Cost Management Cloud | Workshop Agenda

Day 1 Day 2 Day 3 Day 4

ü Receipt ü Discrete ü Costing of Fulfillment ü Supply Chain Financial

Accounting Manufacturing Costing Flows Orchestration

ü Cost Accounting ü Process Manufacturing ü Landed Cost

Costing Management

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Cost Management Cloud
Costing of Fulfillment Flows

Vinit Poddar
Product Management Director
Oracle Development
Safe harbor statement

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Oracle undertakes no duty to update any statement in light of new information or future events.

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Agenda

• Overview
• Use Case
• Business Flows
 Overview | Fulfillment Business Flow
ü Supply Chain Orchestration Whitepaper

Back-
to-Back
Orders
Revenue/
Configure
COGS
to Order
Matching

Fulfillment
Business
Flows
Drop Consigned
Shipment Order

Internal Contract
Material Manufact
Transfers uring

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Agenda

• Overview
• Use Case
• Business Flows
 Use Case | Back-to-Back Order

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 Use Case | Back-to-Back Order

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 Use Case | Revenue COGS Matching

Sales Orders Shipping Receivables

• Cost of Goods Sold

• Deferred Cost of Goods Sold
• Revenue

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

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 Use Case Accounting | Back to Back Order | Accounting Perspective | Buy
Qty: 10, Price: 140
ü Transfer Transactions from Receiving to Costing ü Transfer Transactions from Inventory to Costing
ü Create Receipt Accounting Distributions ü Create Cost Accounting Distributions
o Charge Account ü Create Accounting ü Create Accounting
o Accrual Account
o Charge Account
o Variance Account
Material Overhead
Qty: 10, Price: 95 Qty: 10, Price: 95
2% of Material Cost

Sales Order Requisition Purchase Order Receipt Put Away

DR Receiving Inspection* 950 DR Inventory 950

CR Accrual 950 DR Inventory 19
CR Receiving Inspection* 950
DR Accrual 950
CR Liability 950 Vendor Invoice CR Material Overhead
Absorption* 19

ü Import AutoInvoice
DR Receivable 1,400 ü Create Accounting
CR Revenue 1,400 Customer Invoice Shipment

DR Deferred COGS* 969

ü Import Revenue Lines CR Inventory 969
ü Create Cost Accounting Distributions
ü Create Accounting
COGS Recognition

DR COGS* 969
CR Deferred COGS* 969

* Mapping Sets Receipt Accounting Cost Accounting

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Agenda

• Overview
• Use Case
• Business Flows
 Business Flows | Consigned Inventory | Process Flow

Create Create
Purchasing consignment
agreement
consignment
order

Receive
Receiving consigned
inventory

Calculate Calculate cost of

cost of
Cost Management consigned
consumption and
create supplier
Inventory accrual

Consumption Create
Inventory Management (ownership
change)
consumption
advice

Generate Pay
invoice supplier

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 Business Flows | Consigned Inventory | Procure to Pay
ü Consigned Inventory Accounting Overview

Consigned Consigned Receipt Consumption

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

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 Business Flows | Contract Manufacturing
ü Contract Manufacturing Overview

Contract Manufacturing helps

OEMs:
• Outsource the manufacturing
process Customer Contract
Manufacturer
• Outsource build-to-plan or
Order Management

build-to-order
• Supply components to the
contract manufacturer
• Track and monitor the
outsourced manufacturing Order Promising/ Value
Chain Planning
Supply Chain Orchestration
Manufacturing
process
• Track and monitor inventories

Procurement Logistics

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 Business Flows | 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 PRC Receipt
CM Service Item
Contract
Manufacturer

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 Contract Manufacturing | Accounting Perspective
ü Transfer Transactions from Receiving to Costing ü Transfer Transactions from Inventory to Costing
ü Create Receipt Accounting Distributions ü Transfer Transactions from Production to Costing
ü Create Accounting ü Create Cost Accounting Distributions
ü Create Accounting

Receipt Accounting
Work Order Issue DR WIP Valuation*
Sales Order Work Order
(Raw Materials) CR Inventory Valuation*

DR Receiving Inspection*
CR Accrual#
Requisition Purchase Order Receipt Work Order DR Inventory Valuation*
(Contract Charges) (Contract Charges) (Contract Charges) Completion CR WIP Valuation*

DR Accrual# Put Away DR Inventory Valuation*

Vendor Invoice
CR Liability** (Contract Charges) CR Receiving Inspection*
DR/CR WIP Valuation*
Payables CR/DR Respective Variance*
(Standard Costing only)
DR WIP Valuation* Work Order Issue
Work Order Close
CR Inventory Valuation* (Raw Materials)
ü Import AutoInvoice
ü Create Accounting
DR Receivable$ Customer Invoice Shipment
CR Revenue $

Receivables DR Deferred Cost Of Goods Sold* CR Inventory Valuation*

* Mapping Sets
** Payables Common Option
DR Cost Of Goods Sold*
COGS Recognition CR Deferred Cost Of Goods Sold*
# Transaction Account Builder ü Import Revenue Lines
$ Auto Accounting ü Create Cost Accounting Distributions
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 Business Flows | Internal Material Transfer | Process Flows

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
Supply Chain Financial Orchestration Cost Accounting
Orchestration

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 Business Flows | Internal Material Transfer | Accounting Perspective
Transfer Type – In Transit

Org Event Accounting Entry DR/CR Application

Transfer Order Trade In-Transit Valuation DR
Inter org
Shipping Inventory Valuation CR
Shipment
Org
(Source) Trade In Transit Interorganization Receivables DR
Issue Trade In-Transit Valuation CR Cost
DR
Accounting Transfer Type - Direct
Trade In Transit Trade In-Transit Valuation
Receipt Trade Clearing CR
Org Event Accounting Entry DR/CR Application
Transfer Order Inventory Valuation DR
Transfer Order Trade In-Transit Valuation DR
Receiving Inter org Receipt Receiving Inspection CR Inter org
Org Shipping Inventory Valuation CR
Shipment
(Target) Transfer Order Receiving Inspection DR Org
Receipt (Source) Trade In Transit Interorganization Receivables DR
Trade In-transit Valuation CR Receipt Issue Trade In-Transit Valuation CR
Trade Clearing DR Accounting Cost
Trade Receipt
DR Accounting
Accrual CR Trade In Transit Trade In-Transit Valuation
Inter Organization Payables
Receipt Trade Clearing CR
Receiving Transfer Order Inventory Valuation DR
Org Inter org
Trade In-transit Valuation CR
(Target) Receipt

Trade Receipt Trade Clearing DR Receipt

Accrual Accounting
Interorganization Payables CR

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 Business Flows | Internal Material Transfer | 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

• Will be discussed in detail in “Supply Chain Financial Orchestration” session

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 Business Flows | Drop Shipment
ü Drop Ship Flows

Physical Shipment
Supplier Customer

Order ASN

Trade Receipt Accrual

Trade Sale Issue

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

Physical Flow
Your supplier ships directly to Logical Flow
your customer

Single BU Use Case

• Will be discussed in detail in “Supply Chain Financial Orchestration” session

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 Business Flows | Configure To Order
ü CTO Implementation Tips

ü Automatic Cost Rollup

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
Cost Planning Scenario’
to obtain the Configured Item cost
automatically

Same step for CTO and Non CTO

CTO-specific step

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Thank You

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