Drop Shipment Using Oracle Order Management

1
Drop Shipment Using Oracle Order Management
Mukesh Goel Diversified Computer
Consultants mgoel_at_divcomp.Com
2
Topics of Discussion

• What is Drop Shipment
• Advantages
• Drop Ship Order Flow
• Setting up Drop Shipment
• Examples of Drop Shipment
• Conclusion

3
What Is Drop Ship

• Ship products from a suppliers inventory,
  directly to the customer.

4
Advantages

• Never tie up any of your own money in inventory.
• Choose from a wide variety of merchandise to
  please a wide variety of customers.
• No need to rent office or warehouse space.
• No loss due to unsaleable goods.

5
Advantages Cont...

• One can easily work from home, devoting all the
  time to promoting sales.
• Easiest ways to make money with the smallest
  possible investment in merchandise.
• No shipping expenses and problems.

6
Drop Ship Order Flow

• Booking Drop Ship Orders
• Holds and Approvals
• Create Purchase Order
• Shipment and Receipt
• Quantity Adjustment
• Generating Invoice
• Complete Drop Ship Orders

7
Book Drop Ship Order

• Enter, copy or import drop ship orders.
• Set source type at line to external.
• Source type defaults automatically for pure drop
  shipment order types.
• Only standard items may be drop-shipped. Kits and
  models cannot be drop-shipped.

8
Holds and Approvals

• Control order flow using hold and approvals.
• View orders on hold - use drop ship discrepancy
  report.
• Usage
• Your supplier reserves right to refuse returns,
  you can add an approval step to your order cycle
  to ensure that the customer will not receive a
  credit unless your supplier notifies you that
  they accept the returned item.

9
Create Purchase Order

• Use Purchase Release program to transfer
  information to oracle purchasing interface
  tables.
• Requisition Import to generate purchase
  requisitions.
• Approve requisitions.
• Generate and release purchase order.

10
Shipment and Receipt

• Receive shipment information from supplier.
• Record receipts, to create inbound and outbound
  transactions for accounting.
• Receive drop-ship items in a logical
  organization.
• Receiving information is automatically reflected
  in the order entry system.

11
Quantity Adjustment

• Over Shipment
• Adjust over shipment manually.
• Reporting use drop ship order discrepancy
  report.

• Partial Shipment
• Drop shipment for remaining quantity.
• Cancel remaining quantity to complete the order.

12
Generating Invoice

• Use receivables interface and autoinvoice to
  generate invoices.
• Any special charges imposed by supplier can be
  manually added.

13
Complete Drop Ship Orders

• Order line is eligible to close, if all the line
  level actions with in order cycle are applied.
• Close orders when all of the order-level actions
  have been satisfied and all of the lines are
  closed
• Use Close Order program.
• Closing complete order enhances performance.

14
Setting-up Drop Shipment

• Drop Ship Order Cycles and Types
• Drop Ship Returns
• Defining Locations
• Defining Logical Receiving Org.
• Requisition Import and Receiving Transactions
• Associate Ship-To and Receiving Location

15
Drop Ship Order Cycles and Order Types

• Define separate order cycle/ order type for drop
  ship.
• OR
• Add drop ship functionality to existing order
  cycle/ order type.
• For drop ship order cycle, Pick Release, Ship
  Confirm, and Inventory Interface are replaced by
  Purchase Release.

16
Drop Ship Order Cycle

• Setting-up drop ship order cycle.

17
Drop Ship Returns

• Use similar order cycle/ order type as used for
  other return orders.
• Depending upon material acceptance (partial/
  complete) issue credit.
• Add approval steps to order cycle, depending upon
  business requirement.

18
Drop Ship Returns Cont...

• Optional Approval Steps
• Add a step to verify drop ship items has been
  received and passed to the supplier.
• Add a step before Receivables Interface, to
  verify material acceptance by supplier, before
  you issue credit.

19
Defining Locations

• Define site addresses for locations in oracle HR.
  
• Locations are shared across business groups in
  oracle HRMS, Oracle Inventory and Purchasing.

20
Defining Logical Receiving Organization

• Define at least one logical organization for
  receiving purposes.

21
Requisition Import and Receiving Transactions

• Use Requisition Import process to import
  requisition lines form interface table.
• Define Approval Hierarchy.
• The entered receipt information is reflected in
  the order entry system.

22
Associating Ship-to and Receiving Locations

• Order Entry/Shipping use customer ship-to and
  bill-to locations.
• Oracle Purchasing uses locations defined in
  Oracle Human Resources.
• Associate the Order Entry/Shipping ship-to
  location with the Purchasing receiving location.

23
Associating Ship-to and Receiving Locations
Cont...

• This enables Oracle Purchasing to create a
  requisition with the correct ship-to information
  for your drop-ship sales order.
• You can assign a given receiving location to only
  one ship-to site.

24
Examples of Drop Shipment

• Virtual Mall
• Get orders on the internet and pass the same to
  distributors for shipment.
• Less Investment, greater returns.
• Focused approach on getting orders.

25
Conclusion

• Consumer will be benefited by having one source
  for all their needs. (Source .com location)
• Opportunity for entrepreneurs with small
  investment to start businesses.
• E-commerce will give boost to the concept of Drop
  Shipment.

26

• Questions?
• Comments?