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Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | 1

Oracle Cloud Cost Management
Understanding Landed Cost Management

Customer Connect Session: September 2018

Presenter Information

Krishna Ghantasala
Product Manager –Costing Cloud

Kaushik Sivakumar
Director – Costing and Financial Orchestration Product Strategy

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Safe Harbor Statement
The following is intended to outline our general product direction. It is intended for
information purposes only, and may not be incorporated into any contract. It is not a
commitment to deliver any material, code, or functionality, and should not be relied upon
in making purchasing decisions. The development, release, and timing of any features or
functionality described for Oracle’s products remains at the sole discretion of Oracle.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 3
Agenda
• Overview
• Key Setups
• Estimate Landed Costs
• Invoices for Landed Costs
• Landed Cost Reporting
• New in Landed Costing

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Management: Key Capabilities
– Capture and itemize landed cost charges associated with material purchases
– Support handling mass volume of data
– More accurate total costs and gross margin reporting
– Facilitate Regulatory compliance
– Better sourcing decisions
– Tools to automate matching of actual invoice amounts to estimated charges

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Management: Purpose
• Capture additional costs
associated with procuring
materials
• Estimate total purchase
costs in advance for better
decisions
• User defined landed cost
entities
• Capture actual landed cost
invoice data

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Management: Landscape
– Capture landed cost charges Fusion Landed Cost Management
and process them.
Capture
– Perform tax calculation on Estimates
landed cost charges. Fusion
Fusion
Cost
– Get accurate landed Tax
Management
cost charge details from AP
Invoice.
Charge Charge
– Review item unit cost, Fusion Allocation Analytics

including landed cost. Purchasing

Fusion
Receipt
Accounting
Fusion Capture Actual
Payables From
Invoices

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Management: Flow
Actual charge data
from AP Invoice

Trade Operation
Start
End

Estimate Allocate Item Cost to

charges Associate material charges to
Include
based on PO schedules. PO schedules actual charge
service PO. based on Invoice. details

End

Re- Allocate Item Cost to

Allocate charges
charges to Include
to
PO schedules actual charge
PO schedules.
based on Invoice. details

Item Cost to
Include
estimated charge
details
End

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Agenda
• Overview
• Key Setups
• Estimate Landed Costs
• Invoices for Landed Costs
• Landed Cost Reporting
• New in Landed Costing

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Fusion Landed Cost Management Setup – Overview
Setups for Landed Cost Management:
• Charge Names (required)
• Reference Types (optional)
• Routes (optional)
Setup Templates for Landed Cost Management:
• Trade Operation Templates
(optional)

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Defining Charge Names
• User-defined charge names to
Charge Names are for specific capture landed cost
Procurement BU Sets.
• Option to enable automatic tax
calculation on charges

Seeded Charge Names:

Discount
Freight
Insurance
Miscellaneous

Navigation: Navigator > Setup and Maintenance > All Tasks > Manage Charge
Names

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Mapping Landed Cost Charge Names to Cost Elements
• Landed cost charges are tracked
individually in landed cost and
receipt accounting
• Use cost component mapping in
cost accounting to define how
landed cost charges map to cost
elements
• Landed cost charges can be
grouped into cost elements for cost
accounting purposes depending on
how much detail you want to track
for inventory value and cost of
goods sold purposes
• You can also configure if any of the
landed cost is to be included to
item value or book it as expense

Navigation: Navigator > Setup and Maintenance > All Tasks > Manage Cost Component Mappings

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Agenda
• Overview
• Key Setups
• Estimate Landed Costs
• Invoices for Landed Costs
• Landed Cost Reporting
• New in Landed Costing

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost - Trade Operation
– A landed cost charge can apply to one or more than one purchase order shipment (a
“container” of multiple material purchases)
– A trade operation can include multiple landed cost charges that apply to a shipment.
– A landed cost charge can be payable to a supplier who is different than the material
supplier
– A material purchase can be involved in multiple trade operations on the journey
from supplier to final destination
– A trade operation is flexible; tailorable to different business use cases.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Trade Operation from a Template
– You can create a trade operation from
scratch or from a template
Trade Operation Template
– Trade operation templates streamline
creation of trade operations – useful for Create Trade
Operation from
repeat purchases. Template.
– Automatically populate new trade
Trade Operation
operations with the typical charges for a
type of purchase Supplier Information

– Associate purchase order schedules with the Charge Lines

trade operation.
Reference Type

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Trade Operation Templates
• Use trade operation
templates for repeat
purchases.
• Create trade operations
based on the template as
repeat purchases occur.
• Templates define the
structure for trade
A template can capture charge information. operations: charges,
reference types, taxes, and
routes.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Managing Trade Operations
• Landed costs charges are
captured on trade operations.
• Associate material PO schedules
with trade operations.
• View charges and their
proportions.
• View the difference between
estimated and actual charges.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Trade Operation – Landed Cost Charges
• Use trade operations to capture
estimates of landed cost
charges for material POs.
• Allocate the estimated landed
costs to the PO schedules in the
trade operation.
• Edit the trade operation
estimates at any time as new
information becomes available.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Trade Operation - Landed Cost Charges
• Landed cost charges can have
different charge BU’s
• Select a charge basis and an
allocation basis.
• Add a reference to the service
purchase order if applicable.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Trade Operation - Landed Cost Charge Basis
• Aggregate - a total amount
• Per unit – an amount per unit
• Percentage of item price – a
percentage of total material price
• Percentage of other charges – a
percent of other landed cost
charges
• Variable per unit - user entered
amount for each purchase order
associated with the trade
operation
• Variable percentage of item price -
user entered percentage for each
purchase order associated with
the trade operation

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Allocation Basis
• Equally – spread the charge
across all PO lines equally
• Quantity – spread the charge
across PO lines based on qty
• Volume – spread the charge
across PO lines based on volume
• Weight – spread the charge
across PO lines based on weight
• Item value - spread the charge
across PO lines based on Item
value
• Manual allocation factor –
spread the charge across PO lines
based on a user entered factor

**Note: allocation is only applicable for aggregate charges

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Tax on Landed Cost Charges
• Seamlessly integrated with the Tax
application
• Non-recoverable tax calculated
based on tax attributes
• Tax amount added to landed cost
charge amount

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Charges and PO Schedule Association

• Associate a Purchase Order schedule to charges grouping by Shipment Number.

• Charges get allocated to receipts after the allocation process is run.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Charge Allocation
• Central Run Control page
for all landed cost
processes
• “Allocate landed cost
charges process” to
allocate charges to PO
schedules (and receipts)

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Accrued Landed Cost Charges
• Landed Costs are
accrued along
with the receipt
of the material in
Receipt
Accounting.
• Cost Accounting
includes landed
costs for
deliveries to
inventory.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Agenda
• Overview
• Key Setups
• Estimate Landed Costs
• Invoices for Landed Costs
• Landed Cost Reporting
• New in Landed Costing

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Invoices
• Associate the actual landed
cost charge invoices with
the trade operation charges.
• Use the reference type to
let the system automatically
associate the actual invoice
amount with the trade
operation.
• Adjusts estimated landed
cost to actual landed cost in
Receipt Accounting and Cost
Accounting.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost – Transfer Invoice Data from AP to Costing
• Invoices flagged for
landed cost management
are transferred to Landed
Cost Management.
• This process is for a
specific Business Unit for
a given Cutoff Date.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Invoices
• Central Run Control
page for all CML
processes
• Invoices automatically
matched to trade
operations

Navigation: Landed Cost Management > Manage Landed Cost Processes

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Manage Charge Invoice Associations
• Create a trade operation
for a specific landed cost
invoice.
• The application
automatically associates
the actual invoice amount
with the trade operation.
• The application identifies
and classifies the invoice-
to-trade-operation
matching as “good match,”
“potential match,” “no
match,” and so on.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Agenda
• Overview
• Key Setups
• Estimate Landed Costs
• Invoices for Landed Costs
• Landed Cost Reporting
• New in Landed Costing

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

View Item Landed Cost
• PO receipt level landed
cost per unit
• Details of per unit item
cost
• Item cost for most
recent receipts in
stacked bar chart

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Landed Cost Reporting
Charge Item Route Supplier

Supplier Route Charge Item

Essbase View and Analyze Landed Cost

Cube
By Item
By PO Receipts
By Route
By Charges and Variance
By Supplier
.
.
.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Analyze Landed Cost Charges
• Analyze landed cost charges and
variances based on key
dimensions such as:
– Item
– Charge Name
– Supplier

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

OTBI: Landed Costs Real Time
• Gives real-time information
on the estimated and actual
landed costs
• Displays details at BU, trace
operation, charges, supplier,
receipt and landed cost
invoice amount level

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Agenda
• Overview
• Key Setups
• Estimate Landed Costs
• Invoices for Landed Costs
• Landed Cost Reporting
• New in Landed Costing

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

User Story
Working with High volumes:

1. Users will get data from their suppliers about shipments and typically are of high volumes.

2. User want to eliminate manual efforts and human error by automating the flow of data

3. Some of these charges are variable and requires specific allocation to the expected Purchase order
schedule shipments

4. Use REST services, to automate the capturing of shipment details and associated landed cost charges for
estimation.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 37
Landed Cost REST Services
• Manage Trade Operations
– Get list of trade operations
– Get list of charges for a trade operation
– Add / manage PO Schedules, References and Related Lines associated to the charge line in a Trade Operation
– Manage trade operations, charges for a trade operation

• Review Purchase Orders for Landed Cost

– Get Purchase Orders for landed costs
– Get purchase order for landed cost based on ASN
– Get trade operations charges for purchase orders schedules.

• Manage association of invoice lines to landed cost charges

• REST Resources
– Primary Resources : tradeOperations, purchaseOrderSchedulesForLandedCosts, invoiceLinesForLandedCosts (Future)
– Child Resources : charges, chargePurchaseOrderSchedules, shipmentDetails, tradeOperationDetails

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 38
REST resources
Resource Name Parent Resource Operations Description
Supported
tradeOperations* null Get This resource can be used to search for Trade Operations that exist
in the system.
Charges* tradeOperations Get Charges is a child resource of tradeOperations. It provides
information of all charges that exists under a Trade Operation.
chargePurchaseOrderSchedules charges Get, Patch, Post, This can be used to read, create, update and delete the associated
Delete Purchase Order Schedules to a charge in a trade operation.
* Full operations (patch, post, delete) in subsequent releases of 18C

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 39
REST resources
Resource Name Parent Resource Operations Description
Supported
purchaseOrderSchedulesFor null Get The purchaseOrderSchedulesForLandedCosts resource
LandedCosts provides information about all purchase order schedules
available for landed cost estimation.
shipmentDetails purchaseOrderSchedulesForLandedCosts Get This is a child resource of
purchaseOrderSchedulesForLandedCosts. It provides
information about shipments associated to purchase
order schedule.
tradeOperationDetails purchaseOrderSchedulesForLandedCosts Get This is a child resource of
purchaseOrderSchedulesForLandedCosts. It provides
information about Trade Operations and Trade
Operation Charges associated to a purchase order
schedule.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 40
Manage Trade Operations UI
Resource: tradeOperations

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Edit Trade Operation UI
Resource: tradeOperations/charges

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Material PO Schedules associated to the Charge
Resource: tradeOperations/charges/chargePurchaseOrderSchedules

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Review Purchase Orders for Landed Cost UI
Resource: purchaseOrderSchedulesForLandedCosts

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Shipments associated to a Purchase Order Schedule
Resource: purchaseOrderSchedulesForLandedCosts/shipmentDetails

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Trade Operation Details associated to a Purchase Order Schedule
Resource: purchaseOrderSchedulesForLandedCosts/tradeOperationDetails

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 46
User Steps using REST -18C

3 Trade Operation Complete

with Charge Estimates for
Associated PO Schedules
2 Invoke the
TradeOperation>Charge>Char
gePurchaseOrderSchedules
and do a Post Operation in a
1 Using the REST Service
batch passing the PO unique
PurchaseOrderSchedules
IDs noted in previous step
ForLandedCost do a Get
Operation and note the
Create Trade Operation with
unique Landed Cost Purchase
Charge lines Manually
Schedule ID
[In subsequent releases of
18C, this step can also be
performed using REST]

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 47
Landed Cost Management Roadmap

Next (<=12 months) Future (>12 months)

•REST services for trade operations •Landed cost for global procurement
•Landed cost for transfer order flows receipts
•Landed cost for drop ship flows
•Integration to GTM for trade
operations

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Safe Harbor Statement
The preceding is intended to outline our general product direction. It is intended for
information purposes only, and may not be incorporated into any contract. It is not a
commitment to deliver any material, code, or functionality, and should not be relied upon
in making purchasing decisions. The development, release, and timing of any features or
functionality described for Oracle’s products remains at the sole discretion of Oracle.

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 49
Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Confidential – Oracle Internal/Restricted/Highly Restricted 50