Total Pageviews

April 16, 2016

4/16/2016 02:09:00 AM

Order Management Drop shipment

What is drop shipping?

Drop shipping is a fulfillment model that allows you to buy products individually from a wholesaler and ship them directly to your customer.
Instead of purchasing a large amount of inventory, you simply partner with a drop shipping supplier and list their merchandise for sale. Then, once you receive an order you forward it to the supplier for fulfillment. The supplier will ship the product directly from their warehouse to your customer, and charge you only for the price of the shipped item.

What are the benefits of drop shipping?

The drop shipping model has a number of advantages:
Lower Capital Requirement: With drop shipping, you don’t need to invest thousands of dollars in inventory. Instead, you only purchase a product when you have an existing order to fill.
Wider Product Selection: When you don’t have to pre-purchase all the items you sell, you can offer a significantly larger number of products to your customers.
Reduced Risk: Without thousands invested in inventory, the risk involved with starting an online store is dramatically reduced. If things don’t work out, you aren’t stuck with thousands in inventory you have to sell at a loss.
Location Independence: Because you don’t have to worry about fulfillment or running a warehouse, it’s possible to run a drop shipping business from anywhere with a laptop and an internet connection.
Highly Scalable: Because you don’t need to manually fulfill each order, it’s relatively easy to scale a drop shipping business.
Q1. What is a Drop Ship PO?

A: Oracle Order Management and Oracle Purchasing integrate to provide Drop Shipments. Drop Shipments are orders for items that your supplier ships directly to the customer either because you don't stock or currently don't have the items in inventory, or because it's more cost effective for the supplier to ship the item to the customer directly.

Q2. How is a Drop Ship PO created?

A:
 Drop Shipments are created as Sales Orders in Order Management. The Purchase Release concurrent program or workflow in Order Management creates rows in the Requisition Import tables in Purchasing. Then Purchasing Requisition Import process creates the requisitions. Drop Shipments are marked with the Source Type of External in Order Management and Supplier in Purchasing. 

Q3. What is the setup required for Drop Ship PO? 

A: ITEM ATTRIBUTES:
 
Navigate: Inventory -> Items - > Organization items 
  • Purchased (PO) Enabled 
  • Purchasable (PO) Enabled 
  • Transactable (INV) Enabled 
  • Stockable (INV) Optional 
  • Reservable (INV) Optional 
  • Inventory Item (INV) Optional 
  • Customer Ordered (OM) Enabled 
  • Customer Orders Enabled (OM) Enabled 
  • Internal Ordered (OM) Disabled 
  • Internal Orders Enabled (OM) Disabled 
  • Shippable (OM) Optional 
  • OE Transactable (OM) Enabled 
All Drop Ship items must be defined in the organization entered in the profile option OE: Item Validation Organization and in the Receiving Organization. 


All Drop Ship sub-inventory must have Reservable box checked. If the sub-inventory is not Reservable the Sales Order issue transaction will not be created in MTL_TRANSACTIONS_INTERFACE. After Drop Ship inventory organization is created, sub inventories should be defined.

To create the subinventory, go to an inventory responsibility and navigate to 
Setup -> Organizations -> Sub inventories. Asset sub inventories must have the reservable and Asset boxes checked. Expense subinventories must have the Reservable box checked and the Asset box unchecked. 
Subinventory Attributes for Asset Sub nventory 
Reservable/Allow Reservations 
Asset Subinventory 
Subinventory Attributes for Expense Subinventory 
Reservable 
Asset-must NOT be enabled. 



Q4. How can we avoid the miscounting of supply as logical organization is involved?

A: 
You must receive drop-ship items in a logical organization. If you use Oracle master Scheduling/MRP and Oracle Supply Chain Planning, to avoid miscounting supply you may not want to include logical organizations in your planning. If you choose to include logical organizations, ensure that doing so does not cause planning and forecasting complications.


Q5. If you make changes to a Sales Order after the Purchase Order (PO) has been generated, will the order changes automatically be updated on the PO?

A: 
Order changes will not be automatically updated on the PO. Pulling up the Discrepancy report will allow you to view the differences between the Sales Order and PO. However, you will have to manually update the POs in the Purchasing application. Please note: Sales Order changes will be automatically updated on the PO if the PO Status is Incomplete or Require Re-approval. If the PO is already approved, you cannot make changes to the Sales Order line (without un-approving the PO).

Q6. If items on a Drop Ship order are cancelled, does the system automatically generate a PO Change to the PO originally sent to the supplier? 

A: 
 There is a discrepancy report available that will report differences between the PO and the Sales Order.

Q7. Does Order Management  have functionality to do serial number management with Drop Shipments? 

A: 
You are able to receive serial numbered Drop Ship stock. Order Management will receive the serial number noted on the PO.

Q8. Can Configurable Items be Drop Shipped? 

A: 
Currently only Standard Items can be Drop Shipped. Functionality for Configurable Items will be added in future releases.


Q9. How are over/under shipments handled in Drop Shipment? 

A: 
If part of a drop-ship line ships, and you do not wish to fulfill the remaining quantity, cancel the line. Over shipments must also be handled manually. If the supplier ships more than the ordered quantity, you can bill your customer for the additional quantity or request that they return the item. Use the Drop Ship Order Discrepancy Report to view differences between your drop-ship Sales Orders and their associated purchase requisitions and orders.


Q10. Will Blanket PO's work with Drop Shipment?

A: 
Blanket PO's will not work with Drop Shipment because the PO must be created when OM notifies PO that a Drop Ship order has been created. This PO is linked to the Drop Ship order so that when the receipt is done (partial or complete) .OM is updated to receiving interface eligible. Drop Ship lines do not use the pick release, ship confirm or inv interface order cycles.


Q11. Is it possible to create releases based on drop shipment orders for the items in the blanket agreement when a valid Blanket PO is created ? 

A: 
Yes, it is possible to create releases from drop ship orders automatically or via Autocreate window, if the drop ship Requisition has the correct Blanket Information (Source)

1.Set up the ASL entry for the supplier site desired. 
2.Depending on the hierarchy determine which assignment  better suits and define sourcing rule according to the required level with   the required supplier,site. 
Also ensure that ASL entry exists for the above supplier/site.
For automatic sourcing to be done also set profile  'PO:Allow Automatic Sourcing' to Yes so that the source document will be determined automatically depending on the creation dates and the type of the document.


Q12. Can we cancel Drop Shipment after it is received? 

A: 
Drop Shipments cannot be cancelled once Oracle Purchasing obtains the receipt. A user who wants to cancel a Drop Ship Sales Order line must ensure no receipts have been created against the line and that the requisition and/or Purchase Order associated with the line is cancelled. Cancellation of a Partial Drop Ship receipt is allowable. But only the portion that has not been received can be cancelled. If you cancel a Drop Shipment line for which you have not shipped the entire quantity, the order processing splits the line. The first line contains the quantity shipped and the second line contains the non-shipped quantity in backorder. You can cancel the second line the back order on the Sales Order. The PO line quantity should be changed to reflect the new quantity.


Q13. What is the Import source and status of PO generated from Drop Shipment? 

A: 
Import source is Order Entry. 
Status of PO will always be Approved.

Q14. Can we receive a PO Shipment for which the related Sales Order Line is Cancelled / Closed? 

A: 
PO Shipments for which the relates Sales Order line has been cancelled or closed cannot be received. The PO shipment should be cancelled. A new Sales Order Line should be created, if needed. 

Main table Involved in Drop shipment  is
OE_DROP_SHIP_SOURCESStores relationships between order lines in oe_order_lines_all table and associated oracle purchasing requisitions in PO_REQUISITIONS_ALL and Oracle purchasing purchase orders in PO_LINES_ALL


0 comments:

Post a Comment