| Oracle® Retail Merchandising Implementation Guide Release 16.0 E80776-04 |
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This chapter is an overview of Oracle Retail Trade Management (RTM).
Oracle Retail Trade Management shares the same database with RMS. RTM is enabled in an RMS instance by the following system options parameter settings:
Simplified RTM Indicator is N
Import Indicator is Y
RTM requires certain master data maintenance such as outside locations, Freight Type, Freight Size and Standard Carrier Alpha Codes (SCAC). Import-specific data maintenance is required for country, supplier, partners and items. For calculation of duties, fees, and taxes applicable on import merchandise, Harmonized Tariff Schedule (HTS), files must be uploaded or entered into the system.
Landed cost is the total cost of an item received from a vendor inclusive of the supplier cost and all costs associated with moving the item from the supplier's warehouse or factory to the purchase order receiving location. RTM facilitates the setting up of various cost components, associating them to the purchase orders, calculating the estimated landed costs at the time of purchase order creation. It also facilitates the tracking and booking of the actual costs after the receipt process.
Estimated Landed Cost (ELC) is composed of cost components from the Supplier, Trading Partners, Item and Origin Country, which are brought together during Purchase Order (PO) creation to develop an estimate of costs associated with purchasing a particular item on the current PO.
The components of landed cost are defined using Expenses, Assessments, and Computation Value Bases (CVBs).
Expenses are direct and indirect costs incurred in moving a purchased item from the supplier's warehouse/factory to the purchase order receiving location. Expenses should not be confused with up charges, which allow add-on costs from an initial receiving location to a final retail location and are not part of the landed cost.
An example of a direct expense is the packing cost or insurance cost. Charges incurred for clearing and loading goods at the lading port are an example of indirect costs. Expenses are either added to the base inventory value or booked as a separate expense. Expenses apportioned to inventory affect the weighted average cost (WAC) of the item. Expenses can be assigned to a particular country, supplier, or partner. Expenses are tracked at country or zone levels, as the following defines.
Country level expenses track the costs of bringing merchandise from the origin country, through the lading port, to the import country's discharge port. For example, track expenses for a silk blouse from China, through the lading port, Hong Kong, to the discharge port, Los Angeles.
Zone level expenses track the costs of bringing merchandise from the import country's discharge port to the purchase order receiving location. For example, track expenses for a silk blouse from discharge port, Los Angeles, through to the retailer's New York City warehouse and to the retailer's Chicago warehouse. Costs are different based on the final destination (for example, longer truck route, railroad).
Zones are defined using the Cost Zone dialog (see Cost Management information in RMS documentation). When the zones are created they are used to define expenses at the supplier level (by zone) for default to items.
Assessments are the cost components that represent the total tax, fee, and duty charges for an item. Computation formulas and specific fee and tax types contained in the harmonized tariff schedule (HTS) determine most assessments. The harmonized tariff schedule is defined for an import country.
The HTS comprises a hierarchical structure for describing all goods in trade for duty, quota and statistical purposes. The HTS structure is based on the international Harmonized Commodity Description and Coding System (HS), administered by the World Customs Organization in Brussels, Belgium.
There are two components used to track HTS within the system:
HTS chapter tables
HTS tariff item tables
The HTS chapter tables are organized by the first one to four digits of the tariff schedule classification. The HTS tariff item tables are organized around the full tariff item number. The length of the HTS heading or chapter is defined by import country along with the display format of the tariff number on the HTS import country setup table. The item level tariff codes do vary among GATT (General Agreement on Trades and Tariffs) countries. Each tariff item has various duty rates assigned to it. Classification of goods in this system must be done in accordance with the country-specific rules. For example, in the U.S. it should be done as per General and Additional U.S. Rules of Interpretation, starting with the a four digit heading level to find the most specific provision and then moving to the subordinate categories. Other assessments, such as taxes, fees, countervailing charges, and anti-dumping charges are also assigned at the tariff item level.
RTM also allows the retailer to set up the quota restrictions imposed by the government on an item. The quota is linked to the HTS classification.
HTS calculations can be performed based on the country of manufacture or the country of sourcing for their products. This determination is made at implementation time and is defined on the System Options table.
Computation value bases (CVB) are mechanisms used to create a compound expense or assessment. CVBs allow expenses to be a certain percentage of a group of other expenses and assessments rather than just of one value.
If RTM is enabled in an RMS instance, then import orders can be created in RMS. The purchase order dialog provides additional import functionalities along with standard PO information, if the import purchase order indicator is checked. Throughout each step of the import purchase order creation, there are several options available to capture additional information-specific to ordering imported merchandise.
The menu options within the PO Header Maintenance window are used to attach shipping, letter of credit, order dates, attributes, required documents, and timeline information. The menu options within the PO Item Maintenance window are used to attach HTS, required documents, and timeline information for line items on the PO. The PO Item/Location window provides the option to assign expenses at the Item/Location level. All of the expense components are brought together in one view in the Order Item Expense Maintenance window.
A letter of credit (LC) is a bank instrument used by most retailers to finance purchase of imported goods. LCs are a preferred method of international settlement because the conditions of the purchase, such as required documents and special instructions are detailed in the text of the LC and reviewed by the bank for compliance before the release of payment. They provide importers with a secure method to pay for merchandise and vendors with a secure method to receive payment for merchandise. Letters of credit can be created and applied to purchase orders. Activity against the letter of credit can also be tracked. When the goods are shipped and shipping documents are available, the seller presents documents at the desk of the advising bank, and if there are no discrepancies, collects the specified payment amount. The advising bank debits the issuing bank for the amount of the negotiation as well as any charges, and the issuing bank makes payment and notifies the retailer of the amount of the principal draw down and associated charges.
RTM also supports the exchange of letter of credit (LC) information with a bank in the internationally recognized Society for Worldwide Interbank Financial Telecommunications (SWIFT) format.
The transportation functionality in RTM provides a facility to track information from trading partners as merchandise is transported from the manufacturer through customs clearance in the importing country. This information is recorded at various levels: vessel/voyage, bill of lading (BOL), container, PO/item, and commercial invoice. Transportation information is most often received through EDI. When entered, the information is tracked and edited, as it changes.
The Transportation module is used to track the following information: Shipments, deliveries, licenses and visas, claims, missing documents, packing, dates, timelines, commercial invoices, inland freight, and totals.
When a transportation record is complete, the record is finalized. Finalized transportation records are used to automatically create customs entries. The goods are then tracked as they move through customs.
The Customs Entry module manages entries of merchandise for clearance through customs while providing the information required for government documentation and reporting. Government duties, taxes and fees are calculated in accordance with the country of import. Entry information is prepared for transmission to the customs broker for entry submission. The Customs Entry module provides the ability to track the arrival of a shipment at customs, the customs clearance or associated delays, customs exams, and entry and liquidation payment amounts.
When the charges and assessments are complete, the retailer can choose to allocate the costs to the actual landed cost module. When the customs entry is complete, the custom entry record needs to be confirmed. Non-merchandise invoices are created automatically from confirmed customs entries in the Oracle Retail Invoice Matching application.
As an item progresses through the import process, bills are received from various service providers. As non-merchandise invoices are received from trade partners and suppliers, they can be recorded in the obligations module. They are allocated over the shipment, orders and items that they cover, and the system proportionally allocates the charges to the line item level. Approving an obligation allocates the costs to the actual landed cost module. Approving an obligation creates a non-merchandise invoice in approved status in the Oracle Retail Invoice Matching application.
RTM helps to track the actual landed cost incurred when buying an import item. The module reports variances between estimated and actual landed costs by cost component and shipment. The Actual Landed Cost (ALC) dialogs provide the flexibility to view information about actual and estimated landed costs for any item on a purchase order or invoice obligation. The information can be organized by obligation, obligation cost component, shipment, or location. Duties, fees and taxes are posted directly to the Actual Landed Cost module bypassing the obligations maintenance process. While finalizing the ALC at a purchase order level, the user can also choose whether or not to update weighted average cost (WAC) for each purchase order. For those circumstances where goods might be partially or completely processed through a distribution center to another location prior to assembly and calculation of ALC, it might be more accurate to have WAC be determined by ELC to stand rather than updating it with an ELC/ALC variance.
This section describes RTM integration with other application.
Oracle Retail Trade Management (RTM) and RMS share the same database schema. When RTM is enabled in an RMS instance, certain import-specific data maintenance is required for country, supplier, partners and items. These are directly updated into the RMS database and subsequently used in RTM.
RTM, RMS, and ReIM share the same database schema.
Customs Entry Record - Confirmation of the customs entry record inserts an approved non-merchandise invoice record into the Invoice Matching staging tables for extract and uploads into ReIM.
Obligations Entry - Approving an obligation inserts an approved non-merchandise invoice record into the Invoice Matching staging tables for extract and upload into ReIM.
RTM automates the international import transaction data. Four components of RTM: Customs entry, harmonized tariff schedule, letter of credit, and transportation have batch-processing modules that facilitate the flow of data between RTM and external applications and files.
Letter of credit batch modules process letter of credit applications and amendments to banks, and upload confirmations, drawdown notifications, and related information from banks. Letter of credit batch module downloads and uploads data in an internationally recognized standard format called SWIFT (Society for Worldwide Interbank Financial Telecommunications).
The batch program LCADNLD extracts approved letter of credit applications to banks. The LCMT700 Perl script converts the LC applications from an RTM file format to the SWIFT (MT 700) format.
The issuing bank sends the retailer a confirmation when it agrees to stand as guarantee for the LC. The LCMT730 Perl script converts letter of credit confirmations from a SWIFT format (MT730) to an RTM flat file format. The batch program LCUPLD uploads the converted data from the table to the RTM database tables.
The issuing bank informs the retailer when credit draw downs are made against the LC or when bank charges the retailer the bank fees. The LCMT798 Perl script converts draw downs and bank fees data from a SWIFT file format to an RTM format. The batch program LCUP798 uploads the converted data from the table to the RTM database tables.
At times after a LC has been issued and confirmed, the retailer might want to make amendments to the LC. An amendment to a LC is valid when all parties involved agree to the new conditions and the agreement has been registered. Retailer initiated amendments are extracted by the batch program LCMDNLD. The LCMT707 Perl script converts the LC Amendments from an RTM file format to the SWIFT (MT707) format.
The batch program CEDNLD (customs entry download) extracts custom entry information from the RTM database to custom brokers. Custom Entry (CE) transactions that are in a Sent status are written into a flat file. One flat file is written per broker. Information contained in the files include: order items, bill of lading/airway bill information, shipment information, container information, license, and visa information, broker charges and missing documents information.
The output file could be FTP to the broker. This process has to be handled during implementation and is outside the scope of RTM.
Customs agencies provide HTS data, this information must be converted to the RTM HTS upload file format for uploading into the system. The RTM batch program TRANUPLD uploads the data from the file into the RTM/RMS database. The program handles both the initial HTS information load as well as mid-year HTS updates that are supplied by the import country's government. The initial upload is handled by inserting information from the file into the tables. HTS information already available in the tables is handled by adjusting the effective dates of the existing HTS records and inserting a new set of HTS records into the tables. Files provided by the import country's government includes HTS Chapters, HTS classification, HTS Tax, HTS Fee, HTS OGA, Tariff Treatments, Tariff Treatment Exclusions.
The files provided by the import country government must be placed in the proper input directory after it is converted, so that the batch program TRANUPLD can pick up the file and process the data.
As the merchandise moves from manufacturers' warehouse/factory to the discharge port at the import country, the supply chain partners share information with the retailer in a specified file format. The batch program TRANUPLD uploads the information provided in the files into the transportation tables in RTM/RMS database, thus providing online visibility of the merchandise in the supply chain.
The files provided by the supply chain partners should be placed in the proper input directory, so that the batch program TRANUPLD can pick up the file and process the same. In case the files provided by the supply chain partners differ from the expected file format, custom program must be written to convert the data from the original file format to the required file format.
The following diagram illustrates the interaction between RTM and external agencies.
As RTM and RMS share the same instance, the application shares the security framework of RMS. The user setup, role assignment and access permission are done in the RMS framework.
For details on the user and security setup in RMS, refer to the RMS Users and Security section of this guide.
RTM is a simplified version of Oracle Retail product suite targeted at mid-tier retailers. The simplified Oracle Retail Merchandising Operations Management applications support basic retail processes needed by a mid-tier retailer. Advanced features are turned-off through system parameters, with the goal to reduce implementation complexity and enabling faster implementation and lower total cost of ownership.
If the system option parameter Simplified RTM indicator is enabled, then the following RTM functionality is not available in the application:
Setting up RTM-specific master data such as freight type, freight size, and standard carrier alpha codes (SCAC)
Letter of credit functionality
Transportation functionality
Customs entry functionality
Obligation maintenance
Actual landed costs
If both the Simplified RTM indicator and the Import indicator are enabled, then some import-related functionality is available in RMS. With this set up, the retailer has the option to set up the HTS data and use it in the purchase order process. The retailer can also choose letter of credit as a payment option in the Purchase Order header level, but all other related LC functionality is not available. It is assumed that the retailer is using some other external system for LC processing.
If the import indicator is not enabled, then no RTM functionality is available in the application. For additional information on setting the value in a System Configurations table, see Oracle Retail Merchandising System Installation Guide.
