Optimize Your Supply Chain Management with Microsoft Dynamics 365 Landed Cost

Introduction

Managing the total cost of imported goods is essential in today’s global market. The Microsoft Dynamics 365 Supply Chain Management Landed Cost module streamlines inbound shipping operations and gives you complete control over imported freight from the manufacturer to your warehouse. Importantly, landed costs—duties, taxes, and transport fees—can account for up to 40% of the total cost of each item. This makes accurate landed cost estimates crucial.

If you are struggling to calculate landed costs accurately, facing challenges with fluctuating transportation costs, or looking to improve your supply chain efficiency and profitability, the Microsoft Dynamics 365 Landed Cost module was built for you – read on to learn more.

Landed Cost Definition

Landed cost is the total cost of getting goods from your supplier to your warehouse, including the cost of the goods themselves, freight, insurance, duties, taxes, and other charges. Accurate landed cost information is essential for managing your supply chain costs and setting precise prices for your products.

Here are some of the benefits of accurate landed cost estimates:

Improved cost control: By understanding all of the costs associated with getting goods to your warehouse, you can better control your supply chain costs.
More accurate pricing: When you know your landed cost, you can set more accurate prices for your products.
Improved profitability: By managing your landed costs effectively, you can improve your profitability.

Microsoft Dynamics 365 Landed Cost: Your Strategic Advantage

Calculating landed cost can be complex, especially for businesses that import from multiple origins or deal with fluctuating transportation costs. Fortunately, the Dynamics 365 Landed Cost module offers a robust and user-friendly platform to manage all aspects of landed cost calculations. This integrated landed cost software solution enables you to streamline your supply chain operations with the following powerful features:

Estimate Landed Costs with Precision

From the moment you create a voyage, the Microsoft Landed Cost module provides accurate cost estimates to help you stay on budget and maintain financial clarity.

Apportion Costs Across Multiple Items and Orders

Efficiently allocate landed costs across multiple items and orders in a single voyage, ensuring accurate cost distribution and precise financial reporting.

Support Goods Transfer and Accrual Recognition

Recognize landed costs during the transfer of goods between locations and account for accruals of goods in transit, ensuring smooth logistical operations and better financial accuracy.

By leveraging these features, you gain timely and accurate cost estimates for all overhead and landed costs. This increased visibility into the supply chain reduces costing errors and minimizes administrative tasks.

Key Features of Microsoft Dynamics 365 Landed Cost

D365 Landed Voyages: Accurately Track Freight Movement

A voyage is a distinct journey that moves freight from an outbound location through various destinations to your warehouse. You can add purchase orders to single or multiple containers and have costs accurately allocated to each item line, simplifying logistics and finances.

D365 Landed Cost Item Ownership and Costs: Stay in Control

You take ownership of goods once they leave the original port, before they arrive at your location. This feature, known as a goods-in-transit order, lets you invoice the goods upon departure rather than upon receipt, aligning with international trade practices. Predefined costs linked to a voyage are automatically added and apportioned down to the item level through detailed apportionment rules. With accurate estimates closely aligned to actual costs, you avoid surprise expenses and simplify cost invoicing.

D365 Landed Cost Tracking and Control: Stay Up-to-Date on Your Shipments

You can update each journey segment as a voyage progresses for better tracking. Microsoft Dynamics 365 automatically updates delivery dates based on real-time logistics data, giving you greater control over your supply chain.

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Setting up Dynamics 365 Supply Chain Management's Landed Cost Module: A Simplified Guide

This guide walks you through setting up the Landed Cost Module in Dynamics 365 Supply Chain Management, streamlining your import cost calculations. Refer to the provided Microsoft Docs links for detailed instructions on each step.

1. Define Landed Cost Parameters in D365

First, navigate to Landed cost > Setup > Landed cost parameters. Here, you can configure various settings across several tabs:

General: Manage posting behaviors, status updates, number sequences, and overall module behavior.
Inventory dimensions: Select inventory dimensions that will be displayed by default on various Landed Cost pages.
Number sequences: Assign specific number sequence codes to different reference number sequences needed within Landed Cost.

2. Configure Voyage Setup in D365 Landed Cost Module

Next, head to Landed cost > Setup > Voyage setup. This section allows you to define the different stages your imported goods go through during their journey.

Select the cost area for which you want to configure voyage statuses.
For each voyage status, set details like its name, description, and permissions for user actions like modifying or deleting.
You can also establish a hierarchy to create a sequential order for voyage statuses.
More information

3. Configure Shipping Container Setup in D365 Landed Cost Module

This step is only necessary if your company owns or frequently reuses shipping containers. If that’s the case, navigate to Landed cost > Setup > Shipping container setup. Here, you can define shipping container types, including unique identification codes, descriptions, maximum volume and weight, and whether the container type is returnable. Additionally, you can set up individual shipping containers with unique IDs and designated container types. More information.

4. Configure Delivery Information Setup in D365 Landed Cost Module

Proceed to Landed cost > Delivery information setup. In this section, you’ll be able to:

Define Shipping Ports: Specify shipping ports by location (city, country/region).
Set Up Tracking Control Center: Configure lead times, status updates, and information flow associated with a voyage. This allows for automated updates based on specific criteria. There are three main “create types” you can configure:
- Blank: Override or enter data in a field based on another field’s value.
- Lead time: Manage automatic date updates.
- Status update: Update the status of purchase order lines, or the status at the voyage, shipping container, or folio level based on predefined rules.

Additional Microsoft D365 Landed Cost Module Resources

These Microsoft Docs links provide further details on specific functionalities within the Landed Cost Module:

Multi-leg journey setup: Configuring management of journeys with multiple legs within the D365 Landed Cost module.
Shipping information setup: Defining information related to shipments within the D365 Landed Cost module.
Auto-cost setup: Configuring automatic cost allocation rules within the D365 Landed Cost module.
Costing parameters setup: Defining costing methods and parameters within the D365 Landed Cost module.
Other Resources:

Remember, Microsoft Dynamics 365 Landed Cost requires setting up parameters specific to your business needs, such as voyages, shipping containers, ports, and tracking mechanisms. This way, every aspect of your landed cost process is tailored to meet your organization’s unique requirements. For in-depth instructions and all available configuration options, refer to each step’s specific Microsoft Docs page linked above and contact Avantiico directly.

Conclusion

Accurately calculating landed costs is critical for improving your supply chain management, reducing expenses, increasing profitability, and improving logistical transparency. The Microsoft Dynamics 365 Landed Cost module provides a comprehensive solution to streamline import operations and manage all aspects of your landed cost process. By leveraging its powerful features like accurate cost apportionment, voyage tracking, and advanced cost allocation rules, you will gain better control over your pricing strategy and ensure a smooth journey for your imported goods. Ready to get started?

Take control of your supply chain by implementing Microsoft Dynamics 365 Supply Chain Management Landed Cost. Contact Avantiico today for personalized guidance on configuration and training and start optimizing your import process today!