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Process Costing Overview & Setup TOI

Process Costing Enhancements
• Common Inventory
• Organization Structure
• OPM Costing to skip Discrete Organizations
• Support for transfers from Process to Discrete Organizations
• Usability improvements
• Menu Changes
• Set up changes
• Industry standard terminologies
• Inquiry Screens
 OPM Costing – Release 11i

Order
GMI Purchasing GMD, GME
Management

Cost Setup Calculate Cost Store Costs MAC Oracle GL

 OPM Costing – Release 12

Oracle Order
Purchasing GMD, GME
Inventory Management

Cost Setup Calculate Cost Store Costs SLA Oracle GL

Organization Structure
Parent
Ledger
Company

OPM Company Legal Entity Operating Unit

Plant or Lab

Inventory Org
OPM
Warehouse
Sub-Inventory

Locator Locator

11.5.10 Release 12
Organization Structure

• OPM Company migrated to the Legal Entity (LE)

• If multiple 11.5.10 companies share the same LE, consider moving them to
separate LEs, if possible
Industry Standard Terminologies
11i Terminology 12 Terminology

Cost Method Cost Types

Burdens Overheads

Percentage Burdens Percentage Overheads

PM Batch Detail (Actual cost

Production Batch
transaction view)

PCO account COGS account

Cost Component Class Usages:

Material – Resource - Overhead
Cost Detail – FM Route - Burdens
 Item Definitions

Ensure for Asset Items,

Inventory Asset Value
(in Costing Tab) &
Process Costing Enabled
Flags are set.
Organization
The Costing Method on Org
Parameters is not relevant for
Process Orgs. Set up Valuation
Cost Type in Fiscal Policy
OPM Costing in Converged Inventory
Setup – Cost Types

Lot Cost is now

a independent
cost method
OPM Costing in Converged Inventory
Cost Calculation
• Cost Roll up, Actual Cost Process, and Lot Cost Process will be
run for a Legal Entity
• Resource costs stored at a legal entity level or at each
organization
 OPM Costing in Converged Inventory
Setup – Resource Costs

Cost
captured at
a Legal
Entity level
Transfers between Process and
Discrete Organizations
• Provides an ability to cost material transfers between
Organizations that use different Costing methods
• Transfers between Process and Discrete organizations will use
Transfer Price
• Transfer price derived from price list set up in the Shipping
Networks form
• Transfer applies to both inter-org transfers with or without
internal orders
• New Interorg Profit account created to record profits from such
transactions
• Intercompany Invoicing also available
New Features in OPM Costing

• Deferred Cost of Goods Sold support

• Shared Services in Purchasing (Global Procurement)
• Advanced Drop Shipments
• Miscellaneous Receipts and Issues
• Sub-Inventory Transfers
• Subledger Journal Entries simulation in multiple cost types
simultaneously
 Changed Features

• Inventory Close for Process Organizations

• Handled by OPM Costing
• Preliminary Close is still supported for Process Organizations
• Period Ending Balances saved in an OPM Costing Table
(GMF_PERIOD_BALANCES)
• Inventory Valuation report available in OPM Costing reports
Subledger Accounting Replaces MAC

OPM Costing with MAC OPM Costing with SLA

Completed material and Completed material and

resource transactions resource transactions

OPM Costing engine OPM Costing engine

generates cost generates cost

Cost Preprocessor
creates
accounting events

MAC processes SLA processes these

transactions events to create
and creates journals journal entries
 Subledger Accounting Replaces MAC
Equivalent functionality in SLA
OPM MAC SLA Comments
Source Process Category
Event Event Entity
Sub-Event Event Class
Account Titles Journal Line Types (JLT)
Application Accounting
Accounting Template
Definitions (AAD)
Account Mapping Attributes (SLA) Sources
Priorities and Account Account Derivation Rules
Mapping (ADR)
Test Accounting Builder
Test Mapping
(TAB)
OPM Currency, OPM Ledger,
Use GL set ups
OPM Exchange Rates
 Subledger Accounting Replaces MAC
Equivalent functionality in SLA
OPM MAC SLA Comments
Test and Actual Subledger
Accounting
Draft and Final Accounting -

Subledger Program Accounting Pre-Processor

Run Subledger for multiple SLA supports multiple
Supports multiple valuation
valuation/cost methods for a representations at the
methods
ledger. same time.
Is retained and has been
Detailed Subledger Report modified to use SLA
repository
Subledger Accounting Replaces MAC
OPM example with MAC
SOURCE EVENT SUBEVENT

Shipping

Internal Order
Shipping
Shipments
(OMSO)

Order
Management Customer
Returns(RMA)
Subledger Accounting Replaces MAC
OPM example with SLA
EVENT ENTITY EVENT CLASSES EVENT TYPES

Shipping

Internal Order
Shipping
Shipments
(OMSO)

Order
Management Customer
Returns(RMA)
Data Model Highlights

• Inventory_Item_id & Organization_id used in place of item_id &

whse_code
• Item is validated in context of an Inventory Organization
• Period_Id & Cost_Type_id used in place of Calendar_Code,
Period_Code, Cost_Mthd_Code
Usability Improvements

Main Costing Menu

reorganization to reflect
typical setup and process
sequence
 Usability Improvements

• Following inquiries are available within the OPM Costing

responsibility for easier navigation and access
• Material Transactions Inquiry
• Receiving Transactions Inquiry
• Material Transaction Summaries & Pending Transactions view
• Batch Details and Resource Transactions
Form Structure

• Item Number field becomes a key flexfield

• Item Cost Class, Item GL Class and other Classes are key
flexfields now
• Calendar_Code and Cost_Type_Code lengths are expanded
• Ability to view concurrent program logs directly from the process
status forms (Rollup, Actual Cost and so on)
• Item Costs, Overheads and Allocation setup forms are expanded
and reorganized for ease of use
Troubleshooting Recommendations

• Support FND Logging for OPM Preprocessor and Period Close

• All other profile options for debugging per Release 11.5.10
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Setup Screens
 Setup Screens

• Cost Types
• Cost Calendars
• Cost Organizations
• Cost Factors
• Fiscal Policies
• Percentage Overhead Codes
• Percentage Overhead Priorities
• Percentage Overhead Percentages
 Setup Screens

• Source Organizations
• Material Cost Components
• Expense Allocation Codes
• Expense Allocation Basis
• Expense Allocation Expenses
• Lot Cost Items
• Lot Cost Burdens
• Lot Cost Adjustments
Setup - LDM
 Setup Screens

• Cost Types
• Cost Calendars
• Cost Organizations
• Cost Factors
• Fiscal Policies
• Percentage Overhead Codes
• Percentage Overhead Priorities
• Percentage Overhead Percentages
 Cost Types

• Cost Methods renamed to Cost Types

• Cost Type Code extended to Accept 10 Characters
• Lot Cost is now a Cost Type rather than being a sub option
of Actual Cost Method.
• Lot Actual Cost Checkbox Removed.
Cost Methods (11.5.10)
Cost Types (12.0)
 Cost Calendars

• Cost Calendars are now defined as Global Records instead

of for a particular Company and Cost Method.
• Same Calendar Code can be assigned to different Legal
Entities and Cost Type Combinations
• Calendar Code extended to Accept 10 Characters
• Support for Legal Entity Time zones.
Cost Calendars (11.5.10)
Cost Calendars (12.0)
Cost Calendars (12.0)
Cost Calendars (12.0)
 Cost Organizations

• Cost Organizations Associations are defined between

Inventory Organizations
• OPM Organization & Company have been removed
from the header region as they are obsolete.
• OPM Organization has been removed from the detail
region as it is obsolete.
• Cost Warehouses & Inventory Warehouses have
been renamed as “Cost Organizations” & “Inventory
Organizations”
Cost Warehouses (11.5.10)
Cost Organizations (12.0)
 Setup Screens

• Cost Types
• Cost Calendars
• Cost Organizations
• Cost Factors
• Fiscal Policies
• Percentage Overhead Codes
• Percentage Overhead Priorities
• Percentage Overhead Percentages
Cost Factors

• PO Special charges replaces OPM Acquisition costs

• Option to include costs in Item cost or expense
• Each code is attached to a Cost Component and analysis
code to track and analyze charges.
• Multiple Pricing Basis options available.
• Multiple Allocation Basis options available.
Cost Factors (12.0)
 Fiscal Policies
• Fiscal Policies are now defined for a Legal Entity.
• Cost Revaluation not applicable since the parameters are
specified at the time of submission of process for OPM
Accounting Pre-processor.
• Ledger, Segment De-Limiter, Maximum Periods are obsolete
fields along with specification of Set Of Books and Operating
Unit.
• Currency and Ledger displayed are for the Primary Ledger
linked with the Legal Entity.
• Additional Details for Overhead Cost Class and Analysis Code
are mandatory.
• Secondary Ledgers can be linked with a Valuation Method (Cost
Types).
Fiscal Policies (11.5.10)
Fiscal Policies (12.0)
Fiscal Policies (12.0)
 Setup Screens

• Cost Types
• Cost Calendars
• Cost Organizations
• Cost Factors
• Fiscal Policies
• Percentage Overhead Codes
• Percentage Overhead Priorities
• Percentage Overhead Percentages
Percentage Burden Codes (11.5.10)
 Percentage Overhead Codes (12.0)
• Change limited to Screen title change and
corresponding menu changes.
Percentage Burden Priorities (11.5.10)
 Percentage Overhead Priorities (12.0)
• OPM Organization is obsolete and has been removed from the screen.
• Warehouse priority is replaced with Inventory Organization Priority.
 Percentage Overhead Percentages

• Overhead Percentages are now defined for a Legal Entity

• Cost Methods & Burden Codes are now renamed to “Cost
Types” & “Overheads”
• OPM Organization is obsolete and has been removed from
the screen. Warehouse is replaced with Inventory
Organization.
• Items, Cost Categories, GL Business Class & GL Product
Line are now Key flex fields.
• Cost calendar Code, Period Code and Cost Method Code
are replaced with Period Id.
Percentage Burden Percentages (11.5.10)
Percentage Overhead Percentages (12.0)
 Setup Screens

• Source Organizations
• Material Cost Components
• Expense Allocation Codes
• Expense Allocation Basis
• Expense Allocation Expenses
• Lot Cost Items
• Lot Cost Burdens
• Lot Cost Adjustments
 Source Organizations

• Rollup Source Organizations are defined for a Legal

Entity rather than a OPM Organization which is
obsolete.
• Items, Cost Categories are now Key flex fields.
• Warehouse is replaced with Inventory Organization.
• Option is available to define the source Organization
at a global level for a Legal Entity and also there is an
option to specify the Source organizations for a
Inventory organization which overrides and take
precedence over a Legal Entity Level global record.
Source Warehouses (11.5.10)
Source Organizations (12.0)
 Material Cost Components

• Material Cost Components are defined for a Legal

Entity rather than a OPM Company which is obsolete.
• Items, Cost Categories are now Key flex fields.
• Option is available to define the source Organization
at a global level for a Legal Entity and also there is an
option to specify the Source organizations for a
Inventory organization which overrides and take
precedence over a Legal Entity Level global record.
Material Cost Components (11.5.10)
Material Cost Components (12.0)
 Setup Screens

• Source Organizations
• Material Cost Components
• Expense Allocation Codes
• Expense Allocation Basis
• Expense Allocation Expenses
• Lot Cost Items
• Lot Cost Burdens
• Lot Cost Adjustments
Expense Allocation Codes (11.5.10)
 Expense Allocation Codes (12.0)
• Expense Allocation Codes are now defined for a
Legal Entity rather than for a Company Code.
 Expense Allocation Basis

• Expense Allocation Basis is now defined for a Legal Entity

rather than for a Company Code.
• Allocation Method is now renamed to Allocation Basis.
• Item and Account Key are now Key flex fields.
• Screen layout has been redesigned to have the Allocation
result region as part of a separate tab.
• New list item Basis Type applicable for Allocation Basis
has been added, for future use.
Expense Allocation Basis (11.5.10)
Expense Allocation Basis (12.0)
Expense Allocation Basis (12.0)
Expense Allocation Basis (12.0)
 Expense Allocation Expenses

• Expense Allocation Expenses to allocate is now

defined for a Legal Entity rather than for a Company
Code.
• Account Key is now a key flex field.
• Screen has been redesigned to have more details on
a single screen.
Expense Allocation Expenses (11.5.10)
Expense Allocation Expenses (12.0)
Expense Allocation Expenses (12.0)
 Setup Screens

• Source Organizations
• Material Cost Components
• Expense Allocation Codes
• Expense Allocation Basis
• Expense Allocation Expenses
• Lot Cost Items
• Lot Cost Burdens
• Lot Cost Adjustments
 Lot Cost Items

• Lot Cost Items is now defined for a Legal Entity rather

than for a Company Code.
• Lot Cost Method is now renamed to Lot Cost Basis.
• Item and Item Cost Categories are now Key flex
fields.
Lot Cost Items (11.5.10)
Lot Cost Items (12.0)
 Lot Cost Overheads

• Lot Cost Overheads are created for a Organization

Context.
• Item is now a Item Key flex field.
• Cost Method is renamed to Cost Type.
• Sub lots are obsolete and thus removed from the
screen layout.
• Instead of Storing the Lot Id, we are now storing the
Lot Number.
Lot Cost Burdens (11.5.10)
Lot Cost Overheads (12.0)
 Lot Cost Adjustments

• Lot Cost Adjustments are created for a Organization

Context.
• Item is now a Item Key flex field.
• Cost Method is renamed to Cost Type.
• Sub lots are obsolete and thus removed from the
screen layout.
• Instead of Storing the Lot Id, we are now storing the
Lot Number.
Lot Cost Adjustments (11.5.10)
Lot Cost Adjustments (12.0)
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Transaction Screens
 Transaction Screens

• Item Costs
• Resource Costs
• Fixed Overheads
• Actual Cost Adjustments
• Actual Cost Transactions View
• Lot Cost Details
• Lot Cost Overheads
• Lot Cost Adjustments
 Transaction Screens

• Item Costs
• Resource Costs
• Fixed Overheads
• Actual Cost Adjustments
• Actual Cost Transactions View
• Lot Cost Details
• Lot Cost Overheads
• Lot Cost Adjustments
 Item Costs
• Cost Details form renamed as Item costs in 12.0
• Warehouses are replaced with a organization context.
• Cost Methods are renamed as Cost Types.
• Item Costs table stores the Period Id instead of Calendar Code, Period
Code & Cost Method.
• Item field is now a Key flex field.
• Usage Type values have been changed in accordance with industry
standard terminology.

Old Terminology Industry Standard Terminology

Cost Detail Material
FM Route Resource
Burden Overhead
Cost Details (11.5.10)
Item Costs (12.0)
 Resource Costs

• Resource are created for a Legal Entity rather than for

OPM organizations which are obsolete.
• Option available to have a Legal Entity level Global record
and Inventory Organization specific record, which takes
precedence over global records.
• Cost Methods renamed as cost types.
• UOM Codes selected are now the 3-digit Converged
Inventory Unit of Measures.
Resource Costs (11.5.10)
Resource Costs (12.0)
 Fixed Overheads

• Burden Details is now renamed as Fixed Overheads.

• Fixed Overheads will be created for a specific Organization
context rather than a OPM Organization which is obsolete.
• Cost Methods are renamed as Cost Types.
• Fixed Overheads stores the Period Id instead of Calendar
Code, Period Code & Cost Method.
• Overflow Region consisting of Resource Count, Unit Of
Measure & Currency Code have been included in the main
detailed block itself.
• Item field is now a Key flex field.
Burden Details (11.5.10)
Fixed Overheads (12.0)
 Actual Cost Adjustments

• Actual cost adjustments will be created for a specific

organization context.
• Cost Methods are renamed as Cost Types.
• Actual Cost Adjustments table stores the Period Id
instead of Calendar Code, Period Code & Cost
Method.
• Item field is now a Key flex field.
Actual Cost Adjustments (11.5.10)
Actual Cost Adjustments (12.0)
 Actual Cost Transactions View

• Actual cost transaction view details will be filtered based on

a specific organization context.
• Cost method has been renamed as Cost type.
• OPM Organizations are obsolete and thus have been
removed from the layout.
• Document number renamed as reference.
• Sources renamed as per Industry standard terminology.
(Ex): “PM Batch Details” renamed as “Batch Material Cost”
Actual Cost Transactions View (11.5.10)
Actual Cost Transactions View (12.0)
 Transaction Screens

• Item Costs
• Resource Costs
• Fixed Overheads
• Actual Cost Adjustments
• Actual Cost Transactions View
• Lot Cost Details
• Lot Cost Overheads
• Lot Cost Adjustments
 Lot Cost Details

• Warehouses are replaced with a organization context.

• Lot Cost Methods are renamed as Lot Cost Types.
• Sub-lot model is obsolete in 12.0 and is replaced by Parent
Lot – Child Lot Model.
• Lot Costs table stores the Lot Number instead of Lot Id.
• Item field is now a Key flex field.
Lot Cost Details (11.5.10)
Lot Cost Details (12.0)
 Lot Cost Overheads

• Lot Cost Burdens has been renamed as Lot Cost Overheads.

• OPM Organizations are obsolete and have been removed from the
screen layout.
• Lot Cost Overheads are now defined for a Inventory Organization
Context.
• Sub-lot model is obsolete in 12.0 and is replaced by Parent Lot –
Child Lot Model.
• Lot Cost Overheads table stores the Lot Number instead of Lot Id.
• Item field is now a Key flex field.
• Cost Methods have been renamed as Cost Types.
Lot Cost Burdens (11.5.10)
Lot Cost Overheads (12.0)
 Lot Cost Adjustments

• OPM Company is obsolete and has been removed

from the screen layout.
• Lot Cost Adjustments are now defined for a Inventory
Organization Context.
• Sub-lot model is obsolete in 12.0 and is replaced by
Parent Lot – Child Lot Model.
• Lot Cost Adjustments table stores the Lot Number
instead of Lot Id.
• Item field is now a Key flex field.
• Cost Methods have been renamed as Cost Types.
Lot Cost Adjustments (11.5.10)
Lot Cost Adjustments (12.0)
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Copy & Process Submission Screens

 Copy & Process Submission Screens

• Copy Item Costs

• Copy Resource Costs
• Copy Fixed Overheads
• Copy Percentage Overheads
• Cost Rollup Process
• Actual Cost Process
• Cost Update Process
• OPM Accounting Pre-Processor
 Copy & Process Submission Screens

• Copy Item Costs

• Copy Resource Costs
• Copy Fixed Overheads
• Copy Percentage Overheads
• Cost Rollup Process
• Actual Cost Process
• Cost Update Process
• OPM Accounting Pre-Processor
 Copy Item Costs

• Cost Methods are renamed as Cost Types.

• Burden Organization has been removed from the layout
since the functionality of Copying Burdens is available as
part of a new form.
• Items & Item Cost Categories are now range flex fields.
• Inventory Organizations are introduced in lieu of
Warehouse. If “All Organizations” option is chosen, then
the costs get copied to all Inventory Organizations under
the Legal Entity selected.
• From & To prompts have been renamed as Source &
Target to avoid ambiguities.
Copy Item Costs (11.5.10)
Copy Item Costs (12.0)
 Copy Resource Costs

• Cost Methods are renamed as Cost Types.

• OPM Organization are obsolete and have been removed
from the layout.
• Resource Costs can be copied between two Legal Entities
for global records.
• Inventory Organizations are introduced in lieu of OPM
Organizations, which are optional for copying. Required for
copying Inventory Organization specific resource costs.
• From & To prompts have been renamed as Source &
Target to avoid ambiguities.
Copy Resource Costs (11.5.10)
Copy Resource Costs (12.0)
 Copy Fixed Overheads (12.0)
• New form Introduced as part of 12.0 to provide Copy Fixed
Overheads as standalone functionality.
• Existed as part of Copy Item Costs with limited functionality,
since copy always happens along with item costs.
 Copy Percentage Overheads

• Cost Methods are renamed as Cost Types.

• Percentage Burdens can be copied between two Legal
Entities.
• Burdens have been renamed as Overheads and the Form
name from “Copy Percentage Burdens” to “Copy Percentage
Overheads”
• From & To prompts have been renamed as Source & Target
to avoid ambiguities.
Copy Percentage Burdens (11.5.10)
Copy Percentage Overheads (12.0)
 Copy & Process Submission Screens

• Copy Item Costs

• Copy Resource Costs
• Copy Fixed Overheads
• Copy Percentage Overheads
• Cost Rollup Process
• Actual Cost Process
• Cost Update Process
• OPM Accounting Pre-Processor
 Cost Rollup Process

• Cost Rollup is run for a Legal Entity rather than a

company linked with the Calendar Code.
• Cost Methods are renamed as Cost Types.
• OPM Organizations are obsolete and are replaced
with Inventory Organizations.
• Items & Item Cost Categories are Range flex fields.
• Option is provided on the Cost Rollup screen for
viewing the log file associated with the Process
reference no.
Cost Rollup Process (11.5.10)
Cost Rollup Process (11.5.10)
Cost Rollup Process (12.0)
Cost Rollup Process (12.0)
 Actual Cost Process

• Actual Cost Process is run for a Legal Entity rather

than a company linked with the Calendar Code.
• Cost Methods are renamed as Cost Types.
• Option is provided on the Actual Cost Process screen
for viewing the log file associated with the Process
reference no.
Actual Cost process (11.5.10)
Actual Cost process (11.5.10)
Actual Cost process (12.0)
Actual Cost process (12.0)
 Cost Update Process

• Cost Update Process is run for a Legal Entity rather

than a company linked with the Calendar Code.
• Cost Methods are renamed as Cost Types.
• Option is provided on the Cost Update Process
screen for viewing the log file associated with the
Process reference no.
Cost Update Process (11.5.10)
Cost Update Process (11.5.10)
Cost Update Process (12.0)
Cost Update Process (12.0)
 OPM Accounting Pre-Processor

• OPM Accounting Pre-Processor is run for a Legal Entity

rather than a OPM company which is obsolete in 12.0.
• Cost Type is picked up from the Legal entity Fiscal policies
and displayed on the screen layout.
• Costing Revaluation parameters are now defined in the
OPM Accounting Pre-Processor submission screen rather
than in the Fiscal Policies screen.
• Option is provided on the OPM Accounting Pre-Processor
Process screen for viewing the log file associated with the
Process reference no.
Sub-Ledger Update (11.5.10)
Sub-Ledger Update (11.5.10)
OPM Accounting Pre-Processor (12.0)
OPM Accounting Pre-Processor (12.0)
OPM Accounting Pre-Processor (12.0)