Transcript Drop Shipment and Back to Back Order Processes in Oracle 11i

Drop Shipment and Back to Back
Order Processes in Oracle 11i
July 19, 2004
©2004 Deloitte
Agenda
•Introduction
•Drop shipment process
•Back to back order process
Drop Shipment and Back to Back Order Processes
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Drop Shipment
• Drop shipment enables to take order from
customer 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 where
the product is standardized and the company plans to focus
more on product design rather than manufacturing
Drop Shipment and Back to Back Order Processes
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Drop Shipment
• Functionality Overview
–
Order processing is managed using workflow
–
Links Order Management and purchasing to provide visibility
through entire supply chain
–
Drop ship functionality is based on source type of an order
line (Internal/External)
–
Automatic PO/BPA release creation based on ASL/sourcing
rule information
–
Drop ship process uses standard OM workflows. Hold and
approval steps can be added to order processing flow.
–
Use Sales order Purchase order discrepancy report to
identify discrepancies between the SO and the PO
Drop Shipment and Back to Back Order Processes
©2004 Deloitte
Place
PO
Create Oracle
Sales order
Purchase
Requisition (PR)
created
Logical receipt into
Drop ship location
(EDI, manual)
Finance
Supplier
Oracle
Purchasing
Customer
requests
product
Oracle
Inventory
Oracle OM
Customer
Drop Shipment Process Flow :
Standard Item
Customer receives
item
Specify line is
Drop shipped &
Book order
Autocreate PO
from PR (Can be
automated using
BPA and Release)
Shipment of
product to
customer
Communicate ASN
Customer Invoice
(AR)
Approve PO &
communicate to
supplier (Via EDI,
fax, email etc
Manage
collections
Drop Shipment and Back to Back Order Processes
Supplier invoice
(AP)
Payment
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Drop Shipment Features:
Sales Order Line
Source type
determines whether
item is internally
sourced or drop
shipped
Drop Shipment and Back to Back Order Processes
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Drop Shipment Features:
Sales Order Line-> Additional Line
Information
PO/Requisition
details can be seen
from Order
Organizer
Drop Shipment and Back to Back Order Processes
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Drop Shipment Features: Purchase
Order
Purchase
Order: Note
that header
level ‘ship-to’
is not used
Drop Shipment and Back to Back Order Processes
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Drop Shipment Features: Purchase
Order Line -> Shipment
Shipment level
Ship to
information is
used by
supplier
Drop Shipment and Back to Back Order Processes
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Drop Shipment New features in 11i
• Internal location relationships need not be
maintained
• Can drop ship kit, model and configured items
excluding Ship model complete (SMC)
–
–
–
Within a configuration items can be sourced from
different 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 Drop
ship items
• User item description can be sent to Purchasing
Drop Shipment and Back to Back Order Processes
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Implementation Considerations
• Order line attribute: Source Type (need to be
external). 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 be
setup for Automatic PO creation
• Oracle recommends using a logical organization for
drop shipment. Exclude this organization for
planning purposes. It can be worked around using
non nettable ‘Dropship’ subinventory
Drop Shipment and Back to Back Order Processes
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Drop Shipment: Limitations
• Sales order changes need to be manually updated
in 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 item
is 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.
Drop Shipment and Back to Back Order Processes
©2004 Deloitte
Agenda
•Introduction
•Drop shipment process
•Back to back order process
Drop Shipment and Back to Back Order Processes
©2004 Deloitte
Back to Back Order
• Able to create specific supply orders for customer
sales orders.
• Key Business Drivers
– Lower inventory cycle time and cost
– Link supply to specific demand
Drop Shipment and Back to Back Order Processes
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Back to Back Order: Features
• Designate specific items as “B-to-B” orderable
• Enter sales order lines for these items, and have the supply
automatically created via a requisition
• Have the requisition converted into a Purchase Order or a
release of a blanket Purchase Order
• View the requisition number or PO number and its status from
the Sales Order (using reservation details window)
• Reserve the supply from the Requisition to the PO and finally
to 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 order
information
Drop Shipment and Back to Back Order Processes
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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 ‘Awaiting
Shipping’
• Changes and Cancellations on sales orders:
– Reservation is changed
– Notification sent to Buyer
Drop Shipment and Back to Back Order Processes
©2004 Deloitte
Place
PO
Create Oracle
Sales order
Purchase
Requisition (PR)
created
Receive items
against the PO
linked to the sales
order
Finance
Supplier
Oracle
Purchasing
Customer
requests
product
Oracle
Logistics
Oracle OM
Customer
Back to Back Order: Process flow
Customer receives
item
Specify line item
enabled for Backto-Back orders &
Book order
Autocreate PO
from PR (Can be
automated using
BPA and Release)
Approve PO &
communicate to
supplier (Via EDI,
fax, email etc
Pick Release SO
Drop Shipment and Back to Back Order Processes
Decrement
Inventory
Shipment of
product to the
organization
Communicate ASN
Supplier Invoice
(AP)
Ship Confirm
Payment
Customer Invoice
(AR)
Manage
Collections
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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
Drop Shipment and Back to Back Order Processes
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Back to Back Orders: Item Master
Setup
Drop Shipment and Back to Back Order Processes
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Back to Back Order: Item Master
Setup
Drop Shipment and Back to Back Order Processes
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Back to Back Order: ASL Setup
Specify Item Name
Specify supplier
and supplier site
Drop Shipment and Back to Back Order Processes
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Back to Back Order: Key Process
Elements
Sales order line:
New line status
Drop Shipment and Back to Back Order Processes
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Back to Back Order: Key Process
Elements
Sales order line:
Reservation
Details
Drop Shipment and Back to Back Order Processes
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Back to Back Order: Key Process
Elements
Purchase req line:
Note to buyer is
automatically
populated
Drop Shipment and Back to Back Order Processes
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Back to Back Order: Limitations
• Only one sourcing rule can be defined for Back-to-Back
orderable items
• Cannot use a combination of ‘Buy from’ and ‘Make’ sourcing
rules within the assignment set
• Sales order changes need to be manually updated in PO
• Cannot create Internal Requisitions from Back-to-Back orders
Drop Shipment and Back to Back Order Processes
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Contact Information
• Kaushik Bakhandi
• Deloitte Consulting
• [email protected]
• Ph: 650 372-4769
Drop Shipment and Back to Back Order Processes
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Q&A / Open Forum
THANK YOU!
Drop Shipment and Back to Back Order Processes
©2004 Deloitte