Oracle Landed Cost Management ( LCM)

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Oracle Landed Cost Management

Overview:

• Oracle Landed Cost Management (LCM) is a part of the Oracle E-Business Suite. It is a web-based application. Using LCM, we can calculate the estimated cost and actual cost for an item purchased from a supplier. The costs are variable and can include the following

• Transportation charges
• Freight charges 
• Port charges
• Demurrage charges
• Container deposit and insurance, and so on

• Key Functions:

• With Oracle Landed Cost Management, actual and estimated item costs are managed. We can apply charges to different items using its costs, weight, quantity, and volume.
• It is fully embedded with Oracle Purchasing, Pricing, Cost Management, and Payables, which empowers us to eventually manage the estimated and actual cost.
• Each item cost is factorized using a cost factor. These cost factors eventually build up the estimated cost. We can use as many cost factors as we need to achieve the desired item cost.

LCM integration with Oracle Other Modules:

Oracle Landed Cost Management is fully integrated with other Oracle E-Business Suite modules. The following are the modules that are integrated with Oracle Landed Cost Management:

  
 

Oracle Purchasing: Oracle Landed Cost Management is fully integrated with the Oracle Purchasing Suite. When a purchase order is raised for an inventory organization, which has landed cost available on it as a pre-receiving application, the approved purchase order can be called and updated in LCM. In LCM, extra charges such as freight, miscellaneous charges, port charges, and duties are added, which eventually update the cost of the goods that are to be received in the inventory.

Oracle Payables: Oracle LCM is fully integrated with the Oracle Payables Suite. When the actual invoices against the purchase order arrive and enter in to Oracle Payables, the actual cost is transferred to Oracle LCM to see the difference that is raised between the actual and estimated cost of the items.

Oracle Advanced Pricing: Oracle LCM is fully integrated with Oracle Advanced Pricing. When Advanced Pricing is enabled, the cost and freight duties are automatically picked from Advanced Pricing, and all shipments are updated directly.

 

 Landed Cost Management Setup Process:

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.

Oracle Inventory

Oracle Purchasing

Oracle Payables (required for actual landed cost calculation)

(Conditionally Optional) Oracle Cost Management

(Conditionally Optional) Oracle Process Manufacturing

The use of Oracle Landed Cost Management is optional for Oracle Discrete and Process manufacturing implementations

Landed Cost Management can integrate with Oracle Advanced Pricing but it is not required.

LCM Process Flow:

 

LCM Accounting :

 

Features of Landed Cost Management:

Charge Management

         Oracle LCM collects an unlimited number of estimated charges and enables you to configure how theses charges are applied to a shipment line, a group of lines within a shipment, or an entire shipment. It applies these charges based on weight, volume, quantity, or the value of the items being traded. Once actual amounts are received, Charge Management records the new value for comparison with the earlier estimates. 
¡Landed Cost Calculation

         The Oracle LCM Calculation process provides the ability to calculate the estimated landed cost based on charges manually assigned and automatically allocated based on the configuration of the charge lines. It also calculates the actual landed costs by prorating the actual invoices and proportional taxes to obtain the variances between what was estimated and what was charged. Cost components summed in the calculation remain stored at the most granular level for detailed tracking of charge amounts while variances are updated to the appropriate accounts.

¡Shipments Workbench

        With the Landed Cost Management Shipment Workbench, companies can view the real time accrual updates for a particular receipt or shipment. They can validate the accuracy of a suppliers estimate by comparing estimated and actual costs and can view the percentage of a particular cost component for a particular item. Additionally, you can make use of all the flexible Oracle and E-Business Suite tools to meet your own customized reporting requirements.