Supply Chain Management Cloud

Landed Cost Management

Sreeni Devireddy
Product Management Director
PTS, Oracle Development

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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
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Agenda
1 Why?
2 How does it work?
3 Setup
4 Demo

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Agenda
1 Why?
2 How does it work?
3 Setup
4 Demo

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Why?

• 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

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Why?
• Landed cost charges are the direct and incidental costs incurred in bringing a
product to its final destination to be included in the inventory value.
• Freight and transportation costs, from the supplier to the buyer's ultimate location.
• Costs associated with the physical preparation of the goods in order for them to be transported such as labeling,
picking, packaging and packing goods, including all inventory, distribution center, and warehouse costs.
• Ship loading, unloading, demurrage, and other assessorial costs.
• Haulage, drayage, storage, and detention fees.
• Equipment and container fees.
• Sales tax and value added tax (VAT).
• Import and export charges, import VAT fees, customs brokerage fees, and excise taxes.
• Port or pier fees, wharfage, and harbor maintenance fees.
• Currency revaluations, with currency fluctuations and multiple currency conversions.

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Why?

• Inventory value includes

total landed cost
• Accurate product
profitability analysis
• Corrective action possible
when landed costs trend
away from plan
• Better sourcing decisions

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Why?
• Reporting in Landed Cost Management is
primarily driven by analytics which are
based on an Essbase cube.
• All the reporting is based on a single
source of truth: Receipt Level Allocated
Landed Cost Charges.
• Analysis can be done on the following
dimensions:
• Business Unit
• Inventory Organization
• Route
• Third Party Supplier
• Charge
• Item Category
• Item
• Time Period

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Agenda
1 Why?
2 How does it work?
3 Setup
4 Demo

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 Invoice Matched to UPS Service PO Invoice Matched to GE Service PO
With Service PO Service POs
Accrual 500 Dr Accrual 1000 Dr
UPS ($500) IPV 100 Dr IPV 200 Dr
Liability 600 Cr Liability 1200 Cr
Material PO Trade Operation
GE ($1000) Associate Invoice to TO Associate Invoice to TO
Laptop ($4000) Freight
Expense 80 Cr Expense 160 Cr
Invoices Receiving Inspection 80 Dr Receiving Inspection 160 Dr
Printer ($1000) Insurance Expense 20 Cr Expense 40 Cr
UPS ($600) Receiving Inspection 20 Dr Receiving Inspection 40 Dr

GE ($1200) Receiving Inspection 80 Cr Receiving Inspection 160 Cr

Inventory 80 Dr Inventory 160 Dr
Receiving Inspection 20 Cr Receiving Inspection 40 Cr
Inventory 20 Dr Inventory 40 Dr

Receive Material PO Receive UPS Service PO Receive GE Service PO

Accrual 4000 Cr Accrual 500 Cr Estimated Costs:

Accrual 1000 Cr
Laptop = 4000 + 400 + 800
Receiving Inspection 4000 Dr Expense 500 Dr Expense 1000 Dr Printer = 1000 + 100 + 200
Accrual 1000 Cr
Receiving Inspection 1000 Dr Expense 400 Cr Expense 800 Cr
Receiving Inspection 400 Dr Receiving Inspection 800 Dr Actual Costs:
Put-Away Material PO Expense 100 Cr Expense 200 Cr
Receiving Inspection 100 Dr Receiving Inspection 200 Dr Laptop = 4000 + 400 + 800 +
Receiving Inspection 4000 Cr 80 + 160 = 5440
Inventory 4000 Dr Receiving Inspection 400 Cr Receiving Inspection 800 Cr
Receiving Inspection 1000 Cr Inventory 400 Dr Printer = 1000 + 100 + 200 +
Inventory 800 Dr
Inventory 1000 Dr 20 + 40 = 1360
Receiving Inspection 100 Cr Receiving Inspection 200 Cr
Inventory 100 Dr Inventory 200 Dr
* Actual / Average Costing

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 Receive Material PO Put-Away Material PO
Without Service PO Accrual 4000 Cr Receiving Inspection 4000 Cr
Receiving Inspection 4000 Dr Inventory 4000 Dr
Accrual 1000 Cr Receiving Inspection 1000 Cr
Material PO Trade Operation Invoices Receiving Inspection 1000 Dr Inventory 1000 Dr
Laptop – 40*100 Freight – 10% UPS ($600) Landed Cost 400 Cr Receiving Inspection 400 Cr
($4000) ($500)
Receiving Inspection 400 Dr Inventory 400 Dr
Printer – 20*50 Insurance – 20% Landed Cost 100 Cr Receiving Inspection 100 Cr
($1000) ($1000)
GE ($1200) Receiving Inspection 100 Dr Inventory 100 Dr

Landed Cost 800 Cr Receiving Inspection 800 Cr

Receiving Inspection 800 Dr Inventory 800 Dr
Landed Cost 200 Cr Receiving Inspection 200 Cr
Estimated Costs: Estimated Costs Actual Costs Receiving Inspection 200 Dr Inventory 200 Dr
(Per Unit): (Per Unit):
Laptop = 4000 + 400 + 800 =
UPS Invoice GE Invoice
5200 Laptop : 130 Laptop : 136
PRC : 100
Printer = 1000 + 100 + 200 = FRT : 10 Expense 600 Dr Expense 1200 Dr
PRC : 100
1300 INS : 20 Liability 600 Cr Liability 1200 Cr
FRT : 10
INS : 20
Printer : 65 FRT : 2 Associate Invoice to TO Associate Invoice to TO
Actual Costs: PRC : 50 INS : 4
FRT : 5 Landed Cost 80 Cr Landed Cost 160 Cr
Laptop = 4000 + 400 + 800 + INS : 10 Printer : 68 Receiving Inspection 80 Dr Receiving Inspection 160 Dr
80 + 160 = 5440
Landed Cost 20 Cr Landed Cost 40 Cr
PRC : 50 Receiving Inspection 20 Dr Receiving Inspection 40 Dr
Printer = 1000 + 100 + 200 +
FRT : 5
20 + 40 = 1360
INS : 10 Receiving Inspection 80 Cr Receiving Inspection 160 Cr
FRT : 1 Inventory 80 Dr Inventory 160 Dr
INS : 2
* Actual / Average Costing Receiving Inspection 20 Cr Receiving Inspection 40 Cr
Inventory 20 Dr Inventory 40 Dr

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Agenda
1 Why?
2 How does it work?
3 Setup
4 Demo

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Setup
UPS-56749

Material PO Trade Operation Invoices

Laptop ($4000) Freight – 10% UPS ($547.5)
($500)

Printer ($1000) Insurance – 20%

($1000)
GE ($1095)
Actual Costs:

Laptop : 132.85

GEC-87523 PRC : 100

FRT : 10
INS : 20
Reference Type FRT : 0.95
INS : 1.90 Cost Element Mapping
(Manage Cost Component Mappings Task)
Charge Names Printer : 66.425

PRC : 50
Trade Operation Template FRT : 5
INS : 10
FRT : 0.475
INS : 0.95

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Agenda
1 Why?
2 How does it work?
3 Setup
4 Demo

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 Receive Material PO Put-Away Material PO
Without Service PO - Demo Accrual 4000 Cr Receiving Inspection 4000 Cr
Receiving Inspection 4000 Dr Inventory 4000 Dr
Accrual 1000 Cr Receiving Inspection 1000 Cr
Material PO Trade Operation Invoices Receiving Inspection 1000 Dr Inventory 1000 Dr

Laptop – 40*100 Freight – 10% UPS ($547.5) Landed Cost 400 Cr Receiving Inspection 400 Cr
($4000) ($500) Receiving Inspection 400 Dr Inventory 400 Dr
Landed Cost 100 Cr Receiving Inspection 100 Cr
Printer – 20*50 Insurance – 20%
($1000) ($1000)
GE ($1095) Receiving Inspection 100 Dr Inventory 100 Dr

Landed Cost 800 Cr Receiving Inspection 800 Cr

Receiving Inspection 800 Dr Inventory 800 Dr
Landed Cost 200 Cr Receiving Inspection 200 Cr
Receiving Inspection 200 Dr Inventory 200 Dr
Estimated Costs: Actual Costs:

Laptop : 130 Laptop : 132.85 UPS Invoice GE Invoice

PRC : 100 PRC : 100 Expense 547.5 Dr Expense 1095 Dr

FRT : 10 FRT : 10 Liability 547.5 Cr Liability 1095 Cr
INS : 20 INS : 20
FRT : 0.95 Associate Invoice to TO Associate Invoice to TO
Printer : 65 INS : 1.90
Landed Cost 38 Cr Landed Cost 76 Cr
PRC : 50 Printer : 66.425
Receiving Inspection 38 Dr Receiving Inspection 76 Dr
FRT : 5
PRC : 50 Landed Cost 9.5 Cr Landed Cost 19 Cr
INS : 10
FRT : 5 Receiving Inspection 9.5 Dr Receiving Inspection 19 Dr
INS : 10
FRT : 0.475 Receiving Inspection 38 Cr Receiving Inspection 76 Cr
INS : 0.95 Inventory 38 Dr Inventory 76 Dr
Receiving Inspection 9.5 Cr Receiving Inspection 19 Cr
* Actual / Average Costing
Inventory 9.5 Dr Inventory 19 Dr

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