back to back drop ship

8/12/2019 Back to Back Drop Ship

1/27

2004 Deloitte

Drop Shipment and Back to Back

Order Processes in Oracle 11i

July 19, 2004


2/27

2004 DeloitteDrop Shipment and Back to Back Order Processes

Agenda

IntroductionDrop shipment process

Back to back order process


3/27


Drop Shipment

Drop shipment enables to take order fromcustomer and fulfill it directly from a supplier

Key Business Drivers

Low inventory cost Reduced shipment time to customer

Can offer a variety of product to customer

Used heavily in contract manufacturing environment wherethe product is standardized and the company plans to focus

more on product design rather than manufacturing


4/27


Drop Shipment

Functionality Overview

Order processing is managed using workflow

Links Order Management and purchasing to provide visibilitythrough entire supply chain

Drop ship functionality is based on source type of an orderline (Internal/External)

Automatic PO/BPA release creation based on ASL/sourcingrule information

Drop ship process uses standard OM workflows. Hold andapproval steps can be added to order processing flow.

Use Sales order Purchase order discrepancy report toidentify discrepanciesbetween the SO and the PO


5/27


Drop Shipment Process Flow :Standard Item

Customerrequestsproduct

PlacePO

Create OracleSales order

Specify line isDrop shipped &

Book order

Customer receivesitem

Customer

Oracle

Purchasing

Supplier

Finance

Customer Invoice(AR)

Managecollections

Oracle

Inventory

OracleOM

Logical receipt intoDrop ship location

(EDI, manual)

Shipment ofproduct tocustomer

PurchaseRequisition (PR)

created

Autocreate POfrom PR (Can beautomated using

BPA and Release)

Approve PO &communicate to

supplier (Via EDI,fax, email etc

Communicate ASN

Supplier invoice(AP)

Payment


6/27


Drop Shipment Features:Sales Order Line

Source type

determines whether

item is internally

sourced or drop

shipped


7/27


Drop Shipment Features:Sales Order Line-> Additional Line

InformationPO/Requisition

details can be seen

from Order

Organizer


8/27


Drop Shipment Features: PurchaseOrder

Purchase

Order: Note

that header

level ship-to

is not used


9/27


Drop Shipment Features: PurchaseOrder Line -> Shipment

Shipment level

Ship toinformation is

used by

supplier


10/27


Drop Shipment New features in 11i

Internal location relationships need not bemaintained

Can drop ship kit, model and configured itemsexcluding Ship model complete (SMC)

Within a configuration items can be sourced fromdifferent suppliers

File attachment can be sent for ATO configurations.Vendor can also view information using iSupplier portal

Perform a match and use existing configuration ids

Item master attribute can be used to identify Dropship items

User item description can be sent to Purchasing


11/27


Implementation Considerations

Order line attribute: Source Type (need to beexternal). Can be defaulted from item or order type

Item attributes (OM and Purchasing)

Setup requisition import parameters

Typically group by Vendor

Multiple distributions set to No

ASL and/or Sourcing rule relationship need to besetup for Automatic PO creation

Oracle recommends using a logical organization fordrop shipment. Exclude this organization forplanning purposes. It can be worked around usingnon nettable Dropship subinventory


12/27


Drop Shipment: Limitations

Sales order changes need to be manually updatedin PO

Sourcing an item from multiple supplier

Drop shipment across operating unit is not possible

Cannot create sales order in OU A but receive PO into OU B

Management of sales order holds and approvals

Need to be managed manually after the PO has been created

Tracking serial number could be a problem.

Serial numbers cannot be captured during PO receipt if the itemis serial number control at shipment

Serial number control at receipt works fine for manual receipt.This implies receiving using serial number for all transactions.May be worked around using a logical receiving organization.


13/27


Agenda

IntroductionDrop shipment process

Back to back order process


14/27


Back to Back Order

Able to create specific supply orders for customersales orders.

Key Business Drivers

Lower inventory cycle time and cost Link supply to specific demand


15/27


Back to Back Order: Features

Designate specific items as B-to-B orderable

Enter sales order lines for these items, and have the supplyautomatically created via a requisition

Have the requisition converted into a Purchase Order or arelease of a blanket Purchase Order

View the requisition number or PO number and its status fromthe Sales Order (using reservation details window)

Reserve the supply from the Requisition to the PO and finallyto the Sales Order once the PO is received

Pick, ship and finally invoice the customer for the product.

Note to Buyer field in the requisition captures the Sales orderinformation


16/27


Back to Back Order: Features

Line status information shows the progress of the order

PO Req Created

PO Req Requested

PO Created PO Received

If line is manually reserved it progresses to AwaitingShipping

Changes and Cancellations on sales orders:

Reservation is changed

Notification sent to Buyer


17/27


Back to Back Order: Process flow

Customerrequestsproduct

PlacePO

Create OracleSales order

Specify line itemenabled for Back-to-Back orders &

Book order

Customer receivesitem

Customer

Oracle

Purchasing

Supplier

Finance

Supplier Invoice(AP)

Payment

Oracle

Logistics

OracleOM

Receive itemsagainst the PO

linked to the sales

order

Shipment ofproduct to theorganization

PurchaseRequisition (PR)

created

Autocreate POfrom PR (Can beautomated using

BPA and Release)

Approve PO &communicate to

supplier (Via EDI,fax, email etc

Communicate ASN

Customer Invoice(AR)

ManageCollections

Pick Release SO Ship ConfirmDecrementInventory


18/27


Back to Back Order: Setup

Item attributes Assemble to Order, Build in WIP

Item attributes Customer Orderable and Purchasable

Sourcing Rule need to be setup

BPA may be setup optionally


19/27


Back to Back Orders: Item MasterSetup


20/27


Back to Back Order: Item MasterSetup


21/27


Back to Back Order: ASL Setup

Specify Item Name

Specify supplier

and supplier site


22/27


Back to Back Order: Key ProcessElements

Sales order line:

New line status


23/27



Sales order line:

Reservation

Details


24/27



Purchase req line:

Note to buyer is

automaticallypopulated


25/27


Back to Back Order: Limitations

Only one sourcing rule can be defined for Back-to-Backorderable items

Cannot use a combination of Buy from and Make sourcingrules within the assignment set

Sales order changes need to be manually updated in PO

Cannot create Internal Requisitions from Back-to-Back orders


26/27


Contact Information

Kaushik Bakhandi

Deloitte Consulting

[email protected]

Ph: 650 372-4769


27/27


Q&A / Open ForumTHANK YOU!

back to back drop ship

Documents