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Copyright © 2015 Oracle and/or its affiliates. All rights reserved. | 1 Cost Rollup Process For Configured Items (CTO) Devaraju Holenarasipur Rajkumar Chockalingam

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CTO Cost Rollup

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  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. | 1

    Cost Rollup Process For Configured Items (CTO)

    Devaraju Holenarasipur Rajkumar Chockalingam

  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

    Objectives

    How cost rollup works in case of Configured Items (CTO)

    Key setups / Processes Involved

    2

  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

    Agenda

    1

    2

    3

    4

    5

    Introduction

    Cost Rollup Process For CTO

    Basic setups and Process Flow

    Scenarios

    Troubleshooting CTO Cost Rollup Issues

    Question And Answer 6

    3

  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

    Introduction

    Environment in which product or service is assembled or kitted on receipt of Sales Order

    Includes ATO, PTO and Hybrids

    ATO Configuration item is created from selected options using configurator

    ATO Item can be used to Create Pre-Configurations

    In case of PTO, Pick slip used to kit included items and selected options.

    What is Configure to Order

    4

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    Introduction

    Calculates the cost of an Assembly Item (Configured item) as per the required components, subassemblies, resources, and overheads.

    Configuration item cost rollup is a single level cost rollup.

    Optional Process that occurs during the Auto create configuration Process

    Also can be run manually for all sales orders and preconfigured items using the CTO Calculate Cost Rollup concurrent program.

    CTO Cost Rollup

    5

  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

    If the organization is using standard costing, CTO will update the frozen cost of the configuration with the cost rolled up in the CTO cost type.

    If the costing organization is an average, LIFO, or FIFO organization, the valuation cost of the item is not updated and the cost in CTO cost type serves as an estimated cost.

    If a configuration item is purchased, an entry will be created in CTO Buy Cost type, based on the list price of the configuration in the PO Validation Organization

    CTO cost rollup will internally call Supply chain cost rollup.

    CTO Cost Rollup Introduction

    6

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    In the case of Multilevel configuration items, CTO performs the cost rollup for all configuration items in the BOM, starting with the lowest level configuration item. Cost of the parent configuration uses the cost of the child configuration from the CTO cost type.

    For procured configurations, the cost specified in the profile BOM: CTO Buy cost type is used as the Buy Cost, and is included in the rollup of the parent configuration

    CTO Cost Rollup Introduction

    7

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    Make Configuration Cost Rollup Process For Make configurations, the cost is rolled up by adding up the valuation costs of

    all the components / subassemblies in the configuration BOM for which Include in cost rollup flag is set to Yes.

    The cost is first rolled up in seeded, non updatable CTO cost type, then the value in CTO cost type is copied to frozen

    This is the total Rolled up Cost for the configuration. The cost is calculated in the manufacturing organization.

    8

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    Buy Configuration Cost Rollup Process If a configuration item is purchased, an entry will be created in the cost type

    specified in the profile BOM: CTO Buy Cost type, based on the list price of the configuration in the PO Validation Organization.

    This cost is the total Rolled up Cost for the configuration.

    The cost in the buy cost type will be used in the rollup only if the configuration has a buy type sourcing rule in the assignment set.

    If a configuration is procured, but does not have buy type sourcing rules, it will be treated as a manufactured item for the purposes of cost rollup

    9

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    Setups and Processes

    Define Costs

    Define items, BOM, routings

    Setup valuation costs for Components and Subassemblies.

    Define buy cost type

    Setup MRP sourcing rules

    Define sourcing rules

    Assign sourcing rules to Assignment Set

    Set up Profile Options

    Run CTO Cost Rollup Program

    10

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    Setups and Processes

    BOM: CTO Perform Cost Rollup

    BOM: CTO Buy Cost type

    BOM: Match to Existing Configurations

    MRP: Default Assignment Set

    BOM: Send Notifications for Autocreate Config Exceptions

    BOM: CTO Perform List Price and Purchase Price Rollup

    Profile Options

    11

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    Scenarios

    Case 1: Make Configurations

    Case 2: Pre-Configurations

    Case 3: Buy Configurations

    12

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    Scenarios

    Case 1: Make Configurations

    13

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    Make Configurations Model Bill

    14

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    Make Configurations Setup items (Model)

    15

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    Make Configurations

    Setup items (Model)

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    Make Configurations Setup items (Option Classes )

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    Make Configurations Setup items (Option Classes )

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    Make Configurations Model Bills Setup

    Has two option classes under it. Each option class has two optional items.

    Option class one has two procured optional items under it.

    Option Class two has two Sub Assembly items under it.

    19

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    Option Class Bills Setup

    Option Class1 have two procured components. Optional check box Is checked. Similarly option Class2 BOM is also set with two optional Sub-assemblies.

    Make Configurations

    20

  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

    Make Configurations Item Costs setup for components and subassemblies

    Before performing Cost rollup, ensure all components under Model should have item cost defined in Valuation (Frozen) cost type .

    Cost of Sub-Assemblies also needs to be rolled up and updated in frozen cost type since CTO cost rollup process will perform only single level rollup..

    21

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    Make Configurations Process Flow Create Sales Order

    Enter sales order header and line details.

    For a model item, Click on Configurator Button to invoke configurator

    22

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    Make Configurations Process Flow Configure using Oracle Configurator

    In the configurator window, after Choosing appropriate Components, Click Finish button to complete configuration.

    In this case the option items under option class chosen are highlighted

    23

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    Make Configurations Process Flow Book Sales Order

    Once configuration is complete , Option Items chosen during configuration are copied into the sales order line

    24

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    Make Configurations Process Flow Progress Sales Order

    Actions(N)-> Progress Order Next step is to progress the model line to Create Configuration. Upon completion of this process, The configured item gets created and new line is inserted to Sales order line.

    25

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    Make Configurations Process Flow Newly Created Configuration Item

    26

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    Make Configurations Process Flow Configuration Item

    Configuration Item (star Item), Configuration BOM and other related entities are created by Auto Create configuration process. Configured Item : Make_Model*381006 Base Model: Make Model

    27

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    Make Configurations Process Flow Configuration Item BOM

    28

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    Make Configurations Cost Rollup Configuration Item cost details

    Cost rollup is performed by auto create configuration process, since profile option BOM: CTO Perform Cost rollup is set to Yes.

    The cost is rolled up in CTO cost type by adding up the valuation costs of all the components in the configuration BOM for which Include in cost rollup flag is set to Yes.

    In standard costing org, the cost in CTO cost type is copied to Frozen cost type.

    29

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    Make Configurations Cost Rollup Summary

    Configured Item Make_Model*381006 Created with highlighted Components from Base Model

    Cost of Configured Item (Make_Model*381006) Material ( 10 + 7.7+5.5) = 23.2 Resource ( 10 + 5) = 15 Total Item Cost = 23.2 + 15 = 38.2

    30

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    Cost Rollup Scenarios

    Case2: Pre-Configurations

    31

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    Pre-Configurations Model Structure

    Create Pre-configuration from the Base Model

    32

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    Pre-Configurations - Setup

    Setup items (Preconfigured Item)

    Create a new item in the master organization and assign it to the appropriate manufacturing organization. Enter the base model item (on which the pre- configured item is configured) in the Base Model field on the BOM tab of the item master for the pre-configured item.

    33

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    Pre-Configurations Process Flow Preconfigured Item Bill

    Steps to Create Pre-Config BOM Create a new bill of material for your item, without components. Place your cursor in the Components region. From the Tools menu, choose Configure Bill.

    A New Configurator Screen will open

    34

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    Pre-Configurations Process Flow Pre-configuration in Configurator

    Configurator window is launched from BOM. After Choosing appropriate Components, Click Finish button to complete configuration.

    In this case the components chosen are highlighted

    35

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    Pre-Configurations Process Flow Bill for completed Pre-Configuration

    Once configuration is complete , Option Items chosen during configuration process in configurator are inserted in BOM accordingly, and completes Configuration BOM.

    This process also creates

    respective routings if there are any for Model / Sub Models

    36

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    Pre-Configurations Process Flow Pre-Configured item cost before rollup

    Pre-Configured Item cost is zero in both CTO and Frozen cost types since CTO cost rollup was not done.

    37

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    Pre-Configurations Process Flow Run CTO cost rollup

    Profile option BOM: CTO Perform Cost rollup is set to Yes and this has no impact , as it is applicable for configurations created from sales orders

    Run CTO Calculate Cost rollup from BOM responsibility

    Choose configuration and created days ago request parameter.

    38

  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

    Pre-Configurations Item Cost Details Pre-Configuration Item cost details

    Cost is rolled up in CTO cost type by adding up the valuation costs of all the components in the configuration BOM for which Include in cost rollup flag is set to Yes.

    buy cost type does not have any cost since Pre-configuration is a make configuration.

    The cost in CTO cost type is copied to Frozen cost type.

    39

  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

    Pre-Configurations Cost Rollup Summary

    Pre Configured Item Make_PreConfig Created with highlighted Components from Base Model

    Cost of Pre-Configured Item (Make_PreConfig) Material ( 15 + 7.7+6.6) = 29.3 Resource ( 10 + 5) = 15 Total Item Cost = 29.3 + 15 = 44.3

    40

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    Cost Rollup Scenarios

    Case3: Buy Configurations

    41

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    Buy-Configurations

    Model Bill

    42

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    Buy Configurations - Setup Setup items (Model)

    43

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    Buy Configurations - Setup

    Setup items (Model)

    Under General Planning tab ensure the Make or Buy attribute value is set to Buy

    44

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    Buy Configurations - Setup Setup items (Option Class )

    45

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    Buy Configurations - Setup Model and Option Class Bill

    Model Bill contains two option classes under it.

    Each option class have two optional purchased items.

    46

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    Buy Configurations - Setup Sourcing Rule creation and assignment

    Sourcing rule is created with Buy from sourcing type and assigned It to Assignment set for the Buy model.

    If a configuration is procured, but does not have buy type sourcing rules, it will be treated as a manufactured item for the purposes of cost rollup

    47

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    Buy Configurations - Setup Profiles Set up applicable for buy configuration

    Procured configuration item should have a buy type sourcing rule in the assignment set defined by MRP: Default sourcing Assignment Set.

    For Buy item, an entry will be created in the cost type specified in the profile BOM: CTO Buy Cost type, based on the list price of the configuration in the PO Validation Organization.

    This cost is the total Rolled up Cost for the buy configuration

    48

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    Buy Configurations- Setup Component Costs

    Item cost is not set for any components under of Buy Model since this configuration is procured and the cost is rolled from list prices of components.

    Also Based on Rollup flag needs to be manually checked for Buy_Model since by default it will be unchecked.

    49

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    Buy Configurations - Setup Component List Price

    Similarly list price is set in item validation organization for other two components

    - Buy_OC2_Comp1 : 30 - Buy_OC2_Comp 2 : 35

    50

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    Buy Configurations Process Flow Create Sales Order

    Create sales order for Base Buy Model and click on configurator button.

    This action will invoke configurator if the sales order line is against a Model item.

    51

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    Buy Configurations Process Flow Configurator Choosing the options

    Choose the appropriate Components, Click Finish button to complete configuration.

    In this case the components chosen are highlighted

    52

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    Buy Configurations Process Flow Book and Progress Sales order

    53

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    Buy Configurations Process Flow

    Configuration Item Created

    Configured Item Buy_Model*381980 Is created from base model (Buy_Model)

    54

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    Buy Configurations- Process Flow Configured Item

    Configured item is created and its list price is rolled up during auto create configuration process.

    55

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    Buy Configurations- Process Flow Configuration Item BOM and sourcing Rules

    Configured Item BOM and Sourcing rule created during auto create Configuration process

    56

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    Buy Configurations Item Cost Details Configured Item cost details

    Cost rollup is performed by auto create configuration process, since profile option BOM: CTO Perform Cost rollup is set to Yes.

    An entry is created in the cost type specified in the profile BOM: CTO Buy Cost type, based on the list price of the configuration in the PO Validation Organization.

    A single level cost rollup is performed in the CTO cost type, using Buy cost type.

    If the organization is using standard costing, the frozen cost of the configuration is updated with the cost rolled up in the CTO cost type

    57

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    Buy Configurations Item Cost Details

    A single level cost rollup is performed in the CTO cost type, using Buy cost type.

    If the organization is using standard costing, the frozen cost of the configuration is updated with the cost rolled up in the CTO cost type

    Configured Item cost details

    58

  • Copyright 2015 Oracle and/or its affiliates. All rights reserved. |

    Buy-Configurations Cost Rollup Summary

    Buy Configured Item Buy_Model*381980 Created with highlighted Components from Base Model. List Price and Cost are rolled up.

    Cost of Buy-Configured Item (Buy_Model*381980) Material ( 12 + 30) = 42

    59

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    References - Troubleshooting CTO Issues

    Note 1387196.1 -> Things to do Prior to Logging a Configure to Order (CTO) Service Request or Bug in EBS Release 12

    Note 1565190.1 -> Configure to Order (CTO) for a Basic Assemble to Order Item (ATO) for Release 12 [Video]

    60

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    Learnt Concepts around CTO Cost Rollup

    Basic Setups for Performing CTO Cost Rollup

    Demo flows for

    Make Configurations

    Pre-configurations

    Buy Configurations

    MOS Notes to troubleshoot CTO related Issues

    What we covered today

    Summary

    61

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    THANK YOU

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