OverviewforOracleLandedCost … SIG Minutes/LCM for Cost... · OverviewforOracleLandedCost...

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Overview for Oracle Landed Cost Management with Endeca OAUG Cost Management Webinar

Mario Nobre Director, LCM Product Management EBS Supply Chain Management Development November, 2014

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Safe Harbor Statement The following is intended to outline our general product direcMon. It is intended for informaMon purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or funcMonality, and should not be relied upon in making purchasing decisions. The development, release, and Mming of any features or funcMonality described for Oracle’s products remains at the sole discreMon of Oracle.

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Program Agenda

LCM Overview & Value ProposiMon

SoluMon Flow

Landed Cost Analysis

New FuncMonaliMes Highlight

Customer Update

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What is Landed Cost Management?

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Tradi;onal: Total cost of an item once it has arrived at the Buyer’s door Modern: Having full visibility into extended supply chain costs, with the power to use this informaMon as a strategic decision support, accounMng and profitability tool within the organizaMon

Warehousing and Handling Fees

TransportaMon & Insurance

Purchase Price

Customs DuMes, Taxes & Fees

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What Happens When You Cannot Understand, Predict, Plan

‘Risks’ of Hidden Supply Chain Costs

Purchase Price Transporta;on

Insurance

ExpediMng Fees/Warehousing

Customs Du;es & Taxes

Unexpected Fuel Surcharge Other Accessorial Fees

Unplanned Customs Storage

Visible

LANDED COST EXPECTATIONS

Hidden

IT Staff

60% Margin Expected

EXAMPLE IMPACT

0% or Nega;ve Margin Realized

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Copyright © 2014 Oracle and/or its affiliates. All rights reserved. | 7

Landed Cost Roles in Supply Chain

Analytics

Planning

Execution Financials/Costing

Periodic Repor;ng & Measurement Use landed cost data to track KPIs, metrics and uncover trends to address in supply chain processes

From PO Crea;on to Receipt EffecMvely esMmate planned costs and

revise based on order/shipment changes

At Invoicing Receive and process invoices, update inventory valuaMon based on actual data Compare actuals to esMmate for variances

Prior to PO Cost simulaMons used upfront to

strategically support sourcing acMviMes

Landed Cost Lifecycle

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EBS Landed Cost Management

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Analy;cs Execu;on

Planning

• Cost Visibility into the Supply Chain – Accurately reflect the inventory cost – Financials integraMon for quickly view outstanding liabiliMes • Product Profitability

– OpMmize product margins

•  Improve global procurement decisions – Decision support for strategic sourcing iniMaMves

– Source efficiently with visibility into cost components

Financials /Cos;ng

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Landed Cost Management SoluMon Flow Oracle E-‐Business Suite



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Business Flow Track Landed Cost throughout the Flow

Receive Goods Capture Invoices Create PO

imulate • Model the landed cost before approval

• Account for esMmated cost in inventory value

EsMmate • Adjust item cost based on invoice amount

Actual

Ship Goods

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•  Apply pre-‐defined cost model to derive landed cost for a purchase order

•  Drive purchasing decision using simulated landed cost

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Simulate Landed Cost

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Receive Goods

•  LCM as a service – Receiving is the first step – LC shipments are automaMcally created based on receipts •  Landed costs are calculated with no user intervenMon

•  LCM as pre-‐receiving – LC shipments is created first •  Accommodate complex shipments with mulMples suppliers •  Full flexibility for users can add, delete, or modify system-‐generated charges

– Receipts are created using the LC shipments as source of informaMon

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LCM and Receiving Integra;on EsMmate

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LCM as a Service

Receive Goods

•  Receipts are created based on purchase orders

•  LC shipments are automaMcally created based on receipt’s informaMon

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•  The landed cost components are computed in the ELC •  Item price •  Charge amounts •  Non-‐recoverable tax amounts

•  Item valuaMon based on esMmated landed cost

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EsMmate Landed Cost

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•  MulMple suppliers in a single LC shipment

•  IdenMcal landed cost calculaMon

•  Item valuaMon based on esMmated landed cost

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EsMmate Landed Cost in Pre-‐Receiving Flow

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LCM as Pre-‐Receiving

Receive Goods

•  The receipts are created based on the LC shipment data

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Capture Invoices •  Enter Invoices –  Item invoices –  Charge invoices (any currency)

•  Match invoices to receipts

•  Match on receipt drives the communicaMon to LCM

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Actual Landed Cost •  Adjust LC based on invoice

•  Capture charges in any currency

•  Post variances to item cost

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Landed Cost Analysis •  Metrics bar

•  LC components cloud

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•  Total item Actual LC •  CumulaMve actual

amount

•  EsMmated and actual history

•  Detailed informaMon on Landed Cost Shipments table

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•  Unit Actual LC •  Variance history

•  EsMmated versus Actual •  Variance percent

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•  Compare landed costs •  Of categories, single

item, etc. •  Across mulMple

dimensions such as suppliers, countries, etc.

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•  Compare landed costs •  Supplier site country

perspecMve

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•  Unplanned charges

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New FuncMonaliMes Highlight •  Set LC calculaMon for specific items • Review shipments before receiving in LCM as a service • Update esMmated amounts before invoicing • Payables matching enhancements • Cost Management Components for Endeca





Calcula;on For Specific Items

•  Landed cost is calculated only for items in the category set

•  Implemented on 12.2.2




Review shipments before receiving in LCM as a service

•  Review the cost components before its posted into the inventory value

•  Define rules to idenMfy specific receipts which must be reviewed





Update Es;mated Amounts

•  Update esMmated amounts before invoicing –  Via shipments workbench –  Via mass update API (12.2.4)





Payables Matching Enhancements

•  Match charge invoices in any currency

•  Use landed cost informaMon to find candidate receipt lines




Payables Matching Enhancements

•  Review landed cost informaMon during charge invoices matching

•  ValidaMon framework for charge invoice matching

•  Implemented on 12.2.4 –  Available for 12.1.3




Cost Management Extensions for Endeca

Period Health Check

TransacMon AccounMng Register

Monitor Daily OperaMons


Real-‐Mme InformaMon Discovery & Analysis


Customer Update



Customers Overview •  Sold to 230+ customers around the world FY15-‐Q1

•  Top Selling Industries – Wholesale & DistribuMon – Natural Resources – Industrial Manufacturing, AutomoMve

– Consumer Goods – Foods and Beverages


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APAC

LAD

NA

MEA

Europe


Q&A


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