates

For the example, You wants to capture the 'Actual Labour Cost' for each the work order.Maintenance employees work in different shifts and have different applicable rates.The working time will be entered against work orders using OTL.
Application must not calculate the cost based on rate defined for Resource as many employees will work under each resource.Depending upon the time or shift they work, the cost should be accounted for the work order


For the above case, there is no standard function to handle simultaneously 'Labour rates' for both Regular and Overtime for an employee within eAM. It provides a means to capture the costs at both Resource level and at Employee level. Depending on whether a resource or an employee is charged, the corresponding rates are used by the resource transaction cost manager. There is no way to capture 'Overtime rates' in EAM as of today


There is only 1 obvious workaround that you might consider feasible,The workaround is to use 2 separate resources each one with own rate.
1. RES_REGULAR resource with cost rate = 100
2. RES_OT resource with cost rate = 50
3. Assign the same employee to both.
4. Create 2 charge time transactions. 1 for regular one using RES_REGULAR resource and 1 for the Overtime using RES_OT.
5. You will have 2 resource transactions at the desired rates. And the cost is correct.

Asset Route Cost Distribution To Member Assets in EAM

According to the new design costs no longer reside in the Route asset...Instead it will get distributed to the member Assets, even if you have a work order for the Route asset.
For the example :
If you have a work order, Route asset Costs for this work order will get distributed to the member assets for the route, When you look at Work Order Value Summary form, you look at costs for a particular work order...Hence in the work order value summary form, you are able to see the costs for the work order
                                                                                                               
However in Self Service, According to the new design the Route asset would not hold any cost..It will get distributed to its member Assets..Hence Route asset does not show up any cost ,However if you search for costs for each of the member Assets, then you will be able to track the cost of the work order for the Route asset


Asset route is a logical asset and costing of asset route works as below:
During the transaction processing, costs are accumulated to the A/c's in the Asset route work order WIP accounting class. Till the closure of asset route work order , these costs would be accounted in the WIP of Route work order only.After closing the Asset route work order, these costs would then be actually distributed to each of the member asset "WIP accounting class variance accounts"

Purchasing Encumbrance Accounting Concepts and Process

Encumbrance accounting is a form of budgetary control within Oracle Applications which allows a company to allocate funding for specific accounts.  There is a funds checking feature integral to encumbrance accounting which checks for funds availability on those accounts and can either prevent (absolute), warn (advisory) or ignore (none) funding availability (dependent on how each account is defined in GL) for the specific transaction (requisition or purchase order)
that is currently being performed

Basic Process

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The basic process flow for encumbrance accounting activity related to Oracle Purchasing typically is as follows:

1. Create a requisition.
2. Approve and reserve funds for the requisition.
3. AutoCreate requisition onto a purchase order.
4. Approve and reserve PO (which automatically reverses the requisition funds
   reservation)
5. Receive against the purchase order (either period-end or online accruals)
   and the funds are reversed for the amount received and entered against the
   charge account

Purchasing Setup: Encumbrance Accounting

Setting up encumbrance accounting actually has very few actions that need to be performed in Oracle Purchasing module. The primary level of effort required for encumbrance accounting setup is in the General Ledger module. There is one action that can be taken by PO and it deals with the AP form Financial Options
Here are some quick setup steps for encumbrance accounting. The setup details may differ depending on the business needs. the steps included here are for Release 11

1) Define the Encumbrance Account

    1.1. Navigation in GL: Setup -> Financials -> Flexfields -> Key -> Values
         Navigation in PO: Setup -> Financials -> Flexfields _> Key -> Values
    1.2. Perform a find by entering the following criteria:
         Application: Oracle General Ledger
         Title: Accounting Flexfield
         Structure: <name of a structure to be used>
         Segment: Account
    1.3. Click the Find button.
    1.4. Add a new segment value.
         Value: (enter your own)
         Description: Reserve For Encumbrance