Overview of Oracle Landed Cost Management
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. The costs are variable and can include the following:
- Transportation charges
- Freight charges
- Port charges
- Demurrage charges
- Container deposit and insurance, and so on
The key functionalities of Oracle LCM
The key functionalities of Oracle LCM are as follows:
- 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.
Overview of Oracle Landed Cost Management
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. The costs are variable and can include the following:
· Transportation charges
· Freight charges
· Port charges
· Demurrage charges
· Container deposit and insurance, and so on
The key functionalities of Oracle LCM
The key functionalities of Oracle LCM are as follows:
· 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.
Oracle Landed Cost Management process (pre-receiving application)
The process initiates when we create a purchase order for an item that a landed cost is associated with. The matching options for such purchase orders will always be receipts, otherwise, we cannot create a purchase order for an LCM-enabled inventory organization. After an approved purchase order is created, we can search for the purchase order in the LCM module. We can create a shipment for the item referred to in the purchase order. Now, at this level, the estimated cost against the cost factors will be entered. After entering the cost, we will validate and submit it.
After providing the estimated cost, the goods will be received in the inventory organization using the new estimated cost. Upon receipt of actual invoices against the order, we will match the invoice with the shipment and have the estimated and actual value of the item.
Integration of Oracle LCM with 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.
Oracle LCM end-to-end process
In this section, we will see an end-to-end process for Oracle Purchasing, as follows:
· Entering purchase order
· Creating shipment header
· Creating shipment line
· Managing charges
· Validating and submitting charges
· Entering actual invoice
· Matching invoice interface
· Viewing estimated and actual cost
Purpose
“Landed Cost Management” will be the solution for estimating, acquiring, and
calculating the cost to “land” products (goods or services) to an ultimate
destination, inclusive of the related charges.
Scope and Application
Oracle Landed Cost Management enables organizations to gain insight into all of
the “real” costs associated with acquiring products including broker,
terminal, insurance, and transportation fees as well as duties and taxes.
EBS LCM - How to do Setup for Landed Cost Management LCM
Suggested Common steps for LCM Setup Flow:
