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Agile Product Lifecycle Management Product Cost Management User Guide Release 9.3.3 E39298-01 |
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# 1 Introduction

This chapter provides an introduction to the Agile Product Cost Management solution.

## 1.1 Overview of the Agile PLM Suite

- Agile Product Collaboration (PC) - Management and collaboration of product record information throughout the product lifecycle, across internal organizations and the extended supply chain.

- Agile Product Governance & Compliance (PG&C) - Management and tracking of all substances and materials contained by any item or manufacturer part, allowing companies to meet substance restrictions and reporting requirements, design recyclable products, minimize compliance costs, and eliminate noncompliance on future products.

- Agile Product Portfolio Management (PPM) - Integration of project and product information in the context of overall product development in order to streamline business processes across the product portfolio and lifecycle.

- Agile Product Quality Management (PQM) - Management of customer, supplier and product quality issues, tied to the product design via a closed loop corrective action process.

- Agile Product Cost Management (PCM) - Management of product costs across the product lifecycle and synchronization of product cost and cost processes with both internal and external participants.

- Agile Engineering Collaboration - Management of CAD design data from the engineer's desktop directly in a central PLM product record, automating both the design and product BOM change processes and supporting IP reuse.

- Agile Enterprise Visualization - Visualization, markup, and analysis of native documents (MS Office, image, drawing, and CAD) through the Web across the extended enterprise, without the need for the original authoring tool or conversion to a neutral format.

## 1.2 What is Product Cost Management

Agile Product Cost Management (PCM) enables companies to manage direct material sourcing across the product cost lifecycle, from product inception to the product's end-of-life. It is designed to continuously manage a product's lifecycle cost against a company's target cost objectives and maximize lifecycle profitability.

It addresses the requirements across a multi-tiered network of materials and resources consumed in the delivery of the product to the customer, and it allows key people within sales/marketing, procurement, operations, engineering, and trading partners to collaborate on product design decisions.

The four distinct levels of cost reduction that you can achieve by implementing Agile PCM are:

- Commodity and Supplier Leveraging

- Co-Sourcing and Reprice Management

- Design for Total Cost and Margins

- New Business Acquisition

For examples of PCM use cases, see "PCM Use Cases."

### 1.2.1 Commodity and Supplier Leveraging

A company can reduce product costs by identifying and leveraging opportunities across suppliers and manufacturing partners. Agile PCM provides a forward and comprehensive lifecycle view of the product forecast, new product bills of material, product changes, and cost/quote history. It fully automates the creation of the bid package, the bidding and negotiation process, and supplier/customer contract management.

Agile PCM lets you abstract and aggregate the appropriate view of product usage across all relevant product records. You can analyze the potential cost impact of a change collaboratively, in real-time, across all partners and suppliers. A successful sourcing strategy enables a company to reduce sourcing cycle time and direct materials spending while improving overall sourcing efficiency.

### 1.2.2 Co-Sourcing and Reprice Management

In addition to reducing sourcing cycle time and direct materials spending, companies can use Agile PCM to develop sourcing strategies that extend across their network of manufacturing contractors and suppliers. With Agile PCM, companies can ensure BOM accuracy across their multi-tier network of manufacturing partners and suppliers.

With Agile PCM, all business partners are assured they are using the current bills of material while responding to and analyzing material and non-material cost adders. Inter-enterprise sourcing teams collaboratively uncover savings opportunities through co-sourcing analysis, which identifies the strongest collective negotiation position. On a regularly scheduled basis, you can renegotiate and reset prices as the market dictates.

### 1.2.3 Design for Cost and Supply

Agile PCM improves New Product Introduction (NPI) processes by aligning design objectives with sourcing strategies to achieve product cost targets and minimize supply risks. Companies that design for cost and supply analyze each design selection against downstream supply and manufacturing objectives.

During the early design phase, your supply and cost planning teams stay current against dynamically changing product structures. They are provided the capabilities to cost each program, factor sourcing alternatives, forward cost projections and time-based constraints. Within a project-based environment, design and sourcing teams can establish an audit trail of bi-directional changes against the bills of material, sourcing alternative recommendations, and price updates.

Agile PCM allows you to achieve target costing, manage component obsolescence, identify at-risk items and suppliers earlier in the process, and drive sourcing preference management into the design phase.

### 1.2.4 New Business Acquisition

Agile PCM can be used to support the new business acquisition process across the front and back office. Automating the reuse of a rich repository of contract prices, previous quotes and ERP cost feeds, with the ability to gather new cost information (deltas), you can dramatically reduce average customer response time to new business requirements. The results include the ability to process a higher volume of price quotes faster, improving operating efficiency and customer win rates.

## 1.3 Agile Client Applications

Oracle Agile PLM provides two clients:

- Web Client - HTML-based client that you run from a Web browser. It requires no client-side installation. The Web Client provides full access to Agile PCM functionality, but limited access to administration features.

- Java Client - Java application that provides advanced UI features, such as multiple windows, and full access to Agile administration features. You install Java Client locally, and it is updated automatically over the network via Java WebStart. The Agile Java Client allows you to search for Agile PCM objects, such as projects and RFQs, but not to create them.

Use the Web Client to access most Agile PCM functionality, such as creating sourcing projects, RFQs, and RFQ responses. Use the Java Client to administer the Agile PLM server.

Unless otherwise noted, the Web Client is used throughout this manual to perform Agile PCM procedures. For general information about Agile Web Client functionality, see Getting Started with Agile PLM.

## 1.4 Licenses

To set up licenses, the Agile administrator uses the Java Client to turn on licenses for the PLM solutions that your company has purchased. Once the PCM license is turned on, PCM-specific classes, such as Sourcing Projects, and other solution-based functions that pertain to your company's business will be enabled. For more information about licenses, seeAgile PLM Administrator Guide.

## 1.5 Item Master and Sourcing Projects

The Item Master is also known as the product record. It is the entire collection of Items - Parts, Documents, and any other user-defined subclasses of the Items class maintained under change control in the Agile system. If you run a search for all Items in Agile PLM, the search results would essentially be from the Item Master. However, the Item Master also includes all objects associated with Item revisions, such as changes (ECOs, MCOs, SCOs), sites, manufacturer parts, and prices.

The Item Master figures prominently in Agile PCM. Most data that you bring into a Sourcing Project comes from the Item Master, as shown in the figure below. You can also create new project items or import them from external data files.

When you add data to a Sourcing Project, you can select objects from the Item Master. If you make changes to Items or Manufacturer Parts contained within a project, you can publish the changes to the Item Master to update the following content:

- Items

  - Bills of Material

  - Approved Manufacturer Lists

- Manufacturer Parts

You can selectively import BOM Items using filters. For more information about publishing Items and Manufacturer Parts to the Item Master, see "Publishing Items and Manufacturer Parts."

After negotiating prices with your suppliers, you can publish them to the Item Master. For more information about publishing prices, see "Publishing Prices for Items and Manufacturer Parts."

Each project can have a specific manufacturing site, which constrains the project to include only items associated with that site.

## 1.6 Understanding Ship To Locations

When the Agile PLM administrator configures system settings for Agile PCM, one of the things he must do is define the Ship To locations. As the name implies, a Ship To location is one place where suppliers can directly ship materials to fulfill orders made by your company. Ship To locations are important to the product sourcing process for several reasons:

- The Agile administrator defines system-wide Ship To locations in the Agile Java Client. For more information, see "Ship To Location."

- Sourcing Project managers must have at least one authorized Ship To location defined in their user profile. Otherwise, they will not be able to specify a Ship To location for Sourcing Projects.

- Each Sourcing Project must have a specific Ship To location. Without a Ship To location, project status cannot be changed from Draft to Open.

- When sourcing managers send RFQs to Suppliers, they can choose to disseminate the RFQs only to the Suppliers with manufacturer or commodity offerings that match the desired parts, ratings, and Ship To location.

The following figure is an example of how a company's Ship To locations are assigned to a Sourcing Project manager, who then selects a specific Ship To location for a Sourcing Project.

## 1.7 Searching Agile Objects

When you use Agile PLM, you will need to find existing objects in the Agile system, such as sourcing projects, suppliers, items, manufacturer parts, and RFQs. You can search objects in the following ways:

- Quick Search - Searches objects by Name, Number, or Description.

- Advanced Search - Searches all objects with fields that match the conditions you have defined. For example, you could search for parts where the Description field contains "Computer."

- Saved Searches - Pre-defined searches that have been saved for later use.

- Bookmarks - A list of frequently visited Agile objects. You can click a bookmark to quickly display that object.

For complete information about how to search for Agile objects, see Getting Started with Agile PLM.

## 1.8 Working with Customers, Suppliers, and Partners

You can use Agile PLM to manage organizations that exist outside your company, such as Customers, Suppliers, and Partners. These outside organizations participate in business processes such as sourcing, quality management, and design engineering, and are involved throughout various phases and activities of a program.

Customers and Suppliers are two Agile PLM classes you can use to define organizations. Partners are suppliers with whom your company has a special relationship, and are therefore given access to complete project BOMs, whereas ordinary suppliers can view only the information about assigned Items in an RFQ.

Each Sourcing Project can be associated with a Customer, Supplier, and/or Partner. These objects must exist in the Agile system before you create a project.

For details on how to create and manage Customers and Suppliers, see the chapter called "Managing Customers and Suppliers" in Getting Started with Agile PLM.

## 1.9 Top PCM User Tasks

In PCM, there are many activities that take place during the sourcing process. From creating suppliers to creating sourcing projects and RFQs to publishing prices, some of the top tasks that PCM users must complete include the following:

- Working with Sourcing Projects

  - To create a sourcing project, see "Creating a New Sourcing Project."

  - To add items to a sourcing project, see "Adding Items to a Project."

- Creating RFQs

  - To create RFQs from a sourcing project, see "Creating Request for Quote."

  - To request information from the suppliers, see "Creating Request for Quote."

- Working with RFQs

  - To change the status of an RFQ to Open, see "Changing the RFQ Status."

  - To share an RFQ, see "Sharing an RFQ With Other Users."

  - To open an RFQ to suppliers, see "Sending RFQs by Changing the Status."

  - To lock the responses in the Responses tab, see "Editing Responses."

  - To request a requote, see "Requesting Requotes."

- Analyzing Prices in a Sourcing Project

  - To set best responses for item response lines, see "Setting the Best Response for an Item."

  - To view a Costed BOM comparison, see "Viewing Costed BOM Comparisons."

- Managing Prices

  - To create prices, see "Creating Prices.".

  - To add price lines, see "Creating Price Lines."

  - To release prices through a PCO, see "Redlining Price Information."

- Managing Suppliers

  - To create suppliers, see "Creating a Supplier."

  - To assign line cards, see "Defining Manufacturer and Commodity Offerings.".

- Managing Commodities

  - To create commodity objects, see "Creating Commodities."

  - To add items to a commodity, see "Associating Items with Commodities."

- Using Java Client for PCM administrative tasks

  - To map attributes between Product Collaboration and PCM, see "Pulling Data from Item Master Flex Fields into Sourcing Projects."

  - To set up RFQ Terms & Conditions, see "RFQ Terms and Conditions."

## 1.10 What's New in PCM

The following sections list PCM new features by the product release in which they were introduced.

### 1.10.1 New features in PCM 9.3.3

New features in Agile PCM Release 9.3.3 include the following:

- You can now update the Quantity Per Assembly (QPA) for an item in a sourcing project.You can also update the QPA field with data from the Item Master, as well as publish the QPA back to the Item Master when publishing the items. For more information see, "Editing Quantity Per Assembly (QPA)."

- QPA can be edited in PCM via Import, SDK, and Web Services. See relevant documentation for more information.

Some new, general PLM features that affect PCM include the following:

- Several new list fields have been added to Page Two for only the Item object (Parts and Documents). Although these fields are not directly related to PCM, just like other P2 fields, they can be mapped to sourcing project attributes. For more information, see the Agile PLM Administration Guide.

### 1.10.2 New features in PCM 9.3.2

New features in Agile PCM Release 9.3.2 include the following:

- You can now restrict suppliers from proposing alternates in an RFQ, by unchecking the Propose Alternates option in the RFQ's Data to Share options. See "Selecting Data to Share with Suppliers." for more information.

Some new, general PLM features that affect PCM include the following:

- Additions have been made to routable object workflows, such as PCOs in PCM, to allow for greater efficiency when a user changes job functions. A new global list, Job Function, was created so that job functions, users, and user groups can be linked together to form functional teams. The functional team attribute was added to the following PCM-related objects:

  - Prices (General Information tab)

  - PCO (Cover Page tab)

  - Part Group (General Info tab)

Read and modify privileges for Prices, PCOs, and Part Groups now have the Functional Team(s) attribute. Functional teams that have been added in the Prices Cover page will be pulled into the PCO > Affected Prices tab as a read-through field. Functional teams can also be added to the PCO manually. Note that the Functional Team attribute is a read only field on an Items's Prices tab, Manufacturer Part's Prices tab, and PCO's Affected Prices tab. For more information about these workflow changes, see the Getting Started with Agile PLM.

- Also, in addition to approvers and observers, a new group of reviewers called acknowledgers, have been added to workflows. For the PCO workflow, acknowledgers need the Acknowledge PCOs privilege or the (Restricted) Acknowledge PCOs privilege for suppliers. Acknowledgers need to confirm that they performed what was expected of them when the object (PCO in PCM) was routed in the Price Review and Release status criteria. It is not an approval, but is required. For more information about these and other related changes, see Getting Started with Agile PLM.

- Audit windows now contain hyperlinks to unresolved issues, where the errors are highlighted, so that a user can correct errors more easily to pass the audit.In PCM, you can get audit warnings if:

  - there are manufacturer redlines that will be lost after the routable object is released.

  - there are conflicts due to another routable object being released first.

  - the DuplicateFindNumbers SmartRule is set to Warning or Disallow and there are duplicate numbers caused by a change release.

  - the DuplicateRefDes SmartRule is set to Warning or Disallow and there are duplicate reference designators caused by a change release.

  - the Item Release First SmartRule is set to Warning or Disallow and there are unreleased children.

There are additional circumstances that prompt audit warnings in PCM and elsewhere in PLM. To learn more about the audit warnings and how to resolve the issues, see Getting Started with Agile PLM.

### 1.10.3 New features in PCM 9.3.1

New features in Agile PCM Release 9.3.1 include the following:

- Supplier users can now be authenticated through an LDAP server. For more information, see the Agile PLM Administrator Guide.

- The BOM filtering feature now allows filtering on fields other than BOM flex fields and BOM Quantity. All enabled cover page, P2, and BOM tab fields are available for filtering. See "BOM Filtering" for details.

- All standard and flex fields are now bulk editable on the Analysis tab. See "Bulk Editing" for details.

- Several features that were previously only available on the Items tab or the AML tab are now also available on the Analysis tab. For example, you can now add items to a sourcing project from the Analysis tab. See Completing Non-Analysis Tasks on the Analysis Tab for details.

- You can publish rolled up material costs for an assembly. See Publishing Rolled Up Material Costs for an Assembly for details.

- Multi-column sorting and filtering is available on Project-Analysis tab. Configuring Project Tabs on page 24 for details.

- Multi-column filtering is available on the RFQ-Responses tab and the RFQ Response-Responses tab.

- Using SDK, you can now export PCM data into a spreadsheet, apply your own price models, recalculate the costs using your own formulas and data from external sources, and finally import the recalculated costs back into PCM. Two new IProject APIs are available through web services to support this new price model feature. For more information, see the SDK Developer Guide.

- All dates related to prices are now in DateOnly format in GMT. Project periods, RFQ due dates, price line effective from/to dates, valid from, and valid until dates are all now in DateOnly format.

- A new configurable attribute is available on the RFQ Response Entry form to allow you to explicitly set a start date for prices that have quantity breaks. The new attribute, Valid From, has a default of the current date.

- Table Edit mode for editing response lines is unavailable.

Some new, general PLM features that affect PCM include the following:

- You now have the ability to choose which tabs you see with the "Manage Tab Display" privilege. See Getting Started with Agile PLM for details.

- Your Agile administrator now has the ability to configure a status in a workflow so that no password is required for approval or rejection. For PCM, this means that you may not need to enter your password in the approval/rejection window for a PCO. For more general information, see the Agile PLM Administrator Guide.

- There are a few new search features that affect PCM:

  - You can now access the advanced search palette from within the quick search window when you attempt to add objects to a table by search. You can also use saved searches to populate the advanced search palette. Once you have the results you need in the advanced search palette, you can directly add the objects to the table by drag and drop, etc. For more information about how this affects your ability to add items to a table, see "Adding Items to a Project"

  - When filling in list or multi-list fields, in addition to being able to either type in values or use the quick search, you can now use saved searches. A saved search button appears on the quick search palette. The saved search feature is available for all list and multi-list fields in cover pages, tabs, action dialogs, and wizards.

  - The ability to use advanced searches is now available when running reports that have a step in their wizard that requires you to add items or another object to a table. For example, in PCM, the Effective Cost Comparison report wizard requires that you add items or manufacturer parts to be analyzed in the report to a table. You can click the "Custom Search" button to launch the advanced search palette. Saved searches are also accessible from within the advanced search palette. You can add objects directly from the advanced search palette to the table.

  - Custom search is now also available during the export process scenarios, as well.

Note: For detailed information about any of the new search features, see Getting Started with Agile PLM.

### 1.10.4 New features in PCM 9.3

Several new UI enhancements in Agile PLM help make the PCM experience more efficient and beneficial. Additionally, event functionality is now available to help automate certain actions. The following sections provide an overview of PCM-specific enhancements. For details about general UI enhancements that affect all Agile PLM modules, see Getting Started with Agile PLM.

#### 1.10.4.1 UI Enhancements

There are several new enhancements and changes to the UI in PCM. The following are some of the general changes:

- You can "drag and drop", or copy and paste, data into Sourcing Projects, PCOs, and Suppliers. For example, you can drag items from your My Bookmarks folder and drop them into the Items table on the Items tab of a sourcing project.

- When filling in list and multi-list fields in a form, you can type ahead values if you already know the value you want to enter. If you do not know the value to enter or if the value you enter displays in red, you can search for the value by clicking the search button.

- When filling in date fields, you can either type in the date manually or click on the calendar button to select a date.

- The Prices, PCO, and Commodity objects support full view personalization.

- The Supplier, Sourcing Project, RFQ, and RFQ Response objects support limited view personalization.

Note: For more information about personalization in PCM, see "Configuring Project Tabs".

For details about view personalization and other general UI enhancements, such as the drag and drop feature, see the Getting Started with Agile PLM.

#### 1.10.4.2 UI Enhancements for Sourcing Projects

The following are enhancements that affect the Sourcing Project object:

- Some action buttons, and their menu options, have been rearranged and/or renamed in the Items, AML, and Analysis tabs.

- The Personalize button replaces the Configure Display button. The Personalize button launches the personalization palette.

- Multi-column filtering is supported in the AML tab through view personalization. Sorting is not supported.

- Filtering is supported in the Analysis tab through view personalization. Multi-column filtering is not supported. For more details about filtering in Sourcing Projects, see Filtering Project Data.

- On the Items tab and the AML tab, editing of Item/Manufacturer Part information is done through the Item/Manufacturer Part quick view palette. To access the quick view palette, click on the number of the Item or Manufacturer Part.

- Changes tab has 3 sub-tabs: Item Master Changes, Project Item Changes, and Supplier Response Changes. The content on the three tabs was previously available as three separate views.

- On the Analysis tab, view options for price details, that were previously accessed through Filter functionality, have been relocated to a View dropdown list.

- On the Analysis tab, the price lookup wizard was redesigned to improve efficiency. See Looking Up Price Information.

- When adding items from Product Collaboration to a sourcing project, you can now narrow down your search by item revision.

- Changes in the BOM filter UI and the process. See "BOM Filtering"

- Changes in the procedure for adding AML to an item in a project. See "Adding an AML to an Item"

#### 1.10.4.3 UI Enhancements in RFQs and RFQ Responses

The following are enhancements that affect the Requests For Quote object:

- Some action buttons, and their menu options, have been rearranged and/or renamed on the Responses tab.

- Filtering is supported in the Responses tab through view personalization. Multi-column filtering is not supported.

- Response Status tab has 2 sub-tabs - Supplier Response Status and Terms & Conditions. The content on the two tabs were previously displayed as tables on the same page.

The following are enhancements that affect the RFQ Response object:

- Some action buttons, and their menu options, have been rearranged and/or renamed on the Responses tab.

- Filtering is supported in the Responses tab through view personalization. Multi-column filtering is not supported.

- When using Advanced Table Edit mode, inline table editing is supported for editable fields.

- The wizard flow diagram in the left pane is no longer displayed. Instead, when using Basic edit mode, the diagram is replaced with a text version of the flow steps. The flow is not displayed while in other edit modes.

#### 1.10.4.4 UI Enhancements in Prices and Price Change Orders

The following enhancement affects the PCO object:

- On the Workflow tab, the Summary table and the Signoff History table have been combined into one table. Now, the two sections on this tab are the Summary section and the Workflow section, which contains the table.

#### 1.10.4.5 Events in PCM

In Agile PLM, a preconfigured event is an automation that occurs when a user performs a task that is specified by an event mask. The triggered event then results in an event outcome, such as the delivery of a notification to a user. There is limited event functionality for the PCM solution, however, some events can be configured for PCM objects, including Sourcing Projects. For more details about event functionality in PCM, see "Managing Events in PCM."