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EBS Landed Cost

Management (Pre-receiving)
Demo Script

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EBS Landed Cost Management (Pre-receiving) 365107698.doc


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EBS Landed Cost Management (Pre-receiving)
Document Control

Date Owner App Version Change Reference


Release
04-Jun-2009 Brian.Filice 12.1.1 v1.0

Distribution

Ownership
The Demo Script Writer [Brian.Filice@oracle.com?Subject=365107698.doc] is responsible for
ensuring that this document is current.

Objective
The purpose of this script is to review the features available in EBS Landed Cost Management,
new in release 12.1.1. This script focuses on the Pre-receiving method where the estimated
landed costs need to be calculated prior to receipt.

What's New?

Pitfalls
You should be aware of the following issue:
8411594: multiple validations of the landed cost invoice inflate the value in the LCM
workbench. As a work-around follow the steps in the script.
Review repository ticket 288096 to get more information:
http://adsweb.oracleads.com/pls/ads/ads_ticket.details?pticket=288096

Assumptions

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Related Business Flows (Optional)

Related Documents

Begin Demo

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Introduction

Introduction
1. Overview and benefits

Overview:

Oracle Landed Cost Management enables you to manage estimated and actual landed cost for an
item purchased from a supplier. Landed Cost Management allows you to determine the "real"
costs associated with acquiring items including insurance, transportation, handling, storage costs,
container fees, and import or export charges.

Benefits:

Maximize profit: by illuminating "real" product costs, organizations have the opportunity
to identify areas for potential cost reduction.

Increase competitiveness: when all of the charges, fees, duties and taxes are known,
companies can more strategically source products/components from lower cost foreign
locations. Oracle LCM also enables companies to better justify contracts with vendors or
potential customers.

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.

Ensure compliance: Oracle Landed Cost Management gives you the option to determine
and calculate estimated landed costs before the receipt of the items into inventory (a
requirement in India, Brazil, and Romania) or after the receipt of the item into inventory.

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Landed Cost Mgmt Scenario

Landed Cost Mgmt Scenario


2. Review business flow, integrations, and flexible calculation methods

Business flow and integrations:

Flexible business process to calculate estimated landed costs:

Pre-receiving: determine and calculate estimated landed costs before the receipt of the
items into inventory. This is a requirement in many foreign countries like India, Brazil,
and Romania. This script focuses on the Pre-receiving method.

LCM as a service (Blackbox): determine and calculate estimated landed costs after the
receipt of the item into inventory.

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Login to EBS

Login to EBS
3. Login to EBS

Username = dist; Password = welcome

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The Landed Cost Management, Pre-receiving

Review the LCM Pre-receiving


4. Create and approve a Purchase Order (PO)

Create a PO using the Distribution Manager responsibility or the Purchasing, Vision


Operations (USA) html navigation.

Enter the information as pictured below; and make sure to enter a Need By date.

Use the Shipments button to set the Match Method to Receipt.

On the More tab make sure the Invoice Match Option is set to Receipt and then Save the
PO.

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Use the Approve button to approve the PO.

Click OK to approve the PO.

The status of the PO should now be Approved. Note that the Total price on the PO is
$8,250.00.

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5. Create a Shipment

Create the LC shipment using the Landed Cost Management, Vision Operations
responsibility.

Click the Switch Responsibility button and select the Landed Cost Mgmt, Vision Ops
responsibility.

Navigate to the Landed Cost Mgmt Workbench: select Workbench > Shipments.

Select the Los Angeles Inventory Organization and then click Go.

Click the Create shipment button.

On the Shipment Header enter the Shipment Type, Third Party, Third Party Site, and
then select the Lines tab.

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On the Lines page, enter the PO created earlier, and then click Go.

Generate charges.

Select the row, set Actions to Generate Charges and then click Go.

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A warning message to save your changes will display.

Select Yes.

You will see that the shipment was created and charges executed.

6. Manage Charges

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The Generate Charges process uses the Advanced Pricing setup to calculate the estimated
landed cost for the landed cost freight and insurance lines. Now you will update those
values because you have received more accurate landed cost information.

Set the Action to Manage Charges and then click Go.

Update the landed cost amounts for freight and insurance like pictured below and then
click Apply.

You will see the following message stating that the updates have been saved.

7. Calculate the estimated landed costs

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Since you have made changes to the landed cost amounts you will need to run calculations
process.

Set the Action to Calculate and then click Go.

You will see the following message.

8. Review the estimated landed costs in the workbench

Set the Action to View Landed Cost and then click Go.

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Review the estimated landed cost amounts and then click the Unit Landed Charge link:

Review the Landed Cost Pie Graph.

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Use the Return to Shipment links to return to the shipment.

9. Submit the Shipment

Now that all the landed costs have been entered and represent the closest estimate, you will
need to submit the shipment.

Set the Actions to Submit and then click Go.

10. Receive the items into the Inventory Organization

Receive the items into W5 using the Distribution Manager responsibility.

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Click the Switch Responsibility button and select the Distribution Manager
responsibility.

Navigate to Receipts using Purchasing > Receiving > Receipts, and select the Los
Angeles Inventory Organization.

Set the Source Type to LCM, enter the PO, Shipment, and then click Find.

W5 is WMS-enabled so select the receipt row, enter Subinventory of STA, Locator of


L1.1.1 and then click Save.

Note your receipt ID.

11. Enter the Item Invoice

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Navigate to Invoices using Payables > Entry > Invoices.

Enter the PO (and tab-out of the field to retrieve the PO information), Invoice Date,
Invoice Num, Invoice Amount like pictured (note that the PO amount was $ 8,250), set
the Match Action to Receipt, and then click Match.

Enter the receipt Num from before and then click Find.

Select the row, enter Match Amount, and then click Match.

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You will be returned back to the Invoice Workbench. Now you will need to validate the
invoice.

To validate the invoice click the Actions button, check Validate, and then click OK.

Due to taxes you will need to re-validate the item invoice.

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Manually enter the header Invoice Amount so that it matches the Total on the General
tab. Next, click the Actions button then re-Validate.

The item invoice now has a status of validated.

12. Enter the invoice line for the landed cost charges (first for freight, secondly for insurance)

First, create the invoice line for the landed cost freight charge.

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Select a new row, enter United Postal Service as the Trading Partner, Supplier Site,
Invoice Date, Invoice Num, Invoice Amount of $ 950 (freight & insur), Match Action =
Receipt, and then click Match.

Set Matching Type to Freight, enter the Item Supplier Allied Manufacturing, the Receipt
Num, and the click Find.

Set the Cost Factor Name to LCM Freight Charges, enter the amount ($840 for just
freight), select the row, and then click Match.

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You will see the following message:

Select OK.

You will be returned back to the Invoice Workbench.

Secondly, create the invoice line for the landed cost insurance charge.

Back on the Invoice Workbench and within the same row as LC freight was entered click
Match again.

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Set the Matching Type to Miscellaneous, enter the item supplier Allied Manufacturing,
the Receipt Num from before, and then click Find.

Set the Cost Factor Name to LCM Insurance, enter the insurance amount, select the row
and then Match.

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You will see the following message:

Select OK.

You will be returned back to the Invoice Workbench. Now you will need to validate the
invoice row for landed costs. However, keep in mind, that due to taxes you will need to do
this twice.

Back on the Invoice Workbench click the Actions button, check Validate, and then click
OK.

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Because of taxes you will need to re-validate the invoice the Invoice Amount in the
header must match the Total from the lines below. Manually enter the value from the
Total field (General tab) in the lines into the Invoice Amount in the header and then
Validate again (Actions button, check Validate, OK).

The landed charges invoice will now have a status of Validated.

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13. Run the actual landed cost calculations

First run Matches Interface Import using the Landed Cost Management, Vision Operations
responsibility.

Click the Switch Responsibility button and select the Landed Cost Management, Vision
Operations responsibility.

Run Matches Interface Import from Other > Requests.

Now run the submit shipment process to complete the actual cost calculation from the LCM
Workbench.

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Navigate to Workbench > Shipments.

Retrieve your shipment, set the Actions to Submit, and then click Go.

You will see that the landed cost process completed successfully.

14. View the actual landed costs in the workbench

Select View Landed Cost in the Actions field and then click Go.

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Reviewing the actual landed costs

Click the Unit Landed Cost link.

Review the actual landed cost details.

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End of activity.

Demo Support
Please see http://adsweb.oracleads.com > (M) Support > Procedures, for current information
regarding demonstration support.

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Flowchart
Start

Introduction
Overview & benefits (1)

Landed Cost Mgmt


Scenario
Review business flow,
integrations, & flexible
calculation methods (2)

Login to EBS
Login to EBS: (3)

Review LCM Pre-


receiving
Create & approve a
P.O. (PO) (4)
Create a Shipment (5)
Manage Charges (6)
Calculate estimated
landed costs (7)
Review estimated
landed costs in
workbench (8)
Submit Shipment (9)
Receive items into
Inventory Organization
(10)
Enter Item Invoice (11)
Enter invoice line for
landed cost charges
(first for freight,
secondly for insurance)
(12)
Run actual landed cost
calculations (13)
View actual landed
costs in workbench (14)

End

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