Allocate Landed Cost for Transfer Order Receipts

You can now associate transfer order shipment to a trade operation and perform landed cost charge allocations using the shipment quantity. This ensures enhanced cost visibility and accurate inventory valuation for interorganizational material movements.

Here are some of the new functional capabilities and benefits introduced as part of this update:

• Search, filter, and process transfer order shipments from the Orders to Estimate page. The scorecard on this Redwood page provides a quick overview of transfer orders received in the last 7 days.

Orders to Estimate page with transfer order shipments created in last 7 days

• Create trade operations on the shipment quantity for transfer orders. Transfer orders are now supported as a valid transaction type in trade operations, allowing for proportional distribution of charges across transfer order shipments. Trade operations can be created from the Trade Operations page as well as the Orders to Estimate page.

Create trade operations

• Automate transfer order shipment allocation by associating transfer order shipments at the trade operation level:
  • Add transfer order shipments to a trade operation from the Edit Trade Operation page or by using the new Default Transfer Order Shiplines REST API.
  • Use the extensive search options to quickly get to the list of transfer order shipments to be added to the trade operation.
  • Shipments added are automatically associated to each charge line in the trade operation along with the shipment quantity. The allocation process uses the shipment quantity to allocate landed cost charge estimate and actual amounts.

Edit trade operation 

Add transfer order shipments to a trade operation

• Allocate landed cost charges based on transfer order shipment quantity. You can view the allocated estimate and actual amounts in the Estimates and Actuals tab of the trade operation. You can also use the view item landed costs to get an overview of the total landed cost on the transfer order receipts. 

Screenshot of the Estimates and Actuals tab for a trade operation

Screenshot for Item Landed Costs

• Accurate landed costs for receipt accrual and inventory valuation:
  • Landed cost charges are captured based on shipment information. Therefore, receipt accrual and inventory valuation computation happens based on estimate or actual amounts incurred on a specific shipment or set of shipments.
  • Accurate landed cost charges are available even before the actual receiving happens.
  • Invoice amount is fully absorbed into receipt quantities based on the transfer order shipments.
  • Event types and transaction types are defined for creating the receipt accounting and cost accounting distributions:
    • Receipt Accounting:  
      • Landed Cost Adjustment for Transfer Order Receipt (for inventory destination)
      • Landed Cost Adjustment for Transfer Order Deliver (for expense destination) 
      • Landed Cost Receipt Accrual for Transfer Order (both inventory and expense destination when charge BU is different from receiving BU)
    • Cost Accounting: 
      • Landed Cost Adjustment for Transfer Receipt
  • For an inventory destination, in case of a return receipt for the transfer order, the landed cost charges won't be reversed.

Receipt Accounting Distributions page

Receipt accounting distributions for landed cost charges

Cost accounting distributions for inventory destination landed cost charges

Some of the benefits of this feature include:

• Improves landed cost accuracy for transfers by allocating charges on transfer order shipment quantity.
• Ensures correct accounting of transfer-related costs, enabling better cost control and margin analysis.

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

• We encourage you to enable and use this new user experience for maximum benefit.
• The feature supports modeling charges on the receiving organization. It doesn't support scenarios where the source organization pays the charges.
• Only transfer order shipment-based flows are supported for landed cost charge modeling.
• Consigned transfer orders, return transfer orders, and direct transfers aren't supported.
• Transfer order receipt and landed cost charges are always covered separately for distributions even if they are processed together.
• Cost accounting distributions would be available only when these features are also enabled:
  • Enable Parallel Processing in Cost Preprocessor (update 25B; opt-in based)
  • Enable Parallel Processing in Main Cost Processor (update 25A; opt-in based)
• Trade operation should be used as a container object for charge lines, transfer order shipments, and allocated amounts.  
  • You can group transfer order shipments that are shipped together to capture all charges incurred on the shipment and associate and allocate to relevant transfer order shipments.
  • Landed cost processes like Allocate Landed Cost Charges, Associate Invoices to Trade Operation Charges, and others can be scheduled to run at regular intervals to automate association of invoices to charge lines and allocation of charges to receipts.
• Ensure that the subledger accounting setup (mapping sets, account rules) is complete for the new event types. You can modify the seeded mapping set and account combination rules based on your business requirements.

Key Resources

• Oracle Fusion Cloud SCM: Using Supply Chain Cost Management guide, available on the Oracle Help Center.
• Oracle Fusion Cloud SCM: REST API for Oracle Fusion Cloud SCM 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:

• Manage Trade Operations (CML_MANAGE_TRADE_OPERATIONS)
• Manage Trade Operations by Web Service (CML_MANAGE_TRADEOPS_WEB_SERVICE)
• Review Landed Cost Transfer Order Shipments by Web Service (CML_REVIEW_TOSHIPLINES_WEB_SERVICE)
• Review Landed Cost Transfer Order Shipments (CML_REVIEW_TO_SHIPLINES_FOR_LANDED_COST)
• View Item Landed Costs for Purchase Order and Transfer Order In-transit Receipts by Web Service (CML_ITEM_LANDED_COSTS_WEB_SERVICES)