Track Lot or Serial Level Costs During Transfers

When using the actual or average cost methods, lot and serial level costing helps you to accurately track the cost of goods throughout the production process. With this enhancement, you can now retain and track this cost information for cost-based transfers, when goods are transferred from one organization to another or within an organization when transfer flow isn't orchestrated by Supply Chain Financial Orchestration.

Let's consider an example of how the costs are retained on transfer before and after upgrade.

Transfer costs before and after upgrade

Item Lot/Serial Cost in Shipping Organization Cost in Destination Organization Before Upgrade Cost in Destination Organization After Upgrade
ABC Lot1 - Serial1

$10.00

 $15.00 (Average Cost)

$10.00
ABC Lot1 - Serial2

$20.00

 $15.00 (Average Cost)

$20.00

The business flows that support this feature are:

  • Inventory destination cost-based transfers from one inventory organization to another inventory organization
  • Expense destination cost-based transfers from inventory organization to an expense location

This feature supports transfers for the following cost method and valuation unit combinations:

  • Perpetual average cost method with granular valuation structure having valuation unit at the Serial or Lot level

  • Actual cost method with any valuation unit where summarization at the Lot or Serial level isn't enabled

This feature helps you:

  • Retain cost information across transfers ensuring a complete picture of the production costs.
  • Know the cost throughout the supply chain allowing for better decision making with reference to cost visibility, tracking, and pricing.

Steps to Enable

Use the Opt In UI to enable this feature. For instructions, refer to the Optional Uptake of New Features section of this document.

Offering: Manufacturing and Supply Chain Materials Management

Tips And Considerations

  • The costs are retained only for receipts recorded corresponding to the shipments done after opting in to this feature. For shipments made before opting in to this feature, the costs will continue to be averaged.
  • Return flow will be processed in accordance with how the forward shipment flow was costed. If the shipment flow was costed earlier with averaging, then the return will be processed accordingly.
  • After you opt in to this feature, the number of distributions generated for trade events will be in proportion to the lot or serial combinations at the time of shipment because the costs are retained at the most granular level.
  • Items with different inventory control in source and destination organizations will continue to be average costed. For example, the item is lot or serial controlled in the shipping organization and no control in the destination organization or vice versa.
  • Expense destination transfers without receipt having multiple distributions will continue to be average costed.
  • Transfer order receipt transactions to expense destination will continue to be average costed because the receipt doesn't have visibility of lot or serial data. The actual cost will be used when booking expense on receipt delivery event. 

Key Resources

  • Oracle Fusion Cloud SCM: Implementing Manufacturing and Supply Chain Materials Management Guide, available on the Oracle Help Center.

  • Oracle Fusion Cloud SCM: Using Supply Chain Cost Management Guide, available on the Oracle Help Center.

Access Requirements

Users who are assigned a configured job role that contains these privileges can access this feature:

  • Review Cost Distribution (CST_REVIEW_COST_DISTRIBUTIONS)
  • Manage Item Costs (CST_MANAGE_ITEM_COSTS)
  • Review Receipt Accounting Distributions (CMR_REVIEW_RECEIPT_ACCOUNTING_DISTRIBUTIONS)