A Step-by-Step Guide to the Oracle Fusion Redwood Order Management Drop Ship Process

 

A Step-by-Step Guide to the Oracle Fusion Redwood Order Management Drop Ship Process

This blog post provides a detailed walkthrough of setting up and executing a Drop Ship order in Oracle Fusion Cloud using the Redwood user experience. The drop ship process allows your business to sell items that are directly shipped from your supplier to your customer, eliminating the need for you to handle inventory.

Contents

Overview of Drop Ship in Order Management 1

How Drop Ship Works in Order Management 2

Drop Ship Process. 2

Blanket Agreement 2

Setting Item Specifications. 4

Global Order Promising Setup. 6

Create ATP Rule. 7

Assignment Rule. 8

Order Management Parameter 8

Prepare Setup. 8

Offering Selection. 9

Sales Order Fulfillment Enablement under Procurement Options. 9

Drop Ship Enablement under Order Management Options. 11

Drop Ship Financial Flow.. 11

Drop Ship Sales Order Creation. 13

Create ASN for the Purchase Oder 16

Sales Order Line is at Awaiting Invoice Status. 19

 

 

Overview of Drop Ship in Order Management

Drop Shipping is a pivotal supply chain model for modern commerce. It enables a seller to fulfill customer orders without stocking the items in their own warehouse. Instead, when an order is placed, the seller purchases the item from a third-party supplier, who then ships it directly to the end customer. This process minimizes inventory holding costs and can significantly expand a company's product catalog. In Oracle Fusion, this entire flow—from sales order to purchase order to shipment—is seamlessly integrated and automated.

Process Flow:

How Drop Ship Works in Order Management

 This section breaks down the prerequisite setup and the transactional flow.

Drop Ship Process

Blanket Agreement

A Blanket Purchase Agreement (BPA) is a long-term agreement with a supplier for predefined items at negotiated prices. For drop shipping, having a BPA in place is crucial for automation. It allows the system to automatically generate a standard purchase order against the agreement when a sales order is booked, ensuring correct pricing and supplier terms without manual intervention.

• Agreement Used for Testing: 52207
• Item: CM53035

Setting Item Specifications

For an item to be eligible for drop shipping, specific attributes must be configured correctly. This setup tells the system, "This item is not stocked by us; procure it from a supplier when a customer orders it."

Key attributes to verify in the Product Information Management workspace:

• Order Management Tab:
• Back to Back Enabled: Set to "Yes". This is the master switch that triggers the automatic creation of a supply order (purchase order) when a sales order demand exists.
• Default Sales Order Service Type: Set to "Enabled".
• Purchasing Tab:
• Purchasable Item: Must be set to "Yes".
• MRP Planning Tab:
• Ensure sourcing rules are defined (covered next).

Item: CM53035

 

Global Order Promising Setup

Global Order Promising is the engine that determines how and from where an item will be sourced to fulfill an order. For drop shipping, we must configure it to always source the item by buying it from a specific supplier.

• Sourcing Rule: This rule defines the supply source. For drop ship, you create a "Buy" rule from your designated supplier.
• ATP (Available to Promise) Rule: This rule defines how the system checks for availability. For drop ship items, you might use a rule that considers the supplier's lead time.
• Assignment Rule: This is the crucial link that attaches the sourcing rule to the specific item (e.g., CM53035). By setting the assignment level to "Item," you ensure that every time this item is ordered, the system uses the drop ship sourcing rule.

 

Create ATP Rule

Assignment Rule

For the Global Order Promising, assignment rule set is required to confiture the item and specifying the sourcing rule we have created above

Assignment level = Item

Item: CM53035

Select Sourcing Rule: assign the rule that we created above

Order Management Parameters

Prepare Setup

The Order Management parameters control the default behaviors and features for the entire module. Before proceeding, ensure your setup is initialized via the "Manage Order Management Parameters" task.

Task: Manage Order Management Parameters

 

 

Offering Selection

Sales Order Fulfillment Enablement under Procurement Options

Oracle Fusion uses a concept of "Offerings" and "Features" to toggle high-level functionalities on and off.

Two key features must be enabled for drop shipping to work

Go to Offering

Select Procurement and then Opt-In Feature

Customer Sales Order Fulfillment must be enabled

 

Drop Ship Enablement under Order Management Options

Drop Ship feature required under Order Management

 

Drop Ship Financial Flow

Task: Drop Ship Financial Flow

 

 

Drop Ship Sales Order Creation

Now that the setup is complete, you can create a sales order. When you add the drop ship-enabled item (e.g., CM53035), the system automatically:

1. Recognizes the item needs a back-to-back supply source.
2. Uses the GOP setup to determine the supplier from the sourcing rule.
3. Creates an internal requisition for the item.
4. Automatically generates a Drop Ship Purchase Order (in this case, US165205) based on the Blanket Agreement.

Order 98500

 The Fulfillment tab in the sales order line provides a powerful view of this entire linkage, showing the requisition, purchase order, and their statuses.

 

Below is the screenshot of Supply Purchase Order

Drop Shipment PO: US165205

 

 

Create ASN for the Purchase Oder

Once the purchase order is created and sent to the supplier, the supplier's responsibility is to ship the goods and provide an Advance Shipment Notice (ASN). In Oracle Fusion, this can be done by the supplier through the Supplier Portal. The ASN provides electronic notification of the shipped goods, including contents, quantities, and shipment tracking information. Creating the ASN against the PO (US165205) is a key step that triggers updates in your system.

PO: US165205

 

Select lines and create ASN

 

Provide the sample ASN details such as Shipment No, Packing slip, Bill of Lading and others.

 

Sales Order Line is at Awaiting Invoice Status

Once the Supplier ASN processed in Oracle Fusion, related Sales Order Lines status will changed to Awaiting Billing

When the supplier's ASN is received and processed in Oracle Fusion, the system understands that the physical shipment to the customer will complete. Consequently, it automatically updates the status of the corresponding sales order line to "Awaiting Billing".  This status indicates that the item has been shipped to the customer.

We will send AR Invoice when coustomer confirmed the reciving of supply.

 

By following this step-by-step guide, you can configure and execute a fully automated drop ship process in Oracle Fusion (Redwood UI). This process streamlines your supply chain, reduces inventory costs, and ensures a seamless flow of information from your customer's order directly to your supplier's shipment.

Reference: For further official details, please refer to the Oracle document: Order to Cash Drop Ship Order Flow (Doc ID 2278649.1)