Oracle Supply Chain Management Cloud: Plan to Produce

Transcription

1 Oracle Supply Chain Management Cloud: Plan to Produce (includes Manufacturing, Planning, Inventory and Cost Management, Supply Chain Financial Orchestration, and Advanced Fulfillment) Release 11 Release Content Document December 2015

2 TABLE OF CONTENTS REVISION HISTORY... 4 PLAN TO PRODUCE... 5 MANUFACTURING... 5 Define the Discrete Manufacturing Process... 5 Use Adaptable Operation Models for Manufacturing Plants... 5 Visually Design the Discrete Manufacturing Process... 6 Coordinate Engineering Modifications and Communicate Them to Manufacturing... 6 Use Spreadsheets to Import Work Definitions... 6 Run Discrete Manufacturing Processes... 7 Manage Work Orders... 7 Use Simplified Reporting for Production Tasks... 7 Maintain Tight Control of Serialized Products... 7 Plan for Production Costs... 8 Integrate Seamlessly with Services... 8 Use Embedded Social Collaboration in Manufacturing... 8 Run Contract Manufacturing Processes... 8 Run Configure-to-Order Processes... 8 PLANNING... 9 Integrate Demand and Supply Planning... 9 Forecast Demand... 9 Calculate Safety Stock Plan Supply Customize Your Plan Scope to Meet Business Needs Monitor Supply Chain Performance Monitor Plan Performance at the Aggregate Level Use Guided Navigation to Analyze Root Causes Use Spreadsheet Tools to Analyze Data Configure Embedded Analytics Respond to Changing Conditions Simulate Alternative Supply Chain Scenarios Simulate Supply and Demand Scenarios and Get Intelligent Recommendations Manage by Exception Use Notes to Collaborate with Other Planners Use Oracle Social Network to Collaborate with Cross-Functional Users Integrate Planning and Fulfillment Collect Data from Integrated Oracle Supply Chain Management Cloud Products Collect Data from External Data Sources Release Recommendations to Fulfillment Systems COST MANAGEMENT Use Standard Cost Estimation and Rollup Cost the Manufacturing of Work Orders Manage Compliance to Cost Standards Use the WIP Inventory Valuation Report Control Budgets and Perform Encumbrance Accounting Control Budgets for Receipt Transactions Use Encumbrance Accounting for Receipt Transactions

3 Use Landed Cost Management Apply Landed Cost Charges to Purchase Order Receipts Enter Landed Cost Charges in a Trade Operation Allocate Charges and Taxes to Receipts Accrue Landed Cost Charges and Taxes View Landed Cost of Purchase Order Receipts Apply Actual Landed Cost Charges to Receipts Flag Third-Party Invoices That Require Landed Cost Processing Interface Supplier Invoice Adjustments From Payables Automatically Match Invoice Lines to Receipts SUPPLY CHAIN FINANCIAL ORCHESTRATION Use Simplified Setup and Monitoring INVENTORY MANAGEMENT Fulfill Orders in Complex Fulfillment Scenarios Deploy Materials Management Locations More Quickly Support Internal and External Manufacturing ADVANCED FULFILLMENT Use Contract Manufacturing Flows Use Configure-to-Order Flows Use Supplier-to-Customer Drop Ship Flows Use Back-to-Back Flows Use Internal Material Transfer Flows SUPPLY CHAIN ORCHESTRATION SIMPLIFIED SETUP Quickly Set Up Common Components and Facilities Quickly Set Up Cost Management

4 REVISION HISTORY This document will continue to evolve as existing sections change and new information is added. All updates are logged below, with the most recent updates at the top. Date What s Changed Notes 15 DEC 2015 Initial Document Creation 4

5 PLAN TO PRODUCE The Plan-to-Produce business flow is now available in Release 11. Several new products in the Oracle Manufacturing Cloud and Oracle Supply Chain Planning Cloud solutions enable you to plan, schedule, and manage your discrete manufacturing operations and optimize your supply chain. Advanced fulfillment features, such as contract manufacturing and back-to-back shipments, optimize the flow of your organization s transactions, and enable you to capture and analyze landed costs. A simplified setup helps you quickly set up supply chain common components, as well as basic features of inventory, manufacturing, and cost management. MANUFACTURING Oracle Manufacturing Cloud delivers core discrete manufacturing capabilities in the Cloud that allow you to efficiently set up, manage, and operate your production operations, and to connect through social collaboration tools. Oracle Manufacturing Cloud supports both in-house manufacturing and contract manufacturing. DEFINE THE DISCRETE MANUFACTURING PROCESS Manufacturing engineers can use an intuitive interface that includes visualization and web-based tools to build a foundation of manufacturing plant data, and to design a discrete manufacturing process for the products being built in the plant. USE ADAPTABLE OPERATION MODELS FOR MANUFACTURING PLANTS Reduce the time required to configure the manufacturing plant using a standardized data model for production operations that you can adapt to changing business processes and market conditions. Improve access to data so that a manufacturing engineer can define, view, and update the manufacturing plant data and the relationships that exist between entities, including the following items: Manufacturing Plant. Define a plant where you can specify manufacturing setup data, run manufacturing processes, and support materials management. Configure plant parameters that determine the behavior of work definitions, work orders, and work execution. Use a plant calendar that schedules production resources. Manufacturing Calendar. Define a manufacturing calendar that includes work days, shifts, and exceptions. Work Areas. Define work areas that represent locations in the plant, where multiple work centers comprise each work area. Work Centers. Define each work center, such as a department or production line, where manufacturing operations are performed. Each work center is comprised of production resources that maintain capacity and availability. 5

6 Production Resources. Define the generic equipment or labor resources that your organization uses in production. Define resource calendar exceptions, such as training, according to day or shift. Define and view resource rates in Oracle Fusion Cost Management. Standard Operations. Create a predefined library of standardized production operations and their resources and usages so that you can add them to work definitions and work orders. Automatically propagate subsequent changes that occur to a standard operation to the work definitions that reference it. VISUALLY DESIGN THE DISCRETE MANUFACTURING PROCESS Visually design a work definition that represents the discrete manufacturing process, materials, and resources needed to make a standard or assemble-to-order product. Use drag-and-drop interactions and data visualization views to build a sequence of operations, and to specify how each operation is executed (for example, use push or pull components, count point or backflush materials, automatic resource charging, and product serialization). Determine primary and alternate production processes according to planning priorities, costing priorities, and calculations that determine the manufacturing lead times that your supply chain requires to fulfill the product. Use work definition versioning to monitor and implement the changes that occur to the manufacturing process. Print a report of the work definition, including count point operations and material and resource requirements. You can share this report internally in your organization and externally with contract manufacturers. COORDINATE ENGINEERING MODIFICATIONS AND COMMUNICATE THEM TO MANUFACTURING Coordinate the modifications and revisions that engineers make to item structures, and communicate these modifications to manufacturing. Quickly assess how these modifications impact the work definitions that reference the item structure, and then revise them accordingly. USE SPREADSHEETS TO IMPORT WORK DEFINITIONS Quickly create or update work definition data, including operations, items, and resources. Use a Microsoft Excel spreadsheet to create and update this data in Oracle Manufacturing Cloud. View and correct data validation errors that occur during upload. 6

7 RUN DISCRETE MANUFACTURING PROCESSES Focused on enhancing the productivity of both the production supervisor and the production operator, Oracle Manufacturing Cloud helps manage and execute production activities with an enhanced user experience for standard and configured products. All you need is a tablet to manage production. MANAGE WORK ORDERS The first thing a production supervisor needs to know at the start of the day is: What needs to be done today? Oracle Manufacturing Cloud helps the supervisor focus on the shop floor activities that must be finished today. It manages the schedules and work order exceptions that affect work order performance. You can view and manage all aspects of production, such as create standard work orders, create nonstandard work orders, update or edit work order operations, update or edit priorities, edit and manage work order status, pre-assign serial numbers, view production progress, monitor production history, and print component lists and work order travelers. USE SIMPLIFIED REPORTING FOR PRODUCTION TASKS Improve productivity by allowing operators to get reports on materials, resources, and operation completion with only two clicks, and provide access to more detailed information, if required. The dispatch list gives your operators a single location where they can view production priorities and run production tasks for their work center and their shift. The operator can start and end the day with only the dispatch list and perform all production activities for work orders, such as completing operations, resolving material problems, returning materials, charging resources, printing production documents, printing labels, printing report rejections, handling scrap, and so on. Use out-of the-box integration with scanning devices to get touchless reporting data on material transactions for components that are controlled by serial numbers or lot numbers. MAINTAIN TIGHT CONTROL OF SERIALIZED PRODUCTS Maintain tight control over your serialized products. Specify the operation in a work order where your manufacturing floor must begin tracking serial numbers for a finished good. Ensure that after this point, your shop floor operator charges all the materials and resources that your processes use to an individual finished goods serial number.go Lean with Orderless Completion Manage and run production processes without using work orders. Report product completions, report returns, report scrap, and use the item work definition to automatically backflush all materials and charge all resources. 7

8 PLAN FOR PRODUCTION COSTS Effectively manage your cost planning and product costing activities so that they support your company s production operations. INTEGRATE SEAMLESSLY WITH SERVICES Integrate with third-party systems to report when material consumption and operations are complete. Use prebuilt Microsoft Excel templates to create and update work orders, and to report materials, charge resources, and report operation completions. USE EMBEDDED SOCIAL COLLABORATION IN MANUFACTURING Use the following capabilities to leverage the power of social collaboration in your manufacturing operations: Stay connected with work definitions and work orders to get updates Collaborate in real time, and in multiple threads, with internal and external partners Resolve shop floor problems and share recommended practices through social collaboration RUN CONTRACT MANUFACTURING PROCESSES Contract manufacturing provides real-time visibility into the production progress that occurs at the contract manufacturer site, and can also monitor components that an original equipment manufacturer (OEM) supplies to the OEM site. To monitor milestone operations at the contract manufacturer site, you can define your contract manufacturer and related entities in the Oracle Manufacturing Cloud. When the last operation of the work order finishes, you can automatically receive the finished goods from the contract manufacturer. For more information about contract manufacturing, see the Advanced Fulfillment section of this document. RUN CONFIGURE-TO-ORDER PROCESSES Define and fulfill configured products with ease. You can simply and easily define the production process that will be used to build the unique configurations for an assemble-to-order product. After taking an order for a configuration, automatically create a configured item, automatically and dynamically create the work definition for the configured item, and automatically create the work order to build the configured item. For more information about configured items, see the Advanced Fulfillment section of this document. 8

9 PLANNING Oracle Fusion Planning Central is a modern supply chain planning solution for industrial, high technology, and other discrete manufacturing companies. It combines forecasting, inventory, and supply planning with a multidimensional analytics framework so that you can balance supply and demand, while simultaneously deriving management insight into your supply chain. You can use Planning Central to do the following: Accurately forecast demand Plan for manufacturing of products and procurement of components Respond effectively to the changes that occur in supply and demand You can use social collaboration to significantly improve the speed and the quality of decisions. You can use embedded analytics and intelligent recommendations to communicate complex supply chain information in a simple business format. Planning Central uses tight integration with other Oracle Supply Chain Management Cloud applications to bridge the gap between planning and execution. With Planning Central, you can automatically release orders to execute material transfers, factory work orders, or purchase requisitions. INTEGRATE DEMAND AND SUPPLY PLANNING Increase forecast accuracy, reduce inventory levels, and increase customer service levels for your enterprise. You can forecast demand and plan for supply in an integrated environment, and almost in real time. FORECAST DEMAND The following features enable you to accurately forecast demand, and therefore minimize inventory: Automated forecast generation. Use an accurate statistical forecasting engine to automate forecast generation for shipments or bookings. Planning Central offers built-in techniques for outlier detection, and it uses cutting edge statistical forecasting methodology to determine the best forecast incorporating seasonal trends and minimize forecast error. Enter forecast overrides. Enter overrides to the forecasts to incorporate additional insights to the forecast. The manually entered forecasts are monitored independently of the statistical forecasts to maintain data accuracy for measurement purposes. You can disable manual entry for the time periods where it is not advisable to change the forecasts. Manage forecasts at aggregate levels. Analyze and enter forecasts at appropriate levels of the hierarchy. Planning Central intelligently disaggregates each forecast that enters a higher level of the hierarchy according to historical proportions. A Product Family forecast is an example of a higher-level forecast. Planning Central uses the appropriate aggregation mechanism, such as sum, average, and so on, to aggregate information when you view forecasts and other information at different levels of the hierarchy. 9

10 Incorporate data that drive forecasts. Automatically consider factors, such as seasonality, that can affect forecast accuracy. For example, a planner can modify the price of a product, and then view how these modifications affect the forecast. Measure forecast accuracy. Use automated calculations that determine forecast accuracy and fix forecast quality problems. Planning Central uses predefined measures for mean absolute percentage error (MAPE), mean absolute deviation (MAD), and forecast bias. Simulate new product introduction. To efficiently simulate new product introduction, Planning Central can use the history of a similar product to create the forecast for a new item. CALCULATE SAFETY STOCK Increase customer service levels while minimizing the inventory that is required to hedge against unexpected variations in demand. Planning Central can calculate the required buffer stock as follows: Automatically calculate safety stock levels. Planning Central considers demand variability when it calculates safety stock. It also uses the MAD, MAPE, and arrival rate forecast errors, and the service levels that are defined for an item at a facility or alternatively a common service level for the entire plan. Manually set safety stock levels. You can manually set safety stock levels for an item, either in the Product Information Management work area or in Planning Central, when an automated calculation is not appropriate. Planning Central can also use a days of cover paradigm to calculate a safety stock level that varies according to time. You can also import safety stock levels. PLAN SUPPLY Balance supply and demand to reduce inventory and prevent out-of-stock situations. Planning Central offers an unconstrained supply planning engine that includes advanced analytical and visualization capabilities so that you can quickly identify a supply and demand imbalance, and then quickly resolve it. Use sourcing rules to model the supply chain. Plan for the entire supply chain. Use flexible rules to source material from the full supply chain. Consume forecasts. Consume forecasts with orders to get the net demand picture. Spread forecasts when the granularity of the timeframes that Planning Central uses to plan demand are higher than the granularity of the timeframes that it uses to plan supply. Recommend new supplies and reschedule or cancel existing supply orders. Planning Central plans to the schedule date on the order, and it will recommend new supply orders. It nets orders from forecasts and uses the fixed and variable lead times on the item, and then reschedules or cancels existing orders. It might include the following recommendations: o Create or reschedule a purchase order to source material from a supplier. 10

11 o Create or reschedule a transfer order to move material from another organization in your supply chain. o Create or reschedule a manufacturing order to manufacture the product. Planning Central use various schedules to calculate the dates for replenishment, including shipping schedules, receiving schedules, and carrier schedules. Consider business rules. Planning Central considers effectivity dates on components, expiration dates on inventory lots, and reservations on on-hand inventory, work orders, purchase orders, and transfer orders to sales orders. Automatically calculate resource requirements. Plan and analyze resource requirements. The definitions for manufacturing the product, such as resources, work centers, and manufacturing calendars in Oracle Manufacturing Cloud, are used as input when doing this calculation. Consider safety stock requirements. Planning Central makes sure that the projected inventory over time is not less than the stocking levels specified. CUSTOMIZE YOUR PLAN SCOPE TO MEET BUSINESS NEEDS Control the scope of planning so that it meets business needs. Easily change the scope to adapt to changing business conditions: Create a named plan. Create and name a plan. Identify the locations, items, and hierarchies to use for data analysis. Define planning scope. To transcend traditional demand and supply planning roles, you can plan for supply and demand in one plan. You can also create a standalone plan, one each for forecasting, manufacturing, and production, as required. If you use a standalone plan, then Planning Central allows you to use the forecast from a demand plan in a supply plan, or to feed the statement of demand from the manufacturing plan to the production plan. Use fine grained access control. Control access to a plan to authorized users and limit planner access only to the data that their responsibility allows. MONITOR SUPPLY CHAIN PERFORMANCE To improve planner productivity, reduce the time required to identify problems. Identify the highest priority problems to fix. MONITOR PLAN PERFORMANCE AT THE AGGREGATE LEVEL Use summary views of data, including color coding, to identify any deviation from enterprise goals, and to quickly interpret enterprise plan performance. Examine future business performance and narrow down problems through an integrated plan summary view. Each infotile of the summary provides oneclick access to charts and graphs that can help you indentify the root cause. To investigate further, you can drill from the summary charts into detailed data. 11

12 Access predefined infotiles that display a snapshot of plan performance, such as revenue, margin, forecast attainment, forecast error, demand at risk, inventory turns. USE GUIDED NAVIGATION TO ANALYZE ROOT CAUSES Reduce the time required to analyze the root cause of a problem and to support corporate reporting tasks. Leverage over 50 prepackaged tables and graphs that you can modify to meet your requirements: Analyze root cause. Drill down from the predefined, aggregate infotiles to predefined worksheets that display detailed information that can help you identify the root cause. Use the predefined worksheets to analyze and validate your hypotheses, and to navigate in context to related data. Analyze, update, and view forecast modifications. Use the predefined Forecast Analysis worksheet to analyze and modify each forecast at multiple levels of the hierarchy. Analyze, update, and view supply and demand in aggregate timeframes. Use the predefined Material Plan worksheet to manage supply and demand. This worksheet helps you to understand the supply and demand picture aggregated in timeframes, and to understand where and when supply and demand is out of balance. You can view the projected supply and demand trends, including potential future inventory levels. Optimize resource usage. Use the Resource Plan worksheet to optimize resource requirements and availability. This worksheet helps you understand resource utilization over time, and to take remedial action for over capacity and under capacity situations. Analyze, update, and view supply and demand in detail. Analyze demand and supply pegging at the detailed levels, such as sales orders, purchase orders, transfer orders, and planned orders. Use the supply and demand pages to release orders back to Oracle Procurement Cloud and Oracle Manufacturing Cloud. Analyze other data. Use other predefined worksheets to analyze planning data such as items, item structures, work definitions, resources, resource capacity, resource requirements, supply chain bills, suppliers, and supplier capacity. 12

13 USE SPREADSHEET TOOLS TO ANALYZE DATA Use popular spreadsheet tools to analyze, edit, and update planning data, and to improve productivity: Analyze plans offline. Download data from a table for offline analysis. Edit plans and synchronize modifications to the system. Edit the downloaded data, make mass updates in Microsoft Excel, and then upload changes. This capability is available for demand, supply, and items. CONFIGURE EMBEDDED ANALYTICS Use a visual, configurable user interface to increase your productivity. Enable guided problem analysis with in-context drill-throughs between worksheets: Configure the layout of the page to meet your preferences. Specify the tables and charts to display to facilitate holistic analysis. For example, you can analyze the material plan and the resource plan at the same time. Configure planning dimensions and hierarchies. Quickly analyze large data sets through a common set of planning dimensions and hierarchies that support aggregate data analysis. Analyze supply and demand on multiple dimensions. The dimensions for analysis include product, customer, geography, resource, supplier, and time. Configure tables for multidimensional data analysis. You can analyze demand, inventory, and supply data in a single table. This capability provides consistent views, and allows you to compare and analyze efficiently, including using different units of measure and monetary value. Create new data analysis worksheets. Create new worksheets, and include data visualization tools like tree maps, sunburst charts, and line and bar graphs in these worksheets to facilitate easy problem identification. You can also use existing worksheets as a baseline to create variants that meet specific planning needs. Share these variants with other users or make them private. Configure navigation between charts and graphs and use guided navigation. Specify the worksheets that you can drill to, with context, from an existing worksheet or graph element. Configure favorite lists, saved query criteria, and analysis sets. Reduce the time that is required to bring the correct data into worksheets for further analysis. RESPOND TO CHANGING CONDITIONS Use what-if planning to prioritize actions and solve problems. Take advantage of intelligent recommendations to reduce the time required to develop solutions. 13

14 SIMULATE ALTERNATIVE SUPPLY CHAIN SCENARIOS Identify the best course of action to take to solve long-term supply chain problems. Isolate modifications and apply them to a plan. Model what-if modifications to key item attributes, such as ordering policies, or to the sourcing rules and assignment sets that define the supply network. SIMULATE SUPPLY AND DEMAND SCENARIOS AND GET INTELLIGENT RECOMMENDATIONS Identify the best course of action to take to solve short-term supply chain problems. Modify order dates and quantities, and then rerun the plan with the modified data to determine whether or not your change solved the problem: Analyze demands that are at risk. Identify the most important orders that are at risk of being late. Planning Central prioritizes the recommended supply order modifications according to their demand impact. You can accept some or all of them, and then rerun the plan to make sure no other problems exist before you release your modifications to the fulfillment system. Simulate hot demand. To understand the impact of accepting a hot demand, add simulated orders to the plan and view the effects that they have on your existing plan. Simulate order pull-in. Assess the feasibility of pulling in existing orders to meet corporate financial targets. MANAGE BY EXCEPTION Determine how varying the plan affects performance thresholds so you can tackle the most important exceptions: Configure the thresholds for reporting on exceptions. You can create reports for over 25 types of exceptions. You can specify the thresholds to use. Configure exception sets. Identify the exceptions that are important for your plan. Planning Central will calculate and report only these exceptions. Analyze plan exceptions. View the exceptions and drill directly from the exception to relevant data so that you can understand the circumstances that are causing the exception, and so you can create an action plan that resolves it. USE NOTES TO COLLABORATE WITH OTHER PLANNERS Collaborate with the planning community so that you can make informed planning decisions. You can annotate the data that you modify to help other users understand your assumptions and reasons for the modifications. You can associate notes with the following items: 14

15 A plan Data in a plan, such as items, organizations, or customers A table that contains planning combinations For example, you can attach a note to a shipment forecast for an item or organization in a specific week so your peers know why you modified the forecast. USE ORACLE SOCIAL NETWORK TO COLLABORATE WITH CROSS-FUNCTIONAL USERS Collaborate with the extended community using Oracle Social Network. You can also examine historical conversations to uncover the clues that can help you solve current problems: Start a conversation centered on a plan. Any number of interested participants can comment on this conversation. Add comments. You can add a comment to an Oracle Social Network conversation on the plan when you work in Planning Central. INTEGRATE PLANNING AND FULFILLMENT To reduce implementation timelines and reduce total cost of ownership, you can use the out-of-box, two-way integration that exists between Planning Central and other Oracle Supply Chain Management Cloud applications. You can also incorporate supplementary data from other data sources. COLLECT DATA FROM INTEGRATED ORACLE SUPPLY CHAIN MANAGEMENT CLOUD PRODUCTS Use predefined integration with other Oracle Supply Chain Management Cloud applications to reduce implementation complexity. To reduce the potential data latency that exists between fulfillment and planning systems, use a multi-threaded process that improves data synchronization time: Use preconfigured integration. Get the data that planning requires from Oracle Product Master Data Management Cloud, Oracle Manufacturing Cloud, Oracle Procurement Cloud, Oracle Inventory and Cost Management Cloud, and Oracle Order Management Cloud. Optimize data collection to reduce planning cycle time. Use targeted data collection, where data represents a business entity, or use data collection according to net change, where you use data that changed since the last run. To collect a subset of the data, you can use filters that specify the data to collect. For example, to reduce the number of items collected, you can filter according to the organizations being planned, or to reduce the order history collected, you can filter according to date ranges. COLLECT DATA FROM EXTERNAL DATA SOURCES To improve decision making in Planning Central, you can use data from other sources that you may have. You can: 15

16 Upload forecasts. If you use another system for forecasting, then you can upload these forecasts. The forecast can be used to create your supply plan. Upload sales order history. Upload safety stock levels. Upload supplier capacity and planned order supplies. For example, if your organization gets supply commits from a supplier, then you can upload this data to Planning Central. Collect other data. Upload other entities, such as item costs, planners, demand classes, causal factors, approved supplier lists, sourcing rules, sourcing assignment sets, calendars, organizations, carriers, currencies, units of measure, and other mapping information that is cross-referenced. NOTE: Planning Central requires you to use other components of the Oracle Supply Chain Management Cloud in this release, including: Oracle Order Management Cloud, Oracle Product Master Data Management Cloud, Oracle Manufacturing Cloud, Oracle Procurement Cloud, and Oracle Inventory and Cost Management Cloud. RELEASE RECOMMENDATIONS TO FULFILLMENT SYSTEMS Release plans to fulfillment systems so they take effect: Automatically release orders for fulfillment. Release orders when the supply planning cycle completes according to predefined parameters. Manually release orders. Modify information, such as due dates and quantities, prior to release. 16

17 COST MANAGEMENT Oracle Fusion Cost Management delivers essential cost management capabilities that enable you to effectively manage the cost planning and product costing activities that your company materials management and manufacturing operations require when running these operations in the Cloud. USE STANDARD COST ESTIMATION AND ROLLUP Use a cost planning framework that allows cost accountants to estimate, roll up, and publish standard costs for your company components, assemblies, and products: Iteratively estimate manufacturing standard costs. Cost Management provides your cost accountants with the tools that they need to plan and monitor manufacturing costs and variances to plant standards. A cost accountant can create cost planning scenarios and cost plans that specify the standard costs of manufactured items. Cost Management then uses these scenarios and plans to estimate standard cost and the cost rollup process for a manufacturing plant. Import material costs spreadsheets. Use costs that were previously defined in a spreadsheet to quickly enter the standard costs of your materials. Download your existing material costs to a spreadsheet where you can quickly modify material cost estimates so that they reflect the current or projected material prices and commodity prices that your suppliers quote. Upload your updated material and commodity costs so that you can publish them in cost rollup and standard costs for an upcoming period. Prioritize work definitions in cost rollups. Determine the work definitions to use to set frozen standard cost for a manufactured item. If multiple work definitions are defined for an item, then the cost accountant can specify the work definition to use when rolling up and publishing standard costs for the item. Use graphical views of rolled-up cost. When the cost rollup of the manufactured items in a cost planning scenario finishes, the cost accountant can view their rolled up cost graphically, and can view them through the levels that their work definitions define. The graph view includes unit and total material cost, resource and overhead cost according to operation, and costs according to level. COST THE MANUFACTURING OF WORK ORDERS Cost Management costs work order transactions and can provide the cost accountant and manufacturing manager with the information they need to control the material and resource costs incurred during the manufacturing process: Use comprehensive reporting of work order costs. Cost the material and resource transactions and display total cost for a work order, including the manufacturing overhead that a cost accountant specifies and adds to the work order cost. Cost Management 17

18 monitors work order costs across the entire lifecycle of the work order, from initial charges to work order close. Valuate partial work order completions. To streamline your period end close process, you can specify to include the value of work-in-process that exists in your work orders at a point in time that you specify. Work-in-process includes material and resources charged to a work order that remain unused, or that are used in partially completed assemblies. Valuate work order scrap. Flexibly define accounting policies for scrap transactions that occur in the manufacture of an assembly. The cost accountant determines whether or not to expense the scrap that occurs in work orders for an assembly in the current accounting period, or to add this expense to the cost of assemblies that are completed. MANAGE COMPLIANCE TO COST STANDARDS Effectively identify the manufactured items that do not comply with plant cost standards. View work order costs and current manufacturing cost standards to determine the root causes for cost variances. USE THE WIP INVENTORY VALUATION REPORT A new report displays material, resource, and overhead charges to a work order, scrap cost, total cost, and, where applicable, standard cost and standard cost variances. CONTROL BUDGETS AND PERFORM ENCUMBRANCE ACCOUNTING Cost Management supports budgetary control, encumbrance accounting, funds check, funds reservation, funds inquiry, budget inquiry, and reporting for procure-to-pay and project transactions. CONTROL BUDGETS FOR RECEIPT TRANSACTIONS Budgetary control for funds in the receipt accounting that Cost Management uses are forced passed. It reserves funds according to the transaction amount that is available on the receipt and the funds balance that is currently available. To perform fund check and fund reservation for purchase orders that include project details, it adds project burden amounts to the transaction amount. Cost Management supports the following transaction types: Receipt delivery to inventory and expense destinations Correction to receipt delivery Retroactive price adjustment Return to receiving USE ENCUMBRANCE ACCOUNTING FOR RECEIPT TRANSACTIONS You can perform budgetary control without creating encumbrance accounting entries, and you can perform encumbrance accounting entries without doing budget checking. If you use budgetary control, 18

19 and if you set the budgetary control validation status to funds reserved, then Cost Management uses receipt accounting that performs encumbrance accounting, and the receipt accounting process liquidates the reserve for the encumbrance account, and then sends the actual journal entries for the receipt. USE LANDED COST MANAGEMENT Oracle Fusion Landed Cost Management enables procurement professionals and cost accountants to incorporate the shipment service charges that come from a third party. It incorporates these charges with the cost of individual purchase order receipts. This capability improves financial reporting and fiscal regulatory compliance, and it more accurately measures and reports the product cost trends and margins. APPLY LANDED COST CHARGES TO PURCHASE ORDER RECEIPTS You can create and use trade operations to manage the capture and allocation process used for landed costs. These operations define and add the landed cost charges to the material supplier cost of the purchase order receipts: Manage trade operations. Enter the amount of third party service charges and taxes that apply to the shipment of goods from your suppliers. Specify the purchase orders where landed cost charges and taxes apply. Allocate the amounts of trade operation charges to the receipts that are associated with the purchase orders in the trade operation. Manage routes. Assign a route name in the trade operation to facilitate landed cost analysis of goods that move through your supply chain. Group multiple trade operations into a single route. Manage charges. Define the charges that a user can enter in a trade operation. You can also specify the default allocation basis and allow taxes to be automatically calculated on the charge. ENTER LANDED COST CHARGES IN A TRADE OPERATION Manually enter the charges and charge amounts that are related to one or more purchase order shipments that a trade operation specifies. Use predefined charge templates or upload spreadsheets that include charges to streamline how you capture landed cost charges. Enter charges for individual schedule lines in each purchase order. ALLOCATE CHARGES AND TAXES TO RECEIPTS Enter landed cost charge and tax amounts in a trade operation, and allocate them to purchase order receipt items according to the allocation basis that the trade operation defines. 19

20 ACCRUE LANDED COST CHARGES AND TAXES Add landed cost charge amounts that come from service suppliers who are third parties in a trade operation. You add them to the cost of a related purchase order receipt and accrue them to an account that the subledger accounting rules specify. VIEW LANDED COST OF PURCHASE ORDER RECEIPTS Search and view the total landed cost of purchase order receipts, including material cost from the goods supplier, third party service charges, and nonrecoverable taxes. Quickly view landed cost trends of recent purchase order receipts for items that reside in an inventory organization. APPLY ACTUAL LANDED COST CHARGES TO RECEIPTS The cost accountant can optionally adjust estimated amounts for landed cost service charges in purchase order receipts so that they reflect the actual amounts that third-party service suppliers invoice. Define the charge references that a supplier invoice contains so that the references can be used to associate an invoice line with a receipt. For example, a freight invoice line can reference the bill of lading number that is associated with a receipt of goods from a material supplier. FLAG THIRD-PARTY INVOICES THAT REQUIRE LANDED COST PROCESSING The payables specialist can flag the freight invoices and invoices for other services that require processing in Landed Cost Management when processing supplier invoices. INTERFACE SUPPLIER INVOICE ADJUSTMENTS FROM PAYABLES You can interface supplier invoices that require landed cost with Landed Cost Management so that it can adjust the receipt cost in the purchase order to reflect the actual cost that the third party invoices. AUTOMATICALLY MATCH INVOICE LINES TO RECEIPTS Automatically match and allocate invoice line amounts to purchase order receipts according to the matched references that the invoice and the receipt contain. Manually allocate invoice line amounts that are not matched to receipts. 20

21 SUPPLY CHAIN FINANCIAL ORCHESTRATION Oracle Fusion Supply Chain Financial Orchestration is a configurable application that manages the financial relationships that result from the trade that occurs between internal parties. This functionality allows you to separate your physical flow of goods from the financial accounting of these goods. It includes the following new features: Define multi-node financial flows. Model and automate multiple ownership changes for a single movement of goods so that you can account for supply chain functions that are centralized without sacrificing supply chain speed. You define a relationship between your internal parties that controls each ownership transfer, that specifies the transfer price to use, and specifies the documentation and accounting that the sale requires. Support Advanced Fulfillment Flows. Define financial flows for supplier-to-customer drop shipments, internal material transfers, and configured products. USE SIMPLIFIED SETUP AND MONITORING Supply Chain Financial Orchestration setup incorporates the buy and sell terms setup directly into the financial orchestration flow, reducing one setup task and improving visibility into your supply chain relationships. You can also use a single page to manage event exceptions and to monitor event orchestration, giving you a complete view of the status of your financial orchestration tasks. 21

22 INVENTORY MANAGEMENT Oracle Fusion Inventory Management offers a complete materials management solution that allows your company to successfully manage the flow of goods: inbound, within the warehouse, and outbound. This functionality optimizes the flow of material so that it meets customer demand in a cost-effective manner. FULFILL ORDERS IN COMPLEX FULFILLMENT SCENARIOS Inventory Management improves efficiency in your supply chain and optimizes working capital. It centrally manages internal inventory transfers across the Oracle SCM Cloud. Internal material transfers is an end-to-end, cross-supply chain solution that orchestrates transfers according to business rules. You can manage transfers separately, or combine them with sales orders to improve customer service: Support drop ships that travel from supplier to customer. If your supplier ships goods directly to your customer, then visibility of the fulfillment event automatically starts when Inventory Management receives the advance shipment notification (ASN) from the supplier. The process records the virtual receipt of these goods, updates the purchase order so that your supplier can be paid, and starts the update process that fulfills your customer order, including billing and subsequent payment from your customer. Fulfill supply chain orders in a back-to-back environment. Inventory Management supports situations where you request supply from one of the following sources of supply so that you can satisfy your customer order: o A supplier o A production facility o Another distribution center It automatically reserves supply for the customer order, which results in streamlined fulfillment for the order. It can reserve supply that is purchased, made, or transferred. Fulfill demand in a configure-to-order (CTO) environment. Inventory Management streamlines handling of orders that include configured products. It treats these orders in the same way that it treats an order for a standard purchased or manufactured product. It models them internally in the same why that it models a finished good. This approach eliminates the need for special processes or procedures that can slow down a configure-toorder environment. Your customers, transportation providers, and export partners need to understand the details of each unique configuration. So, these details display on shipping documents which helps to avoid transportation, export, and customer confusion. Use packing slips that meet regional requirements. To support requirements in different regions of the world, consecutive packing slip numbers improve audit capability for shipments. Draft and final version support for each packing list provides an easy way to make sure documents are correct before they are sent. More attributes on the shipment allow you to use more fields that are related to shipping and transportation. 22

23 Use internal material transfers. Inventory Management includes a new Transfer Order document that manages the transfer of goods between your stocking locations. It includes shipping statuses and receiving statuses in one location. To improve warehouse efficiency, it leverages the fulfillment processes and receiving processes that your warehouse operations already use when it fulfills customer orders or receives purchase orders. DEPLOY MATERIALS MANAGEMENT LOCATIONS MORE QUICKLY Realize benefits of your implementation more quickly and deploy more stocking locations more quickly. You can use a streamlined setup that includes more predefined values for commonly used configurations, more predefined default values for required fields, and automatic creation for related setup tasks. SUPPORT INTERNAL AND EXTERNAL MANUFACTURING Inventory Management seamlessly and efficiently manages inventory so that it can support internal and contract manufacturing facilities: Support and monitor goods in manufacturing facilities. Warehouse operations support your production operations. They issue raw materials to the shop floor, return raw materials from the shop floor, record scrap, and complete finished goods into inventory. These capabilities provide complete visibility and support for inventory transactions. Get visibility into contract manufacturing operations. Inventory Management and Oracle Manufacturing Cloud provide improved visibility into and support of manufacturing that third parties perform. They can model production and inventory transactions at third-party locations, and can provide integrations that ship or receive raw materials and finished goods into and from third parties. 23

24 ADVANCED FULFILLMENT In an effort to reduce cycle times, deliver an excellent customer experience, and increase revenues, Release 11 supports advanced fulfillment strategies, such as configure-to-order, drop-ship, back-toback, and internal material transfer flows. Fueled by a powerful and innovative supply orchestration architecture, Release 11 has unsurpassed fulfillment capabilities for supply chains that must exploit the cloud. Now you can utilize the same flexible fulfillment options in the Oracle Supply Chain Management Cloud that are available in traditional, on-premise, order-to-cash solutions. USE CONTRACT MANUFACTURING FLOWS Streamline and effectively manage your extended supply chain to reduce cost, improve on-time delivery, and improve visibility. Automate and orchestrate the end-to-end contract manufacturing process for make-to-stock and make-to-order processes. Allow for a touchless fulfillment of your contract manufacturing process that includes your raw material supplier, contract manufacturer, customer, and the enterprise: Promise and plan for product manufacturing. Plan outsourced manufacturing locations as if they were in-house manufacturing plants, and make sure customer service levels remain high. Provide accurate promise dates for orders that the contract manufacturer builds. Forecast demand for products built at contract manufacturer locations. Plan for supply, taking into consideration work-in-process and on-hand inventory. Plan for the components you supply to the contract manufacturer. Automatically create the documentation that is required to manufacture the product when you release the planned orders. Automatic supply creation and fulfillment. Automatically create the purchase requisitions and purchase orders that your contract manufacturer requires so that they can build the finished goods on your behalf. Automatically create a work order that references the purchase order so that you can monitor manufacturing progress and record costs. Automatically send shipment requests to the contract manufacturer that instructs them to ship the finished goods to your customer or back to your warehouse. Monitor production progress. Interact with your contract manufacturer to get periodic progress of production and consumption of materials for real time visibility. Automatically manage changes that occur in the supply chain. Automatically adjust to changes in supply and demand, and allow your supply chain manager to re-source the supply, if necessary. To keep the supplier up to date, automatically update the purchase order so that it reflects customer order changes, and update the customer regarding delays or changes that occur with the contract manufacturer. Plan and account costs. Plan, account, and manage the costs of elements that are associated with a product that a contract manufacturer builds. 24

25 USE CONFIGURE-TO-ORDER FLOWS Efficiently fulfill each configured order through the new configure-to-order (CTO) process. This streamlined, end-to-end process simplifies fulfillment for a configured product, and provides complete visibility for every step. It uses an intelligent design that reduces item proliferation, reduces replicated data, improves item management, and improves on-time order fulfillment: Capture and manage customer orders for configured products. Select and configure assemble-to-order (ATO) products during the sales order process. View the model price and availability information during this process. Price the configuration at the model level and at the selected option level. You can offer multilevel, multiorganization, configured products that are assembled for each order. You can offer a combination of pick-to-order and assemble-to-order configurations. Automatically create items for specific configurations. When the user finishes selecting options for the model, new algorithms quickly determine whether or not a match for this item definition already exists. If not, then an algorithm creates the new item and the core structure that this item requires. The application dynamically creates views to the item structure or manufacturing work definition throughout the supply chain, depending on the information that the user requires. A planner or production operator can access the complete view whereas, a sales representative, buyer, supplier, or customer can access a sales view. A warehouse user views the final stockable or shippable product, and can drill into the sales view. Promise and source configurations. Promise and source customer orders for a configured product. Ensure that the configuration is sourced from the right location that is capable of fulfilling the configured product order. Plan demand and supply for the configure-to-order process. Forecast the demand for the configure-to-order model. Consume orders for the configured product from model forecasts. Derive the demand on lower level options and option classes according to predefined planning percentages. To make sure options are available in a timely manner to manufacture the configured product, offset the required lead times. Automatically create supply for configured products. Automatically create supply for configured products to reduce cycle times for configured orders. You can procure this supply through drop ship, procured back-to-back, manufactured back-to-back, transferred back-to-back, or on-hand inventory. Each configured product uses the same process that any procured or manufactured product uses. A special procedure or manual procedure for a configured product is not necessary. You can monitor the configure-to-order process from beginning to end, from creating the supply through procurement, to internal transfers or inhouse manufacturing. You can visually monitor progress and manage exceptions that might jeopardize order fulfillment. Maintain configured item data. Automatically include modifications that occur to the models in the item master to unique configurations, and immediately include modifications that occur in the model structures in the dynamic item structures. To minimize setup, 25