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
03 FEB 2017		Initial Document Creation

Overview

This document communicates information about functionality being introduced in Oracle In-Memory Cost Management Cloud Service.

Disclaimer

The Information contained in this document may include statements about Oracle’s product development plans. Many factors can materially affect Oracle’s product development plans and the nature and timing of future product releases. Accordingly, this Information is provided to you solely for information only, is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described remains at the sole discretion of Oracle.

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Oracle In-Memory Cost Management Cloud Service

Oracle In-Memory Cost Management Cloud Service (IMCMCS) is a new SaaS on PaaS subscription offering that provides a bottoms-up approach to maximizing profit margins by enabling near real-time insight into all aspects of cost management. 

Cost accountants, managers and line of business owners in finance, operations, manufacturing and procurement can use Oracle In-Memory Cost Management Cloud Service to derive product costs, quickly perform cost-volume-benefit (Break-even-point), what-if simulations on complex cost data and visualize the impact of changes to their business.

Initial release of In-Memory Cost Management Cloud Service consists of following components:

Cost Planning

This release includes Cost Planning for manufacturing industries. Cost Planning enables organizations to derive cost-to-serve covering direct and indirect costs. Application lets you set up of costs from expenses incurred in entire supply chain from purchasing ‘Buy’ parts to fulfillment of customer’s orders. Cost Planning provides capabilities to quickly and easily organize your source of costs; target items like purchased raw materials, resources and overheads and provides several allocation methods to define cost allocation strategy. Users can also upload and use demand forecasts and production plans to calculate future costs, margins and profits.

Define Allocation Scope

In Allocation Scope UI, user identifies the target items, resources and overheads for which the cost will be calculated. This UI provides flexible selection and categorization criteria to enable users to easily create a scope or group of items, resources and overheads. Users can create several different groups to identify items, resources and overheads that need cost calculations.

Allocation Scope UI provides following fields and selection criteria to easily organize your scopes:

• Name and Description
• Type supports: Items, Resources and Overheads
• Unit of Measure, Date to inactivate the Allocation Scope and Status (Draft, Validated, Error)

In Scope details section users can define multiple lines to create target list:

• Attribute Type: Organization, Sub Inventory, Item Category, Item, Cost Group, Cost Type, Item Sub Element, Project and Task
• Include range From and To fields
• Exclude range: From and To fields

Define Allocation Pools

Create allocation pools to group sources of your costs. Users can use both actual and budget journals from one or more financial systems. Additionally, users can also specify ad hoc amounts to make manual adjustments. Allocation Pools UI provides several filtering and categorization criteria to help easily segregate source accounts. Users have the flexibility to create several different allocation pools to group similar sources.

Allocation Pool UI provides following fields and selection criteria to easily organize your pools:

• Source Types: Actual Account Balances, Budget Accounts and ad hoc values
• Systems: (E-Business Suite, Other systems)
• Ledgers: All Ledgers imported into IMCMCS data base
• Users can set a date on which the Pool will be inactive

In Pool details section users can define multiple lines of sources:

• Line type: Manual or ad hoc, Actual or Budget
• Account Range with Account From and Account To
• Description: A Description for the line
• Amount and how much to allocate
• User can enable and disable individual lines

Define Allocation Rules

Allocation Rules enables users to define allocation methodology for individual or group of cost and sub elements. Each allocation rule further includes a scope, pool, allocation percentage and several other criteria that bind pool and scope. Using a Pool or not using a Pool in a rule enables users to influence selection of Cost Drivers. Cost Drivers allow users to select a criteria to allocate a pool or pools across the scope. User is allowed to choose from a set of pre-seeded cost drivers and driver methods.

Allocation Rules UI provides following fields and selection criteria to easily organize your scopes:

• Name and Description
• Date to inactivate the Allocation Rule
• Cost Element: (Material, Material Overhead, Routing: Resources, Overheads and Out Side Processing, Non-Routing: Resources, Overheads and Out Side Processing and Fixed)
• Sub Element (all details uploaded to database)
• Basis Type (Item, Lot, Resource Unit, Resource Value and Total Value)
• Allocation Scope, Scope Type, Allocation Pool, Pool Type, Allocation percentage

Cost Drivers: (Volume, Value, Contribution Margin, Planned Volume, Planned Value and Planned Contribution Margin, Price List, Quote, Purchase Order, Receipt, Landed Cost and Invoices)

• Function: (Minimum, Maximum, Average, First, Last)
• Unit Cost Method: (Average Volume, Planned Volume)
• Unit Cost Plan, Driver Plan and Price List

Define Cost Plan

A Cost Plan is a combination of Allocations Pool, Allocation Scope and Allocation Rules. Using Cost Plan UI users can create as many alternate cost scenario, as they feel necessary, to help them model their diverse supply chain combinations. When defining Cost Plans users can input the time horizon that cost planning engine will use to output costs for future period.

These cost plans are then executed by Cost Plan Engine to calculate costs for raw material, resources, overheads included in the cost plan over a user selected time horizon. Once leaf node costs are calculated costs are rolled up for higher-level intermediate and finished goods.

Cost Plan UI provides following fields and selection criteria:

• Name and Description
• Basis Cost Type: (Seeded: Frozen, Pending, Average, FIFO and LIFO, and any simulation that have been created)
• Currency, Currency Conversion Type and, Currency Conversion Date
• Time Horizon with From and To date
• Status: (Draft, Finished, Error)

In Cost Plan Rules section users can define multiple rules using:

• Allocation Rule
• Allocation Scope
• Allocation Pool, Allocation Percentage, Date Range with From and To
• Driver Date Range with From and To
• Mark Up Percentage

User has access to several parameters that allow them to further fine tune the selection of intermediate and finished goods that should be included in cost rollup calculations when cost plan is executed.

• Assignment Set
• Buy Cost Type,
• Lot Size Option: (Use Existing Lot Size, Use Factor of Standard Lot Size and Specify Lot Size)
• Lot Size Setting
• Include Unimplemented ECOs
• Include Engineering Bills
• Include Configurations with Closed Orders
• Configuration Order Start Date
• Alternate Bill
• Alternate Routing and
• Effective Date

Cost Analyzer

Once the cost plan run is completed users can use several features under Cost Analyzer to review the future costs. This release provides several spreadsheet based, easy to use repots that allow users to do cost-volume-profit analysis, drill down from top level allocations at Organization level to leaf node level costs like purchased items and machine operation costs.

From these spreadsheets users can run what-if simulations to evaluate change impacts across the business. Further they can model the impact on margins and profits.

• Break-Even Point Analysis

Cost Planning lets you allocate fixed costs; the product provides the detailed break-even point and contribution margin analysis of finished goods. Calculating the break-even point provides a simple, yet powerful quantitative tool for managers.

• Organization Summary

Analyze the Cost of Goods Manufactured (COGM) and the contribution margin for all organizations, providing a view of cost saving areas

• Item Summary

Analyze details for each item in a cost plan month for planned, actual and current costs

• Item Cost Details

Analyze planned item cost detail and COGM schedule for an item in a planned month.

• Item Cost Structure Details

Analyze cost element details of an item in a plan month, including the entire bill of materials and routing costs.

• Resource Summary

Analyze resource rates planned across organizations and a plan month.

• Resource Details

Analyze cost details of a planned resource and the cost of the impacted items.

• Overhead Summary

Analyze overhead rates planned across organizations in a plan month.

• Overhead Details

Analyze cost details of a planned overhead and the cost of the impacted items.

Cost Impact Simulator

In this release, users can create what-if simulations to model changes in cost and evaluate the impact on costs, valuations, margins and profits in real-time. User can also create simulations on top costs derived in cost plans.

In Cost Impact Simulator users create simulations in spreadsheet based UI. Simulations show the impact of product cost variations on bills of materials, formulae, recipes, routings, resources, and overheads. The Cost Impact Simulator also shows the impact on valuations of Inventory, Manufacturing shop floor and in-transit goods. Further analysis is possible on impacts to current and forecasted demand, Cost of Goods Sold and gross margins and profits in real-time.

While creating simulation users need to enter following mandatory fields:

• Item Type: (Item, Resource, Overhead)
• Item, Organization and,
• Cost Type: (Seeded: Frozen, Pending, Average, FIFO and LIFO, and any simulation that have been created)

For Process Manufacturing simulations users need to enter following mandatory fields:

• Item Type: (Item, Resource)
• Item, Legal Entity and
• Cost Type: (Seeded: Frozen, Pending, Average, FIFO and LIFO, and any simulation that have been created)

From the Cost Details screen users can make edits to following fields:

• Qty Per Assembly
• Resource Usage and
• Rate or Amount

From the Cost Details screen for Process manufacturing, users can make edits to following fields:

• Formula Quantity
• Scrap Factor
• Resource Usage and
• Rate or Amount

User has access to several parameters that allow them to further fine tune the selection of intermediate and finished goods that should be included in cost rollup calculations when cost plan is executed.

• Assignment Set
• Buy Cost Type,
• Lot Size Option: (Use Existing Lot Size, Use Factor of Standard Lot Size and Specify Lot Size)
• Lot Size Setting
• Include Unimplemented ECOs
• Include Engineering Bills
• Include Configurations with Closed Orders
• Configuration Order Start Date
• Alternate Bill
• Alternate Routing and
• Effective Date

Gross Profit Analyzer

In this release, Gross Profit Analyzer enables users to slice and dice and do multi-dimension analysis on current and future gross margins and profits. Gross Profit Analyzer uses Oracle Business Intelligence Enterprise Edition (OBIEE) technology to provide multi-dimensional slice-and-dice capability. There are two functional flows for invoking the Gross Profit Analyzer. Users can navigate to Gross Profit Analyzer to analyze the impact of costs derived from cost plans or after simulating a change in cost in Cost Impact Simulator. Having either made changes to costs or having derived new costs of components, ingredients, resources or, overheads, users will use Gross Profit Analyzer to evaluate the impact of cost changes on actual, planned, and forecasted cost of goods sold, gross margins and gross profits.

Users can also navigate directly to Gross Profit Analyzer from the Navigator to slice-and-dice and analyze current and forecasted gross margins and, gross profits.

Gross Profit Analyzer provides an interface to import demand forecast data and lets you evaluate the impact of cost changes to future margins and gross profits.

In this release, following dimensions are supported:

• Customer
• Geographic Regions
• Sales Organization
• Sales Channels
• Sales Orders
• Product
• Product Category
• Currency and
• Time

Cost Comparison

In this release, Cost Comparison provides the ability to compare detailed indented assembly and recipe costs across different periods, cost types, simulations, cost plans, manufacturing plants and organizations. Indented details of cost structure are presented in a spreadsheet based UI with side-by-side view to highlight similarities and difference in the two selected items. Cost Comparison enables you to view costed bills and recipes and associated elements, investigate differences, and take actions on costs impacting profitability.

Cost Comparison search enables users to find items by filtering on following fields:

• Item Code
• Item Description
• Organization
• Cost Type
• Simulation Code

Following additional field are available in Process Manufacturing UI:

• Legal Entity
• Calendar and
• Period

Background Processes

Several background processes have been included in this release. These background processes can be submitted form the Administration UI. Following background processes are available:

• Calculate Actual COGM (Discrete)
• Calculate Gross Profit for Cost Impact Simulator (Discrete)
• Calculate Gross Profit for Cost Impact Simulator (Process)
• Create Cost Hierarchy (Process)
• Create Product Category Hierarchy
• Create Territory Hierarchy
• Create Time Dimension
• Generate Key-Flexfield Views
• IMCM Full Process Cost Rollup
• Import Price Lists
• Import Supply/ Demand for Cost Planning (Discrete)
• In-Memory Cost Planning Engine (Discrete)
• Incremental Margin Load (Discrete)
• Incremental Margin Load (Process)
• Incremental Margin Load for Planned Orders (Discrete)
• Incremental Margin Load for Planned Orders (Process)
• Margin Load for Cost Plans (Discrete)
• Purge Cost Plan (Discrete)
• Purge Margin Data
• Purge Simulation (Discrete)
• Purge Simulation (Process)
• Simulation Margin Load (Discrete)
• Simulations Margin Load (Process)
• Validate Cost Planning Scopes (Discrete)

Administration

Administration section provides UI that allow users to perform various admin related tasks.

Background Process

In this release, Background Process UIs allow users to submit and monitor background processes. When submitting a background process users provide:

• Program Name
• Trace Enabled
• Trace File Identifier
• Trace Level
• Debug Enabled
• Debug Level
• Parallel Degree
• Schedule Type: (As Soon As Possible, Repeating, Once)
• Re Run Interval, Start date and time and, End date and time

Security

In this release, Security UI enables the users to define and regulate data access for each user. The UI provides user with:

• Search and Select User Name
• List of Organization and check box to select the organization
• Add access and Remove access buttons

Configuration

In this release, Configuration UI lets users set default values and configure the application with following parameters:

Discrete Cost Parameters

• Category Set: (from category data loaded to IMCMCS database)
• Currency Conversion Type: (from currency data loaded to IMCMCS database)
• Include Phantom Costs and
• Quantity Precision

Process Cost Parameters

• Use Substitute Items (Yes, Period start date as effective date, Yes, Period end date as effective date and, No)
• Compute Ingredient Cost (Yes, In Detail, Yes, In Summary and, No)
• Costing Validity Rules
• Full Cost Rollup Parallel Degree

Profitability

• Product Catalog Category Set: (from category data loaded to IMCMCS database)
• Margin Load Parallel Degree
• Margin Load Start Date
• Simulation Margin Duration (months)

Cost Planning

• Planning Engine Parallel Degree
• Default Selling Price List: (from price list data loaded to IMCMCS database)

Diagnosis

• Debug Enabled
• Debug Level: (Statement, Procedure, Event, Exception, Error, Unexpected)

Background Process Scheduler

• Status
• Interval (seconds)