Setup steps for Drop Shipments in Oracle EBS

 

Oracle Order Entry and Oracle Purchasing integrate to provide drop shipments. Drop shipments are orders for items that your supplier ships directly to the customer either because you don't stock or currently have the items in inventory, or because it's more cost-effective for the supplier to ship the item to the customer directly

SETUP

A) Associate drop shipments with a receiving location.
B) Drop shipments support a Destination Type of Expense or Inventory only.
C) We can handle returns of drop shipments using standard Order Entry/Shipping or Purchasing functionality. There are different ways you may want to handle returns depending on whether the customer returned the item to you or directly to the supplier.

We have to consider the following setup:

1- Inventory Setup 

Inventory Setup : (Define and Maintain The Item)
The drop ship inventory organization, item and subinventory must be setup prior to creating any drop ship orders. All drop ship subinventory must have the Reservable box checked.
Below are list of the required item attributes for a drop ship item. All of these attributes MUST be enabled unless otherwise specified.

Inventory Attributes: Inventory Item , Stockable, Transactable, Reservable
Purchasing Attributes: Purchased, Purchaseable
Costing Attributes: Costing Enabled – this should only be checked for items that are cost enabled, Inventory Asset Value – this should only be checked for asset items (non-expense items)
Receiving Attributes: Receipt Routing set to Direct – this is not required, but preferred since it makes receiving process one step versus two or three
Order Management Attributes: Customer Ordered, Customer Orders Enabled, OE Transactable
As a Troubleshooting tips on creating a drop ship item and subinventory:

•  Make sure the subinventory is Reservable.If the subinventory is not Reservable, the sales order issue transaction will not be created in MTL_TRANSACTIONS_INTERFACE.
•  Make sure the item has the above mentioned item attributes in the drop ship organization. If the above item attributes are not set, problems will arise in various places during the drop ship transaction process.

2- OM Setup

• Make sure the sales order line Source Type is External. If the source type is not External, workflow will not distinguish the line as being a drop shipment and will not insert any data into the purchasing module’s requisitions interface. 
• For customer, enter internal ship to location.
• Customer must have a valid ship-to and bill-to locations. 
•  Make sure that either the schedule ship date or request date is populated.If both of these are null, the requisition will not be imported into the purchasing module’s requisitions interface. 
•  Make sure there are no holds against the line. If there is a hold, the hold must be removed and then the order can be progressed or the line must be manually purchased release.
  Verify in HR, that the employee has an active status and has not been terminated.

For more details metalink
Note 99888.1: Drop Shipments – Setup
Note:99886.1 : Drop Shipments – FAQ
Note:99889.1 : Drop Shipments - Troubleshooting

3- PO Setup

• Make sure the Import Source parameter list of values contains ORDER ENTRY.
  If ORDER ENTRY appears in the Import Source parameter list of values, then it means that the Workflow Background Processor successfully inserted a requisition into PO_REQUISITIONS_INTERFACE_ALL. If ORDER ENTRY is not visible in the Import Source parameter list of values, then no rows were inserted into the table. Review the setup under Order Management. 
• User should be setup as a valid PO Buyer.
•  Make sure the Group By parameter is actually set the user wants the requisitions grouped.

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