Describe use cases for landed cost
The Landed cost module in Supply Chain Management helps you streamline the inbound shipping operations of your organization. You can get complete financial and logistical control over imported freight from the manufacturer to the warehouse. Based on different factors, the landed cost of an imported item can be high compared to the actual item price. Your inbound shipping operations are streamlined once you have the complete visibility of freight involved in the shipping process. Using the Landed cost module provides you with an accurate landed cost calculation and timely cost estimates. These estimates and calculations maintain increased financial and logistical visibility into the extended supply chain. It eventually helps to reduce the administration of costing and costing errors.
Voyage and shipping container
A voyage is typically a vessel that follows a distinct movement from an outbound location through a specific set of destinations over a specified period. For a shipment, you may need to create a new voyage, or you can place it in an existing voyage.
When you create a voyage, you can select a vessel. A vessel is the unique name of a ship that a shipping company or agency uses. You also need to associate the mode of delivery to the vessels.
You can access voyages from Landed cost > Voyages > All voyages. To create a voyage, you need to select the shipping company and the journey template. A journey template is the route that goods take between two ports.
Once the voyage is created, select the Voyage editor in the action pane. The Voyage editor page, on selecting the Generate data button, displays all the outstanding purchase lines that are waiting to be shipped. You can add the purchase lines that you want to ship and add them to the staging list. From the staging list, you need to add them to a shipping container.
A shipping container can be of different types, which define the weight and volume of the container. The measurement of the item is validated with the measurement of the shipping container during loading.
Cost
When a voyage is created for a shipment, cost is automatically added to it. Various cost options and cost bases are available for the voyages. An estimation option provides accurate cost estimates of the voyage.
Landed cost then runs a preliminary posting/accrual of the estimated landed costs to ensure that an accurate calculation of estimated costs is provided at the time of voyage creation. As these automatic costs are invoiced, the estimated costs are reversed and replaced with the actual costs, based on cost invoices.
You can create a cost template that helps to reduce complexity in the estimating process by minimizing the selection option. You can access the cost template from Landed cost > Costing setup > Cost templates page.
To estimate the cost, navigate to Landed cost > Periodic tasks > Cost estimate. Use the Cost estimate dialog box to generate a new cost estimate that is based on a selected cost template, a selected set of items, and other details of a journey. These settings are then used to determine the estimated landed costs of goods. These cost estimates are primarily used to work with standard cost items. Adding estimated landed costs to the standard cost of goods reduces variance in transactions when goods are added to a voyage.
On the Items tab, you can add as many items to the estimate as you require. The Cost estimates page shows how each estimated cost was derived. It also shows the estimated landed cost for each item.