In Oracle E-Business Suite (EBS) R12, organizations often need to transfer inventory between internal inventory organizations. Oracle supports this requirement through the Internal Requisition (IR) and Internal Sales Order (ISO) process.
What Is an Internal Sales Order in Oracle EBS?
An Internal Sales Order (ISO) represents an internal demand for goods or services raised within the same enterprise. Typically:
- An employee or system creates an Internal Requisition in Oracle Purchasing
- The source organization is internal (not an external supplier)
- Oracle Purchasing transfers the requisition to Order Management using Order Import
- Order Management creates an Internal Sales Order
Once created, the ISO is processed like a standard sales order — pick, ship, and close — while maintaining internal accounting controls.
Key Characteristics of IR → ISO Flow
- Same item can exist in multiple inventory organizations
- Internal requisitions can be created across operating units
- ISO quantities can be partially or fully cancelled
- If an ISO is cancelled, the linked requisition must be manually cancelled
- Only limited changes are allowed after ISO creation (shipment date, quantity reduction)
- Item: IR_ITEM004
- Destination Inventory Organization: M1
- Source Inventory Organization: M2
Create the item using the Purchased Item template and enable it for internal ordering.
Important Setting
- Enable Internal Order Enabled flag
Step 2: Assign Item to Inventory Organizations
Assign the item to both:
- Destination Org (M1)
- Source Org (M2)
Navigate to:
Inventory → Costs → Item Costs
- Define standard cost for the item
- Ensure cost exists in the source organization
Step 4: Update Standard Costs
Run the Update Standard Cost program to activate the defined cost.
Navigation:
Costs → Update Standard Costs
Internal customers and ship-to sites are required for ISO processing.
- Verify customer and ship-to site setup
- Associate ship-to with internal organization
Step 6: Define Shipping Network
Define the shipping network between the source and destination organizations.
Navigation:
Inventory → Setup → Organizations → Shipping Networks
Key Settings:
- From Org: M2
- To Org: M1
- Transfer Type: Internal
Step 7: Purchasing Options Setup
Configure purchasing options to support internal orders.
Navigation:
Purchasing → Setup → Organizations → Purchasing Options
Define:
- Internal Requisition Order Type
- Internal Requisition Order Source
Step 8: Create and Approve Internal Requisition
Create an internal requisition with:
- Destination Organization: M1
- Source Organization: M2
Save and Approve Requisition.
Step 9: Run “Create Internal Orders” Program
Submit the concurrent program: Create Internal Orders
This program converts the approved requisition into Order Management interface records.
Step 10: Run Order Import
Run Order Import to create the Internal Sales Order in Order Management.
Step 11: Query Internal Sales Order
Query the Internal Sales Order in Order Management using the Requisition Number.
Validate:
- Order header
- Order lines
- Source and destination organizations
Step 12: Ship and Close the Internal Sales Order
Process the ISO through:
- Pick Release
- Ship Confirm
- Close Order
