Drop Shipment

Drop Shipment Business Process

Receiving orders for items that you do not stock, and have a supplier provide the items directly to your customer is called Drop Shipment. The following diagram illustrates the drop shipment process.

Imagine a scenario where you order a Dell Laptop from Flipkart/Amazon(Order Processing Company). Flipkart doesn’t manufacture the Dell Laptop rather they create an order with DELL to ship the product to customer directly. DELL ships you the laptop and you pay Flipkart on successful delivery. Flipkart pays DELL after successful receipt by the customer on his behalf.

Now we will see how this can be achieved in Oracle.

Create an Item and copy all the necessary detail from ‘Purchased Item’ template.

Ensure the below :

Enable Purchased and Purchasable checkboxes on ‘Purchasing’ Tab

Enable Customer Ordered, Customer Orders Enabled and OE Transactable checkboxes on ‘Order Management’ Tab.

Disable Internal Order checkbox on ‘Order Management’ Tab.

Default SO Source Type must be ‘External’

Create a Sales Order

Ensure the Source Type is defaulted as ‘External’

Book the Order

Run the ‘Workflow Background Process’ to proceed further.

PROCESS DEFERRED: Specify whether this background engine checks for deferred activities. Setting this parameter to YES allows the engine to check for deferred activities.

PROCESS TIME OUT: Specify whether this background engine checks for activities that have timed out. Setting this parameter to YES allows the engine to check for timed out activities.

Once the program is completed successfully, re-query the order line to check the status.

Line Status would have been changed from ‘Booked’ to ‘Awaiting Receipt’. This will push the information of our sales order into Requisition Interface tables.

Run ‘Requisition Import’ program to create a requisition based on the data that was inserted in Requisition Interface tables.

Requisition Import creates a requisition line and one or more requisition distributions for each row it finds in the interface table. It then groups these lines on requisitions according to parameters you define below.

Navigate to Purchasing > Requisitions > Requisition Summary and search for the requisition by selecting ‘ORDER ENTRY’ as ‘Import Source’

Note down the Requisition number which is 15910 in the below case.

Navigate Purchasing > Autocreate. Search with the ‘Requisition Number’ created. Through AutoCreate, A purchase requisition can be converted into a Purchase Order.

Click on Find button.

Select the line and click on ‘Manual’ Button. Enter the supplier detail.

Click on ‘Add To Document’

Click on Create button which will open the Purchase Order form with a PO created in ‘Incomplete’ status.

Verify all the detail and click on ‘Approve’ button.

Query for the Sales Order. Click on ‘Action’ Button and choose ‘Additional Line Information’ to view the PO information that is linked to the Sales Order line.

Receive the goods for the PO.

Purchasing > Receive > Receipts and Search for PO.

Enter the Subinventory detail and click on ‘Save’.

Ensure that the Receiving Transaction is completed.

‘ADS (Pay On Receipt AutoInvoice)’ program which gets invoked automatically along with ‘Receiving Transaction Processor’ ensures the user to automatically create standard, unapproved invoices for payment of goods based on receipt transactions. Invoices are created using a combination of receipt and purchase order information that eliminates duplicate manual data entry and ensures accurate and timely data processing.

Navigate to Purchasing > Receving > Receiving Transactions Summary

Line Status of the Order Line changes to ‘Shipped’

Go to Tools > Workflow Status to see that the line got ‘Deferred’

To process the deferred activity, please run ‘Workflow background engine’ again.

Autoinvoice Master or Import program (which gets invoked automatically while running Workflow Background Processor) will transfer transactions from the interface tables to Oracle Receivables.

Line Status is changed to ‘Closed’

Go to Actions > Additional Line Information to see the Invoice detail

Click on ‘Invoice Details’ to see the complete detail about this Invoice.

Go to Receivables to complete the Accounting. Post the Entries to GL to complete accounting.