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  • 8/12/2019 Back to Back Drop Ship

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    2004 Deloitte

    Drop Shipment and Back to Back

    Order Processes in Oracle 11i

    July 19, 2004

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Agenda

    IntroductionDrop shipment process

    Back to back order process

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Drop Shipment Features:Sales Order Line

    Source type

    determines whether

    item is internally

    sourced or drop

    shipped

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Drop Shipment Features:Sales Order Line-> Additional Line

    InformationPO/Requisition

    details can be seen

    from Order

    Organizer

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Drop Shipment Features: PurchaseOrder

    Purchase

    Order: Note

    that header

    level ship-to

    is not used

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Drop Shipment Features: PurchaseOrder Line -> Shipment

    Shipment level

    Ship toinformation is

    used by

    supplier

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    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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.

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Agenda

    IntroductionDrop shipment process

    Back to back order process

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    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

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    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

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Back to Back Orders: Item MasterSetup

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Back to Back Order: Item MasterSetup

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Back to Back Order: ASL Setup

    Specify Item Name

    Specify supplier

    and supplier site

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Back to Back Order: Key ProcessElements

    Sales order line:

    New line status

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    2004 DeloitteDrop Shipment and Back to Back Order Processes

    Back to Back Order: Key ProcessElements

    Sales order line:

    Reservation

    Details

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