Internal Requisition/Internal Sales Order provide the mechanism for requesting and transferring material from one inventory organization to other inventory
organization or expense location.
When Purchasing, Order Management, Shipping Execution, and Inventory are installed, they combine to give you a flexible solution for your inter-organization
and intra-organization requests.
Where : First you need to understand , where demand comes for Internal requisitions in company.
Demand for internal requisitions  can come from the following sources
- Online user's request for stock items out of inventory
- Inventory Replenishment Requests
- Inventory generates replenishment requests automatically using the following methods:
- Min-Max Planning
- Reorder Point Planning
- Subinventory Replenishments for Replenishment Counts
- Kanban Replenishments
Oracle Master Scheduling/MRP creates requisitions for buy items when you release them using the Planner Workbench.
For External system's requests, you can automatically import internal requisitions from other Oracle Applications or existing non-Oracle systems using the Requisitions Open Interface.
How : here are steps which helps you to understand the flow from IR to ISO.
The key setup Steps Includes for IRO should be:
Item to be used on Internal requisition should have the following flags enabled.
- Purchasing -> Purchasable
- Order Management -> Internal Orders Enabled
- Order Management -> Internal Ordered
- Order Management -> OE Transactable
More important is , Item needs to be assigned to both source and destination inventory organizations.
Then you need to create shipping network between source and destination Inventory organizations.
Follow this navigation
Inventory responsibility -> Setup -> Organizations -> Shipping Networks
Once your shipping network should be created from source to destination organization.
You can setup transfer type can be either Direct or Intransit and internal Order required checkbox should be checked.
When you are using Internal Requisition/Internal Sales Orders, it is required to create an internal customer for each destination organization and a customer ship-to site for each deliver-to location within the destination organization.
Make sure you have defined the same address for your customer ship-to-site as your deliver-to location.
The Customer must be created in the Operating Unit of the Source Inventory Organization that is used on the Internal Requisition.
Make sure Profile option PO: Legal Requisition Type should be setup correctly which should be either BOTH or INTERNAL
- PO: Legal Requisition Type = BOTH - That means items can be purchased from a vendor or from on hand inventory
- PO: Legal Requisition Type = INTERNAL - that means items can only be obtained from on hand inventory
Next, refer to previous Post "Understanding data flow for “Internal Orders ” helps you to understand the data flow table to table level.