Do you know , Earnest Money Deposit (EMD) is a payment/deposit that suppliers are required to make to a buying organization in order to be eligible to participate in a Sourcing negotiation.

EMD is very common in Public Sector companies and Government organizations and in certain global markets, particularly in APAC and EMEA.

The EMD amount is decided by the buying organization and all suppliers (except those who are exempted based on organization specific business rules) are required to pay the EMD amount in order to participate in the negotiation process (RFQ, Auction).

The EMD amount is retained by the buying company untill the negotiation is closed. After the negotiation is closed (or awarded), the EMD amount is refunded to the suppliers, except in a case where the supplier has not conformed to the rules of the negotiation, the EMD amount can be forfeited, that is, the buying organization does not return the amount to the supplier and keeps it as a penalty charge.

Oracle Sourcing provides a complete end-to-end EMD functionality, which contains an automated EMD flow: the flow captures the process of receiving, refunding/forfeiting and updating the journal entries.

Oracle Sourcing supports the following EMD types that a supplier can pay to the buying organization:

An out-of-the-box integration is available with Oracle Financials, so that the receipt, forfeit, and refund of EMD can leverage Oracle Receivables and Oracle Payables. For customers, not using Oracle Financials, there is a non-integrated EMD deployment process where the company can still use the EMD feature in Oracle Sourcing.

KEY BENEFITS OF EMD SOURCING SOLUTION

The Earnest Money Deposit solution for Oracle Sourcing has a number of advantages

• The requirement of deposit ensures that all the suppliers participating in the negotiation are very serious about their participation. This acts as a process of supplier qualification and filtering and makes sure that there are no suppliers who are not very keen or interested in the contract
• The option of forfeiting the EMD amount compels the suppliers to completely adhere to the negotiation rules and process and substantially reduces the occurrences of misleading response information
• Meets the regulatory requirements of Government organization
• The system will have an automatic integration with Oracle Financials for receiving, refunding and forfeiting the EMD amount
• EMD information is captured and stored for future audit and references purposes

SETTING UP EARNEST MONEY DEPOSIT

To integrate with Accounts Receivables and Accounts Payables, set up the following in Oracle Financials:

• Profile Option: Using the System Administrator responsibility set the value of the profile option AR: Deposit Offset Account Source as Transaction Type at the site and responsibility level.
• Flexfield Segments: Using the Receivables responsibility, navigate to (N) Setup >Financials > Flexfields > Descriptive > Segments. Click the Find icon to search for and display the Receivables Line Transaction Flexfield. The Context Field Values region will display EMD Transactions in the Code column.
• Transaction Types: Using the Receivables responsibility, navigate to Receivables > Setup > Transactions > Transaction Types. Enter information to setup the following transaction types: EMD Deposit, EMD Credit Memo and EMD Invoice.
• AutoAccounting: Navigate to Receivables > Setup > Transactions > AutoAccounting and select the operating unit. Search for the Type with a value of Revenue. In the Segment column, the Accounts row should have a value in the Table Name column.
• Sequential Numbering: Using the System Administrator responsibility, navigate to Application > Sequential Numbering > Assign > (T) Document.Assign sequential numbering to the EMD entities.
• Batch Source: Using the Receivables responsibility, navigate to Setup > Transactions > Sources > (T) Batch Source to set up a batch source.
• Payment Terms: Navigate to (N) Receivables > Setup > Transactions > Payment Terms. Create a new payment term.
• Receipt Class: Using the Receivables responsibility, enter the Receipt Class. Navigate to (N)
  • Receivables > Receipts > Receipts Classes.
• Receivable Activity: Using the Receivables responsibility, navigate to (N) Receivables > Setup > Receipts. > Receivable Activities. Enter the Receivable Activity information.

If you are not integrating the EMD functionality with Oracle Financials, navigate to the Administration page and specify an operating unit that will not be used with Financials.

Ensure that the Enable Integration with Oracle Financials checkbox is not selected.

However, you must enter the Receivables Payment Type region. Currently the Payment Types of Cash, Check and Demand Draft are supported.

FURTHER REFERENCE

You can refer to Oracle Sourcing – Implementation and Administration Guide and Check the section Set Up Earnest Money Deposit

Oracle Advanced Procurement is an integrated suite of software that dramatically cuts all supply man-agement costs.

It adapts to your purchasing processes, supporting any combination of procurement models. It leverages Oracle’s extensive applications capabilities, robust development and operating platform, and award-winning global support. Thousands of companies in diverse industries—including professional services, government, asset-intensive sectors, and manufacturing—rely on Oracle Advanced Procurement to deliver billions in savings year after year.

Oracle Advanced Procurement (Fig 1) includes the following applications:

• Oracle Purchasing helps buying professionals streamline PO processing while strengthening compliance.
• Oracle Sourcing improves the effectiveness a nd efficiency of strategic sourcing
• Oracle iProcurement controls employee spending and streamlines ordering through a familiar Web-store interface.
• Oracle Services Procurement enables complete control and oversight for services spending.
• Oracle Procurement Contracts creates and enforces better purchasing contracts.
• Oracle iSupplier Portal structures all supplier communications through a secure, internet-based portal with online PO collaboration and paperless fulfillment and payment.
• Oracle Supplier Network is an electronic transaction service that automates delivery of purchasing and payment documents.
• Oracle Landed Cost Management (LCM) gives organizations financial visibility into their extended supply chain costs, including transportation and handling fees, insurance, duties, and taxes.
• Oracle Procurement and Spends Analytics Solution help organizations optimize their supply side performance by integrating data from across the enterprise value chain, thereby enabling executives, managers, and frontline employees to make more informed and actionable decisions

Good Reasons for Using Oracle EBS Advanced Procurement –How Oracle Helps !

Here is Integrated Process Flow you can see, if planning to implement Advance Procurement Application

10 Good Reasons for Using Oracle EBS Advanced Procurement

Oracle E-Business Suite mobile apps enable users to perform needed tasks or take action on Oracle E-Business Suite transactions from mobile devices, such as iOS smartphones.

The Oracle Mobile iProcurement for Oracle E-Business Suite app enables requesters to monitor their requisitions and take action on the go.

Using this app, as requesters, you can:

• Track your requisitions for approval and delivery status
• View requisitions, approvers, lines, and shipments
• Monitor alerts for approvals, rejections, returns, and shipment delays
• Collaborate in transaction context using device features such as e-mail, phone, and text

To use this app, you must be a user of Oracle iProcurement, with mobile services configured on the server-side by your administrator.

EBS Users can download these apps from the Apple App Store. To use the apps, users must be licensed for the base products, with mobile services configured on the Oracle E-Business Suite server.

To find Oracle E-Business Suite mobile apps, search for the keywords “Oracle America EBS” in the Apple App Store.

• Oracle Mobile Approvals for Oracle E-Business Suite (for Purchase Order approvals)
• Oracle Mobile Approvals for Oracle E-Business Suite (for Requisition approvals)
• Oracle Mobile iProcurement for Oracle E-Business Suite
• Oracle Mobile Procurement for Oracle E-Business Suite

There is slight difference in Iprocurement and Procurement Mobile Apps

iProcurement Mobile Apps shows the requisition details which include status of requisitions, requisition lines, shipment, receipt information, and person card details. Also, the PO line and shipment associated to the requisition, whereas Procurement Mobile Apps shows Purchase Order (PO) information along with approval status.

Some Key Note

• iProcurement is available in Mobile Apps starting in 12.1.3
• • You need patch for Oracle E-Business Suite 12.2
    • Patch 20048436:R12.PRC_PF.C: PRC – 12.2 Consolidated Patch For Mobile Applications Foundation V2.1
  • You need patch for Oracle E-Business Suite 12.1.3
    • Patch 20048948:R12.PRC_PF.B: PRC – 12.1.3 Consolidated Patch For Mobile Applications Foundation V2.1
• Currently, Oracle E-Business Mobile Apps is available in English only
• iProcurement Mobile Apps is compatible with iOS 7.0 and iOS 8.0

Limitation of Oracle Mobile iProcurement

• There are some restrictions and conditions of the data shown in Mobile App for requisitions
  • Internal requisitions and contingent reqquisitions are not available in Mobile Apps.
  • Also, requisitions in incomplete or cancel are not supported at that time.
  • Summary page shows need by date only if all the lines have the same date.
  • When the line is placed in a PO, it shows the shipment with received or not received status.
  • The status of not received, partially received, and fully received are available only in Mobile App.

This is available at no additional cost for licensed users of the base applications.

Oracle has recently released 14 mobile applications for Oracle E-Business Suite. In order to support real-time business decisions and collaboration , today’s increasingly mobile workforce requires instant access to targeted enterprise data and functions-wherever and whenever they want.

These mobile applications, including horizontal apps targeted for all employees as well as role-based line of business applications .

These new applications provide simple on-the-go access to horizontal functions such as:

For app availability search ‘Oracle EBS America’ on app store

Oracle E-Business Suite mobile applications are extremely easy to use, resulting from a user-centered design process and user experience (UX) design principles based on simplicity, action ability, consistency, and device integration.

Oracle E-Business Suite mobile applications are built using Oracle Mobile Application Framework .

Oracle MAF framework accelerates and simplifies mobile development with the ability to build once and deploy to multiple platforms, providing tight integration with camera and other device services, device-native user experience, and enables end-to-end encryption and security

This framework accelerates and simplifies mobile development with the ability to build once and deploy to multiple platforms, providing tight integration with camera and other device services, device-native user experience, and enables end-to-end encryption and security

• EBS Mobile Apps Documentation: Note 1641772.1
• EBS Mobile Apps Administrator’s Guide: Note 1642431.1

The Oracle Supplier Network (Oracle SN) in an online service managed by Oracle that provides electronic messaging services. It is open to all EBS , Fusion , Peoplesoft customers and their trading partners.

The Oracle Supplier Network (OSN) together with iSupplier Portal provide a complete supplier enablement portfolio – and helps achieve real-time integration generating important cloud spend management benefits such as cash conservation and lower costs-to-serve.

Oracle Supplier Network is part of Advanced Procurement suite and integrates seamlessly with other Oracle modules other modules including Purchasing and iProcurement.

The OSN includes quick on-boarding, a single connection point to a community of suppliers and the ability to automate routine paperwork associated with procure-to-pay business processes.

The Oracle Supplier Network also enables trading partners to track the delivery of all business documents with a Transaction Monitor for both test and production transactions.

The Oracle Supplier Network provides private, secure transaction management with trading partners of every size and level of sophistication.

Oracle Supplier Network Portal Lets You:

• Simplify Integration – Onramp trading partners quickly with features such as quick, web-based registration, company profile setup, and account maintenance capabilities.
• Minimize Integration Costs – Avoid cost of supporting individual connections, multiple protocols, and multiple standards.
• Track Performance – Track successful delivery of all message traffic. Deploy auto-retry capabilities for exceptions.
• Support Key Transactions – Support key procurement and payment transactions, including purchase orders, change orders, advance ship notices, and invoices.
• Simplify Support – Receive 24/7, award-winning technical support. Rely on infrastructure designed for resiliency, redundancy, and network security

The OSN includes quick on-boarding, a single connection point to a community of suppliers and the ability to automate routine paperwork associated with procure-to-pay business processes. The solution also eliminates the cost of maintaining point-to-point connections between customers and their suppliers.

The Supplier Network provides a set of services for the routing, translation and delivery of extensible markup language (XML)-based electronic commerce transactions, such as purchase orders, ship notices and invoices. Customers connect once to the Oracle Supplier Network, and the network automatically routes the procurement transactions to the supplier.

Already on the Oracle Supplier Network and available to customers is a pre-enabled community of suppliers including Corporate Express, HP, Kelly Services, OfficeMax and Staples. All Procurement customers and their suppliers can join the Oracle Supplier Network.

The supplier Network also enables members to track the delivery of all business documents with a Transaction Monitor for both test and production transactions. The Oracle Supplier Network provides private, secure transaction management with trading partners of every size and level of sophistication.

If you are buyer , or planning to use for your company/client

Currently OSN integrates out of the box only with E-Business Suite (11.5.10, R12.0, R12.1) and Peoplesoft 9.1 (to be made available in 2009) and Oracle Fusion Apps to use OSN to send POs and receive Invoices

REFERENCE

OSN Datasheet .

This is very common question , you might think and try to under stand , when to use PunchOut ?

Punchout is particularly useful for products that are configurable or include highly variable or dynamic items and pricing. These products are difficult and costly to maintain in a buyer hosted catalog.

In last post , you have observed various model of punchout models thats provide you with the flexibility to pick the model that best works for you.

• Model 1: Punchout from Oracle iProcurement to Oracle Exchange ( XML)
• Model 2a: Punchout from Oracle iProcurement Directly to Supplier-Hosted Catalog (XML)
• Model 2b: Punchout from Oracle iProcurement Directly to Supplier-Hosted Catalog(cXML)
• Model 3a : Punchout from Oracle Exchange to Supplier-Hosted Catalog (XML)
• Model 3b: Punchout from Oracle Exchange to Supplier-Hosted Catalog (cXML)
• Model 4: Punchout from Oracle iProcurement to Supplier-Hosted Catalog via Oracle Exchange (XML)
• Model 5: Punchout from Oracle iProcurement to Supplier-Hosted Catalog via Oracle Exchange (cXML)

OPTING YOUR NEED: SELECTING A PUNCHOUT MODEL

iProcurement and Exchange support various punchout models.

It is important for both buyers and suppliers to decide on the model they want to use before implementing the punchout. The following table compares the punchout models:

The figure below shows the process for deciding which model to use.

For all models, make sure of the following prerequisites:

• Make sure the supplier supports the punchout.
• If the supplier’s site is secure, verify your access to secure sites.

What’s XML?

An eXtensible Markup Language (XML) file is a general purpose markup language file with a set of rules for encoding documents in machine-readable form.

XML is a subset of Standard Generalized Markup Language (SGML).

The primary purpose of XML is to facilitate the sharing of data across different systems.

The upload process will parse and process the XML file to load agreement lines and its associated attributes provided that the XML file conform to the XML DTD.

What’s CIF or cXML?

A Catalog Interchange Format (CIF) file is a comma-separated text file.

A commerce eXtensible Markup Language (cXML) .xml file is based on the XML language.

Put simply, cXML stands for ‘Commercial Extensible Mark-up Language’ and it is basically a solution that allows different systems to ‘talk’ to eachother in the simplest and most efficient way possible. It is simply the connection type being used between the e-procurement system and the suppliers website.

Oracle is currently only support cXML up to version 1.1.007

WHAT IS PUNCHOUT (also known as Supplier PunchOut)

Punchout provides the ability to link out from a procurement application (iproc ) to a vendor’s eCommerce site to shop, place items into a cart, and return that cart to their own procurement application to continue purchasing within their designated workflow. The resulting purchase order is then sent back to the supplier for order fulfillment.

This is a mechanism by which buyers/requestors can navigate to suppliers website directly from iProcurement.

Punchouts are, typically, for expense items such as office supplies, but are often leveraged by maintenance and IT organizations.

WHAT ARE THE ADVANTAGES OF PUNCH OUT?

Some advantages are:

• The ability to cost effectively re-use suppliers existing transactional websites to provide custom content to individual buyers.
• The flexibility which allows suppliers to control product information to ensure real-time quality content, including price and availability.
• Punch out is a low-cost way to provide easily customised content for many buyers, leading to economies of scale, enhanced customer experience, and reduced customer support costs.
• Buyers no longer need to manage catalogue content.
• Punch out enables requisitioners to access supplier catalogues for products / services that reside within the supplier’s website.
• Punch out eliminates the need for the supplier to send electronic catalogues to buying organisations.
• Punch out reduces buyer and supplier error.
• cXML is the most widely adopted Business to Business protocol today.

BASIC FLOW

More or less , these are user steps in punchout process irrespective of any model ( as discussed below) ;

1. The requester in iProcurement or buyer in Exchange clicks a link to the external catalog (punchout) site. Punchout links are available from the Shopping home and
   Search Results pages.
2. The punchout from application (iProcurement or Exchange) sends the login request to the catalog site.
3. The punchout to application (Exchange or the supplier site) authenticates the requester or buyer.
4. The punchout from application redirects the requester’s or buyer’s browser to the catalog site.
5. The requester or buyer browses or searches for items on the external catalog site and completes shopping on the site.
6. Via the requester’s or buyer’s browser, the punchout to application returns the shopping cart with the items to the punchout from application.
7. The requester or buyer completes the checkout process for the items in the shopping cart, and the punchout from application processes the order.

THE PUNCHOUT MODELS

The Punchout Models available are:

• Model 1: Punchout from Oracle iProcurement to Oracle Exchange (XML)
• Model 2a: Punchout from Oracle iProcurement Directly to Supplier-Hosted Catalog (XML)
• Model 2b: Punchout from Oracle iProcurement Directly to Supplier-Hosted Catalog(cXML)
• Model 3a : Punchout from Oracle Exchange to Supplier- Hosted Catalog (XML)
• Model 3b: Punchout from Oracle Exchange to Supplier- Hosted Catalog (cXML)
• Model 4: Punchout from Oracle iProcurement to Supplier- Hosted Catalog via Oracle Exchange (XML)
• Model 5: Punchout from Oracle iProcurement to Supplier- Hosted Catalog via Oracle Exchange (cXML)

Model 1: PUNCHOUT FROM ORACLE IPROCUREMENT TO ORACLE EXCHANGE (XML)

In model 1, the supplier loads catalog items directly to Oracle Exchange.

The catalog administrator then sets up Oracle iProcurement to use Oracle Exchange as the punchout hub.

How this works:

• When the user clicks on a punchout link to Oracle Exchange, Oracle Exchange authenticates the requester and returns a response.
• If the authentication is successful, the user is redirected to the Oracle Exchange site to search for and add items.
• When the requester finishes adding items to the Oracle Exchange shopping cart, Oracle Exchange returns these items to the requisition.
• The requester then submits the requisition.

The illustration below shows Model 1.

If you see above diagram , Oracle Exchange can be setup as an aggregator site, where requesters can have access to items from different suppliers.

In this model benefits for the suppliers include:

• Suppliers only need to load their catalog items once on Oracle Exchange and can reach many Oracle iProcurement customers in addition to the buyers already registered on Oracle Exchange.
• Suppliers can make use of the functionality offered by Oracle Exchange to control pricing.

MODEL 2A and 2B: PUNCHOUT FROM ORACLE iPROCUREMENT TO SUPPLIER HOSTED CATALOG (XML & CXML)

In models 2a and 2b, the supplier hosts the catalog at their own site or web store. The catalog administrator sets up a punchout catalog to use the supplier as a punchout site.

• When the requester clicks on a punchout link to the supplier site, the supplier authenticates the requester and returns a response.
• If the authentication is successful, Oracle iProcurement redirects the requester to the supplier site to search for and add items.
• When the requester completes adding items to the supplier shopping cart, the supplier site returns the shopping cart items to Oracle iProcurement.
• The requester then submits the requisition.

The illustration below shows Models 2a and 2b.

MODEL 3: PUNCHOUT FROM ORACLE iPROCUREMENT TO SUPPLIER HOSTED CATALOG THROUGH ORACLE EXCHANGE (XML)

In this model, the supplier hosts the catalog at their own site or web store.

1. When the user clicks on the punchout link, the requester is taken directly to the supplier site.
   • Although behind the scenes, the access is through Oracle Exchange. Using Oracle Exchange for the punchout simplifies the initial setup process and the authentication and maintenance of the punchout.
2. The supplier must set up a punchout from Oracle Exchange to their site.
   • To setup access to the supplier site through Oracle Exchange, the catalog administrator needs to download the supplier punchout definition from Oracle Exchange.
   • Downloading the supplier punchout definition seeds the punchout definition from Oracle iProcurement to the supplier site through Oracle Exchange, without requiring the catalog administrator to perform manual setup.
3. The requester clicks on the punchout link, Oracle Exchange authenticates the requester, and sends a punchout request to the supplier.
4. The supplier site then responds to Oracle Exchange, and in turn Oracle Exchange forwards the supplier site response to Oracle iProcurement .
   • If successful, the requester is redirected to the supplier site for shopping.
5. When the requester completes adding items to the supplier shopping cart, the supplier site returns the shopping cart items to the requisition. The requester then submits the requisition.

The illustration below shows Model 3.

MODEL 4: PUNCHOUT FROM ORACLE IPROCUREMENT TO SUPPLIER HOSTED CATALOG THROUGH ORACLE EXCHANGE (CXML)

In Model 4, the supplier hosts a cXML catalog at its own site or web store. Similar to Model 3, the requester accesses the supplier site (behind the scenes) through Oracle Exchange.

The supplier must set up a punchout from Oracle Exchange to its site, and the catalog administrator then downloads the supplier punchout definition from Oracle Exchange when setting up the punchout catalog.

• The requester clicks on the punchout link, Oracle Exchange then authenticates the requester, and sends a punchout request to the supplier.
• The supplier site then responds to Oracle Exchange, and in turn Oracle Exchange forwards the supplier site response to Oracle iProcurement .
  • If successful, the requester is redirected to the supplier site for shopping.
• When the requester completes adding items to the supplier shopping cart, the supplier site returns the shopping cart items to Oracle iProcurement .
• Oracle iProcurement then redirects the shopping cart to Oracle Exchange, where Oracle Exchange converts the shopping cart from cXML to XML and returns the items to Oracle iProcurement . The requester then submits the requisition.

The illustration below shows Model 4.

ANALYSIS OF PRESENT AND FUTURE STATE

Before developing a PunchOut, you need to perform an in-depth analysis of your current system and what is needed to support the “new” process. A few things to note:

Take some important note for the current state:

• Do you have an existing e-commerce site deployed?
• Does your site have XML integration enabled?
• Do you currently receive orders electronically through XML or EDI?
• How is integration performed with back-end systems?

For the future state:

• How will the process flow from time of shopping through order placement and fulfillment?
• Will you need to interface with multiple XML-based procurement applications?
• How should your concept of a “shopping cart” be modeled in requisition line items?
• Which model should be best for my company ?

Remember , There is no additional licensing that you need to purchase for using Punchout. Next post will be more focus on setup and troubleshooting.

Oracle Landed Cost Management enables you to manage estimated and actual landed cost for an item purchased from a supplier .

Using Oracle Landed Cost Management you can determine the “real ” costs associated with acquiring items including insurance, transportation, handling, storage costs, container fees, and import or export charges.

Knowledge and visibility into these trade costs help organizations better evaluate new product plans, price their items, and negotiate contracts with both suppliers and customers.

Oracle Process Manufacturing Financials supports Landed Cost management (LCM), a web based application which is part of Oracle E-Business suite and a milestone for customers to track and control the cost of landed goods.

This product is being integrated with logistics, procurement, and financial applications to provide a comprehensive landed cost tracking solution.

Oracle LCM is integrated out of the box with following modules of Oracle EBS :

• Oracle Purchasing
• Oracle Inventory
• Oracle Cost Management
• Oracle Payables
• Oracle Advanced Pricing
• Oracle Transportation Management

Oracle’s Landed Cost Management application is a new product released on E-Business Suite r.12.1.

Using Oracle Landed Cost Management you can first estimate the landed costs for the items and then you can update those costs with the actual landed costs as they become known.

Oracle Landed Cost Management gives you the option to determine and calculate estimated landed costs before the receipt of the items into inventory (Landed Cost as a Pre-Receiving Application) or after the receipt of the item into inventory (Landed Cost Management as a Service). Then when you create and match invoices against those receipts this price information is used to calculate the actual landed costs for the item.

Within Oracle Landed Cost Management you can view the estimated and actual landed costs for an item side by side.

This gives you valuable information about the landed cost for an item and where cost improvement can made.

During the processing of landed costs using Oracle Landed Cost Management, inventory valuations for various cost methods are maintained providing better visibility into individual items profitability and an organizations outstanding exposure.

This data provides insight for item forecasting and budgeting and provides clear evidence of the detailed accumulation of expenses for regulatory requirements and reporting.

Features of Landed Cost Management

Oracle Landed Cost Management provides several features. A few of the key features are:

• Charge Management : Oracle Landed Cost Management collects an unlimited number of estimated charges and enables you to configure how theses charges are applied to a shipment line, a group of lines within a shipment, or an entire shipment. It applies these charges based on weight, volume, quantity, or the value of the items being traded. These charges can be categorized by different cost factors which will ultimately govern the behavior in how they are included in a total landed cost calculation. Once actual amounts are received, Charge Management records the new value for comparison with the earlier estimates.
• Landed Cost Calculation : The Oracle Landed Cost Management Calculation process provides the ability to calculate the estimated landed cost based on charges manually assigned and automatically allocated based on the configuration of the charge lines. It also calculates the actual landed costs by prorating the actual invoices and proportional taxes to obtain the variances between what was estimated and what was charged. Cost components summed in the calculation remain stored at the most granular level for detailed tracking of charge amounts while variances are updated to the appropriate accounts.
• Shipments Workbench : It is common that the financial flows do not mirror the physical supply chain transactional flows. Oracle Landed Cost Management helps to link these two flows together and provides visibility and traceability from one to the other. With the Landed Cost Management Shipment Workbench, companies can view the real time accrual updates for a particular receipt or shipment. They can validate the accuracy of a suppliers estimate by comparing estimated and actual costs and can view the percentage of a particular cost component for a particular item. Additionally, you can make use of all the flexible Oracle and E-Business Suite tools to meet your own customized reporting requirements.

Benefits from Using Landed Cost Management

Using Oracle Landed Cost Management will provide your organization with several benefits. Oracle Landed Cost Management will help organizations:

• Maximize Profits : By illuminating “real” product costs, organizations have the opportunity to identify areas for potential cost reduction. It also helps managers more accurately monitor product performance against profitability targets and ensure estimated costs are in line with actual costs.
• Increase Competitiveness : When all of the charges, fees, duties and taxes are known, companies can more strategically source products and components from lower cost foreign locations. This also enables them to better justify contracts with vendors or potential customers. Ultimately, they can price goods with the full understanding of the charges associated with bringing an item to market.
• Increase Visibility : Itemizing and tracking all acquisition costs and material cost elements as they apply to a product enables organizations to better link their product supply flows with their financial processing and reporting. In addition, tracking estimated costs as soon as they are known gives decision makers more insight into their exposure for budgeting and reporting purposes before invoices are ever received.
• Ensure Compliance : Companies can feel more confident in their financial reports and their cost declarations. This includes accurately calculated taxes and consideration of those taxes whose recovery should be excluded from total cost calculations. Additionally, organizations will adhere to country specific requirements for product specific profitability documentation and income tax calculations.

Senario based Implementaion in Metal extraction Company

In typical metal extraction company like Iron and steel , these are type of Charges involved

• Freight (Inbound and Supplier to Outside Processor)
• Fuel
• Vessel
• Material Surcharges

Understanding the Landed Cost Management Setup Process

Before you can use the Landed Cost Management application you must set up the application. A part of the Landed Cost Management setup occurs in other Oracle E-Business applications and then some of the setup is performed within the Landed Cost Management application itself.

Since Landed Cost Management integrates with several Oracle E-Business applications these applications need to be implemented and set up as well before you can successfully use the Landed Cost Management application. The other Oracle E-Business applications that need to be set up are:

• Oracle Inventory
• Oracle Purchasing
• Oracle Payables (required for actual landed cost calculation)
• Oracle Cost Management [Conditionally Optional]
• Oracle Process Manufacturing [Conditionally Optional]

The use of Oracle Landed Cost Management is optional for Oracle Discrete and Process manufacturing implementations.

Plus, Landed Cost Management can integrate with Oracle Advanced Pricing but it is not required.

Oracle recommends that you integrate with Oracle Advanced Pricing so automatic charge calculation will occur in the processing of landed costs. Otherwise, you will have to enter all of the charge lines manually.

Supports Two Basic Flow .

Landed cost management application supports two basic scenarios of receiving flows. First one is Landed Cost management as Pre-receiving and the other is Landed Cost management as Servicing. Details herewith:

LCM as Pre-receiving:

Before going in details, first understand two term

• Estimated Landed Cost (ELC): Landed costs calculated at the time of receipt based on the one or more estimated charges are called estimated landed costs.
• Actual Landed Cost (ALC): Landed cost calculations based on the actual invoice prices are called actual landed costs. You can calculate actual landed cost at the time of receipt, if all the invoices are available.

Under this senarios, LCM as Pre-receiving is used when we intend to calculate the Landed cost estimation before we receive the goods in Organization with reference to Purchase order.

The LCM Pre-receiving functionality has the flexibility of varying the item quantity and price defined in Purchase order.

The charges associated with the items are generated and validation is performed manually to derive the Estimated Landed Cost (ELC).

The Pre-receiving details from LCM module are passed on to the Receiving applications and receipt of goods and receiving transaction takes place for the same quantity.

LCM as Servicing:
This is scenario is used when the receipt of items into inventory happens followed by automatic creation of Estimated Landed Cost.

1. The receipt happens with reference to Purchase order quantity and price, which cannot be changed like pre-receiving.
2. This scenario is favorable when you assess that the landed cost of an item remains constant with known service providers without much variation to the charges.

The estimation of the item landed cost is also automatically calculated based on the purchase documents price and the charge amounts given by Advanced Pricing.

PUNCHOUT

Punchout is a feature from iProcurement and Oracle Exchange which allows to access the external catalog and bring the items to iProcurement in order to create requisitions. The external catalog can be hosted by Oracle Exchange, a third party organization or by the supplier.

• Model 1: Punchout from Oracle iProcurement to Oracle Exchange ( XML)
• Model 2a: Punchout from Oracle iProcurement Directly to Supplier-Hosted Catalog (XML)
• Model 2b: Punchout from Oracle iProcurement Directly to Supplier-Hosted Catalog(cXML)
• Model 3a : Punchout from Oracle Exchange to Supplier-Hosted Catalog (XML)
• Model 3b: Punchout from Oracle Exchange to Supplier-Hosted Catalog (cXML)
• Model 4: Punchout from Oracle iProcurement to Supplier-Hosted Catalog via Oracle Exchange (XML)
• Model 5: Punchout from Oracle iProcurement to Supplier-Hosted Catalog via Oracle Exchange (cXML)

TRANSPARENT PUNCHOUT

Transparent Punchout is used when users do not see the supplier site.

The system will search the supplier sites and bring the item in iProcurement search results page along with local items.

It is for iProcurement only.

The Transparent Punchout Models available are:

• Model 1: Transparent Punchout from Oracle iProcurement to Oracle Exchange (XML)
• Model 2: Transparent Punchout from Oracle iProcurement to Supplier-Hosted Catalog (XML)

DOUBLE PUNCHOUT

As part of Model 1, the requester has access to Oracle Exchange when creating a requisition. When in Oracle Exchange, the user may have the ability to drill out to a supplier punchout site. This is called a double punchout.

REPUNCHOUT (CXML)

Re-punchout allows to view later the item on the supplier site from the created requisition line.

To use this feature, supplier provides the Supplier Config ID in the xml message which becomes a hidden number in the requisition and purchase order. The Supplier Config ID cannot be edited in Oracle iProcurement and Oracle Purchasing. Also, the applications do not check whether the Supplier Config ID is still valid during purchase order creation, but assume that it is. Only standard purchase orders support the Supplier Config ID field.

In re-punchout, the supplier part auxiliary id is not stored in the requisition lines table. Only the supplier part id is in the requisition line table.

The configuration number for re-punchout is supported by the following models only:

• Model 2a: Punchout from Oracle iProcurement Directly to Supplier-Hosted Catalog (XML)
• Model 2b: Punchout from Oracle iProcurement Directly to Supplier-Hosted Catalog (cXML)
• Model 4: Punchout from Oracle iProcurement to Supplier-Hosted Catalog via Oracle Exchange (XML)
• Model 5: Punchout from Oracle iProcurement to Supplier-Hosted Catalog via Oracle Exchange (cXML)