OTM Settlement Implementation Challenges for 3PL and Others. Anand Madhira OTM Lead Architect, SRUJAN Technologies, Inc.

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2 OTM Settlement Implementation Challenges for 3PL and Others Anand Madhira OTM Lead Architect, SRUJAN Technologies, Inc.

3 Agenda Key Settlement Functionalities for 3PL Gaps/Challenges in OTM Settlement Process for 3PL OTM Requested Enhancements in Finance Module Workarounds to overcome Gaps & Challenges 3

4 Agenda Key Settlement Functionalities for 3PL Gaps/Challenges in OTM Settlement Process for 3PL OTM Requested Enhancements in Finance Module Workarounds to overcome Gaps & Challenges 4

5 Freight Settlement Key Functionalities Planning of Order Releases into Buy Shipments Assignment of GL Codes to each Shipment Cost Line Allocation of Buy Shipment Cost Lines Expense Accruals Generation & Integration with AP System Standard Invoice Creation Invoice Consolidation Invoice Approval & Tolerance Check Voucher Generation Voucher Integration with AP System Voucher Status Update from AP System Credit Note Invoice Creation (If Required) Credit Note Voucher Creation & Integration Shipment Delivered Invoice Creation Voucher Creation Payment to SP 5

6 Customer Billing Key Functionalities Creation of Sell Shipments Assignment of GL Codes to each Shipment Cost Line Allocation of Sell Shipment Charges Revenue Accruals Generation & Integration with AR System Standard Bill Creation Bill Consolidation Bill Approval & Tolerance Check Bill Integration with AR System Bill Status Update from AR System Supplementary Bill Creation (If Required) Supplementary Bill Integration with AR System Final Bill Payment Status from AR System Shipment Delivered Bill Creation Payment from Customer 6

7 Agenda Key Settlement Functionalities for 3PL Gaps/Challenges in OTM Settlement Process for 3PL OTM Requested Enhancements in Finance Module Workarounds to overcome Gaps & Challenges 7

8 Gaps/Challenges in Settlement Process for 3PL Gap/Challenge1 Description: Creation of Invoice at different levels such as per Booking, Container, Voyage, Accessorial Code & Shipment Cost Line in a Buy Shipment as per the physical invoice copy received from the Service Provider s. Business Requirement: 3PL will receive physical copy of invoices through mail from the service provider s and most of the service provider s sends the invoice at different levels (i.e. Invoice per Booking/Container/Voyage/Accessorial Code) at which they expect 3PL to match, validate & pay at the same level. 8

9 Gaps/Challenges in Settlement Process for 3PL Business Scenario: 3 FCL Buy Shipments created (having same voyage no) from 3 Order Releases. Each of these shipments having 3 Shipment Cost Lines (OCF Ocean Freight, BAF Bunker Adjustment Factor & CAF Currency Adjustment Factor). Service Provider sends one invoice for OCF per voyage to 3PL (Via ). In this case, users need to create one invoice for all the 3 OCF shipment cost lines and then match and validate the cost with received copy of invoice and then generate the voucher for further payment processing. 9

10 Gaps/Challenges in Settlement Process for 3PL Gap/Challenge2 Description: Creation of Bill at different levels such as Booking, Container, HBL, Voyage & Per Accessorial Code in a Sell Shipment as per the customer s specific profile. Business Requirement: Greater flexibility have been given by 3PL to the customers to have their own billing profile in which they will specify at which level they want 3PL to send the bill to them. While creating bills in OTM, system need to check the bill level in profile based on the customer and then create those many bill/bills. 10

11 Gaps/Challenges in Settlement Process for 3PL Business Scenario: Buy SDD CFS POL POD CFS SDD First Mile Ocean Shipment (Primary) Last Mile Sell SDD SDD 1 Sell Shipment (Primary) having Origin Trucking, Freight & Destination Trucking Charges 11

12 Gaps & Challenges in Settlement Process for 3PL Business Scenario: 2 Bookings received from NIKE customer having 20 CBM each. Booking Header Port of Port of Source Destination Total Volume Total Weight Shipper Customer Booking ID Loading Destination Location Location Volume UOM Weight UOM Code Code BTP BKG_1 SIN LAX SIN_CFS LAX_CFS 20CBM 1000KG SHIPPER_1 NIKE NIKE BKG_2 SIN LAX SIN_CFS LAX_CFS 20CBM 1000KG SHIPPER_1 NIKE NIKE 1 Sell Shipment created for 2 bookings Shipment ID Service Provider Bill-To Party Volume Volume UOM Weight Weight UOM Charge Code Unit Rate UOM Quantity Cost SHIPMENT_1 APLL NIKE 40 CBM 1000 KG OTRU 10 USD MILE USD Shipment Charges SHIPMENT_1 APLL NIKE 40 CBM 1000 KG OCF 1200 USD CTR USD SHIPMENT_1 APLL NIKE 40 CBM 1000 KG BAF 200 USD CTR USD SHIPMENT_1 APLL NIKE 40 CBM 1000 KG CAF 100 USD CTR USD SHIPMENT_1 APLL NIKE 40 CBM 1000 KG DTRU 15 USD MILE USD 12

13 Gaps/Challenges in Settlement Process for 3PL Business Scenario: NIKE customer wants bills to be created & issued per booking level as specified in the billing profile. So now system needs to create 2 bills (one per booking for NIKE) in this case. OTM Bill Per Booking (BKG_1) OTM Bill Per Booking (BKG_2) BILL ID Bill-To Party Charge Code Charge Code Description Unit Rate Rate Amount Total BILL Amount BILL_1 NIKE OTRU ORIGIN TRUCKING 10 USD 500 USD BILL_1 NIKE OCF OCEAN FREIGHT 1200 USD 600 USD BILL_1 NIKE BAF BUKER ADJUSTMENT FEE 200 USD 100 USD CURRENCY ADJUSTMENT 2150 USD BILL_1 NIKE CAF FEE 100 USD 50 USD BILL_1 NIKE DTRU DESTINATION TRUCKING 15 USD 900 USD BILL ID Bill-To Party Charge Code Charge Code Description Unit Rate Rate Amount Total BILL Amount BILL_2 NIKE OTRU ORIGIN TRUCKING 10 USD 500 USD BILL_2 NIKE OCF OCEAN FREIGHT 1200 USD 600 USD BILL_2 NIKE BAF BUKER ADJUSTMENT FEE 200 USD 100 USD CURRENCY ADJUSTMENT 2150 USD BILL_2 NIKE CAF FEE 100 USD 50 USD BILL_2 NIKE DTRU DESTINATION TRUCKING 15 USD 900 USD 13

14 Gaps/Challenges in Settlement Process for 3PL Gap/Challenge3 Description: GL Code Assignment for Invoice/Bill Objects. Business Requirement: In day to day business of 3PL, there will be many bills/invoices created. Operations will have ad-hoc/missing charges but not added in shipment and also sometimes 3PL receives actual invoice from carrier with additional cost which is not part of original shipment. So in this case Ops user's will add new line items in Bill/Invoice to accommodate these adhoc/missing charges. After the line item is added they require GL Code to be auto assigned to the newly added line items. 14

15 Gaps/Challenges in Settlement Process for 3PL Gap/Challenge4 Description: Allocation of newly added line items in Invoice/Bill. Business Requirement: Once the Invoice/Bill is paid, 3PL wants all the line item costs/charges to be allocated back to the related booking lines (order release lines) as there may be line items which are added directly into the Invoice/Bill due to the last minute ad-hoc or missing costs/charges. This allocation is required to generate the margin view report at different levels using the allocation data from buy/sell shipment & invoice/bill objects in order to compare the expense incurred vs the revenue generated. 15

16 Gaps/Challenges in Settlement Process for 3PL Gap/Challenge5 Description: Population of Line Items in Parent Invoice/Bill. Business Requirement: In day to day business of 3PL, there will be many standard invoices/bills will be created. These invoices/bills will consolidated as per the business needs every day which means there will be many parent invoices/bills will be created having more no of child invoices/bills associated to it. In Parent Invoice/Bill, users require line items to be populated which are grouped by unique Cost Type & Accessorial Code of all related line items of child invoices/bills. This will provide users a single place to review the grouped charges instead of going through multiple child invoices/bills line items to review. 16

17 Gaps/Challenges in Settlement Process for 3PL Business Scenario: Creating consolidated bill/invoice using 2 Standard Bills/Invoices having same service provider and system should create Parent Bill/Invoice by grouping charges based on unique Cost Type and Accessorial Code as shown in the below diagram. 17

18 Agenda Key Settlement Functionalities for 3PL Gaps/Challenges in OTM Settlement Process for 3PL OTM Requested Enhancements in Finance Module Workarounds to overcome Gaps & Challenges 18

19 Requested Enhancements in Finance Module Below are the Enhancements released by Oracle as requested to fulfil the challenges faced in one of the 3PL implementation. New Agents Events added for Invoice & Bill Objects in OTM v New Auto Assign Type ID s added for Invoice & Bill Objects in OTM v6.3.5 Split Invoice/Bill Functionality has been added in OTM v6.3.7 Note: Above enhancements provided more flexibility and also made the settlement process in Finance Module more user friendly for 3PL and other industries. 19

20 Requested Enhancements in Finance Module New Agents Events added for Invoice & Bill Objects in OTM v6.3.5 Challenge Faced: In day to day business of 3PL, operations will have last minute ad-hoc/missing charges to be added in Invoice/Bill due to the many business reasons where they will add new line items in Invoice/Bill or modify the existing line items to accommodate these ad-hoc/missing charges. After the line item is added/modified they require a workflow to be execute as per the business rules. How it was Addressed? By using the below 4 new agents events, the above challenge has been addressed using OOTB solution to raise an agent and execute workflows whenever Invoice/Bill Line Items are Added/Modified/Deleted. 20

21 Requested Enhancements in Finance Module New Auto Assign Type ID s added for Invoice & Bill Objects in OTM v6.3.5 Challenge Faced: 3PL wants to derive finance related fields such as Control Entity, Cost Centre etc.., by looking up different field values exists within the same object for each Shipment Cost Line, Invoice & Bill Line Item whenever the respective record is created. The issue here is today users cannot utilize the Auto Assignment functionality to insert these financial values as remarks/refnums in the shipment cost and invoice/bill line items respectively. 21

22 Requested Enhancements in Finance Module New Auto Assign Type ID s added for Invoice & Bill Objects in OTM v6.3.5 How it was Addressed? Below are the three new auto assign types provided in OTM v6.3.5 in order to address the challenge mentioned before. Now by using this fix financial codes can be easily auto assigned based on certain parameters at shipment cost level as remarks & invoice/bill line item level as refnums. SELL_SHIPMENT_COST_REMARK INVOICE_LINEITEM_REFERENCE_NUMBER CUSTOMER_BILL_LINEITEM_REFERENCE_NUMBER 22

23 Requested Enhancements in Finance Module New Auto Assign Type ID s added for Invoice & Bill Objects in OTM v6.3.5 Setup done as shown below: 23

24 Requested Enhancements in Finance Module New Auto Assign Type ID s added for Invoice & Bill Objects in OTM v6.3.5 Setup done as shown below (Cont..,): 24

25 Requested Enhancements in Finance Module Split Invoice/Bill Functionality has been added in OTM v6.3.7 Challenge Faced: Creation of Invoice at different levels such as per Booking, Container, Voyage, Accessorial Code & Shipment Cost Line in a Buy Shipment as per the physical invoice copy received from the Service Provider s. Creation of Bill at different levels such as Booking, Container, HBL, Voyage & Per Accessorial Code in a Sell Shipment as per the customer s specific profile. How it was Addressed? This functionality of splitting invoices/bills helped in addressing the challenge partially as some of the service provider s and customer s do required invoices/bills at accessorial code & shipment cost line level. 25

26 Requested Enhancements in Finance Module Split Invoice/Bill Functionality has been added in OTM v6.3.7 Setup done as shown below: 26

27 Requested Enhancements in Finance Module Split Invoice/Bill Functionality has been added in OTM v6.3.7 Setup done as shown below (Cont..,): The split rule gid added as a new parameter to the following processes,actions,agents & parameter set Generate All Auto-Pay Invoices Shipment Action - Create Invoice Agent Shipment Create Bill Generate Bills Parameter Set Agent Shipment Generate Invoice 27

28 Requested Enhancements in Finance Module Below are the Enhancements raised to Oracle (yet to be considered for release) to fulfil the gaps & challenges faced for 3PL implementation using complete OTM OOTB features. Creation of Invoice/Bill per Order Release Line Allocation Record. Extension of the GL Code Assignment Functionality to Invoice/Bill Objects. Population of Line Items in Parent Invoice/Bill. 28

29 Agenda Key Settlement Functionalities for 3PL Gaps/Challenges in OTM Settlement Process for 3PL OTM Requested Enhancements in Finance Module Workarounds to overcome Gaps & Challenges 29

30 Workarounds to overcome Gaps & Challenges Gap/Challenge 1 Creation of Invoice at different levels such as Booking, Container, Voyage & Per Accessorial Code in a Buy Shipment as per the physical invoice copy received from the Service Provider s. Workaround Solution After the Buy Shipment Costs are allocated back to order release lines then using agent workflow system will call stored procedure to create standard invoice per each order release line allocation record. Using Invoice finder set, users will manually search and select the records to create parent invoice as required. 30

31 Workarounds to overcome Gaps & Challenges Freight Settlement Process Flow used in one of the 3PL Implementation: Allocation of Buy Shipment Cost to ORL Stored Procedure: Invoice Creation System triggers the agent workflow after the allocation to create standard invoice Service Provider Physical Invoice Copy Manual Generation of Parent Invoice Create Parent Invoice as per the invoice received from the service provider Ops User Invoice Approval AP System Voucher Generation Integration with AP System 31 APL LOGISTICS CONFIDENTIAL

32 Workarounds to overcome Gaps & Challenges Freight Settlement Process Steps used in one of the 3PL Implementation: Allocation o Allocate Buy Shipment (One Per Container Per Service Provider) Costs back to Order Release Line Level (ORL Booking Line). Invoice Creation o Auto Creation of Standard Invoice for each Allocated Order Release Line Record. Consolidate Invoice o Consolidate the Standard Invoices manually as per the physical invoice copy received from Service Provider. Invoice Approval o Approval of the Parent Invoice by the authorized user. Integration o Voucher gets generated after the approval and sent to finance system through integration for further processing. 32

33 Workarounds to overcome Gaps & Challenges OTM Invoice Header Screen Invoice Header level details will be displayed in this section copied from related child invoices Invoice Line Items will be displayed in this section which are grouped from the selected child invoices Refnums & Remarks will be displayed in this section which are copied from related child invoices/shipments 33

34 Workarounds to overcome Gaps & Challenges OTM Invoice Line Item Screen Invoice Line Item details will be displayed here having grouped cost values as per the service provider invoice copy. Financial details will be displayed here which will be used by AP system for accounting purposes. Refnums & Remarks will be displayed in this section which are copied from related child invoice line items/shipment cost lines. 34

35 Workarounds to overcome Gaps & Challenges Gap/Challenge 2 Creation of Bill at different levels such as Booking, Container, HBL, Voyage & Per Accessorial Code in a Sell Shipment as per the customer s specific profile. Workaround Solution After the Sell Shipment Charges are allocated back to order release lines then using agent workflow system will call stored procedure to create standard bill per each order release line allocation record. Using Bill finder set, users will manually search and select the records to create parent invoice. System will then call stored procedure through agent workflow to create parent bill as per the customer specific profile. 35

36 Workarounds to overcome Gaps & Challenges Customer Billing Process Flow used in one of the 3PL Implementation: Allocation of Sell Shipment Charges to ORL System triggers the agent workflow after the allocation to create standard bill Stored Procedure: Bill Creation Ops User Search for Standard Bills to create Parent Bill as per the customer specific profile. Bill Approval Stored Procedure: Parent Bill Creation Search for Standard Bills AR System Bill Issuance Integration with AR System 36 APL LOGISTICS CONFIDENTIAL

37 Workarounds to overcome Gaps & Challenges Customer Billing Process Steps used in one of the 3PL Implementation: Allocation o Allocate Sell Shipment Charges (One Per Container Per Shipment) back to Order Release Line Level (ORL Booking Line). Bill Creation o Auto Creation of Standard Bill for each Allocated Order Release Line Record. Consolidate Bill o Consolidate the Standard Bills semi-automatically as per the customer specific profile. Bill Approval o Approval of the Parent Bill by the authorized user. Integration o After the approval, bill will be send to finance system through integration for further processing. 37

38 Workarounds to overcome Gaps & Challenges OTM Bill Header Screen Bill Header level details will be displayed in this section copied from related child bills Involved Parties related to bill will be displayed in this section which are copied from child bills/shipments Bill Line Items will be displayed in this section which are grouped as per the customer profile Refnums & Remarks will be displayed in this section which are copied from related child bills/shipments 38

39 Workarounds to overcome Gaps & Challenges OTM Bill Line Item Screen Invoice Line Item details will be displayed here having grouped charges as per the customer profile Refnums & Remarks will be displayed in this section which are copied from related child bill line items/shipment charge lines. 39

40 Workarounds to overcome Gaps & Challenges Gap/Challenge 3 GL Code Assignment for Invoice/Bill Objects. Workaround Solution After the new line item has been added in invoice or bill objects then system will fire an agent workflow listening to event called INVOICE - LINE ITEM ADDED OR REMOVED to find out the GL Code from the GL tables using the accessorial code of the newly added line item. 40

41 Workarounds to overcome Gaps & Challenges Gap/Challenge 4 Allocation of newly added line items in Invoice/Bill. Workaround Solution Invoices/Bill Line Items will be allocated back to the related booking lines (using agent workflow by calling the stored procedure) based on the level at which they were created after the invoice/bill gets paid. Note: This functionality is required in order to generate the profit margin report at different levels (i.e. Booking, Container, Voyage etc..,) to compare the Expense Incurred vs Revenue Generated. 41

42 Workarounds to overcome Gaps & Challenges Gap/Challenge 5 Population of Line Items in Parent Invoice/Bill. Workaround Solution After the parent invoice/bill is created, using agent workflow system will call stored procedure to populate the line items into the parent invoice/bill by consolidate the line items from the related child invoices/bills. 42

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