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:
- Item Attributes
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
- And ,your do set up for Order Source Type as External
Drop Shipment – Your Setup checklist
- Ensure you have created your Order Management Transaction Types and linked your Transaction Types to order and line workflows that support drop shipments.
- Ensure the Oracle Workflow Background Engine is running.
- Ensure all Drop ship locations you will use to perform drop shipments have the Ship To Site and Receiving Site defined.
- Ensure you have defined the Internal Ship To Locations for your drop shipment customers (Oracle Receivables Standard Customer window, Business Purpose Details Tab).
- Ensure your standard items have an associated List Price defined within your PO Inventory organization (Oracle Payables Financial Options window, Supplier-Purchasing Tab).
Drop Shipment - Process Steps
- Create a Sales Order with line where the line source is External
- Book and Schedule the Sales Order
- Run Requisition Import Process
- Now the line status will be in Awaiting Receipt
- Login to the Receiving Organization (Purchasing) who has been setup as an Approver
- Run Requisition Import
- Create Purchase Order from the Requisition
- Approve the PO
- Receive the full quantity
- Run Auto Invoice
- Verify Invoice in Sales Order
Check the details here  .
Things not to forget in a DropShipment
Release 11i/12 does not support Drop Shipment across operating units.
Blanket PO's will not used with Drop Shipment , the reason the PO must be created when OM notifies PO that a Drop Ship order has been created.
You can't cancelled Drop Shipments once Oracle Purchasing obtains the receipt.
Standard Items can be used for Drop Shipment.
In 11i, PTO's and ATO's cannot be drop shipped
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Drop Shipment - Functional Setup and flow