Complete the Same Output Across Multiple Operations in Discrete Manufacturing

You can now add co-products and by-products to different operations in a discrete work definition or work order, with enhanced support for accurate cost calculations. When co-products or by-products are specified at the operation level, the application automatically apportions costs based on the cost allocation basis defined in the work definition.

Standard Cost Calculation

The standard cost calculation now uses the multiple instances of co-products and by-products in a work definition and their cost allocation percentages to calculate a blended standard cost. Let's review an example of a work definition where a by-product is yielded in different operations.

Example: Work Definition

Operation	Item Type	Item	Quantity	UOM	Standard Cost	Cost Allocation Factor
10	Component	RM1	1000	Lbs	3
10	By-product	AL Scrap	100	Lbs		30%
20	Component	RM2	10	Lbs	10
20	By-product	AL Scrap	50	Lbs		15%
30	Component	RM3	10	LBS	5
30	Product	FG1	200	EA		100%

Cost Calculations

Example: Standard Cost Calculations

Operation	Item Type	Item	Quantity	UOM	Standard Cost	Cumulative Cost	Cost Allocation Factor	Allocated Output Cost	Carried Forward
10	Component	RM1	1000	Lbs	3	3000			3000
10	By-product	AL Scrap	100	Lbs			30%	900	2100
20	Component	RM2	10	Lbs	10	100			2200
20	By-product	AL Scrap	50	Lbs			15%	330	1870
30	Component	RM3	10	LBS	5	50			1920
30	Product	FG1	200	EA			100%	1920	0

Standard cost of AL Scrap = (Total of allocated output cost in all operations where the product is reported) / (Total quantity reported in all operations)

= (900+330)/(100+50)

= $ 8.2

Standard cost of FG1 = 1920/200

= $9.6

Actual, Average, and Periodic Average Cost Methods

If you use the Use Accumulated Work in Process Balances provisional completion option, each of the product completions will be calculated based on the accumulated work in process balances till that operation. When the work order is closed, the cost processor will calculate a single cost for product completions and will create a product cost adjustment for the difference between the product completion cost and the cost calculated at work order close.

This ensures that the total production costs are distributed appropriately across all outputs, providing precise and transparent cost tracking. As a result, you can achieve accurate inventory valuation, improved profitability analysis, and better alignment with operational realities in complex manufacturing scenarios.

Steps to enable and configure

You don't need to do anything to enable this feature.

Tips and considerations

This feature is available only with the Redwood experience. For a consistent user experience, you can enable the Redwood pages for work orders, production execution, mobile production reporting using industrial handheld devices, postproduction reporting, quality inspection, production transaction history, and product genealogy.
The cost allocation factor basis needs to be same for the same item across different operations. This validation is enforced when you create a work definition and when you add the same item in different operations in a work order.

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 the following privileges can access this feature:

Manage Cost Planning Scenario Definition (CST_MANAGE_SCENARIO)
Perform Cost Rollup (CST_PERFORM_COST_ROLLUP)
Review Rolled Up Costs (CST_REVIEW_ROLLEDUP_COSTS)
Allows review of costs and balances by each individual work order (CST_REVIEW_WORK_ORDER_COSTS_PRIV)

These privileges were available prior to this update.