Consider establishing a logical warehouse to receive drop shipments. This will isolate the costs of drop shipped items from items you physically stock. Order Management does not require you to use a special shipping organization for drop shipments, but you can choose to do so. In that case, define the logical warehouse as a shipping organization, and enable the items you want to be drop shipped in that warehouse.
Order Transaction Type/Line Transaction Type
Define line type/order types for your drop shipment orders that have a workflow containing the Create Supply—Line subprocess. This sub process could have the Purchase Release Line Deferred' activity - so drop ship lines are automatically interfaced to Purchasing via a workflow background process after Booking. You could include the ' Purchase Release Line - Manual' activity and allow Purchase Release to be a manual activity i.e. run adhoc or in batch mode via the concurrent program.
Defaulting Rules
Define defaulting rules, based on conditions that make sense to your business process, for the source type attribute of the Order Line. If you want a line to be drop shipped, make the source type equal to External. In addition, if you defined a special warehouse for drop shipped items, you might want to create a defaulting rule to default that shipping organization to your order line.
Processing Constraints
Depending on your business needs you could use various constraints for example you could prevent changes once a PO is approved or you could choose to disable this constraint provided you have a process to handle any exceptions from the supplier.
Depending on the status of the PO / Requisition - some typical changes allowed from the sales order are - Quantity Increases / Decreases, Cancellations, Scheduled Ship Date, Ship To Location, or Referenced Data elements (ship method).
Depending on the status of the PO / Requisition / Sales Order Line - some typical changes allowed from the PO side are - Promise Date, Delete Lines, or Cancellations. Other restrictions imposed during the change management process are included in
Process Steps
1. Enter and book an order.
Defaulting Rules may set source type attribute to External through the organization level item attribute setting—Default SO source type for the item, or you can manually choose External as the source type on the sales order line. Drop ship order lines can be processed for standard items, ATO models, Non SMC PTO models, and kits. SMC PTO models cannot be used on drop ship order lines. The Create Supply workflow step loads OM information into Oracle Purchasing's Requisition Import tables. Alternatively, a Purchase Release concurrent program can be run to do the same.
2. Run Requisition Import in Purchasing to create the requisition.
3. Create a PO or autocreate a Sales Agreement PO release from the approved requisition.
4. When the vendor ships product to your customer, you may receive an ASN, or even an invoice, to indicate shipment to the customer. If the vendor does not send an ASN, a receipt can be entered manually (passive receiving) to record a logical receipt.
5. You can set the profile PO: Automatically Deliver Drop Ship ASNs to trigger automatic receipt of the ASNs in Purchasing, or choose to have manual intervention to receive the ASN. Inbound and outbound material transactions are automatically created for accounting purposes.
