Oracle landed cost management

Orace E-Business suite has a remarkable addition of a new module for capturing additional costs involved in acquiring inventory items, called “Landed Cost Management” (LCM).  LCM charges can be entered before receiving the items (Pre- receiving application) or after receiving  (LCM as a service), this post will focus on per-receiving application. Since this post is meant for LCM and SCM beginners, it will brief the processes involved in capturing additional costs of inventories through LCM, for details please refer Oracle standard manuals. These processes can be summarized as:

1. Enter and approving purchase order in Oracle purchasing as usual
2. Navigate to Landed Cost Management>Workbench> Shipments
3. Enter shipment header details such as shipment number, operating unit, inventory organization, third party (supplier) detail.
4. Navigate to shipment lines, and search for the approved purchase order
5. Once the PO has been sourced, PO lines and quantities for which landed costs need to be captured, navigate to manage charges and enter charges against each cost factor incurred during the item acquisition.
6. Calculate, validate and submit and review charges
7. Receive items in inventory with an additional cost.
8. Create supplier invoice with actual cost.
9. Run matches interface import program to let system record and compare estimated versus actual charges and report resulted variance.

In these simple steps, you can now easily calculate and record estimated and actual additional charges that incur during inventory acquisition which gives complete visibility for your business towards the actual costs so as to more precisely calculate and estimate the profit margins, bargains and customer offerings and also enhance and improve your upstream supply chain cost effectiveness.

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Image reference: Oracle Corporation USA.