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Oracle Landed Cost Management Process Guide
Release 12.1
Part Number E14299-04
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Setting Up Landed Cost Management

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:

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.

Setting Up Landed Cost Management

Follow this high-level process flow to set up Landed Cost Management:

  1. Implement and set up all the other Oracle E-Business applications (Oracle E-Business Inventory, Purchasing, Cost Management, Process Manufacturing, Payables, and Advanced Pricing) that are integrating with Landed Cost Management.

    For more information on setting up these applications, see the specific implementation guide and user guide for each application.

  2. Set up Inventory organization options.

    For more information, see Setting Up Inventory Organization Options.

  3. Set up Receiving options.

    For more information, see Setting Up Receiving Options.

  4. Set up cost factors.

    For more information, see Setting Up Cost Factors.

  5. Set up Oracle Advanced Pricing profile options.

    For more information, see Setting Up Advanced Pricing Profile Options.

  6. Set up Landed Cost Management Options.

    For more information, see Setting Up Landed Cost Management Options

  7. Set up shipment line types.

    For more information, see Maintaining Shipment Line Types.

  8. Set up shipment types.

    For more information, see Maintaining Shipment Types.

  9. Set up Landed Cost Management profile options.

    For more information, see Setting Up Landed Cost Management Profile Options.

Setting Up Inventory Organization Options

To use Oracle Landed Cost Management you must specify the inventory organizations that you want to have use Landed Cost Management and you must specify the Landed Cost Management variance account for that organization.

For more information on Inventory organization options, see the Inventory Structure chapter in the Oracle Inventory User's Guide.

Use this procedure to set up Inventory organization options:

To Set Up Inventory Organization Options

  1. Navigate to the Organization Parameters - Inventory Parameters window.

    Organization Parameters - Inventory Parameters window

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    The Organization Parameters - Inventory Parameters window appears.

  2. In the Enabled Products & Features region of the window, select the LCM Enabled check box.

    Note: If you are using Oracle Process Manufacturing, the Process Manufacturing Enabled check box should already be selected for the organization. You will then select the LCM Enabled check box for that organization so that the integration between Oracle Process Manufacturing and Oracle Landed Cost Management can occur.

    Note: When the Enable Project Reference checkbox in the PJM Organization Parameters Form is checked, the LCM Enabled flag in the Inventory Organization Parameters form cannot be checked.

  3. Navigate to the Organization Parameters - Other Accounts window by selecting the Other Accounts tab.

    Organization Parameters - Other Accounts window

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    The Organization Parameters - Other Accounts page appears.

  4. In the Other Accounts region of the page, enter a LCM Variance Account.

  5. Save your work.

Setting Up Receiving Options

To use Oracle Landed Cost Management you must setup several receiving options. Using the receiving options you specify whether Landed Cost Management will be used as a pre-receiving application and you also specify the accounts that will be used pertaining to Landed Cost Management in the accrual accounting process.

For more information on setting up receiving options, see the Setting Up chapter in the Oracle Purchasing User's Guide.

Use the procedure to set up receiving options:

To Set Up Receiving Options

  1. Navigate to the Receiving Options page.

    The Receiving Options page appears.

  2. Select an Inventory organization from the list of values in the Inventory Organization field.

  3. Click Go.

    Receiving Options page (1 of 2)

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    Receiving Options page (2 of 2)

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    The Receiving Options page appears, displaying the receiving options that pertain to the Inventory organization you selected.

  4. (Optional) Select the Pre-Receiving in LCM check box to indicate that you want the organization to operate with Landed Cost Management as a pre-receiving application.

    Select this check box if you will need to review or collect landed cost information before receiving activities occur. In the pre-receiving mode (Landed Cost as a pre-receiving application), the received quantity is equal to the Landed Cost shipment quantity and cannot be updated.

    If not selected, Landed Cost Management will operate as a calculation service without any need for user intervention.

    In this case, the Landed Cost Management process will start in the Receiving windows but all the integration and calculation for landed costs will be performed as a calculation service using API's and concurrent programs and the create button on the Shipments Workbench will not be available.

  5. Select an account from the list of values in the Landed Cost Absorption field. This account will be used during the receiving accrual accounting process.

  6. Select an account from the list of values in the Invoice Price Variance field. This account will be used during the receiving accrual accounting process.

  7. Select an account from the list of values in the Exchange Price Variance field. This account will be used during the receiving accrual accounting process.

  8. Select an account in the Tax Price Variance field. This account will be used during the receiving accrual accounting process.

  9. Select an account in the Default Charge Variance field. This account will be used during the receiving accrual accounting process.

Setting Up Cost Factors

Oracle Landed Cost Management uses cost factors to define charge types. Charge types are used in Landed Cost Management when adding a new charge line in the Shipments Workbench.

For more information on setting up cost factors, see the Oracle Sourcing Implementation and Administration Guide.

Use this procedure to set up cost factors:

To Set Up Cost Factors

  1. Navigate to the Cost Factors page.

    The Cost Factors page appears displaying all of the cost factors.

  2. Click Create.

    Create Cost Factor page

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    The Create Cost Factor page appears.

  3. Enter the code for the cost factor in the Code field.

    This code will appear in the Charge Type list of values in the Shipments Workbench.

  4. Select Active for the Status.

    Landed Cost Management only uses cost factors with an active status for charge line creation.

  5. Enter a name for the cost factor in the Cost Factor Name field.

  6. Select the basis for pricing using the Pricing Basis field.

    Per-Unit appears by default for the pricing basis.

  7. Enter the description for the cost factor in the Description field.

  8. In the Cost Management region, select the Allocation Basis for the cost factor. Options are:

    Landed Cost Management supports all of these basisses for allocation. The allocation basis is used to prorate the charge amounts to the items on the Landed Cost Management shipment.

    Note: If the Allocation Basis is blank, Landed Cost Management defaults the allocation basis to Value.

Setting Up Advanced Pricing Profile Options

If you are using Oracle Advanced Pricing to integrate with Oracle Landed Cost Management then you will want to define Advanced Pricing profile options in a manner recognized by Landed Cost Management. The Advanced Pricing application is required if you need automatic charge lines generation when using Landed Cost Management.

Advanced Pricing has several profile options. The following table lists the Advanced Pricing profile options and the profile value settings that must be entered to enable the integration between Landed Cost Management and Advanced Pricing.

Profile Option Profile Value Supported Levels
QP: Blind Discount Option Yes Site and Application
QP: Licensed for Product Purchasing Application and User
QP: Pricing Perspective Request Type Purchase Order Site and Application
QP: Pricing Transaction Entity Procurement Site, Application, and User
QP: Source System Code Oracle Purchasing Site, Application, and User

For more detailed information on these profile options, see the Oracle Advanced Pricing Implementation Guide.

Use this procedure to set up Advanced Pricing profile options:

To Set Up Advanced Pricing Profile Options

Typically, the System Administrator is responsible for setting up and updating profile option values. For more information, see Oracle Applications System Administrator's Guide, Setting User Profile Options.

  1. Navigate to the System Profile Values window.

    The Find System Profile Values window appears.

  2. Enter QP% in the Profile field and click Find.

    The System Profile Values window appears displaying all of the Advanced Pricing (QP) profile options.

  3. Locate the specific profile option and enter the appropriate profile value.

  4. Click the Save icon in the tool bar.

Setting Up Landed Cost Management Options

Setting up Landed Cost Management options is a mandatory step before using the Landed Cost Management application. Landed Cost Management options define the numbering behavior and tolerances control for Landed Cost Management shipments.

Use this procedure to set up Landed Cost Management options:

To Set Up Landed Cost Management Options

  1. Navigate to the LCM Options page.

    The LCM Options page appears with only the Inventory Organization field available for selection.

  2. Select an Inventory Organization and click Go.

    Only the inventory organizations that have LCM enabled appear for selection.

    LCM Options page

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    The Landed Cost Management options display for the inventory organization you selected.

  3. Select how the shipment number will be generated for a Landed Cost Management shipment in the Shipment Number Generation field. Options are:

  4. If Manual is selected for the Shipment Number Generation, then select a Shipment Number Type. Options are:

    The system defaults Numeric as the Shipment Number Type for automatic shipment number generation.

    In the case of automatic shipment number generation, the system will start the numbering at "1" and will display the next shipment number that will be created in the Next Shipment Number field.

  5. Enter a price tolerance percent in the PO Price Tolerance (%) field.

    Land Cost Management provides a consolidated tolerance control for the purchase price entered in Landed Cost Management (equivalent to the quantity tolerance for a receipt in Receiving). Prices out of the tolerance interval are rejected.

  6. Click Apply to save your work.

Maintaining Shipment Line Types

Setting up shipment line types is a mandatory step before you can use Landed Cost Management. Shipment line type is a mandatory attribute of all shipment lines on a Landed Cost Management shipment. It provides a shipment line categorization and also drives the landed cost calculation behavior.

Use these procedures to maintain shipment line types:

To View Shipment Line Types

  1. Navigate to the Shipment Line Types page.

    Shipment Line Types page

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    The Shipment Line Types page appears displaying all of the existing Shipment Line Types in a table.

  2. Click the Code link.

    The Shipment Line Type page appears displaying information just for that shipment line type. From this page you can update the shipment line type.

To Set Up Shipment Line Types

  1. Navigate to the Shipment Line Types page.

    The Shipment Line Types page appears displaying all of the existing shipment line types in a table.

  2. Click Create.

    Create Shipment Line Type page

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    The Create Shipment Line Type page appears.

  3. Enter a short code definition for the shipment line type in the Code field.

  4. Enter a description for the shipment line type in the Name field.

  5. Select the Included in Landed Cost check box if want the landed cost engine to include the line amount for this shipment type in the landed cost for the item.

  6. Select the Associable Line check box if the shipment line can be associated to another shipment line. For example, the amount of the first line will be prorated and allocated to the landed cost of the second shipment line.

  7. Enter the Start Date when this shipment line type becomes active. By default the current date appears.

  8. (Optional) Enter the date when this shipment line type will no longer be active in the End Date.

  9. Click Apply to save your work.

To Update Shipment Line Types

  1. Navigate to the Shipment Line Types page.

    The Shipment Line Types page appears displaying all of the existing shipment line types in a table.

  2. Click the Update icon next to the shipment line type that you want to update.

    Alternate navigation: Click the Code link for a shipment line type in the table and then click Update.

    The Update Shipment Line Type page appears.

  3. Change the information you want associated with the shipment line type.

  4. Click Apply to save your work.

To Delete a Shipment Line Type

  1. Navigate to the Shipment Line Types page.

    The Shipment Line Types page appears displaying all of the existing shipment line types in a table.

  2. Click the Delete icon next to the shipment line type that you want to delete.

    You will receive a warning message asking if you are sure you want to delete the shipment line type.

  3. Click Yes.

    The Shipment Line Type is deleted.

Maintaining Shipment Types

Before you can begin to use Landed Cost Management you must create shipment types. Shipment type determines the validations that will occur for a shipment.

Use these procedures to maintain shipment types:

To View Shipment Types

  1. Navigate to the Shipment Types page.

    Shipment Types page

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    The Shipment Types page appears displaying all of the existing Shipment Types in a table.

  2. Click the Code link.

    The Shipment Type page appears displaying information just for that shipment type. From this page you can update the shipment type.

To Set Up Shipment Types

  1. Navigate to the Shipment Types page.

    The Shipment Types page appears displaying all of the existing shipment types in a table.

  2. Click Create.

    Create Shipment Type page

    the picture is described in the document text

    The Create Shipment Type page appears.

  3. In the Main region of the page, enter the following information:

    Field Name Description
    Code Enter a short code definition for the shipment type.
    Name Enter a description for the shipment type.
    Start Date Enter the start date when the shipment type becomes active. By default the current date appears.
    (Optional) End Date Enter the date when the shipment type will no longer be active.
  4. In the Controls region of the page, select the Third Parties Allowed option. Options are:

  5. Under the Shipment Line Types Allowed tab, select the shipment line types that can be used with this shipment type.

  6. Using the Select column, select the shipment line type that will be the default.

  7. (Optional) To add another row for additional shipment line types, click Add Another Row and then select another shipment line type.

  8. (Optional) To delete a shipment line type from the shipment type, click the Remove icon next to the shipment line type you wish to remove.

  9. Select the Party Types Allowed tab.

    Party Types Allowed tab

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    The Party Types Allowed tab appears.

  10. Select the Party Types that can be used with this shipment type.

    The system restricts the parties that can be chosen by filtering parties that are classified as one of the party types selected for the shipment type.

    Party types are defined as part of the Trade Community Architecture (TCA) setup.

  11. (Optional) To add another row for party types, click Add Another Row and then select another party type.

  12. (Optional) To delete a party type from the shipment type, click the Remove icon next to the party type you wish to remove.

  13. Select the Party Usages Allowed tab.

    Party Usages Allowed tab

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    The Party Usages Allowed tab appears.

  14. Select the Party Usages that can be used with this shipment type.

    The system restricts the parties that can be chosen by filtering parties that have party usage defined as one of the party usages selected for the shipment type. Party usage is defined as part of the Trade Community Architecture (TCA) setup.

  15. (Optional) To add another row for party usage, click Add Another Row and then select another party usage.

  16. (Optional) To delete a party usage from the shipment type, click the Remove icon next to the party usage you wish to remove.

  17. Select the Source Types Allowed tab.

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    The Source Types Allowed tab appears.

  18. Select the Source Types that can be used with this shipment type. The only available Source Type is Purchase Order.

  19. (Optional) To add another row for source type, click Add Another Row and then select another source type.

  20. (Optional) To delete a source type from the shipment type, click the Remove icon next to the source type you wish to remove.

  21. Click Apply to save your work.

To Update Shipment Types

  1. Navigate to the Shipment Types page.

    The Shipment Types page appears displaying all of the existing shipment types in a table.

  2. Click the Update icon next to the shipment type that you want to update.

    Alternate navigation: Click the Code link for a shipment type in the table and then click Update.

    The Update Shipment Type page appears.

  3. Change the information you want associated with the shipment type.

  4. Click Apply to save your work.

To Delete Shipment Types

  1. Navigate to the Shipment Types page.

    The Shipment Types page appears displaying all of the existing shipment line types in a table.

  2. Click the Delete icon next to the shipment type that you want to delete.

    You will receive a warning message asking if you are sure you want to delete the shipment type.

  3. Click Yes.

    The Shipment Line Type is deleted.

Setting Up Landed Cost Management Profile Options

Landed Cost Management has a few profile options. Two of the profile options are related to the generate charges process that occurs in the Landed Cost Management Shipments Workbench, three of the profiles are related to the cost factor UOM conversions for the Generate Charges and Calculate process, and the other profile option is related to the creation of a Landed Cost Management shipment when the system creates the shipment automatically.

For more information on the Landed Cost Management Profile Options, see Overview of Profile Options in the Profile Options appendix.

This table describes the profile options:

Profile Option Profile Option Description
INL: Default Currency Code for QP Charges Generation This profile option is used in Advanced Pricing integration with Landed Cost Management.
The system uses this profile option to determine the base currency code when integrating to Oracle Advanced Pricing. All of the shipment line amounts will be converted to the currency indicated in this profile option.
For more information see, Generating Charges for the Shipment.
INL: Default Currency Conversion Type for QP Charges Generation This profile option is used in Advanced Pricing integration with Landed Cost Management.
The system uses this profile option to determine the currency conversion type when integrating to Oracle Advanced Pricing. All of the shipment line amounts will be converted to the currency conversion type indicated in this profile option.
For more information see, Generating Charges for the Shipment.
INL: Default Shipment Type for Open Interface The system uses this profile option to determine the Shipment Type the Landed Cost Management shipment headers will be created with, in the Managing Landed Cost as a Service flow, where Landed Cost Management shipments are automatically created for the receipts.
For more information see, Understanding Landed Cost as a Service.
INL: Quantity UOM Class Use this profile to indicate the class defined for each unit associated with quantity cost factors.
The system uses this profile option to drive the Landed Cost Management cost factor UOM conversions during the Generate Charges and Calculate processes.
For more information see, Understanding Landed Cost as a Pre-Receiving Application and Understanding Landed Cost as a Service.
INL: Volume UOM Class Use this profile to indicate the class defined for each unit associated with volume cost factors.
The system uses this profile option to drive the Landed Cost Management cost factor UOM conversions during the Generate Charges and Calculate processes.
For more information see, Understanding Landed Cost as a Pre-Receiving Application and Understanding Landed Cost as a Service.
INL: Weight UOM Class Use this profile to indicate the class defined for each unit associated with weight cost factors.
The system uses this profile option to drive the Landed Cost Management cost factor UOM conversions during the Generate Charges and Calculate processes.
For more information see, Understanding Landed Cost as a Pre-Receiving Application and Understanding Landed Cost as a Service.

Use this procedure to set up Landed Cost Management Profile Options:

Prerequisites

To Set Up Landed Cost Management Profile Options

Typically, the System Administrator is responsible for setting up and updating profile option values. For more information, see Oracle Applications System Administrator's Guide, Setting User Profile Options.

  1. Navigate to the System Profile Values window.

    The Find System Profile Values window appears.

  2. Enter INL% in the Profile field and click Find.

    The System Profile Values window appears displaying all of the Landed Cost Management (INL) profile options.

  3. Locate the specific profile option and enter the appropriate profile value.

  4. Click the Save icon in the tool bar.