eAM Cost Management

Costs are generated as maintenance work is executed and completed. These costs roll up through the Parent/Child hierarchies defined within Enterprise Asset Management, and can roll up to any level within an asset hierarchy. Labor, Materials, and Equipment charges can be further classified into several maintenance cost categories.

All work is captured and retained by Enterprise Asset Management. You can reference work that has been completed to review operations, resources, and costs. This information can help you understand the scope of work and the process by
which it is completed.

eAM Costing Methods and Mappings
eAM supports four perpetual costing methods: standard, average, fifo, and lifo. As a foundation, eAM uses the following five basic cost elements provided by Cost Management:

  • Material
  • Material Overhead
  • Resource
  • Resource Overhead
  • Outside Processing

Asset management requires different cost classifications. eAM provides these cost classifications, while maintaining the integrity of the basic costing rules. The five cost elements above are translated into several cost classifications that are familiar to maintenance managers.

eAM classifies work performed on maintenance Work Orders into cost categories. By default, eAM has defined three cost categories: Contract, Operations, and Maintenance. You can define additional cost categories, if needed. Each cost category is further classified into three cost elements: Equipment, Labor, and Material.

  1. Material - Costs from material transactions.
  2. Labor - Costs from labor resource transactions.
  3. Equipment - Costs from equipment resource transactions.

Material charges are classified as Material cost elements. Resource charge of type person is classified as a Labor cost element. Resource charge of type machine is classified as Equipment cost element. All other resource types are classified by the default cost element in the eAM Parameters.

For each department, a maintenance cost classification is identified to reflect the above breakdown. The cost category for the Material cost element is the cost category of the department assigned to the routing of the operation. For the Labor
cost element, it is the cost category of the resource’s owning department. For the Equipment cost element, it is the cost category of the Maintained Number’s owning department.

eAM Mappings

The three cost elements (Material, Labor, and Equipment) are mapped to the five basic cost elements (Material, Material Overhead, Resource, Resource Overhead, and Outside Processing) provided by Cost Management.

The above diagram illustrates that the eAM Material cost classifications are mapped to Material, Material Overhead, and Outside Processing. Labor and Equipment cost classifications are mapped to Resource, Resource Overhead, and Outside Processing.

Oracle Applications Fusion Cloud - Inventory

Oracle Cloud/Fusion Procurement training will help you develop the fundamental skills required to set up and use the Procurement module. This training covers all the tasks, setups, forms and reports used in Procurement and related modules