<Insert Picture Here>

Landed Cost Management Overview

Erin Johansson
Global Trade Management
Product Strategy

Safe Harbour Statement

The following is intended to outline our general
product direction. It is intended for information
purposes only, and may not be incorporated into any
contract. It is not a commitment to deliver any
material, code, or functionality, and should not be
relied upon in making purchasing decision. The
development, release, and timing of any features or
functionality described for Oracles products remains
at the sole discretion of Oracle.

Agenda
Oracle Landed Cost Management Orientation
History & Positioning
Functional Overview
Landed Cost Market
Target Market
Summary & Next Steps

Landed Cost Management Orientation

First Global Trade Management Application

EBS Application
Brazilian Localization
Componentized
Future with GTM Suite (OTM Platform)
GAP: Inability to attribute extended costs to products

New Product EBS 12.1

What is Landed Cost Management?

Business Context
International Trade Promises:
New revenue opportunities
Reduced production costs

International Trade Realities:

Profitability. Is my product truly profitable? Are my expenses attributed to the
product that incurred them? Are my products priced appropriately? Have I
budgeted correctly for a particular product group?

Financial Visibility. What is my outstanding exposure including all of the

extended supply chain costs? Are my financial reports accurate?

Competitiveness. Is the company sourcing strategically? Do I understand all the

costs associated with sourcing from a particular country? Can I negotiate better
contracts with suppliers and/or customers?

Compliance. How am I meeting strict regulations pertaining to item cost in

countries such as Brazil and India?

What is Landed Cost Management?

Inbound Shipment

China Factory Shipment to HK

$100

$2

HK Port

$4

Vessel Carrier US Port

$20

$5

Kansas City Customer

$2
=$133

$2

Benefits of Landed Cost Management

Operational Lifecycle
Market & Sell

Plan & Budget

Better contract

Optimized fulfillment
networks
Better pricing models
More accurate
product profitability
reporting

Enables Organizations:
Maximize Profits

negotiations
Additional
revenue
opportunities

Increase Competitiveness
Improve Financial Visibility into
Supply Chain
Enhance Financial Reporting
Confidence and Compliance

Sourcing
More accurate

Acquisition

total cost
comparisons
Better contract
negotiations

Payment
Linked invoices with
supply chain event
Authenticated cost
declarations

More accurate record of

outstanding liabilities

Regulation compliance

Oracle LCM Roadmap

Phase1 R12.1

Phase2

Future

E-BUSINESS SUITE

Charge Management
Landed Cost Engine
Adjustment
Management
Integration with EBS
Receiving, Costing,
and Payables

Extend Integration
PO Estimation
Cost Methods
OPM Costing
Enhanced OTM

Outbound

Shipments

Strategic

Sourcing

Analytics

Integration

Analytics

Theme

LCM for EBS

Inbound Calculation &

Automation
Planned

Based on Brazil
Localization
Core Product - EBS

LCM standalone
First Global Trade Management

Application
Componentized
Future with GTM Suite (OTM
Platform)

<Insert Picture Here>

Landed Cost Management

Functional Overview

Landed Cost Management

Version 1 Flow
Receipt Estimated Landed Cost
Create
PO

Capture &
Prorate
Trade
Charges

Calculate
Estimated
Landed Cost
& Receive
Good

Update
Inventory
Valuation &
Accounting

Invoice Actual Landed Cost

Receive
Trade
Document
(Invoice)

Calculate
Actual
Landed
Cost

Update
Inventory
Valuation &
Accounting

Receipts - Estimated Landed Cost

User Actions

Buyer

Create PO

Supplier /
Carrier

Ship Goods

Trade Compliance Clerk

Enter LCM Shipment

Receiving
Clerk

Receive
Goods

LCM
Costing

Automated Actions

Load Estimated
charges
Calculate Estimated
Landed Cost

Accrue Receipts

LC Adjustment
Transactions

Receipts - Estimated Landed Cost

Buyer

Supplier /
Carrier

User Actions

Create PO

Ship Goods

Receiving
Clerk

Trade Compliance Clerk

Enter LCM Shipment

Receive
Goods

LCM
Costing

Automated Actions

Load Estimated
charges
Calculate Estimated
Landed Cost

Accrue Receipts

LC Adjustment
Transactions

Receipts - Estimated Landed Cost

Buyer

Supplier /
Carrier

User Actions

Create PO

Ship Goods

Receiving
Clerk

Trade Compliance Clerk

Enter LCM Shipment

Receive
Goods

LCM
Costing

Automated Actions

Load Estimated
charges
Calculate Estimated
Landed Cost

Accrue Receipts

LC Adjustment
Transactions

Invoice - Actual Landed Cost

Supplier /
Carrier

Enter
Invoices

Initiate
Adjustment
Process

Make
Payment

Item
Invoice

LCM

Calculate Actual
Landed Cost

Est. / Actual
Landed Cost

Costing
Payables

Automated Actions

User Actions

Brokerage
Invoice

Payables Clerk

Variance Cost/
Accrual
Adjustment

Create Freight
and/or
Item
Invoice

Enter Shipments Page

Enter Shipment Lines Page

Enter Charges Page

View Landed Costs Page

View Landed Costs Page

Product Map & Information Flow

EBusiness Suite

Purchasing

PO Information

Payables

Landed Cost Management

OTM

Freight
Information

LC Calculator
EB Tax

Product Cost
Dashboard

Actual Variances

VAT Calculation
Duty

Advanced
Pricing

Invoices

Charge Mgt.

Estimated
Landed
Cost

ASN

Charges

Receiving

Estimated
Landed Cost

Costing

Landed Cost Management

Customers Using Brazilian Localization

<Insert Picture Here>

Landed Cost Management

Landed Cost Market

Landed Cost Management Solutions

Types of Functionality
GTM Landed Cost Calculators
Estimates Total Landed Cost Based on To, From, and Item
Attributes
Blackbox No integration
ERP Acquisition Costing
Calculate Estimated Landed Cost in Purchasing and/or Receiving
Manual Entries or Simple Rules
No Actual Calculations
Oracle Landed Cost Management
Automatic Update of Variances between Actual and Estimates
Advanced Pricing
Flexible Application of Charges
Roadmap

Landed Cost Management Market

Incomplete Solutions
Acquisition Costing
Packaging:
Portion of Procurement

application (can be a
separate module)

Functionality:
Basic compared to

Oracle LCM: Calculate

ELC in PO or Receiving.
User can update estimates
manually with changes.

Vendors:
SAP, PeopleSoft, JDE,

Solomon, Great Plains,

SysPro

GTM Calculators
Packaging:
Separate Service or Part of

Inbound Processing
application

Functionality:
Calculator independent

of transactions: Enter To,

From, Item, etc. and ELC is
calculated.

Vendors:
SAP GTS, TradeBeam,

Management Dynamics,
DHL

Competition
No Real Competitors

EBS Customer Solutions Today

Customers typically customize and/or integrate existing assets to try to capture landed costs
Extend EBS
Extend TMS Freight Rating Engines
Calculate Using Excel and Manually Update

LCM enables Oracle to better differentiate and compete in new ERP/SCM deals

Differentiators
Differentiators from Other Integrated Landed Cost

Solutions
Advanced Pricing
Rules engine used for automatically determining applicable
charges to apply to a shipment/line.
Flexible Application of Charges:
Apply to shipment line, a group of lines within a shipment, or
an entire shipment
Application based on weight, volume, quantity (UOM) or the
value of the items being traded
Automatic Update of Variances between Actual and
Estimates

<Insert Picture Here>

Landed Cost Management

Target Market

Target Market
Today:
Large and midsize companies that source 25% or more of their
goods from overseas
Organizations in the Retail, CPG, Distribution, High Tech, and
Industrial Manufacturing Industries
Companies or divisions of companies where regulatory
requirements make it mandatory to track product specific landed
costs e.g. Brazil, Romania, India.
Position with R12.1 Procurement, Inventory & Mfg Prospects
(easy upsell) Help to drive upgrades
Later:
Position with OTM and GTM (Global Trade Management)
Target Process Manufacturing

Launch Activities
KIX Development Site
https://kix.oraclecorp.com/KIX/display.php?articleId=76528
GTM/LCM field website in progress Due September 08
Positioning Document
Overview Presentation
EBS Launch Deliverables
Release Content Document (In Review)
Functional TOI (October 08)
Logistics Release Value Proposition
Logistics Release Overview TOI
LCM Product Overview TOI (October 08)
LCM Datasheet (October 08
Analyst Briefings
AMR, ARC, IDC, Gartner, Forrester (January 09)
Other
Sales Consulting Lead Identified and Training Jay Bonds
Services Consulting Training Planning to begin (9/16/08) Nick Reichenbach (NA); Vuigner
Bertrand (EMEA)
Early Adopter Profile
ROI Calculator (BAT) (TBD)
Sales Target List Prepared by NA Overlay Team (October 08)
APAC Awareness Breifings already begun (Peiter Els)