Slide 4 - Oracle Value Chain Execution Cloud

Supply_Chain_Financial_Orchestration / Monday, November 05, 2018

Slide 4 - Oracle Value Chain Execution Cloud

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Hello, my name is Amit Kumar. Welcome to the Release Training for the new Oracle Value Chain Execution Cloud, Oracle Fusion Supply Chain Financial Orchestration product. In this session, we’ll introduce you to this new product and its capabilities.

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Slide 5 - Slide 5

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We’ll give an overview of the Supply Chain Financial Orchestration, followed by more detail to explain how you can use it, and what business value it brings.

Next we’ll explain what you need to consider before enabling these capabilities in your business, and what you need to know to set them up.

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Slide 6 - Introducing Supply Chain Financial Orchestration

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Introducing Supply Chain Financial Orchestration

Supply Chain Financial Orchestration is a configurable application that manages all the trade relationships between internal parties belonging to a large corporation typically spread across geographies. The supply chain business flows supported by this product are Customer Shipment (between internal parties), Global Procurement and Internal Transfers.

Let us take an example of Customer Shipment (between internal parties) business flow.

Acme is a global product manufacturing company, which is headquartered in USA. Acme US and Acme China are two entities belonging to the company Acme.

Acme US is the company’s centralized sales office located in US, which books the customer sales orders and accounts for the receivables from the customer in US.

Acme China is the manufacturing facility of the company located in China, where finished goods are manufactured.

The finished goods are shipped from Acme China to the customer in US.

This results in transfer of title of the finished good.

So, the financial transfer of ownership happens from Acme China to Acme US and from Acme US to Customer on physical shipment of goods.

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Slide 7 - Introducing Supply Chain Financial Orchestration

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Using Oracle Fusion Supply Chain Financial Orchestration you can model, execute and monitor the financial flows between internal parties.

For example we saw in previous slide, it allows you to model the financial relationship between Acme China and Acme US. Acme China is the internal seller and Acme US is the internal buyer.

Based on the this model it can automatically execute the financial flow where the seller accounts for the inventory cost , revenue and receivables in his book of accounts and buyer accounts for inventory cost and liability for payment in his book.

You can monitor the status of the financial orchestration transactions, manage exceptions, and view the history of all financial transactions created for a single movement of goods.

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Slide 8 - Supply Chain Financial Orchestration

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As business value , Supply Chain Financial Orchestration allows you to model your global, tax efficient corporate structures without impacting the physical movement of goods. This ensures that you can get goods and services to your customers as quickly as possible AND lower your total supply chain costs at the same time.

You are able to optimize operational efficiency by centralized sourcing and order management functions.

The physical execution is streamlined as the physical movement of goods or fulfillment of services is separate from financial flow

Through this product you can easily define business rules. This flexibility reduces your implementation cost and time, as well as allows you to easily react to corporate reorganizations or acquisitions.

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Slide 9 - Model Flexible Financial Flows: Overview

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Overview on modeling of flexible financial flows

Supply Chain Financial Orchestration allows you to model your most complex financial flows between business units involving different pricing and accounting requirements. You can define multiple transfer pricing rules which specifies how the transfer price needs to be calculated. You can choose from multiple options like a PO Price based or Transaction cost based transfer pricing or third party pricing service for calculation of transfer price. You can also specify whether intercompany invoices are required and control the aspects of intercompany accounting like, the currency to be used whether to track profit in inventory in the destination organization etc.

Using the profit center business unit to party relationship setup you can tie up the customer and supplier sites to profit center business units for creation of intercompany invoices.

It allows you to model shared service business unit to process the intercompany billing and payments for multiple profit center business units.

For more details you can go over the Release Training Supply Chain Financial Orchestration : Model Financial Orchestration

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Slide 10 - Model Flexible Financial Flows

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As business value, you will be able to reduce the overall tax outflow, by efficiently modeling the financial route for supply chain transactions across different tax regimes.

Handle your complex business processes like centralized purchase of goods or services for a subsidiary or movement of goods from one warehouse to another across countries or sale of goods involving different selling and shipping business units as we saw in the example earlier.

Supply Chain Financial Orchestration setups are independent, which enables you a setup to be reused across financial flows and enables easy change management. For example you can define transfer pricing rule ‘A’ with a markup percentage of 10% to be used when purchasing category is “Electronics". This can be attached to multiple financial flows. Later, if the markup for “Electronics" needs to be increased to 12%, you do not need to update all the impacted financial flows, a simple change to the transfer pricing rule takes care of the same.

The setups are exhaustive which considers all the possible data required for automatic execution of the financial flows.

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Slide 11 - Automate Execution of Financial Flow : Overview

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Automate Execution of Financial Flow : Overview

The product has the infrastructure in place which triggers the execution of the financial flow automatically, once the movement of goods or fulfillment of services happens in the supply chain flow.

This automated process performs sequence of steps for you in real-time: that includes

Capture of business events raised for physical transactions like shipment of goods from warehouse.

Identifies the financial orchestration flow. Then determines what are the tasks required for accounting and documenting the transfer of ownership along the financial route, and the sequence they need to be performed.

Generates payload for the cost accounting and intercompany invoicing tasks, interfaces the record and tracks the status of their import in target systems.

For more details you can go over the Release Training, Supply Chain Financial Orchestration : Automation and Monitoring

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Slide 12 - Automate Execution of Financial Flow

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Business value of this feature

As the Supply Chain Financial Orchestration separates the physical flow from the financial flow, you will be able to streamline the movement of goods or fulfillment of services.

This ensures on time delivery of goods or services thereby resulting in better customer satisfaction.

It reduces your execution time, as it can handle automatic execution of high volume transactions.

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Slide 13 - Monitor Execution of Financial Flow : Overview

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Monitor Execution of Financial Flow: Overview

Supply Chain Financial Orchestration allows you to monitor and manage financial orchestration execution. Monitor Financial Orchestration Execution is one stop user interface to monitor and manage exceptions.

This interface makes financial orchestration transactions visible to you on a real-time basis.

You can search historical transactions based on status of orchestration. For example, transactions where the financial orchestration is ‘yet to be started’ or ‘in progress’ or ‘completed’.

Exceptions will be highlighted and allows you to manage through this user interface.

Will also be able to trace exceptions that arise in the target system. For example when the Intercompany Payables Invoice creation fails on import in the payables system, the exception is displayed as information for you in the Monitor Financial Orchestration Execution UI.

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Slide 14 - Monitor Execution of Financial Flow

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Business value of monitoring feature

Reporting is easier and faster for you, as it provides visibility to all financial orchestration transactions in real-time basis.

Saves your time in internal and external audits.

You can spend your quality time in analyzing the transaction history and look towards ways to optimize your operational efficiency.

Reduces you product support costs, as it is easier to troubleshoot issues.

These benefits help you in improving brand value of your product.

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Slide 15 - Functional Architecture

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Supply Chain Financial Orchestration uses Fusion stack and technology. It works with Fusion Inventory, Receiving and Shipping systems to receive the supply chain events raised for physical transactions. It talks to other external systems like Distribution Order Orchestration , Procurement, HCM, Product Hub etc. through web services for retrieval of event, source document information and external referenced entities. For example Distributed Order Orchestration exposes web service to retrieve the sales document information.

For interfacing records for intercompany accounting and invoice generation, it integrates with Costing, Receivables and Payables systems through web services.

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Slide 16 - Slide 16

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So that concludes the audio portion of this presentation, thank you for listening. There is no audio in the implementation advice section.

You can easily pause and rewind any of these slides if you require additional time to take in the detail.