Drop Ship Black

Drop Ship Order Demo
in Oracle Apps
By:
Devendra Gulve
http://functionalguy.blogspot.
Drop Shipment
Drop shipment enables to take order from customer
and fulfill it directly from a supplier
Key Business Drivers
Low inventory cost
Reduced shipment time to customer
Can offer a variety of product to customer
Used heavily in contract manufacturing environment where the
product is standardized and the company plans to focus more
on product design rather than manufacturing
http://functionalguy.blogspot.com
Drop-Ship Order Demo
Introduction to Drop Ship

Drop shipment is a method of order fulfillment
where the organization taking the order does NOT
maintain their own inventory for the drop-shipped
product, but fulfill their orders through 3rd party
vendors who directly ship to the end customer
ordering the product
For Example: (C=Customer, M=Organization, S=Supplier)
C orders item x from M
M orders item x from S
S ships Item x to C
S bills M for the order, M bills C for the order
C pays M for the order, M pays S for the order
Drop Shipment
Functionality Overview
Order processing is managed using workflow
Links Order Management and purchasing to provide visibility
through entire supply chain
Drop ship functionality is based on source type of an order line
(Internal/External)
Automatic PO/BPA release creation based on ASL/sourcing rule
information
Drop ship process uses standard OM workflows. Hold and
approval steps can be added to order processing flow.
Use Sales order Purchase order discrepancy report to identify
discrepancies between the SO and the PO
Drop Shipment New features in

11i
Internal location relationships need not be maintained
Can drop ship kit, model and configured items excluding
Ship model complete (SMC)
Within a configuration items can be sourced from different
suppliers
File attachment can be sent for ATO configurations. Vendor can
also view information using iSupplier portal
Perform a match and use existing configuration ids
Item master attribute can be used to identify Drop ship

items
User item description can be sent to Purchasing
Implementation Considerations
Order line attribute: Source Type (need to be external). Can
be defaulted from item or order type
Item attributes (OM and Purchasing): Item should be
Purchasable, BUY and ATO unchecked.
Setup requisition import parameters

Typically group by Vendor
Multiple distributions set to No
ASL and/or Sourcing rule relationship need to be setup for

Automatic PO creation
Oracle recommends using a logical organization for drop
shipment. Exclude this organization for planning
purposes. It can be worked
around using non nettable
Steps for Drop-ship order

1. Receive PO from Customer.
2. Enter Sales Order against the PO from customer with EXTERNAL
source type.
3. Requisition will be generated and then PO for fulfillment/s.
4. This PO will be sent to suppler with ship-to address as customers
address and Bill-to address as our address.
5. Supplier ships material to customer directly and sends shipping
details to us.
6. Customer sends us acknowledgment of material received.
7. Suppler sends us invoice against PO sent by us
8. Receipt will be done against PO sent to suppler
no change in on-hand quantity, even we do receipt
9. Sales Order gets fulfilled and we can send Invoice to customer

against the sales order.
Drop Ship Order flow
Drop Shipment Process Flow :

Standard Item
Enter Order Header
Note the Order# and

Ship-to , bill-to address
Enter Order Line/s
Now the Line status

is Entered
Enter Order Line/s
Make Sure Source

type is External
Mention the Organization,

where you want to receive
the material from External
Source
Book the Order
Order / Line status

becomes Booked
Creating Supply
Run workflow background
This will process the record/s and will put
eligible records in Interface
Run Requisition import program and make

sure the requisition gets generated
This will pull the records from Interface and
then create requisition/s.
Requisition Import
This program
created one
requisition
Find Requisition
PO (R) > Requisitions > Requisition Summary
View Requisition
Once PO gets
created against this
Req. this field will
get populated
It is Same as Ship-to
address mentioned
on Sales Order
Auto Create PO
Auto Create PO
PO (R) > Auto Create
Auto Create PO
Enter Suppler
Details here
Auto Create PO
View Requisition
Here the PO number got Populated for the
Requisition
Open PO
Approve PO
Sales Order Line Status
PO Receipt
PO (R) > Receiving > Receipts
Enter PO Number
PO Receipt
Item is Serial Controlled, so enter Serial Number
View PO Receipt
PO (R) > Receiving > Receiving Transaction Summary
Just on PO Receipt, Order

Line status becomes
Shipped. No need to do
Shipping activity

This will process the record/s and will put
eligible records in Receivables Interface
Now the Line status

became Closed
Auto-Invoice Program
This Program will pull records from
Receivables Interface and create Invoice
for the same
Mention the Order

Number to be invoiced
Invoice Details
Receivables (R) > Transactions > Transactions
Customer will pay against this receivables

Invoice.
Similarly generate Invoice against the
PO/Receipt in Payables and pays money
to Supplier.
Profit margin depends on price difference
in these two invoices
Drop Shipment: Limitations

Sales order changes need to be manually updated
in PO sourcing an item from multiple supplier
Management of sales order holds and approvals
Need to be managed manually after the PO has been created
Tracking serial number could be a problem.

Serial numbers cannot be captured during PO receipt if the item
is serial number control at shipment
Serial number control at receipt works fine for manual receipt.
This implies receiving using serial number for all transactions.
May be worked around using a logical receiving organization.
Thank You
Please post your comments on

http://functionalguy.blogspot.com/2008/10/drop-ship-order-flow.html

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Drop Ship Order Demo

Drop-Ship Order Demo

Introduction to Drop Ship

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop Shipment New features in

Item master attribute can be used to identify Drop ship

Drop-Ship Order Demo

Setup requisition import parameters

ASL and/or Sourcing rule relationship need to be setup for

Steps for Drop-ship order

9. Sales Order gets fulfilled and we can send Invoice to customer

Drop-Ship Order Demo

Drop Ship Order flow

Drop-Ship Order Demo

Drop Shipment Process Flow :

Drop-Ship Order Demo

Enter Order Header

Note the Order# and

Drop-Ship Order Demo

Enter Order Line/s

Now the Line status

Drop-Ship Order Demo

Enter Order Line/s

Make Sure Source

Mention the Organization,

Drop-Ship Order Demo

Book the Order

Order / Line status

Drop-Ship Order Demo

Run Requisition import program and make

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Sales Order Line Status

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Drop-Ship Order Demo

Sales Order Line Status

Just on PO Receipt, Order

Drop-Ship Order Demo

Run workflow background

Drop-Ship Order Demo

Sales Order Line Status

Now the Line status

Drop-Ship Order Demo

Drop-Ship Order Demo

Mention the Order

Drop-Ship Order Demo

Drop-Ship Order Demo

Customer will pay against this receivables

Drop-Ship Order Demo

Drop Shipment: Limitations

Tracking serial number could be a problem.

Drop-Ship Order Demo