Landed cost


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Enabled for Public preview General availability
Users by admins, makers, or analysts Feb 1, 2021 Apr 1, 2021

Business value

This feature enables organizations to increase supply chain visibility and maximize item profitability. Landed cost provides the ability to define shipments of inbound orders and track goods in transit throughout their journey. It also provides the power to calculate item costs associated with procurement and transportation based on a rich set of allocation rules.

Feature details

The landed cost module enables you to define and track each segment of the goods-in-transit journey, beginning at the supplier's warehouse and continuing to the shipping dock, through the freight forwarder, to a landing dock and freight company, and eventually to the destination warehouse. With this visibility, arrivals are predictable, and warehouse planning and efficiency are improved.

Landed cost can streamline the receiving processes. Shipments of inbound orders, such as purchase orders or transfer orders, can be defined and organized into various transportation legs. Legs can be defined by supplier, shipping dock, freight forwarder, landing dock, freight company, and more. Landed cost features can be used to track and trace the containers in the shipment while in transit and receive them upon arrival into the warehouse. This enhances customer service by providing clarity to internal sales, customer service, and logistics stakeholders. It also provides immediate visibility of stock delays that might impact customer deliveries.

Landed cost helps organizations predict item costs, thereby improving pricing decision making. Automatic cost calculations can be configured for various transportation modes, duties, and other fees incurred to get a product to the warehouse. The costs and allocation methods can be further defined on various levels, including overall shipment, by container, for the purchase order, purchase order line, or transfer order line. The estimated costs are defined as landed cost for a collection of inbound orders, planned and received, from a supplier in a single shipment. Based on the estimated cost, purchase accruals can be recorded long before the goods are received. Later, when the actual freight and other handling bills arrive, the estimated costs are adjusted to reflect the actual cost amounts.

Landed cost also reduces administration and costing errors. When using the standard costing method, a reviewed and updated cost can be required in addition to the standard cost for specific items. Landed cost can be used to simulate shipping scenarios to predict a standard cost price for an item. By using the estimated cost definitions, or a cost entered per simulation scenario, the system can predict costs allocated to items within a simulated shipment. This enhances strategic sourcing capabilities and can help increase item profitability.

See also

Landed cost module (docs)