Saturday, May 12, 2012

Oracle Landed Cost Management

Landed costs functions is to automatically add additional fees to an item’s cost.

 The reason one would want to add Landed Costs to an item is to account for expected charges associated with the delivery or handling of an order, such as Harbor Fees, Brokerage Fees, Commissions, Import Duties, etc. Landed costs are costs that exceed the purchase price of an item.

Landed costs are additional fees incurred to deliver an INDIVIDUAL ITEM into inventory.

Landed costs CANNOT be applied to the total cost of a purchase order. Also, landed costs are NOT taxable.

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).

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.

Features of Landed Cost Management

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

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.

Shipments Workbench

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.

Integration with Other Oracle Applications

Oracle Landed Cost Management integrates with
  1. Oracle Purchasing
  2. Oracle Purchasing (Receiving)
  3. Oracle 
  4. Oracle Cost Management
  5. Oracle Advanced Pricing (Optional)
Landed Cost Management Setup Process

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
  • Oracle Inventory
  • Oracle Purchasing
  • Oracle Cost Management
  • Oracle Payables (required for actual landed cost calculation)
Thanks & Regards,
S.Grace Paul Regan