Oracle Landed Cost Management Oracle Landed Cost Management is a new module, which is introduced in Oracle E-Business Suite Release 12.1. Oracle Landed Cost Management's
The key functionalities of Oracle LCM are as follows:
With Oracle Landed Cost Management, actual and estimated item costs are managed. We can apply charges to different items using its costs, weight, quantity, and volume.
It is fully embedded with Oracle Purchasing, Pricing, Cost Management, and Payables, which empowers us to eventually manage the estimated and actual cost.
Each item cost is factorized using a cost factor. These cost factors eventually build up the estimated cost. We can use as many cost factors as we need to achieve the desired item cost
• Port charges
• Storage cost
• Transportation cost
• Shipping person/handling fee
• Demurrage Using Oracle Landed Cost Management, we can identify the factors mentioned earlier so that it becomes easier for us to calculate the cost estimation and make plans. Oracle Landed Cost Management gives a clear visibility of cost incurred on various factors, which makes planning for procurement easier.
Oracle Landed Cost Management process The flow of Oracle Landed Cost Management starts when a purchase order is raised and completes after all the invoices in the system related to the order total cost are calculated. Using Landed Cost Management, we calculate the estimated cost and actual cost for items. These costs are variable, and includes transportation charges, freight charges, port charges, demurrage charges, container deposit, and insurance
For example, the PO Item cost was $100. The real cost of the item was $140. An additional 40% is added to the cost of the item due to extended supply chain costs. In many cases, organizations report and make decisions on the base item cost without visibility to the real costs of product acquisition.
• Landed costs can be initially estimated, either manually or through Oracle Advanced Pricing
• Costs are updated when actual invoices are received
• Support for costing at the time of goods receipt as well as within a “pre-receiving” process
Integration of Oracle LCM with other modules
Oracle Landed Cost Management is fully integrated with other Oracle E-Business Suite modules. The following are the modules that are integrated with Oracle Landed Cost Management:
· Oracle Purchasing: Oracle Landed Cost Management is fully integrated with the Oracle Purchasing Suite. When a purchase order is raised for an inventory organization, which has landed cost available on it as a pre-receiving application, the approved purchase order can be called and updated in LCM. In LCM, extra charges such as freight, miscellaneous charges, port charges, and duties are added, which eventually update the cost of the goods that are to be received in the inventory.
· Oracle Payables: Oracle LCM is fully integrated with the Oracle Payables Suite. When the actual invoices against the purchase order arrive and enter in to Oracle Payables, the actual cost is transferred to Oracle LCM to see the difference that is raised between the actual and estimated cost of the items.
· Oracle Advanced Pricing: Oracle LCM is fully integrated with Oracle Advanced Pricing. When Advanced Pricing is enabled, the cost and freight duties are automatically picked from Advanced Pricing, and all shipments are updated directly.
The key functionalities of Oracle LCM are as follows:
With Oracle Landed Cost Management, actual and estimated item costs are managed. We can apply charges to different items using its costs, weight, quantity, and volume.
It is fully embedded with Oracle Purchasing, Pricing, Cost Management, and Payables, which empowers us to eventually manage the estimated and actual cost.
Each item cost is factorized using a cost factor. These cost factors eventually build up the estimated cost. We can use as many cost factors as we need to achieve the desired item cost
• Port charges
• Storage cost
• Transportation cost
• Shipping person/handling fee
• Demurrage Using Oracle Landed Cost Management, we can identify the factors mentioned earlier so that it becomes easier for us to calculate the cost estimation and make plans. Oracle Landed Cost Management gives a clear visibility of cost incurred on various factors, which makes planning for procurement easier.
Oracle Landed Cost Management process The flow of Oracle Landed Cost Management starts when a purchase order is raised and completes after all the invoices in the system related to the order total cost are calculated. Using Landed Cost Management, we calculate the estimated cost and actual cost for items. These costs are variable, and includes transportation charges, freight charges, port charges, demurrage charges, container deposit, and insurance
For example, the PO Item cost was $100. The real cost of the item was $140. An additional 40% is added to the cost of the item due to extended supply chain costs. In many cases, organizations report and make decisions on the base item cost without visibility to the real costs of product acquisition.
• Landed costs can be initially estimated, either manually or through Oracle Advanced Pricing
• Costs are updated when actual invoices are received
• Support for costing at the time of goods receipt as well as within a “pre-receiving” process
Integration of Oracle LCM with other modules
Oracle Landed Cost Management is fully integrated with other Oracle E-Business Suite modules. The following are the modules that are integrated with Oracle Landed Cost Management:
· Oracle Purchasing: Oracle Landed Cost Management is fully integrated with the Oracle Purchasing Suite. When a purchase order is raised for an inventory organization, which has landed cost available on it as a pre-receiving application, the approved purchase order can be called and updated in LCM. In LCM, extra charges such as freight, miscellaneous charges, port charges, and duties are added, which eventually update the cost of the goods that are to be received in the inventory.
· Oracle Payables: Oracle LCM is fully integrated with the Oracle Payables Suite. When the actual invoices against the purchase order arrive and enter in to Oracle Payables, the actual cost is transferred to Oracle LCM to see the difference that is raised between the actual and estimated cost of the items.
· Oracle Advanced Pricing: Oracle LCM is fully integrated with Oracle Advanced Pricing. When Advanced Pricing is enabled, the cost and freight duties are automatically picked from Advanced Pricing, and all shipments are updated directly.
