modern supply chain planning - inspirage

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Ludwig AvontsLead Solution Consultant ERP/SCM

Modern Supply Chain PlanningManaging the Financial Consequences of

Cross-Border Material Flows

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The Challenge

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Global Companies Are…

• Optimizing the physical supply chain

(e.g. Centralized Planning Function, ABC-Delivery)

• Optimizing VAT (e.g. Principal Business Model, Limited Risk Distributor)

A single physical movement of goods may involve multiple transfers of ownership

As a Result…

Physical Movement(Shipment, Receipt)

Financial Ownership(Orders, Invoices, Payments)

4

Shipment of GoodsAR Invoice

intercompanyAP Invoice

intercompany

AR Invoice

Sales Order

ABC - Delivery

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Limited Risk Distributor Model

Limited Risk Distributor

CustomerSale to Customer

Principal – VAT#Intercompany Sale

Shipment of Goods directly from Principal to customer, the LRD has “split second” ownership

Limited Risk Distributor

Customer

Customer Order

Order Confirmation

Customer Invoice

Principal – VAT#

Intercompany Order

Intercompany Invoice

Order Confirmation

Goods Issue directly to Customer

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Some Variations...

Limited Risk Distributor

CustomerSale to Customer

PrincipalIntercompany Sale

Shipment of Goods directly from third party to customer the principal & LRD have “split second” ownership

Third Party SupplierSame Country

Vendor Invoice

LRD – Country 2CustomerCountry 2

Sale to CustomerLRD – Country 1

Intra community transfer within legal entity

Shipment of Goods directly from third party to customer the principal & LRD have “split second” ownership

Principal Country 1

Intra-community Intercompany Invoice

Limited Risk Distributor

Customer Sale to Customer

PrincipalIntercompany Sale

Shipment of Goods directly from third party to customer the principal & LRD have “split second” ownership

Third Party SupplierOther EU country

Intra-community Vendor Invoice

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The ChallengeIntercompany Invoices &Related Tax Calculation

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The Solution

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Automatic Intercompany CreationModeling & Executing Your Tax Efficient Supply Chain in Oracle SCM Cloud

• Define configurable trade relationships -transfer pricing, intercompany documentation and ownership transfer points for profit center business units

• Create multi-node financial routes

Model Supply Chain Financial Flow

• Automate financial accounting within Oracle SCM Cloud

• Without interfering with the execution transactions

Separate Physical from Financial Transactions

• Monitor and audit financial orchestration transactions

Monitor & Report

Physical movement

Financial ownership

Supply Chain Financial Orchestration

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LocalPurchasing

Supported Scenarios

Warehouse

Global Supplier

Internal Transfer

Global Procurement

Global Sales Order Shipments(Internal Drop Ships)

Global Customer

Local Sales

Warehouse

Warehouse

Warehouse

Global Drop ShipGlobal Customer

Global Supplier

Physical route

Financial route

Local Sales

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Supported Scenarios

Warehouse Warehouse

Physical route

Financial route

LocalPurchasing

Global Supplier Warehouse

LocalPurchasing

Local Sales

Global CustomerLocal SalesWarehouse International

Company

Global Customer

Global Supplier Local Sales

LocalPurchasing

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Supply Chain Financial Orchestration Cloud

Physical Execution: Inventory, Manufacturing, Transportation

Financial Execution: Cost Accounting, Transfer Pricing, Interco Invoicing, Tax

Obligation/Money

Product costs and profitability

• Central financial orchestration tracking ownership and obligations

• Rule based Financial execution enables different financial treatment based on physical transactions

• Supply chain not held back due to any financial processes such as period close

• Rich audit trail on accounting transactions

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Order Management Procurement LogisticsProduct Master Data

ReceivingReceiptEvents

ShippingShipment

Events

InventoryTransferEvents

Model Financial Flows

Receive Supply Chain Events

Monitor and Manage Exceptions

IdentifyFinancial Flow

CalculateTransfer Price

GenerateOrchestration Tasks

Trade Events

IntercompanyAR Invoice

IntercompanyAP Invoice

Costing

Receivables

Payables

TAX ENGINE

Financial Orchestration Financials and Cost Mgt

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Supply Chain Flow

Financial Flow(s)

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Global Tax Needs

Competitive Advantage

Single Solution

Meets Tax needs, globally

Facilitates Global Operations,

Enables entry into newer markets

Across Procure to Pay, Order to Cash flows

Maximise ROIPayables ProjectsPurchasing Receivables

Central Application for Cloud Financials

Tax Configuration

Enforcement of Tax Legislation

Configuration and Transaction repository

Ensure Compliance

Compliance & Reporting

Single Source of Truth for

Configuration & Reporting

Minimises Compliance risk

Tax Record Repository

TaxConfiguration

Tax Calculations : Centralised Tax Engine

Quick start with Third Parties

Total FlexibilityPre Seeded Content

Common rules available for upload.

Additional content delivered by partners

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Tax Setup – Determining Factors – 4 Ps

Place

• Geography• User Defined Geography• Jurisdiction

Product

• Product - Inventory Linked• Product - Non-Inventory Linked• Transaction Input Factor• Product or Service

Party• Legal Party Fiscal Classification• Registration• Party Fiscal Classification• Transaction Input Factor

Process• Document• Transaction Fiscal Classification• Transaction Generic Classification • Accounting Event • Transaction Input Factor

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Parties

Places

Products

Processes

Tax TransactionsTaxes, Rules,

Rates

DetermineRegimes

TaxableBasis

CalculateTax

Amount

Tax Status& Rate

ApplicableTaxes

Single Interface for Transactions

Tax Reports- PDF, HTML, RTF

- Security enabled

Tax Calculation

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Office Depot Case Study

19

Key Facts

Industry : Business Supplies & Services

Owner : Private Equity

Turn-over : 1.3 Bln (margin business)Countries : 10+ (europe)Employee : 6.200HQ : Venlo, NL

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2020

Planning & Budgeting

(PBCS)

Financial Close & Consolidation

(FCCS)

Operational Systems Supply Chain Management

Financials Cloud

PurchasingCloud

(Indirect PO’s)

PurchasingCloud (Direct

PO’s)

PO’s

AP

GL

Fixed Assets

AR

Invoice Scanning & Matching

Tax Management

IntercompanyInvoices

Order Management

SO’s with intercompanyrequirement

Inventory(SFO)

Shipments

Banking Gateway

EDI

AccountingHub (AHCS)

Profitability & Cost Mgmt

(PCMCS)

Proposed Solution Architecture

Copyright © 2018, Oracle and/or its affiliates. All rights reserved. |

Ludwig AvontsLead Solution Consultant ERP/SCM

Modern Supply Chain PlanningManaging the Financial Consequences of

Cross-Border Material Flows