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Oracle R12 Landed Cost Management (lcm)
1. T H E P A S S I O N R U NS D E E P
Stuart Patsos, CIO / Vice President of IT
Landed Cost Management (LCM)
2. Company Background
Macsteel Service Centers USA is one of the leading metals
processors and distributors in North America. March 1, Kloeckner
Metals US.
A division of Kloeckner & Co – the largest mill-independent
distributor of steel in the world
● 30+ locations throughout North America and Puerto Rico
● processes and distributes
► carbon ► aluminum
► stainless ► specialty metals
● Products include a full range of
► flat rolled ► pipe
► plate ► bar
► tubing ► structurals
● The company also supplies a full range of
► Coated ► steel building products
► prepainted metals
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“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”
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3. Applications Footprint
• Version of EBS currently Implemented: 12.1.2
• Oracle products implemented:
– Financials (GL, AP, AR, Advanced Collections)
– Order Management (including Configurator)
– OPM (Process Manufacturing)
– Discrete Manufacturing
– Inventory
– Procurement (including LCM – Landed Cost Management)
– OTM (version 6.04)
– eBusiness Tax (with Vertex O series)
– OBIEE and OBIEA
• On Demand since Sept 20, 2010
• Future implementation
– Warehouse Management
– EAM
– ASCP
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“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”
4. Application Usage
Scope of implementation
Multiple legal entities, 8 Divisions, 30 branches
US & Mexico Ledgers
Hybrid of Process Manufacturing and Discrete Inv. Orgs.
Future rollout to South Africa and Israel Service Centers
Key Business Challenges
Landed Cost Management
Transportation Management
Multiple units of measure
Average Costing RM & FG
Lot Costing process to order steel
Management Reporting (OBIEE)
“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”
5. LCM at Macsteel
Types of Charges
Freight (Inbound and Supplier to Outside Processor)
Fuel
Vessel
Material Surcharges
Integration with Advanced Pricing
Required to calculate charges in a different unit of measure
All items have a dual unit of measure (i.e. Lbs and Pcs)
Charges are in a 3rd unit of measure (i.e. Cwt)
Example:
20,000 lb coil with material surcharge of $5 per Cwt
Advanced Pricing calculates total charge of $1,000
“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”
6. Key Benefits
Ability to capitalize all landed cost charges
Acquisition costs account for a significant portion of the total cost of
material
Can amount to as much as 60% of the cost of the item (ranging from
5% - 60%)
Accurate Cost (material + acquisition)
Accurate AP Matching
Ability to capture key data elements for future reporting
and decision making purposes:
Sourcing
Transportation
Management Reporting / Analysis
“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”
7. Pain Points
Cumbersome Data Entry / Integration with Payables
Macsteel legacy system provided ability to enter LCM charges
directly in the PO
Users complain of multiple screens and additional key strokes
Estimated LCM charges are not included in the PO
Approval proccess
Integration with Oracle Transportation Management
Does not work for internal requisitions
Does not work for drop shipments
Does not handle Macsteel trucking (internal) costs
- Only supplier or third party
No standard LCM reports
“This presentation is for informational purposes only and may not be incorporated into a contract or agreement.”