Drop Shipment

It means you can receive orders for items that you do not stock or for which you lack sufficient inventory, and have a supplier provide the items directly to your customer
.

• Drop shipment on the other hand 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,

• A orders item x from B
• B orders item x from C
• C ships Item x to A.
• B bills A for the order, C bills B for the order

Drop Shipment - Process Steps
• Create a Sales Order with line where the line source is External
• Book and Schedule the Sales Order this will populate data in OE_DROP_SHIP_SOURCES
• The Purchase Release program this will populate data into PO_REQUISITIONS_INTERFACE_ALL
• Run Requisition Import Process PO_REQUISITION_HEADERS_ALL/ LINES/DISTRIBUTION
• Now the line status will be in Awaiting Receipt
• Login to the Receiving Organization (Purchasing) who has been setup as an Approver
• Create Purchase Order from the Requisition , populates data into PO tables
• Approve the PO
• Receive the full quantity
• Run Auto Invoice
• Verify Invoice in Sales Order

Things not to forget in a Drop Shipment

• Release 11i/12 does not support Drop Shipment across operating units.
• Blanket PO's will not used with Drop Shipment, the reason the PO must be created when OM notifies PO that a Drop Ship order has been created.
• You can't cancel Drop Shipments once Oracle Purchasing obtains the receipt.
• Standard Items can be used for Drop Shipment.

TABLES Involved
• PO_LINE_LOCATIONS_ALL
o This table stores document shipment schedules for purchase orders, purchase agreements, quotations, and RFQs.
o This table stores purchase document lines for purchase orders, purchase agreements, quotations, and RFQs.
• PO_HEADERS_ALL/ PO_LINES_ALL/ PO_DISTRIBUTIONS_ALL
• PO_REQUISITION_HEADERS_ALL/ PO_REQUISITION_LINES_ALL/ PO_REQ_DISTRIBUTIONS_ALL
• PO_REQUISITIONS_INTERFACE_ALL
o This is the Requisition Import interface table.
• OE_ORDER_LINES_ALL/OE_ORDER_LINES_ALL/OE_DROP_SHIP_SOURCES
o This table stores 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.
• RCV_SHIPMENT_LINES
o This table stores receiving shipment line information

Drop Shipment - Setup You need to make sure these are attribute setup Correctly:

• Item Attributes

• Purchased : Enabled
• Purchasable : Enabled
• Transactable : Enabled
• Stockable : Optional
• Reservable : Optional
• Inventory Item : Optional
• Customer Ordered : Enabled
• Customer Order Enabled : Enabled
• Internal Ordered : Disabled
• OE Transactable : Enabled
• Shippable : Optional

Difference between “Internal” and “External” Drop-Ship

In Oracle Context External Drop-Shipping means your Oracle Order Management uses purchase orders to outside suppliers that are automatically generated from sales orders for goods supplied directly from the supplier. The “external ” supplier ships the goods directly to the 3rd Party customer and confirms the shipment through the use of an Advanced Shipment Notice(ASN). Note:Oracle uses this ASN to record a receiving transaction into inventory followed by an immediate logical shipping transaction. From these transactions, conveyance of title takes place and the customer can be invoiced and the supplier’s invoice can be processed. where as “Internal” context Drop-Shipping functions in a similar fashion. The key difference is that no inventory transactions take place on the books of the selling operating unit; transfer of ownership of the goods from shipper to seller to customer with the only physical movement of the goods being out of the shipping organization.