Drop Shipment in Oracle Fusion

Concept

Drop shipment is a process where the products are shipped from an organization’s supplier directly to the customer without physically receiving the materials into the organization facility.

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  1. Your customer places and order with you
  2. The oracle Fusion system automatically places an order with your supplier
  3. Your supplier ships directly to customer

Functional Flow

  • A sales order is created and scheduled on DOO workbench.
  • A fulfillment line is sent for promising.
  • Order promising engine determines drop-ship as the fulfillment option based on sourcing rules and availability, buy from sourcing rules that are assigned to a customer or assigned to a geographical region are interpreted as drop-ship sourcing rules.
  • DOO creates the requisite drop-ship purchase order with the PO having drop ship customer and drop ship customer site populated.
  • Drop Ship PO Schedule Number is populated on the fulfillment line which indicates that the purchase order is reserved to the fulfillment line under consideration.
  • Purchase order is sent to Supplier for fulfillment.
  • Fulfillment Line status is Awaiting Shipping.
  • Supplier ships goods against the purchase order and creates advance shipment notice (ASN).
  • Receiving records a logical receipt for ASN and notifies Order Management.
  • Order Management gets details about the shipment from Receiving.
  • Fulfillment Line status is Shipped.
  • Order Management sends request to Receivables to bill the customer.
  • Fulfillment Line status is Awaiting Billing.
  • Receivables creates an invoice and notifies Order Management.
  • Fulfillment Line status is Billed.
  • Order Management closes the fulfillment line once customer is billed.

Setup Tasks

  • Manage Items

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Item must be purchasable in requisition organization and list price must be defined if there is no Blanket agreement.

  • Manage Sourcing Rules

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Sourcing Rule must be type global and mention the supplier details withing Buy From source type.

  • Manage Drop Ship Financial Flows

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Controls communication of ownership change by specifying Supplier ownership change event and associate Selling BU with Receiving trade organization.

  • Item Validation Organization for Drop Ship

For any source system which supports drop shipments, a drop ship validation organization must be specified. Only one drop ship validation organization can be specified for each source system.

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Drop ship validation organization must be the item master for a source system

  • Mange Order Management Parameters

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You need to define preparer/buyer name for procurement activities. Parameter required for sending purchase request to Procurement..

  • Manage Suppliers and Supplier Sites

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Define your requisitioning business unit at supplier and specify the purchasing business function this supplier site provides to client business unit.

  • Manage Agreements

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Define Blanket Purchase agreement and enable to automate purchase order creation from requisition and submission for approval.

  • Once the Drop Ship setup tasks are completed you have to refresh the GOP data store by running below processes sequentially:
  1. Run ESS job the “Collect Planning Data” to collect data for scheduling.
  2. Run the ESS job “Refresh and Start the Order Promising Server “

Drop Ship execution

Create a sales order in Order management using “Create Order”. Navigate to Fulfillment Lines and schedule the sales order. Based on Order promising engine’s recommendations, Order Management will create a drop ship purchase order.

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