Drop Shipment in Oracle Fusion


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.


  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


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

  • Manage Sourcing Rules


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

  • Manage Drop Ship Financial Flows


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.


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

  • Mange Order Management Parameters


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

  • Manage Suppliers and Supplier Sites


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

  • Manage Agreements


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.



Leave a Reply

Your email address will not be published. Required fields are marked *