the description of what you actually checked and confirmed to be working is not very detailed, but it looks like the error is coming from the Exchange server's SMTP, and it's not related to the mailer itself.
I looked at this description (Resolve 530 5.7.1 Client was not authenticated Error In Exchange 2010-2012 | krypted.com) based on that, it appears your Exchange server is not allowing anonymous connections and you probably haven't specified username/password for the SMTP access (probably this was changed on the mail server recently?), I think you have 2 options to try:
1) Try to add the username/password for SMPT authentication for the outbound mailer.
2) Verify the configuration (probably need to involve the admins of the Exchange server), and if it prevents anonymous access - enable it.
Or consult your mail admins to figure out how to use that SMTP service.
If it is due to SMTP server, same server details we are using in another applications, mailer is processing mails with out any issue.
I reread your initial question and I can' t really understand if you' re talking about
- inbound email processing (then it would be IMAP setting
- outbound email processing (then it would be SMTP configuration)
in any case, to understand if the error is related to the mailer config or not, it would be helpful if you tested accessing the mailserver (IMAP and SMTP) using telnet. If that works, then there' s issue with your mailer configuration. If that doesn't work - it's a mail server configuration.
You'll find the guides on how to test mail server using telnet if you google for "telnet IMAP" and "telnet SMTP"
I am talking about SMTP, and I am able to do telnet for SMTP and IMAP with authentication. I am able to start workflow mailer, after some time it was failing. I am attaching logfile.
FNDCPGSC35169.txt.zip 570.8 K
Issue got resolved by applying the patch.
Workflow Notification Mailer Not Authenticating With SMTP Servers Requiring TLS Before Login ( Doc ID 1903575.1 )
This could be
1. Download and review the readme and pre-requisites for Patch.17756944:R12.OWF.B.
2. Ensure that you have taken a backup of your system before applying the recommended patch.
3. Apply the patch in a test environment.
4. Confirm the following file versions:
You can use the commands like the following:
strings -a $JAVA_TOP/oracle/apps/fnd/wf/mailer/SMTPOutboundProcessor.class |grep '$Header'
5. Retest the issue.
6. Migrate the solution as appropriate to other environments.