Onhand vs Lot Status in Release 12

One of the biggest issues we've had since our upgrade is trying to reconcile the difference between lot status and material onhand status. In 11i OPM used lot status which meant that all of a lot was either accepted or not. In R12 a new feature, called material status, is introduced. The feature as a whole is excellent because it allows you to determine the status of a lot + a location (onhand). The benefit of this is that if a portion of a pallet is crushed you can seperate the pallet into two parts and assign the bad crushed part a status of 'throw away' while assigning the good portion an acceptable status.

This feature is great except that the status only persists as long as you have inventory onhand. Once your inventory goes to 0 for a certain lot or location the status no longer exists. Most of the time that is completely acceptable but where we run into problems is when you issue material to a batch (and that issue 0's out the onhand quantity) and then find that you need to perform a wip return for a portion of that quantity. Since the onhand was 0 because the wip issue consumed it all the previous status no longer exists so when a wip return happens and inventory is put back into the location from which it was issued the status defaults to whatever status is setup in the item master for that organization.

For us, this means that whenever an item is returned it defaults back to a status of 'QUAR' which is a status that does not allow wip issues. Since our quality department is the only team who can update that status each time a wip return occurs as described above we have to alert them and they have to go verify that indeed its okay to change the status to acceptable for mfg use.

In 11i the lot status persisted even if the quantity were 0 and so if a return was performed the returned material would be assigned the status of the lot. In R12, everything goes back to the default status setup in the item master. After discussing this with Oracle it seems like our only solution is going to be through customization, at least for the next year or so.