Drop Ship from Supplier Process

Yes

3.0
1.0 2.0 4.0 4.1 4.2
2.1 Internal Site
Customer Orders Customer in No Create Customer Exists for Yes Enter Sales Orders Enter Sales Orders Select Source Type
Item(s) System? Order Information Line Items (Internal or External)
Customer?

No

3.2
3.1 Link Customer Ship 5.0
Create Internal To Site with the Book Order
Receiving Location Internal Receiving
Location

7.0 11.0 13.0

6.0 Validate/ Send P.O.s to 12.0
8.0 9.0 10.0 Supplier Sends
Drop Ship Order Yes Run
Autocreate P.O. Verify Data in P.O. Approve P.O. Supplier Supplier Ships
Notification of
Line? Purchase Item(s) to Customer
Shipments
Release

No

See Shipping 17.0

Documentation* for 16.0
14.0 15.0 Run
Standard Shipping Run
Select P.O. to Enter Receipt Material
Process Inventory
Receive Against Information Transaction
Interface
Manager

18.0 20.0
19.0
Invoicing Print Invoices
Run
Workflow
AutoInvoice
Activity
 OM Drop Ship from Supplier Process
Revised 12/08/21

This document addresses one of the 3 scenarios commonly addressed by companies that implement the
Drop Ship process. In this scenario, the Customer calls the Order Processing company, which sends
Purchase Orders to the Supplier. The Supplier ships the order directly to the Customer. The invoicing
of the Customer is handled by the Order Processing company after they receive a confirmation of the
shipment from the Supplier.
Please see the OM Drop Ship Overview process for information on the 3 scenarios, and the
documents associated with the other scenarios.

Step 1.0 Customer Orders Item(s)

The Customer orders the items. This order can be on the phone, fax or online. The company
taking the order is called the Order Processing company in this document.

Step 2.0 Customer in System?

The order representative has to ensure that the Customer information has been entered in the
Oracle system prior to entering the order. This information includes the Customer header
information and the shipping and billing locations.
If the Customer information exists, proceed to Step 3.0
Else, proceed to Step 2.1.

Step 2.1 Customer in System?

Create the Customer record in the Oracle system. This can be done in the Order Entry
or Accounts Receivable responsibility. This includes entering all the necessary
information about the Customer, including the Ship To and the Bill To site information.
For detailed information on entering and maintaining a Customer, please see the OE or
AR Customer Maintenance Process and Training documents.

Step 3.0 Internal Location for Customer exists?

In order to have items drop shipped to a Customer site, an Internal Receiving Location needs to
be created. This location needs to be created the first time the Order Processing company has
to drop ship items for the Customer, and must be created for each site that orders will be drop
shipped to.
If this location exists, proceed to Step 4.0.
Else, proceed to Step 3.1 to create the Internal Location.

Step 3.1 Create Internal Receiving Location

OM Drop Ship from Supplier Process
Revised 12/08/21

Create the Internal Location that will be used in the Purchasing module as a Receiving
Location. This internal location should have the same address as the Customer Ship To
site. This is the address that is printed as the Shipping address on the Purchase Order
that goes out to the Supplier.
There needs to be a unique internal location for each Ship To site that orders will be
drop shipped for the customer.

Step 3.2 Link Customer Ship To Site with the Internal Receiving Location

Once the internal location has been created, select this location in the details section of
the Ship To site for the Customer. This links the Internal Location to the Ship To Site.

Step 4.0 Enter Sales Orders Order Information

Enter, copy or import an order. NOTE: If the seeded workflow is assigned to the order
type, the both internally sourced lines can proceed through this workflow. The seeded
workflow branches are based on source type.

Step 4.1 Enter Sales Orders Line Items

Enter only standard items. Kits and models cannot be dropped shipped. You can enter
line items to be sourced internally or externally on the same order.

Step 4.2 Select Source Type (Internal or External)

Enter the source type for item entered. Depending on how your order flow is defined,
you can change the source type until the line has been booked. A source type of null
will be treated as an internally sourced line.

Step 5.0 Book Order

Step 6.0 Drop Ship Order Line?

Drop Ship Order Lines follow the process described in the rest of this document.
If the order line is being Drop Shipped, proceed to Step 9.0
Else, for the process followed by an order line that is being shipped from an internal
warehouse, please see the shipping documents.
OM Drop Ship from Supplier Process
Revised 12/08/21

Step 7.0 Run Purchase Release

The Purchase Release concurrent program processes eligible lines with a source type of
External and passes information to the Purchasing module.
Run Requisition Import program after completion of the Purchase Release. This creates
requisitions based on the information interfaced over to Purchasing from Order Management.
When you submit the Requisition Import, ensure that you set Requisition Import’s Multiple
Distributions parameter to “No.”

Step 8.0 Autocreate P.O.

This step allows the user to create a Purchase Order from an approved Requisition without
having to manually enter the data into the P.O. document.
For more details on the Autocreate process, please see the PURCH Autocreate PO Process
document.

Step 9.0 Verify Data in P.O.

Ensure that all the data in the Purchase Order is in compliance with policies.
Make sure that the price and the dates are correct. The price that defaults into the P.O. is the
Item list price defined for the item definition in the Inventory module. If this is not set in
Inventory, the price is set to $0 in the P.O. This will need to be set at this point of time. Even
if the price is set at the item definition, this price could have changed, or needs modification.
Make sure that the Receiving Controls for the Receipt Routing is set to Direct Delivery.
This step can be performed at the same time that the Autocreate P.O. step is performed, but can
be performed at a later time by another person by querying up the P.O.

Step 10.0 Approve P.O.

After verifying the data in the P.O. meets all specifications, and ensuring the dates can be met
by the supplier and meet the customer requested dates, the P.O. needs to be approved.
Note: This document does not have an approval hierarchy set up and the “Document Types”
are defined so that the preparer can approve his own document.

Step 11.0 Send P.O.s to Supplier

OM Drop Ship from Supplier Process
Revised 12/08/21

The prepared and approved P.O.s must be sent to the Supplier. This can be done via a fax or
electronically transmitted.

Step 12.0 Supplier Ships Item(s) to Customer

Once the Supplier receives the P.O., all items on the Purchase Order are packed and shipped to
the address specified on the Purchase Order. In the case of Drop Ship items, the Ship To
address on the P.O. should be the Ship To site of the Customer (which was entered as the
internal location).

Step 13.0 Supplier Sends Notification of Shipments

Upon shipping the items on the Purchase Order, the Supplier sends a notification of the
shipment with all the details to the Order Processing company. This notification can be in the
form of an electronic data transmission, or e-mail, or a telephone call.
This notification is not a confirmation that the customer has received the shipment, but that the
Supplier has shipped the items, and the Order Processing company can Invoice the Customer
for the ordered items.

Step 14.0 Select P.O. to Receive Against

The P.O. that the Supplier fulfilled needs to be updated to reflect the shipment. Select the P.O.
in Purchasing.

Step 15.0 Enter Receipt Information

Although the entered quantity is not physically being received, this receiving transaction is to
record the ownership transfer. At the same time, the Sales Order in Order Management is
automatically updated to reflect the transaction.

Step 16.0 Run Inventory Interface

The Inventory Interface runs in the background on a fixed schedule.

The Inventory quantity is incremented for the items by the quantity received. However, the
items do not physically ever reach the subinventory, and this quantity is decremented the next
time the Inventory Interface is run from Order Management.
OM Drop Ship from Supplier Process
Revised 12/08/21

Step 17.0 Run Material Transaction Manager

The Materials Transactions manager in Inventory will pick these up from the Inventory
Material Interface table, and update the on hand quantities the next time it runs according to its
schedule.

Step 18.0 Invoicing Workflow Activity

The Invoicing Workflow Activity transfers shipped item information including quantities,
selling prices, payment terms, and transaction dates to the Receivables module, which
processes invoices and accounts for revenue.

Step 19.0 Run AutoInvoice

Upon completion of the Receivables Interface, you can submit AutoInvoice from Receivables
to import invoice and credit data from into Receivables. This concurrent program is normally
run on a schedule in the background without any need of any manual submission.

Step 20.0 Print Invoices

The invoice for the items drop shipped that were created by the AutoInvoice program need to
be printed out on a schedule and sent out to the customer for payment.