EBS LCM - Suggested Common Setup Steps for Landed Cost Management 'LCM' [ID 837161.

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Modified 28-JUL-2009 Type BULLETIN Status PUBLISHED

In this Document

Purpose

Scope and Application

EBS LCM - Suggested Common Setup Steps for Landed Cost Management 'LCM'

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Applies to:

Oracle Landed Cost Management - Version: 12.1 to 12.1.1

Information in this document applies to any platform.

Purpose

“Landed Cost Management” will be the solution for estimating, acquiring, and calculating the cost to
“land” products (goods or services) to an ultimate destination, inclusive of the related charges.

Scope and Application

Oracle Landed Cost Management enables organizations to gain insight into all of the “real” costs
associated with acquiring products including broker, terminal, insurance, and transportation fees as well
as duties and taxes.

EBS LCM - Suggested Common Setup Steps for Landed Cost Management 'LCM'

Suggested Common steps for LCM Setup Flow:

EBS LCM : How To Diagnose Issues With Landed Cost Management

In Procure To Pay Cycle [ID 860747.1]
 Setting Up Receiving Options
To use Oracle Landed Cost Management you must setup several receiving options.
Using the receiving options you specify whether Landed Cost Management will be used
as a pre-receiving application and you also specify the accounts that will be used
pertaining to Landed Cost Management in the accrual accounting process.

For more information on setting up receiving options, see the Setting Up chapter in the
Oracle Purchasing User's Guide.

Use the procedure to set up receiving options:

To Set Up Receiving Options:

1. Navigate to the Receiving Options page.

The Receiving Options page appears.

2. Select an Inventory organization from the list of values in the Inventory

Organization field.
3. Click Go.

The Receiving Options page appears, displaying the receiving options that
pertain to the Inventory organization you selected.
4. (Optional) Select the Pre-Receiving in LCM check box to indicate that you want
the organization to operate with Landed Cost Management as a pre-receiving
application.

Select this check box if you will need to review or collect landed cost information
before receiving activities occur. In the pre-receiving mode (Landed Cost as a
pre-receiving application), the received quantity is equal to the Landed Cost
shipment quantity and cannot be updated.

If not selected, Landed Cost Management will operate as a calculation service

without any need for user intervention.

In this case, the Landed Cost Management process will start in the Receiving
windows but all the integration and calculation for landed costs will be performed
as a calculation service using API's and concurrent programs and the create
button on the Shipments Workbench will not be available.

5. Select an account from the list of values in the Landed Cost Absorption field. This
account will be used during the receiving accrual accounting process.
6. Select an account from the list of values in the Invoice Price Variance field. This
account will be used during the receiving accrual accounting process.
7. Select an account from the list of values in the Exchange Price Variance field.
This account will be used during the receiving accrual accounting process.
8. Select an account in the Tax Price Variance field. This account will be used
during the receiving accrual accounting process.
9. Select an account in the Default Charge Variance field. This account will be used
during the receiving accrual accounting process.
EBS LCM : How To Diagnose Issues With Landed Cost Management
In Procure To Pay Cycle [ID 860747.1]
EBS LCM : How To Diagnose Issues With Landed Cost Management In Procure To Pay Cycle [ID
860747.1]

Modified 14-APR-2011 Type TROUBLESHOOTING Status PUBLISHE

D

In this Document
Purpose
Last Review Date
Instructions for the Reader
Troubleshooting Details
SYMPTOMS
FUNCTIONALITY
SETUP
DATA FLOW
PROCESSING OVERVIEW
VALIDATION
DIAGNOSTICS
DEBUG LOGGING
CODE FILES
PATCHES
References

Applies to:

Oracle Landed Cost Management - Version: 12.1.2 to 12.1.2 - Release: 12.1 to 12.1
Oracle Inventory Management - Version: 12.1.1 to 12.1.2 [Release: 12.1 to 12.1]
Information in this document applies to any platform.

Purpose

This document provides the reader with detailed information on how to troubleshoot an issue encountered during the Procure to pay cycle which is
integrated with Landed Cost Management (LCM).

Last Review Date

July 9, 2010

Instructions for the Reader

A Troubleshooting Guide is provided to assist in debugging a specific issue. When possible, diagnostic tools are included in the document to assist in troubleshooting.

Troubleshooting Details
SYMPTOMS

It is very important to understand as much about a problem as possible, in order to effectively assist in diagnosing the cause and solution. This
document has the information which helps in understanding the process flow and providing solutions to all the problems mentioned below.

1. Are you not able to generate charges for the LCM shipment in Shipments workbench?
2. Does the purchase order number not shown in the LOV of shipment lines in LCM shipment workbench while creating LCM shipment in Pre-
Receiving flow?
3. Does the Receipts form returns the error "No Records meet your search criteria" on giving the PO number as search criteria or "Invalid value for field
shipment_num" on giving the LCM shipment number as search criteria?
4. Does the Estimated Landed Cost get calculated incorrectly?
5. Does the Receiving transaction get stuck in Receiving Interface with LC_PENDING or LC_INTERFACED status?
6. Does the Landed Cost Integration Manager or Shipments Interface Import program not processing the records?
7. Does the Landed Cost Adjustment entries not getting created after Actual Landed Cost is calculated?

FUNCTIONALITY

Landed Cost Management feature can be used by enabling the inventory organization as LCM enabled and perform the purchase order receipts in that
organization and matching the invoice against those receipts so that the landed cost can be incorporated in the item cost and the accounting entries
will include the landed cost. Estimated Landed Cost (ELC) gets calculated while performing the PO receipts and Actual Landed Cost (ALC) gets
calculated after invoice matching is done.

LCM Integration with Receiving

Oracle Landed Cost Management application provides the option of calculating the Estimated Landed Cost and performing the receipts in two different
methods.

 Pre-Receiving scenario: LCM shipment has to be created in LCM Shipments workbench with all the charges associated to calculate the
estimated landed cost and then the purchase order receipt has to be created against the LCM shipment. You must have created the PO
before creating the LCM Shipment, since the LCM Shipment Lines refer to PO shipments. Multiple PO shipments with different vendors can
be combined in one LCM shipment and PO shipments pertaining to one particular vendor forms a shipment line group. Receipt will be
created at line group level. To summarize, one LCM shipment can have multiple shipment line groups and one line group can have multiple
shipment lines. Associated Charges can be modified manually from LCM Shipments workbench before calculating the landed cost even
though the amount for the charges are defined in Advanced Pricing.
 LCM as a service: Purchase order receipts can be created directly and the estimated landed cost will get calculated in the background
process by running some concurrent programs and there cannot be any manual intervention in managing the charges while calculating the
landed cost.

Following Oracle White Papers are the central documents that demonstrates the features of Landed Cost Management when integrated with Receiving
with the detailed screenshots

Note.762506.1 - Landed Cost Management Black Box Flow in Receiving

Note.779937.1 - Landed Cost Management Pre-Receiving Flow in Receiving Module
This includes the following information:

 Setups required to do a transaction in LCM enabled organization

 LCM Integration with Receiving - LCM as a Service
 LCM Integration with Receiving - Pre-Receiving Flow

LCM Integration with Payables

After performing the receipt and the Estimated Landed Cost is calculated, invoice needs to be matched with the receipt from Payables. LCM Integration
with Payables is for calculating Actual Landed Cost (ALC), irrespective of what flow we used for ELC: "Pre-Receiving" or "LCM as a service".

 First, the item invoice needs to be created and matched to the PO receipt.
 Then the charge invoice needs to be created for all the charges associated to the LCM shipment by choosing the matching type as Freight
or Miscellaneous and cost factor name as the charges used in LCM shipment at the time of ELC calculation.
 While creating the invoice for the charges, invoice header should have the supplier responsible for freight or other inbound supply chain
activities but while matching this invoice to the receipt, the supplier for the items against which PO receipt is made should be choosen. This
has to be done because the Actual Landed Cost that gets calculated based on the invoices should get mapped to the Estimated Landed
Cost already calculated. Receipt number is the only link to map the charges used in invoice to the corresponding charges used in LCM
shipment at the time of PO receipt. To get the receipt number for invoice matching, the supplier for the items against which PO receipt is
made has been used in the invoice matching form. Since the invoice for charges is matched to the PO receipt which has a different
supplier, the currency code used for charge invoices should be same as the one in PO against which the material is received.
  Both the item invoice and charge invoice have to be validated so that the invoice details will get populated in LCM interface tables.
 Now the program "Matches Interface import" and "Submit Pending shipments" have to be submitted from LCM responsibility to get the
Actual Landed Cost. Another way of submitting the pending shipments is via the Shipments Workbench UI itself, one by one.

LCM Integration with Costing

Accounting flow during the Procure to Pay cycle done in LCM enabled organization is explained in the following Note.
Note.782920.1 - How Does the Landed Cost Management Impacts the Accounting Flow in a Procure To Pay Cycle
This includes the following information:

 Accounting entries for RECEIVE and DELIVER transactions in Standard Costing and Average Costing
 Landed Cost Adjustment entries for RECEIVE and DELIVER transactions
 Accounting entries for LCM Adjustment Average Cost Update transaction
 How does the Actual Landed Cost information flows to Costing
 Accounting entries for Item invoice and Charge invoice
 Accounting entries for Return to Vendor and Debit memo

SETUP

Setups required to perform a transaction using Landed Cost Management are listed below.

1. Enable the LCM flag in inventory organization parameters and define the LCM Variance account. (Significance of this account is explained
inNote.782920.1)
2. Define the LCM accounts in Receiving options (Significance of this account is explained in Note.782920.1)
3. Enable the Pre-Receiving flag if required depending on the business requirement.
Navigation: Purchasing responsibility > Setup > Organizations > Receiving Options
4. Define the Organization Access to the inventory organization which is enabled for LCM for the responsibility 'Landed Cost Management' without
which the organization will not appear in the LOV of LCM workbench.
Navigation: Inventory responsibility > Setup > Organizations > Organization Access

5. Define the Cost Factors in Purchasing which will be used as charges in the LCM Shipment. Based on the allocation basis
(quantity/value/weight/volume) and pricing basis (per unit or fixed amount or % of line price) defined for the charges in the Cost factor page, the
allocation of amount to the charges will be decided.
Navigation: Purchasing Responsibility > Setup > Purchasing > Cost Factors

6. Define the LCM options, Shipment line types and Shipment types in LCM workbench
7. Associate the default Shipment line type to the Shipment type in LCM workbench
8. Define the Party types allowed, Party usages allowed and Source types allowed for the Shipment types defined in LCM workbench
9. Define the modifiers in Advanced Pricing for the charges that need to be used in LCM shipment. This setup shows whether the charges need to be
applied at PO line level or header level and the rate at which the charge allocation should be done.
Navigation: Purchasing Responsibility > Advanced Pricing > Modifiers > Modifier setup

This setup is not mandatory and it depends on the business requirement. If the Advanced Pricing is not used, PO price and non recoverable tax
amount alone will be considered for calculating the estimated landed cost. In case of Pre-Receiving scenario, the charges can be manually added to
calculate the landed cost even without Advanced Pricing setups where as in LCM as a service, Advanced Pricing setup is mandatory if the charges
need to be included in calculating the landed cost.
10. Define the following Landed Cost Management profile options

INL: Default Currency Code for QP Charges Generation

INL: Default Currency Conversion Type for QP Charges Generation
INL: Default Shipment Type for Open Interface

11. Define the following QP profile options at Landed Cost Management responsibility level

QP: Blind Discount Option = Yes

QP: Licensed for Product = Purchasing
QP:Item Validation Organization = <Set the item master organization>
QP:Pricing Perspective Request Type = Purchase Order
QP:Pricing Transaction Entity = Procurement
QP:Source System Code = Oracle Purchasing
DATA FLOW

It is very important to know the table level data flow in the Landed Cost Management process so that data involved in various transactions can be
analyzed and the issues can be fixed.
Please refer to the attachment to understand the data flow and process flow in the Landed Cost Management process. This includes the following
scenarios.

LCM Integration with Receiving - LCM as a Service

LCM Integration with Receiving - Pre-Receiving
LCM Integration with Payables
LCM Integration with Costing

LCM Data flow

PROCESSING OVERVIEW

The following is a very simplified overview of Landed Cost Management process when it is integrated with Purchasing,Costing and Payables. These
details change between releases and are intended to give a basic technical appreciation of the processing, so the most suitable information can be
analyzed depending on the issue.

LCM RCV Integration - LCM as a service

As explained in the functionality section above, PO receipts can be performed directly and the landed cost will get calculated in the background
process in this scenario.

 On saving the receipts in LCM enabled inventory organization, RCV does the validation and inserts the record in rcv_transactions_interface
(RTI) with LC_PENDING status and processing mode as Batch.
 Landed Cost Integration Manager has to be launched from Purchasing responsibility so that the RCV package
RCV_CALL_LCM_WS.insertLCM will call the LCM package INL_INTEGRATION_GRP.Import_FromRCV to derive the data from RCV after
RCV does the validation and the records get inserted into inl_ship_headers_int and inl_ship_lines_int by the LCM package
INL_INTEGRATION_GRP.Insert_LCMInterface and the processing_status_code in RTI gets updated to LC_INTERFACED.
 Then the Shipments Interface Import program has to be submitted from LCM responsibility and the LCM package
INL_INTERFACE_PVT.Import_LCMShipments will process the data from LCM interface tables by calling the QP (Advanced Pricing) to
calculate the estimated landed cost (ELC) and the LCM packages - INL_INTEGRATION_GRPCAll_StampLC and
INL_INTEGRATION_GRPCall_UpdateRCV will populate the unit landed cost and processing status code as PENDING in RTI by calling the
RCV package RCV_UPDATE_RTI_LC_LCupdate_rti. All the charges defined in Cost factors page which have the amount defined in
modifiers in Advanced Pricing will be considered for calculation of ELC.
 Once the Landed Cost Calculation engine is executed for the shipments that got created from RCV, inl_allocations would get populated
with adjustment_num as 0 with all the charges considered for ELC calculation and unit landed cost gets stored in this table which can be
retrieved by the view inl_shipln_landed_costs_v.
 When the record in RTI has the processing_status_code as PENDING, Receiving Transaction Processor (RTP) automatically picks the
record and populates the receiving transactions in rcv_transactions with unit landed cost.
 For subsequent receiving transactions, INL_LANDEDCOST_PUB.Get_LandedCost Public API will be called by Receiving to get the latest
landed cost. For example, if the RETURN transaction is performed after the Actual Landed Cost is calculated, this transaction will be
populated with the actual landed cost and not with the estimated landed cost populated for the parent RECEIVE transaction.
 If Receiving is done through Receiving Open Interface (ROI) in LCM enabled organization which is set to 'LCM as a service', then
Receiving interface can be populated as a normal ROI receipt but the pre-processor will do the validation and updates the
processing_status_code to LC_PENDING so that this record gets processed by LCM to calculate the landed cost.

LCM RCV Integration - Pre-Receiving Flow

As explained already, LCM shipment has to be created to calculate the Estimated Landed Cost in order to perform the purchase order receipts and the
receipt needs to be performed by choosing the source as LCM against the LCM shipment number.

 On creating LCM shipments in LCM Shipments workbench, records get populated in inl_ship_headers_all,inl_ship_line_groups and
inl_ship_lines_all.
 Charges need to be generated for the shipment from LCM shipments workbench by choosing the option "Generate Charges" so that the
QP will be called to calculate the estimated landed cost. If Advanced Pricing is not used, charges has to be manually entered by choosing
the 'Manage Shipments' option.
 After submitting the LCM shipment, records get populated in the table inl_allocations with unit landed cost and this landed cost can be
retrieved by the view inl_shipln_landed_costs_v.
 The code flow mentioned in 'LCM as a service' is applicable for Pre-Receiving scenario also in populating the unit landed cost in Receiving
Interface. Once the rcv_headers_interface and rcv_transactions_interface with unit landed cost is populated, RTP is automatically called in
online mode which will populate the records in rcv_shipment_headers with LCM shipment number and rcv_shipment_lines with
shipment_line_status_code as EXPECTED, LCM shipment_line_id and unit landed cost.
 At this point, Receipts form will return the lines to be received on choosing the source as LCM and querying the LCM shipment number. On
saving the receipt, records get inserted into RTI with PENDING status along with the unit landed cost. RTP processes the records from
Receiving Interface and populates the receipt number in rcv_shipment_headers, updates the shipment_line_status_code in
rcv_Shipment_lines to FULLY RECEIVED and receiving transactions into rcv_transactions with unit landed cost.
  The processing logic for subsequent receiving transactions in Pre-Receiving flow is same as the one used for 'LCM as a service' which is
explained above.
 If Receiving is done through Receiving Open Interface (ROI) in LCM enabled organization which is set to Pre-Receiving, then the
rcv_headers_interface and rcv_transactions_interface should be populated similar to creating the ASN shipment with the shipment number
through ROI. But the shipment number that has to be populated in rcv_headers_interface should be the one created in LCM shipments
workbench. Receiving should be done similar to performing a receipt against an ASN using ROI.

LCM integration with Payables

 On validating the item invoice and charge invoice, AP code does the validation and inserts the record into inl_matches_int and
inl_match_amounts_int. Then the program "Matches Interface import" has to be submitted from Payables to process the record from LCM
interface tables and populate into inl_matches.
 At this point, inl_ship_headers_all would be having the record with Pending matching flag as Y and inl_ship_lines_all would be having the
additional record with adjustment_num getting incremeted as 1,2,3 and so on to the moment you collect/process them into LCM.
 Now the LCM program "Submit Pending Shipments" has to be submitted which will populate the record into inl_allocations with unit Actual
Landed Cost and this can be retrieved by the view inl_shipln_landed_costs_v.

LCM integration with Costing

 On performing the receiving transactions, Costing generates the accounting entries in rcv_treceiving_sub_ledger for RECEIVE transaction
and mtl_transaction_accounts for DELIVER transaction which includes the landed cost information also.
 Actual Landed Cost calculated after the invoice is validated and imported to LCM will be populated in Costing interface table
cst_lc_adj_interface by the LCM code passing the rcv_transaction_id available in rcv_transactions.
 On submitting the program "Landed Cost Adjustment Processor" from Cost Management, record gets processed from cst_lc_adj_interface
by the Costing code to populate the landed cost adjustment accounting entries in rcv_receiving_sub_ledger and mtl_transaction_accounts.
 If the receiving organization is set to Average Costing, Average cost update transaction will get created in mtl_material_transactions for
Landed Cost Adjustment by the Costing code and the corresponding accounting entries would be created in mtl_transaction_accounts.
 Accounting entries for these landed cost adjustment events will get created in SLA and GL once the Create Accounting - Cost Management
concurrent program is submitted.

Note: Please refer to Note.782920.1 - EBS LCM : How Does the Landed Cost Management Impacts the Accounting Flow in a Procure To Pay Cycle to
understand the impact of LCM on accounting entries in Procure to Pay cycle.

VALIDATION

This Validation section discusses some of the possible causes for the symptoms mentioned in this document.

 Invoice match option should be set to Receipt in the purchase order shipments to perform the LCM shipment and to calculate the landed
cost.
 Purchase order distribution having destination type as Inventory alone can be received in LCM enabled organization.
 LCM_flag should be Y in po_line_locations_all to create the LCM shipment and generate the charges or perform a receipt in LCM enabled
organization
 Purchase Order number will appear in the LOV of shipment lines in LCM workbench while creating the LCM shipment in Pre-Receiving flow
only if the third party site name entered under line groups in shipment headers of LCM workbench is same as the supplier site for which the
PO that needs to be received is raised.
 Need-by-date should be available in the PO shipments so that estimated landed cost will be calculated considering the amount for the
charges defined as per Advanced Pricing.
 If the QP profile options are not set with the right values as mentioned in the SETUP section above, estimated landed cost will not be
calculated based on the amounts allocated for the charges in Advanced Pricing.
 If the receiving organization is enabled for Pre-Receiving, it is not possible to perform receipts against POs having inventory destination by
querying the PO number as it will throw the error "No records meet your search criteria". Instead, the receipts should be performed by
choosing the source as LCM and querying the LCM shipment number.
 For Pre-Receiving scenario, it is not possible to do partial receipts or over receipts against LCM shipment as the quantity field in Receiving
forms will be grayed out.
 If the receiving organization is enabled for 'LCM as a service', receipts performed against POs set to inventory destination will get stuck in
receiving interface with processing_mode_code as Batch even though the profile option RCV:Processing mode is set to Online or
Immediate and the process_status_code will be LC_PENDING.
 For LCM as a service (blackbox scenario), Landed Cost Integration manager will not process the records from Receiving Interface if the
profile option INL: Default Shipment Type for Open Interface has not been set with the shipment type and the records in receiving interface
will remain as LC_PENDING.
 If the inventory organization is process enabled, then it is not possible to enable the LCM flag for that organization in organization
parameters. But this is a limitation in release 12.1.1 and LCM will be supported for Process enabled organization from release 12.1.2
  Pay on Receipt will not create the invoice automatically on performing the receipt in LCM enabled organization.
 Retroactive Price update program will not create any retroactive adjustment accounting for the receipts performed in LCM enabled
organization
 It is not possible to create the LCM shipment or calculate the landed cost for RMA,internal order and consigned transactions. But this is
limited to release 12.1.1 and 12.1.2
 It is not possible to disable the LCM flag in organization parameters once the transaction is performed if the organization is set to Average
Costing
 It is not possible to switch from Pre-Receiving to LCM as a service flow or vice versa once the transaction is performed in that organization.

DIAGNOSTICS

In analyzing issues related to Landed Cost Management process, it is important to check some of the background data. Hence run the diagnostics
script available in the following Note to analyze the data which will show the data related to Purchasing, Organization parameters setup, Receiving,
Costing and LCM.

Note.795387.1 - Landed Cost Management Diagnostic script