6

Cost Management Cloud

Fulfillment Flow Costing

Vinit Poddar
Director, Product Management
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, timing, and pricing of any features or functionality described for Oracle’s
products may change and remains at the sole discretion of Oracle Corporation.
Statements in this presentation relating to Oracle’s future plans, expectations, beliefs, intentions and
prospects are “forward-looking statements” and are subject to material risks and uncertainties. A
detailed discussion of these factors and other risks that affect our business is contained in Oracle’s
Securities and Exchange Commission (SEC) filings, including our most recent reports on Form 10-K
and Form 10-Q under the heading “Risk Factors.” These filings are available on the SEC’s website or on
Oracle’s website at http://www.oracle.com/investor. All information in this presentation is current as
of September 2019 and Oracle undertakes no duty to update any statement in light of new
information or future events.

2 Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

Agenda

• Overview
• Use Case
• Business Flows

3 Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

Fulfillment Business Flows
✓ Supply Chain Orchestration Whitepaper

Contract
Manufacturi
ng

Revenue/
Configured
COGS
to Order
Matching

Fulfillment
Business
Flows
Internal
Consigned
Material
Inventory
Transfers

Back-to-
Drop Ship
Back Orders

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

Back to Back Order

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

Back to Back Order

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

 Revenue COGS Matching

Sales Orders Shipping Receivables

• Cost of Goods Sold

• Deferred Cost of Goods Sold
• Revenue

➢ At time of shipping, Costing creates Deferred COGS entries based on item cost.
➢ Receivables creates accounting entries for Revenue during invoicing.
➢ Costing matches Revenue and COGS, and calculates Gross Margin as the difference
between Revenue and COGS.

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

 Back to Back Orders Accounting - Buy
[1 Q * 2000 P] Create Sales Order
Create Purchase Requisition and Purchase
[1 Q * 1500 P]
Order
Receiving Inspection DR 1500
Receive Accrual CR 1500
Receipt
Transfer Transactions from Receiving to
Costing Accounting
Create Receipt Accounting Distributions
Create Accounting

Deliver / Put Away DI

S
Inventory DR 1500
I Receiving Inspection CR 1500
Transfer Transactions from Inventory to N T
Costing T RI
Create Cost Accounting Distributions E B S
R U L
Create Accounting F T A
A I
Shipment C Cost O
Deferred COGS DR 1500
E N
Transfer Transactions from Inventory to Accounting Inventory CR 1500
S
Costing
Import AutoInvoice
Create Accounting Receivable DR 2000
Revenue CR 2000
Import Revenue Lines
Create Cost Accounting Distributions COGS DR 1500
Create Accounting Deferred COGS CR 1500

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

Consigned Inventory – Process Flow

Create Create
Purchasing consignment consignment
order
agreement

Receive
Receiving consigned
inventory

Calculate Calculate cost of

cost of consumption and
Cost Management consigned create supplier accrual
Inventory

Consumption Create
Inventory Management (ownership consumption
change) advice

Generate Pay
invoice supplier

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

Consigned Inventory – Procure to Pay
✓ Consigned Inventory Accounting Overview

Consigned Consigned Receipt Consumption

Consigned PO Receipt Goods
• Dr. Consigned Clearing Owned
• Dr. Consigned Accrual
• Cr. Consigned Accrual • Cr. Consigned Clearing
Consigned PO Delivery Transferred to Owned Issue
• Dr. Consigned Inventory • Dr. Consigned Clearing
• Cr. Consigned Clearing • Cr. Consigned Inventory

Trade in Transit Receipt

Trade Receipt Accrual • Dr. Trade in Transit
• Dr. Trade Clearing • Cr. Trade Clearing
• Cr. Supplier Accrual
Transferred to Owned Receipt
• Dr. Inventory
Receipt Accounting
• Cr. Trade in Transit
Cost Accounting
Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.
Contract Manufacturing
✓ Contract Manufacturing Options

Contract Manufacturing helps

OEMs:
• Outsource the manufacturing Customer Contract
process Order Management Manufacturer

• Outsource build-to-plan or
build-to-order
• Supply components to the
contract manufacturer Order Promising/ Value Supply Chain Orchestration
Chain Planning Manufacturing

• Track and monitor the

outsourced manufacturing
process
Track and monitor inventories
Procurement Logistics
•

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

Contract Manufacturing Process
Contract
Manufacturing
Organization (Virtual)
Work Order in MFG
Supply Requests from
DOO/GOP/VCP for Contract CM Finished Good CM Finished Good Item
Manufactured Item Item
CM Service Item

OEM Component 01

OEM Component 02

SCO

Purchase Order
Purchase Order in Receipt
PRC
CM Service Item
Contract
Manufacturer

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

 Drop Shipment ✓ Drop Ship Flows

Physical Shipment
Supplier Customer

Order ASN

Trade Receipt Accrual

Trade Sale Issue

Your customer places an The system automatically
order with you places an order with your
supplier
Purchasing/ Drop Ship Receipt
Selling
Trade In-Transit Business Unit Drop Ship Delivery

Your supplier ships directly to Physical Flow

your customer Logical Flow

Single BU Use Case

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

 Internal Material Transfers

Supply Chain Planning,

Generate Internal Transfer
Min-Max, Web Service Recommendations

Supply Chain Orchestration, Enrich Rules Price and Tax

Supply Chain Financial Orchestration

Inventory Management,
Manage Transfer Orders Fulfill Transfer Orders
Order Management

Shipping, Receiving, Inventory

Management Pick, Pack, and Ship Receive and Put
Away

Costing,
Financial
Cost Accounting
Supply Chain Financial Orchestration Orchestration

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

 Internal Material Transfers – Profit Tracking
BU: Physical Shipment BU:
China ($10.00) US West ($11.55)

Financial Transfer
Financial Transfer

Mark up 10%

Mark up 5%
$1.00

$0.55
BU: Singapore
($11.00)

Cost Structure with Internal Profit Tracking Enabled: Cost Structure Without Internal Profit Tracking Enabled
BU – China: Material $10.00 BU – China: Material $10.00
BU – Singapore: Material $10.00 BU – Singapore: Material $11.00
Profit-China $1.00 BU – US West: Material $11.55
BU – US West: Material $10.00
Profit-China $1.00 No visibility of internal profit earned
Profit-Singapore $0.55

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

Configure to Order
✓ CTO Implementation Tips

CTO Work Orders from

Manufacturing

Start by selecting ‘Published Enable that scenario Perform Build and

Rollup for CTO Publish CTO item cost
Cost Planning Scenario’ for CTO

1) Creates a new scenario version

2) Cost of Non-CTO Items is obtained from ‘Published
These processes can be scheduled to
Cost Planning Scenario’
obtain the Configured Item cost
automatically

Same step for CTO and Non CTO

CTO-specific step

Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted. PTT Created Content.

24 Confidential – © 2020 Oracle Internal/Restricted/Highly Restricted