Document History

This document will continue to evolve as existing sections change and new information is added. All updates appear in the following table:

Date	Update Version	Notes
16 FEB 2018	Release 18.2	Delivered new features in Release 18.2.

Release 18.2

Revision History

This document will continue to evolve as existing sections change and new information is added. All updates appear in the following table:

Date	Feature	Notes
16 FEB 2018		Created initial document.

Overview

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

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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.

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

Cost Planning

This release includes Cost Planning for process manufacturing industries like Pharmaceuticals, Life Sciences, CPG, and Metals.  Cost Planning for process manufacturing industries will support manufacturing meta data setup as Formulae, Recipes and Routings. Cost Planning enables organizations to derive cost-to-serve covering fixed and variable 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, and resources 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, and resources. Users can create several different groups to identify items, and resources.

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

• Name, Description and Legal Entity
• Type supports: Items and Resources
• 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 Type, Cost Component Class, Analysis Code
• Include range From and To fields
• Exclude range: From and To fields

Define Allocation Pools

Create allocation pools to group sources of your expenses that you would like to allocate as 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.

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

• Pool Name, Description
• Source Types: Actual Account Balances, Budget Accounts and ad hoc values
• Source 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
• Description: A Description for the line
• Account Range with Account From and Account To
• Amount and how much to allocate
• User can enable and disable individual lines of a pool

Define Allocation Rules

Allocation Rules enables users to define allocation methodology for individual or group of cost component classes. Each allocation rule further includes a scope, pool, allocation percentage and several other criteria that bind pool and scope. Using or not using a pool in an allocation 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 organize your allocation strategy:

• Name and Description
• Date to inactivate the Allocation Rule
• Usage Type: Material, Resource, Overhead, Standard Cost Adjustment and Fixed Costs
• Cost Component Classes
• Legal Entity
• Allocation Scope, Allocation Pool

Cost Driver section allows users to setup Cost Drivers to be used by this allocation rule.  Following choices are available to users:

• 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

Users can also define fixed costs from the Allocation Rules UI.  Following setup is required to allocate Fixed Costs:

1. Fixed Component Class Codes
   • Code
   • Name
   • Description
2. Fixed Analysis Code
   • Code
   • Name
   • Description

Fixed Component Class Codes and Analysis Codes can then be used inside an Allocation Rule by selecting a Usage Type of Fixed Cost.

Define Cost Plan

A Cost Plan is a combination of Allocations Pool, Allocation Scope and Allocation Rules.  Using Cost Plan UI users can create a cost scenario for their business. Users can create as many cost plans for 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 calculate costs for future period.

Cost plan models are then executed by Cost Plan Engine to calculate costs for raw material, resources, and overheads 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
• Legal entity
• Basis Calendar, Basis Period,
• Basis Cost Type:– Any other cost type which can be used for costs that are not part of current cost plan
• Currency, Currency Conversion Type and, Currency Conversion Date
• Time Horizon with Plan calendar, From date 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 (For future use)

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 Legal Entity 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.

Background Processes

Several background processes have been included in this release.  These background processes can be submitted from the Administration UI.

Background Processes

Following is a complete list of all background processes are available:

• Calculate Actual COGM (Process)
• Calculate Gross Profit for Cost Impact Simulator (Process)
• Import Supply/ Demand for Cost Planning (Process)
• In-Memory Cost Planning Engine (Process)
• Incremental Margin Load (Process)
• Incremental Margin Load for Planned Orders (Process)
• Margin Load for Cost Plans (Process)
• Purge Cost Plan (Process)
• Purge Simulation (Process)
• Simulations Margin Load (Process)
• Validate Cost Planning Scopes (Process)

Administration

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

Process Cost Parameters

Users can now perform the following admin related tasks for Process Cost:

• 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 and Category Set
• Costing Validity Rules
• Full Cost Rollup Parallel Degree

Cost Planning Parameters

Users can perform the following admin related tasks for Cost Planning:

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