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
How
Drop Ship Works in Order Management
Sales Order Fulfillment Enablement under Procurement
Options
Drop Ship Enablement under Order Management Options
Drop Ship Sales Order Creation
Create ASN for the Purchase Oder
Sales Order Line is at Awaiting Invoice Status
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
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:
- Recognizes the item needs a back-to-back
supply source.
- Uses the GOP setup to determine the
supplier from the sourcing rule.
- Creates an internal requisition for the
item.
- Automatically generates a Drop
Ship Purchase Order (in this case, US165205) based on
the Blanket Agreement.
Order 98500
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)
