Supply Chain Cost Rollup Overview

an Oracle White Paper
by Laura Z. Miller

Supply Chain Cost Rollup Overview Supply Chain Cost Rollup enhances the existing Assembly Cost Rollup process. The BOM does not included sourcing rules information that may exist for these individual components. The rollup cost can show the cost breakdown as computed by the various sources in the supply chain. the Bill used is called the Supply Chain Bill of Material which combines the existing concept of the BOM as well as including the Supply Chain sourcing rules that exist. these costs can be captured in a rollup. and then the percentage weights are used when bringing the costs over to the organization performing the rollup. If the items are made in an organization. This means that every time a supply chain cost rollup occurs. There is an option of using a Buy Cost Hook. The Supply Chain Cost Rollup can be performed for items specifically belonging to one organization or for all organizations included in the Supply Chain. For Buy items. If there are multi sourcing rules on the BOM. the cost of the items is determined by rolling up the costs and then using the sourcing rules percentages that are in place. If this is used then the Buy Cost Type is ignored for the preferences listed in the hook. The retrieval of purchase costs of the vendor. This rollup uses a cost type that is multi-org and updateable. This process supports using organization-specific markup costs.5. which have partial sourcing rules. The Bill of Material is the representation of components that are used for an assembly or a subassembly. Now the application will allow the direct computation of rollup costs when assemblies are made with components from other organizations. these are not used by the Assembly Cost Rollup but are used by the Supply Chain Cost Rollup. For the Supply Chain Cost Rollup. Items that are built in other organizations of the Supply Chain will have their cost calculated first in the owning organization. the shipping site. the costs rows will get re-weighted every time the supply chain cost rollup is performed. Partial sourcing of components from different organizations can also be performed. Since items can be made or bought in an organization. and the shipping method can all be taken into account by use of the Buy Cost Hook. This hook is used to allow customization capabilities in regard to vendor information. The functionality of this process became available in Oracle Applications Release 11. Each item can have a different Bill of Material (BOM) in different organizations and be included in the rollup.2. . the starting buy cost will be different at the start of the next rollup process. The rollup process can be used to create a global standard cost for items. The cost type for buy items should be flagged as multi-org but does not need to be flagged as updateable. The rollup process uses the Bill of Distribution (BOD) and Sourcing Rules that are defined in MRP.

Navigation Path: Cost > Supply Chain Costing Markup costs related to any inter-org transfer of items are also included in the Supply Chain Cost Rollup. the InterOrg Parameters are disregarded. This allows the user to create customizations to capture markup costs for ‘transfer from’ other organizations that are in the Supply Chain. The system will track cost details with source organization/vendor visibility. The cost of an item in a particular organization will be recalculated only if its “Based On Rollup” flag is set to Yes in the Rollup Cost Type. Buy Cost Type: This parameter holds the costs to be used that are setup as purchase costs. a snapshot of the MRP sourcing rules is used. There can be a set of Sourcing Rules established or a Bill of Distribution that is used to compute the Supply Chain costs. When running the rollup. setups include the user-defined costs and the “Based On Rollup” flags for the items. Costs will be marked with the original source organization/vendor and the related allocation percentages that contribute to the final assembly cost.Setup rollup and buy cost types Two types are necessary: Rollup Cost Type: This parameter is as used in assembly cost rollup. the item cost will be taken as is from the Rollup Cost Type. Otherwise. The user-defined costs are applied over and above the weighted average of all sources for a particular item in an organization. The Markup Cost Hook can be used to capture more costs for the rollup. The Supply Chain indented report provides all cost information for the Rollup. If the markup cost hook is being used in the rollup.The details of item sourcing rules for the Supply Chain Cost Rollup are entered using Oracle MRP functionality. These parameters must be setup prior to running the Rollup. . By default. All costs from this cost type will be taken as is. markup costs are retrieved from InterOrg Parameters. The following is the list of steps required to perform a Supply Chain Cost Rollup: 1 . All costs from prior Supply Chain Rollups used in the latest rollup are considered to be previous level costs. with no rollup done within the Buy Cost Type. costs are read from and written to this cost type during the rollup. In the Rollup Cost Type. The navigation for these setups is included in the Cost Management responsibility for ease of use. No loops can exist in the BOM or BOD otherwise the rollup will not compute the costs.

5-Setup Transportation Cost Hook (optional) This allows the user to create customizations to capture transportation cost for “Transfer From” other organizations that are in the Supply Chain. If a Markup Cost Hook is defined then these parameters are disregarded 4-Setup Markup Cost Hook (optional) This allows the user to create customizations of the markup costs for “transfer from” other organizations that are in the Supply Chain. 2-Setup Buy Cost Hook (optional) This provides the user customization capabilities in regard to vendor information. These parameters must be set prior to running a rollup. The Buy Cost Type holds the default buy cost for purchased items specified in the MRP sourcing rules. 6-Setup Sourcing Rules Setup the MRP Assignment Set with sourcing rules/BOD reflecting the Supply Chain structure to rollup the cost on . The Buy Cost Hook can be customized to provide vendor level visibility for purchase costs.Both Rollup Cost Type and Buy Cost Type should be Multi-Org and the Rollup Cost Type must be Updateable. Parameters that can be utilized include: p_rollup_id p_assignment_set_id p_item_id p_organization_id p_vendor_id p_site_id p_ship_method 3-Setup Interorg Parameters The Supply Chain Cost Rollup uses transfer costs in these parameters as the markup charge for interorg transfers. then the Buy Cost Type is disregarded. the Markup Cost Hook can be customized to provide custom markup costs for “Transfer From” other organizations in the Supply Chain ONLY. If hook is not used. If the Buy Cost Hook is used. If desired. the buy costs will be populated by the Buy Cost Hook instead. the default setting in the Inter-Org Shipping Networks will be used.

Consolidated Yes. This information is taken from data entered in MRP. No Yes/No Yes/No Once the process is launched. The snapshot data is then taken from MRP_SOURCES_V and placed in CST_SC_SOURCING_RULES. the code then verifies that the sum of all sourcing percentages for a particular item/org will sum to 100. if the markup hook is not used .7-Run Supply Chain Cost Rollup The following parameters are using in the process: Supply Chain Cost Rollup Parameters: Parameter Cost Type Buy Cost Type Organization Assignment Set Conversion Type Rollup Option Report Type Material Detail Material Overhead Detail Routing Detail Report Number of Levels Effective Date Include Unimplemented ECOs Alternate Bill Alternate Routing Engineering Bills Specific Item Category Set Specific Category Item From Item To Options Required? Y Y N N Y Y Y Y Y Y Y Y Y N N Y N N N N N Full cost rollup. No Yes. a snapshot of the MRP Sourcing Rules/Bill of Distribution is performed. MTL_INTERORG_PARAMETERS. This snapshot has the existing state of relevant information. Single level cost rollup Detail Indented. The markup_percent column in the CST_SC_SOURCING_RULES table will be populated from the interorg shipping network. If any sourcing rules exist in MRP_SOURCES_V. No Yes.

This logic is the same as the Assembly Rollup code but is modified to track the item/org combination instead of tracking the item only. It first calls the rollup processor. .The Supply Chain Bill of Materials Explosion of each assembly then takes place. It resembles the BOM Indented Cost Report for regular assembly rollup. then generates the report using the data generated in CST_SC_BO_STRUCTURES. identified by rollup_id. This is the report that is printed when the Cost Rollup is run with the “Cost Rollup – Print Report” option. Also the explosion will take the sourcing rules that were captured via the snapshot The Supply Cost Rollup Report is re-runnable for particular Supply Chain Rollup previously performed. with additional data displayed to designate the supply chain cost sources.

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