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Drop Shipment and Back to Back Order Processes in Oracle 11i . July 19, 2004 . Agenda. Introduction Drop shipment process Back to back order process. Drop Shipment. Drop shipment enables to take order from customer and fulfill it directly from a supplier Key Business Drivers

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Presentation Transcript
agenda
Agenda
  • Introduction
  • Drop shipment process
  • Back to back order process

Drop Shipment and Back to Back Order Processes

drop shipment
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

drop shipment4
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

drop shipment process flow standard item
Drop Shipment Process Flow : Standard Item

Drop Shipment and Back to Back Order Processes

drop shipment features sales order line
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

drop shipment features sales order line additional line information
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

drop shipment features purchase order
Drop Shipment Features: Purchase Order

Purchase Order: Note that header level ‘ship-to’ is not used

Drop Shipment and Back to Back Order Processes

drop shipment features purchase order line shipment
Drop Shipment Features: Purchase Order Line -> Shipment

Shipment level Ship to information is used by supplier

Drop Shipment and Back to Back Order Processes

drop shipment new features in 11i
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

implementation considerations
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

drop shipment limitations
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

agenda13
Agenda
  • Introduction
  • Drop shipment process
  • Back to back order process

Drop Shipment and Back to Back Order Processes

back to back order
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

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

Back to Back Order: Features

Drop Shipment and Back to Back Order Processes

back to back order features16
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

Back to Back Order: Features

Drop Shipment and Back to Back Order Processes

back to back order process flow
Back to Back Order: Process flow

Drop Shipment and Back to Back Order Processes

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

Back to Back Order: Setup

Drop Shipment and Back to Back Order Processes

back to back orders item master setup
Back to Back Orders: Item Master Setup

Drop Shipment and Back to Back Order Processes

back to back order item master setup
Back to Back Order: Item Master Setup

Drop Shipment and Back to Back Order Processes

back to back order asl setup
Back to Back Order: ASL Setup

Specify Item Name

Specify supplier and supplier site

Drop Shipment and Back to Back Order Processes

back to back order key process elements
Back to Back Order: Key Process Elements

Sales order line: New line status

Drop Shipment and Back to Back Order Processes

back to back order key process elements23
Back to Back Order: Key Process Elements

Sales order line: Reservation Details

Drop Shipment and Back to Back Order Processes

back to back order key process elements24
Back to Back Order: Key Process Elements

Purchase req line: Note to buyer is automatically populated

Drop Shipment and Back to Back Order Processes

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

Back to Back Order: Limitations

Drop Shipment and Back to Back Order Processes

contact information
Kaushik Bakhandi

Deloitte Consulting

kbakhandi@deloitte.com

Ph: 650 372-4769

Contact Information

Drop Shipment and Back to Back Order Processes

q a open forum thank you
Q&A / Open ForumTHANK YOU!

Drop Shipment and Back to Back Order Processes

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