Activity based Billing Solution for Logistics Service Providers (LSP)

An Oracle White Paper April 2011

3PL Billing Solution

CONTENTS

1. 2. 3. 4.

Introduction ............................................................................................................. 1 3PL Billing Business Requirements ....................................................................... 2 Billing Solution Overview ...................................................................................... 3 Setting up LSP Billing ............................................................................................ 3 5.1 Profile Options ................................................................................................ 3 5.2 Define Client Parameters ................................................................................ 4 5.3 Define Item Key Flexfields ............................................................................. 5 5.4 Define Client Items ......................................................................................... 5 5.5 Define sub inventories and locators ................................................................ 5 5.6 Define Billing Items ........................................................................................ 6 5.7 Setup Counters ................................................................................................ 9 5.8 Setup Client specific IB Item Instances and Counter Instances ................... 10 5.9 Define Price List/ Price modifiers................................................................. 10 5.10 Enable Service Agreements for Third Party Billing Responsibility ............. 11 5.11 Author Service Agreement ........................................................................... 12 5.12 Define Billing Sources .................................................................................. 12 5.13 Define Billing Rules ..................................................................................... 14 5. Business Use case ................................................................................................. 14 6. Use case modeling ................................................................................................ 15 7. Use case execution ................................................................................................ 27 8. Limitations ............................................................................................................ 30
FIGURES

Figure 1 : Typical interactions in a 3PL business environment .......................................... 1 Figure 2: Setup and Process flow for 3PL Billing .............................................................. 3 Figure 3: Client Parameters screenshot............................................................................... 4 Figure 4: Usage Item Definition- Main Tab ....................................................................... 6 Figure 5: Usage Item Definition-Service Tab ..................................................................... 7 Figure 6: Trackable Item Definition-Main Tab .................................................................. 8 Figure 5: Usage Item Definition-Service Tab ..................................................................... 8 Figure 4: Counter Setup overview ...................................................................................... 9 Figure 9: Service Contracts Categories window- Responsibilities Tab............................ 11 Figure 10: Seeded Billing source listing ........................................................................... 13 Figure 11: Unit of Measure Conversions- Standard Tab .................................................. 16 Figure 12: Unit of Measure Conversions Intra-Class Tab ............................................. 17 Figure 13: Unit of Measure Conversions Inter-Class Tab ............................................. 17 Figure 14: Stock Locators Window- Dimensions Tab ..................................................... 18 Figure 15: Counter Group Setup ....................................................................................... 18 Figure 16: Counter Template setup s ................................................................................ 19 Figure 17: IB Item instance - counter instances screenshot .............................................. 19 Figure 18: Price List setup ................................................................................................ 20 Figure 19: Price Modifier setup ........................................................................................ 21 Figure 11: Service Agreement screenshot ........................................................................ 22

Figure 21: Service Agreement-Pricing sub tab screenshot ............................................... 22 Figure 22: Service Agreement - Pricing/Products sub tab screenshot .............................. 23 Figure 23: Service Agreement - Billing Schedule screenshot .......................................... 24 Figure 15: Service Agreement - Price Modifiers screenshot ............................................ 25 Figure 25: Billing Source setup screenshot ...................................................................... 25 Figure 26: Billing Rules setup screenshot ........................................................................ 26 Figure 18: Calculate Billing Units screenshot .................................................................. 28 Figure 28: Service Contracts Billing................................................................................. 29

3PL Billing Solution

1. Introduction
Globalization is increasing pressure on companies to achieve extremely efficient sing supply chains, and operat on a leaner distribution model. One way to attain a leaner operate distribution model is through the professional management of the logistics operation... The increasing cost of logistics operations and the need of maintaining costs higher service levels has forced some companies to outsource parts of their supply chain to third parties which specialize in these areas. These third party companies are referred as Logistics Service Providers (LSP) or sometimes as 3rd Party Logistics Providers (3PL). Outsourcing logistics processes can generate greater value across the roviders entire supply chain because LSPs are logistics experts and they can leverage this expertise to aid their clients. . This collaborative relationship enables businesses to focus on core competencies instead of logistic services. . ncies Since these professional logistics service providers offer more efficient logistics solutions, companies are embracing LSP services in their logistics operations resulting growth in the LSP market. LSPs carry out warehousing activities like receipts, shipments, inspections, packing activities etc for specific clients and charge them periodically for the services rendered. LSPs typically create an agreement with each client for warehousing services, rates and the frequency of billing.

Figure 1 : Typical interactions in a 3PL business environment

The figure above exemplifies the general business interaction between a Logistics Service provider, its client clients suppliers, clients customers and shippers. clients,

This whitepaper focuses on the 3PL Billing in E-Business suite. The solution enables LSPs to invoice Clients (Outsourcers) for the warehousing services including material handling, space utilization, labor, and other services rendered.

2. 3PL Billing Business Requirements

Some of the processes for which LSPs bill clients are as follows: 1. 3PLs provide warehousing and shipping services like storage, handling, transportation, packing, and labeling to multiple clients and bill clients for these services. 2. 3PLs define charges based on different transactions such as Receipts, Put away, Picking, Stock Transfer, Inspection, and Packing. 3. 3PLs also charge clients for space utilization within a warehouse. There can be different ways in which the 3PL may charge its client. a. Fixed Space Charge/ time Period ( irrespective of actual usage) b. Fixed charge for Minimum space plus additional charges for extra space usage in a specific period c. Actual space utilized in a period 4. 3PLs also charge clients based on based on various Transactional/Space utilization attributes a. Charge by Item Category/ Product Family b. Charge by Storage Types ( Example Cold Storage, Dry Storage) c. Charging basis - # of transactions (units), square foot, cubic foot etc. d. Charging Frequency (day, week, month etc.) e. Charging Currency f. Minimum Amount (charge amount if the actual charge is less than this) 5. At times the 3PL may want to make adjustments to the charges before generating the client invoices 6. The 3Pl may need to add non-transactional services not captured in the transactional system. These charges may include a. Insurance b. Additional handling charges occurred for a specific items c. Handling charges for returns d. Wrapping 7. Clients may want to have different billing cycles for different services. For example the billing frequency for Receiving Service may be weekly and that of Space Utilization may be monthly.

3. Billing Solution Overview

The following diagram explains the setup and process flow for billing of services provided by an LSP. Service Contracts is used to setup Service Agreements with clients and to perform billing of the services. Install Base is used to associate service items and counter groups to be used in service agreements. Advanced Pricing facilitates pricing of the services provided by the LSP. New setups have been introduced to define billing sources and billing rules to compute the usage of services based on the activities performed by the LSP.

Figure 2: Setup and Process flow for 3PL Billing

4. Setting up LSP Billing

5.1 Profile Options Define the following profile option: Profile Name Value Level

Accounting Transactions

Logistics Activities

Pricing for Services

Service Agreement

Service Items

WMS: Deployment Mode HZ: Generate Party Number HZ: Party Site Number HZ: Generate Contact Number

LSP Mode Yes Yes Yes

Site Site Site Site

Set this profile option to LSP mode of deployment when the implementation is carried out by the Logistics service Provider. 5.2 Define Client Parameters Navigation : LSP Warehouse System Administrator Setup Client Parameters Clients are first required to be defined as customers in TCA. Then, use the client parameters form to define the parameters and defaults associated with a specific client. These parameters include the client code, receiving and shipping parameters, and warehouse controls. The system uses the information defined in this window to differentiate between different clients, and to set shipping and receiving standards required by individual clients. You must also define the customers of clients in TCA. If necessary, the system enables you define customers on the fly. You do not have to define Client Parameters for the customers of the client.

Figure 3: Client Parameters screenshot

5.3

Define Item Key Flexfields All Item codes transacted by the LSP should be identified by a unique client code identifier segment. The System Item key flexfield definition should include a non mandatory client code as the last segment whose list of values should fetch the different client codes defined in the system. Define Client Items The materials received, stored and shipped on behalf of the different clients are to be defined in the 3PL instance by the same item code as known by its clients along with a concatenated key flexfield segment to capture the client code. Some of the key considerations while defining Client Items are 1. All Item codes used by the LSP should be identified by a unique client code identifier segment. The Item codes defined in the LSPs instance should be the same as that used in the clients instance. 2. Costing Enabled flag is unchecked, since the items belong to the client and are not accounted as assets in the LSPs balance sheet. 3. Invoiceable flag is unchecked since shipments to end customers are invoiced by the clients and not invoiced by the LSP. 4. Associate the item to an item category, which represents the client code. This will facilitate definition of warehousing rules based on client code. Define sub inventories and locators Define subinventories and locators to store client items. For storage based services, it is necessary to define the locator dimensions and capacity details for each locator which is used to store these items. Tab Main Main Inventory Costing Costing Costing Purchasing Purchasing General Planning Order Management Order Management Order Management Attribute Unit of Measure Item Status Reservable Costing Enabled Inventory Asset Value Include in Rollup Allow Description Update Expense Account Inventory Planning Method Customer Ordered Customer Orders Enabled OE Transactable

5.4

5.5

Invoicing Invoicing Invoicing Service

Invoiceable Item Invoice Enabled Sales Account Contract Item Type

The system uses the length and width dimensions in the locator definition form to calculate the area of the storage used by the client. For volume based storage service, system uses the volume defined in the capacity tab to compute the volume of the locator. 5.6 Define Billing Items To perform billing for LSP services, you must define usage items and trackable items for every service for which you need to bill a client. A usage item is a service type of item whose main purpose is to price the services provided on a usage based service contract. Usage items have the item attribute Contract Item Type set as Usage. Usage items are referenced at the line level of a usage based service agreement. You must define the following attributes for usage items:

Figure 4: Usage Item Definition- Main Tab

Figure 5: Usage Item Definition-Service Tab

A trackable item, also known as counter item, provides the framework to eventually create counter instances specific to a service provided for a client. These counters will periodically capture the usage of services based on the activity data performed by the LSP. Trackable items have the item attribute Track in Installed base set to Yes. The same item attributes which were set for usage items are required for trackable items. The only different is that the Track in Install Base flag is set to Yes, and the Contract Item Type field is blank.

Figure 6: Trackable Item Definition-Main Tab

Figure 7: Usage Item Definition-Service Tab

Figure 8: Counter Setup overview :

Some key considerations in setting up billing items are: 1. Set up appropriate primary unit of measure for usage items to reflect the type of service provided. 2. Verify the units of measure for the usage items and tracking items match. 3. Define separate usage items for each unique service provided. 4. Usage Items and Trackable items do not need the client code segment to be filled in as they just reflect the generic services provided by the LSP. 5. Usage Items and Trackable items also do not need to be assigned to the client-specific item categories. These are general items that are meant to specific are be reused. 5.7 Setup Counters To facilitate the setup of usage based contracts, users need to setup counter group and counter template entities. The Counter group is a mechanism to group one or more counter templates. Associate the counter group to the trackable item defined earlier. You may define a common counter group trackable item to group multiple counter group/ templates/ usage items underneath it. / Counter templates represent the actual definitional attributes of a counter. It serves as a template to create identical definitions of counter instances every time an IB Item instance is instantiated. An example to group multiple counter templates under a counter group is as follows:

Trackable Item 3PL_Track able_item

Counter Group Counter Group-1

Usage Item Receiving Service Storage Area Service Shipping Service

Usage item Counter UOM Template Pallets Receiving Counter SFT Area Counter Nos Shipping Counter

Counter UOM Pallets SFT

Nos

Some key considerations in the setup of counters are: 1. Set up appropriate primary unit of measure for counter templates to reflect the type of service provided. The primary unit of measure for the counter template needs to match the primary unit of measure for the usage and tracking items. 2. Ensure the effective start date of counter template definition is less than or equal to the contract start date. 3. Consider defining common counter groups as outlined above.

5.8

Setup Client specific IB Item Instances and Counter Instances Item instances represent the specific Installed Base (IB) instance of an item and holds details related to its ownership, current location and other attributes pertaining to inventory, counters, etc. A counter instance is the actual counter against which readings would be captured. The counter instance associated as a sub line on a usage based contract will be used to record the actual quantum of services provided by the LSP to its clients. Define IB item instances for the trackable item with ownership as the customer account corresponding to the client being serviced. Instantiate the trackable item once for every client, so that appropriate counter instances are automatically created against the IB item instance. This IB item instance and counter instance will be referenced at the sub line level of a usage based contract. Define Price List/ Price modifiers Use Price Lists to define the pricing of services offered by the LSP to its clients. You may utilize the features available within Advanced Pricing to define flexible pricing rules for the usage items referenced on a usage based service contract. Optionally Price modifiers can be defined to model additional charges, insurance and discounts to be applied at the header, line or sub line levels.

5.9

Please refer to Advanced Pricing implementation guide for more details about setting up Price Lists. 5.10 Enable Service Agreements for Third Party Billing Responsibility The third party billing functionality leverages service agreements to bill clients for services rendered. Before you can create a service agreement to use in third party billing, you must enable Service Agreements for the Third Party Logistics Billing responsibility. If you do not complete this step, then you will not be able to author Service Agreements. Navigation: Service Contracts Manager: Setup Sources Categories Responsibilities(T) Categories and

Figure 9: Service Contracts Categories window- Responsibilities Tab

5.11

Author Service Agreement Usage service agreements enable you to bill clients for services rendered. The bill services offered by the LSP to its clients are required to be modeled as a usage based service agreement agreement. Reference the client i the header, the usage items in the lines and the in associated counters in the sub lines of the contract. Generate an appropriate billing schedule to reflect the billing periods and frequency to generate an invoice to the client for the services rendered. You can define as many agreements as you need for a client to reference different services provided at various points of time. Please refer to Service Contracts implementation guide for more details about defining usage based service agreement. Define Billing Sources WMS uses billing sources to provide a method to calculate billing units for a particular type of activity. You use a billing source to create billing rules which are associated to a particular client. WMS has eight seeded billing sources which you can use when creating business rules. You can also use PL/SQL to write your own billing sources and import them in to the system. billing The following eight seeded billing sources are available: Calculate Number of Receive transactions performed Calculate Number of SO issue transactions performed Calculate Number of Staging Transfer transactions performed transactions Calculate Quantity of Receive transactions performed Calculate Number of Putaway transactions performed

5.12

Calculate number days locators were occupied for a Client Calculate the total Volume utilized by Client Calculate the total Area utilized by Client

Figure 10: Seeded Billing source listing

Number of Receive transactions: This seeded billing source allows the LSP to bill inbound materials based on the number of receipt transactions performed. The system recognizes any type of receipt transaction including ASNs, purchase orders, internal requisitions, and internal sales orders. Quantity on Receive transactions: This seeded billing source allows the LSP to bill inbound material based on the quantity of the inbound materials received. The billing source applies the appropriate UOM conversions from the transaction UOM to the pricing UOM to compute the total quantity received in a billing period. Number of Putaway transactions: This seeded billing source allows the LSP to bill inbound materials based on the number of putaway transactions performed using the WMS and MSCA interfaces. Number of SO issue transactions: This seeded billing source allows the LSP to bill outbound materials based on the number of shipment transactions performed. Number of Staging Transfer transactions: This seeded billing source allows the LSP to bill outbound materials based on the number of staging transactions performed.

Number of days locators were occupied: This seeded billing source allows the LSP to bill storage of clients material based on the number of days the goods were stored. Total Volume occupied: This seeded billing source allows the LSP to bill storage of clients materials based on the volume occupied to store clients material. The formula used to compute the volume occupied is as follows: Volume occupied = Number of days stored X Volume of locators Total Area occupied: This seeded billing source allows the LSP to bill storage of clients materials based on the area occupied to store clients material. The formula used to compute the area occupied is as follows: Area occupied = Number of days stored X Area of locators (i.e. L x B). The area occupied is calculated for each locator and added to the area calculated for earlier locator. This way cumulative area occupied by all Client locators is calculated. To define a billing source, enter a billing source name and associate it to a PL/SQL procedure which is either seeded in the application or custom written for the implementation. 5.13 Define Billing Rules Warehouse management uses the service agreement and the services rendered to establish billing rules. When you establish billing rules for activities, WMS uses the billing rules to determine which transactions and on hand balances to use as a basis for billing. The billing rules act as query criteria on the source transactions to determine which transactions to consider for billing.

In the Billing Rules window, you can select an existing service agreement, and then enter a billing source for the usage item lines associated with the service agreement. When the concurrent program Calculate Usage/Billing Units is run, the system identifies the usage item lines for each billing rule and calculates the usage for each service based on the billing source logic.

5. Business Use case

Vision Warehouse Inc is a Logistics service provider who provides outsourced logistics services for goods supplied to and shipped by multiple clients such as BigMart Inc and CostMart Inc. The following are the summary of services provided by Vision Warehouse Inc.

Receives, inspects and puts away the clients material

Receiving Service Charges - Based on the number of pallets received in a Week. For less than 1000 pallets, $1 per container and for more than 1000 pallets 75 cents per pallet will be charged. The clients will be charged for a minimum of 1000 pallets per week. Stores non-perishable material in hazard control zone o Materials are stored in locators. The clients are charged on the basis of total locator-area occupied in a month. o 4% Insurance charges will be levied for the storage services o Storage charges to become lower after first 3 months Picks and loads the material to deliver to clients customers o Picking and Loading Charges - Based on the number staging transactions in a Week. For less than 20 staging transactions, $5 per transaction and for more than 20 staging transactions $4 per transaction will be charged. The clients will be charged for a minimum of $50 per week.
o

Additionally, the following specific business practices apply to this LSP.

Client specific price lists - Each client may be charged differently for the services provided. Additional charges can be levied on case to case basis if special material handling equipment is employed for receiving/loading the material. The clients will be sent weekly invoices for the receiving and picking/loading services and monthly invoice for the storage services

6. Use case modeling

The following steps describe the modeling to meet the above use case requirements. 1. Define the following Items and assign them to the appropriate child organizations. Item Name Key Item Attributes Client Items AS54999.Bigmart, Primary UOM : Ea (Pallets) AS54888.Bigmart Item Template : Purchased Item Costing Enabled : No Invoiceable Item : No Item category : <assign appropriately> Usage Items Receiving Service

Primary UOM : Ea Contract Item Type : Usage Primary UOM : SFT

Storage Area

Service Shipping Service

Contract Item Type : Usage Primary UOM : Ea Contract Item Type : Usage

Trackable Items 3PL Trackable Item 2.

Track in Installed Base : Enabled

Define UOM Conversions between the primary UOM and other units of measure in which the clients item will be transacted.

Figure 11: Unit of Measure Conversions- Standard Tab

Figure 12: Unit of Measure Conversions Intra-Class Tab

Figure 13: Unit of Measure Conversions Inter-Class Tab

3.

Define sub inventory and locators to store client items. System will use the length and width dimensions in the locator definition form to calculate the area of the storage used by the client.

For Locator C.1.1 (in cold storage zone), define Length as 400 and Width as 400 and height as 400 For Locator C.5.1 (in hazard control zone), define Length as 400 and Width as 300 and Height as 400.

Figure 14: Stock Locators Window- Dimensions Tab

4.

Define a Counter Group Counter Group-1 and associate the same to the trackable item 3PL Trackable Item. As discussed earlier, the counter group serves as a mechanism to group multiple counter templates. For this use case we will use a single counter group to group all the counters required to track the services provided to Bigmart.

Figure 15: Counter Group Setup

Define a Counter Template Receiving Counter under the just defined Counter template and associate it to the usage item Receiving Service.

Figure 16: Counter Template setup s

Likewise, define separate counter templates Area Counter and Shipping Counter and associate the usage items Storage Area Service and Shipping Service to each of them. 5. Create counter instances of the trackable item. The ownership of the trackable items should be the client, in this case Bigmart. These counter instances will later automatically capture readings which correspond to the actual usage of the services provided to the client based on activity data performed in Oracle Warehouse Management.

Figure 17: IB Item instance - counter instances screenshot

6. Define Price List LSP Price List for all the usage items. Price lists may be defined separately for each client. In this use case as part of the receiving service provided, for less than 1000 pallets, $1 per pallet will be charged and for more than 1000 pallets a flat rate of 75 cents per pallet will be charged for all pallets. This can be modeled

using point type price header breaks. You may also define range type price breaks or simply use unit price to price the services.

Figure 18: Price List setup

Define prices for different effective dates for Storage area service to factor in differentiated prices after 3 months of service. Define price breaks for shipping service. Shipping service will be priced as $5 per staging transaction for up to 20 counts of transactions and $4 per transaction thereafter. 7. Define Price Modifiers: Optionally define price modifiers which can be applied at line or header level of the service agreement. Price modifiers allow additional charges, insurance, discounts to be factored in the usage line of a service agreement. Define a manual line level price modifier 4% Insurance Charge which will be applied later to the storage service line in the service agreement.

Figure 19: Price Modifier setup

8. An important part of the setup is to define the contract between the LSP and its client in the form of a Service Agreement. Usage based service agreements will have to be created to represent the contract and to bill the LSP provided services. Specify appropriate Start date, duration and period types while defining the service agreement. The following screenshots show some of the key setups required to define a service agreement between the LSP and the client. a. Reference the client: Create the service agreement 22141 with client Bigmart as the Customer. Associate the necessary Bill To location, Ship to location and contact roles.

Figure 20: Service Agreement screenshot

b. Reference the Price List: Associate the Price List LSP Price List which consists of the details of the pricing specified for the different services offered. You may configure different prices for services offered to different customers, if required.

Figure 21: Service Agreement-Pricing sub tab screenshot

c. Associate Usage Items and counters: Define Usage type lines on the service agreement and reference the Usage items i.e Receiving Service, Storage Area Service and Shipping Service on different lines. For each line, associate a sub line referencing the trackable item and the

appropriate counter instance. Select the appropriate counter instance by selecting the IB item instance of the counter in the Reference Number field. While defining the sub line, you may specify the minimum counter reading and the default counter reading for the associated counter instance. Caution: It is recommended to associate a single counter against a usage line. Please note that if more than one sub line (ie. multiple counters) are specified for a given usage line, then only the first counter will be used by the Calculate Billing Units program to update the WMS activity data.

Figure 22: Service Agreement - Pricing/Products sub tab screenshot

Under the Effectivities tab, specify the usage type desired for each usage line. Specify one of the following for each line: a) Fixed Per Period : To be used when it is required to bill a fixed quantity of usage every period irrespective of the actual usage recorded b) Actual Per Period : To be used when it is required to bill based on the actual usage in a period as recorded by the counter c) Actual by Quantity : To be used when it is required to bill based on the actual usage reported d) Negotiated price: To be used when a flat fee is to be billed regardless of the actual usage recorded. In this use case, let us select Usage Type as Actual per Period.

d. Define Billing Schedule: Define Billing schedule for each line using the Pricing/Products sub tab Billing sub form. Define the billing periods within the duration of the service agreements effective dates. In this use case, Storage Area Service is billed on a monthly basis. Receiving Service and Shipping Services are billed on a weekly basis. Hence select appropriate period types when defining the billing schedule for each corresponding usage line.

Figure 23: Service Agreement - Billing Schedule screenshot

e. Define Price Modifiers: Associate Price modifiers at line or header level to factor in additional charges, freight, discounts, etc. Associate a modifier 4% Insurance charge against usage line Storage Area Service having a rate of 4%.

Figure 24: Service Agreement - Price Modifiers screenshot

9. Define Billing Source: Define a Billing source Receiving Quantity and map it to the seeded PL/SQL procedure inv_3pl_seeded_sources.qty_receiving_transactions. This billing source will be used to calculate the number of receiving transactions performed from the activity data for inbound materials.

Figure 25: Billing Source setup screenshot

Likewise, define new billing sources Storage Area and Staging transactions by associating the pl/sql procedures inv_3pl_seeded_sources.area_utilized and inv_3pl_seeded_sources.number_picking_transactions respectively.

Note: Billing sources are setup one per associated procedure. These can be reused across multiple billing rules for different clients/service agreements.

10. Define Billing Rules: Define a new Billing Rule Bigmart_22141 by referencing the Service Agreement number 22141. Click the Fetch Lines from Agreement button and associate appropriate Billing Sources to each usage line.

Figure 26: Billing Rules setup screenshot

11. The Main Billing Program computes the billing based on the counter readings, applies price based on the price list and price modifiers if any. Running this program with Preview parameter set to No displays the invoice details without actually posting the invoice to Receivables. You must set this value to Yes. The request output should show the summary information and not the invoice details. The information needs to appear as below: No of Contracts processed - Currency value No of lines processed - currency value No of Successful Lines - currency value No of Rejected lines - currency value No of Sub lines processed - currency value No of Successful Sub Lines - currency value No of Rejected Sub lines - currency value

7. Use case execution

The following is an example of how to perform transactions at the end of a billing period: Using Oracle Warehouse Management, perform the following Receipt transactions for inbound materials. Receipt Date 08-Aug-2010 09-Aug-2010 10-Aug-2010 Item AS54999.Bigmart AS54888.Bigmart AS54888.Bigmart Quantity 1000 650 350 UOM Ea Ea Ea

Using Oracle Warehouse Management, perform the following Staging transactions for outbound materials. Staging Date 12-Aug-2010 13-Aug-2010 14-Aug-2010 Item AS54999.Bigmart AS54888.Bigmart AS54888.Bigmart Quantity 1000 400 600 UOM Ea Ea Ea

In this use case, let us assume that the following storage was utilized. Locator 1.1.1 2.2.2 Item AS54999.Bigmart AS54888.Bigmart Receipt date 8-Aug-2010 9-Aug-2010 Shipment date 12-Aug-2010 14-Aug-2010 Duration 5 days 6 days

To initiate billing, run the following concurrent programs. 1. Run the Calculate Billing Units program The Calculate Billing units program uses the billing sources to compute the activity data performed using Oracle Warehouse Management. On successfully completing this program, the system will update the counters associated to the usage lines of the service agreements with readings corresponding to the actual services rendered.

Figure 27: Calculate Billing Units screenshot

After running the program, the user can verify the counter readings updated on the service agreement. Additional details about the transactions and quantities considered for counter update can be obtained from the log file of the concurrent program. If required update the counter reading manually, to adjust for any corrections or omissions.

2. Run the Service Contracts Main Billing program The Main Billing Program computes the billing based on the counter readings, applies price based on the price list and price modifiers if any. Running this program with Preview parameter set to No displays the invoice details without actually posting the invoice to Receivables. The process also populates billing transaction history information in the History tab of the Billing Schedule. Because the invoice number is assigned and tax is calculated by Oracle Receivables, neither of these pieces of information will be populated until after the Service Contracts Fetch Receivables Info for Billing program is run. Once the invoice is populated in the Receivables interface table, run the Auto Invoice Import program to create an invoice in Receivables.

Figure 28: Service Contracts Billing

In the use case described in this whitepaper, the billing will be created as follows:

Receiving Service Total Quantity received in the period Rate Amount Billed Storage Area Service (i) Area of Locator 1.1.1 Number of days Rate Amount Billed (ii) Area of Locator 2.2.2 Number of days Rate Amount Billed Total Amount Billed (i) + (ii) Shipping Service Number of staging transactions in period Rate Amount Billed

= = =

2000 $0.75 $1500

= = = = = = = = =

6 * 6 = 36 sft 5 days $2 36 * 5 * 2 = $360 5 * 5 = 25 sft 6 days $2 25 * 6 * 2 = $300 $660

= = =

3 $5 $50

8. Limitations

The following are some of the implementation considerations to remember when implementing Billing solution in 12.1.3: 1. You cannot use the following Storage based billing sources together in a Billing rule for a given client, i.e. they are mutually exclusive. System uses the inventory storage data to apply them to only one of the below billing sources selected on the billing rules form.
1. Area utilized 2. Volume occupied 3. Capacity number of days

3PL Billing Solution April 2011 Author: Alexander Vaidhyan

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