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Drop Shipment – Functional Setup and flow

A Drop Shipment occurs when a customer order is sourced from and delivered by a supplier.

Order Management sends information to the Purchasing Application to create that PO, and then when that PO is received (to indicate shipment from the supplier to your customer), the order line is automatically updated to indicate that it was fulfilled.

In this process, the company running Order Management is modeled as the company to whom the end customer places the original order.

Drop Shipment - Setup

You need to make sure these are attribute setup Correctly:

Purchased : Enabled
Purchasable : Enabled
Transactable : Enabled
Stockable : Optional
Reservable : Optional
Inventory Item : Optional
Customer Ordered : Enabled
Customer Order Enabled : Enabled
Internal Ordered : Disabled
OE Transactable : Enabled
Shippable : Optional

Drop Shipment – Your Setup checklist

Drop Shipment - Process Steps

Check the details here [1] .

Things not to forget in a DropShipment

Similar Post on Drop Shipment

3 Comments (Open | Close)

3 Comments To "Drop Shipment – Functional Setup and flow"

#1 Comment By Parul Gupta On September 16, 2008 @ 6:17 am

Hi Sanjit,
You have mentioned ‘Release 11i/12 does not support Drop Shipment across operating units.’
I understand their is a case of External Drop Shipment – A case in which one OU (A) sells the good to the customer (By selling , it means..Raising a Dropship SO and resulting AR invoice ) while the actual physical delivery happens through a External Supplier belonging to another OU( B) . The above Dropship SO would create a PO in OU-B with the ship to as Customer ship to. I/C AR invoice would be created in OU-B which would trigger an I/C AP invoice in OU-A. A PO invoice from OU-B would be created for Supplier. Similar would be a case of INternal drop shipment (Centralised distribution. I think both these models can be configured in apps.
Please clarify and advice

#2 Comment By Asha On February 1, 2011 @ 6:46 am

Can you please also let us know the RMA cycle in a similar way.

#3 Comment By Ashish On March 10, 2011 @ 11:57 pm


We do drop shipment from external Supplier.

Will receving Drop Shipment generates GL transactions, If yes then how we can identify those GL Transactions.