Drop Shipments and Oracle Purchasing in Application Release 11

Lee Ewertz
Oracle Corporation
The Vision demo database has two pre-seeded
order types that can be used to create externally
Introduction sourced sales orders:
Oracle Applications Release 11 introduces a 1. The OE-Drop Ship Only order type uses the
new feature called Drop Shipment. This paper is OE-Drop Ship Only order cycle and is used
intended to assist those implementing and on sales orders whose order lines all need
supporting Drop Shipment to understand the to be drop shipped.
functionality of this feature and the basic
interaction between Order Entry and 2. The OE-Standard w/Drop Ship order type
Purchasing. Order Entry setup information is uses the OE-Standard w/Drop Ship order
included but in depth explanations have been cycle and is used on sales orders that
omitted. contain a combination of drop ship order
lines and regular pick-released order lines.
Order Entry and Purchasing are integrated to
provide drop shipments. Drop shipments are
Drop Ship Receiving Location Setup
orders for items that suppliers ship directly to
customers either because you do not stock or
Order Entry uses locations defined in the
currently have the items in inventory, or
Receivables Customers form while Purchasing
because it is more cost effective for the supplier
uses locations defined in the Human Resources
to ship the item to the customer directly. Drop
Locations form. To source orders externally, you
shipments enable you to ship products directly
must associate the Order Entry ship-to location
from supplier to customer, reducing lead times,
(from Receivables) with the Purchasing
warehouse costs, and inventory investment.
receiving location. This enables Purchasing to
create a requisition with the correct ship-to
Drop shipments are created as sales orders in
address information matching the address on
Order Entry. The Purchase Release concurrent
the order.
program in Order Entry creates rows in the
Requisition Interface tables in Purchasing. Then
Define your drop ship receiving locations using
the Purchasing Requisition Import process
the Purchasing or Inventory responsibility.
creates requisitions and the Autocreate process
creates Purchase Orders. You can track the
drop shipment order status using sales order or
purchase order information. Drop shipments are
marked with the Source Type of "External" in
Order Entry and "Supplier" in Purchasing.

The Purchase Release concurrent process has

been added to Release 11. This process inserts
records into the Requisition Interface table.

Drop Ship Setup

To enter a Sales Order that is sourced

externally, you must use an order type with an
order cycle that includes Purchase Release for
the externally sourced lines .
Define the drop shipment location (Navigate à
Setup à Organization à Location). The Name
of the location should be descriptive enough to
recognize it as a customer Drop shipment

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location. The address is the customer’s drop
shipment address. When defining this location,
enable the location as a Ship-to-Site. This
location will be the Ship-to Location on the PO
Release.
The Inventory Organization must be a logical
organization. The logical inventory organization
should not be included as a part of your MRP
planning cycles. If the inventory organization is
included in the MRP planning cycle then the
Drop Ship Purchase Orders will appear as a
valid supply to MRP.
Associate Order Entry Ship-to and Receiving
Location
In the Oracle Receivables Responsibility:
navigate Customersà Standard
1. Navigate to the Customer Addresses
window.
2. Define the customer address and choose
Open (the Business Purpose window will
display).
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3. In the Business Purposes region, enter a
usage of Ship-to with a Location and Bill-to
site. While at the Ship-to usage record,
choose the Open button and the Business
Purpose Detail form will open.
4. In the Internal Location field, select the
receiving location you defined in
Purchasing. (The list of values displays all
locations defined in Purchasing or
Inventory)
You can assign only one drop-ship receiving
location to one customer ship-to site. The
association between the customer and the PO
location is stored in the table
PO_LOCATION_ASSOCIATIONS. If the
internal location is already assigned, you will
receive the error APP-11111: Internal location is
already assigned to another ship to location.
The following SQL can be used to list the
customer association to internal locations.
Select pla.location_idLoc_ID,
hr.location_code Loc_Code,
pla.customer_id Cus_ID,
rac.customer_name Cus_name,
raa.address1 Address,
ras.site_use_code Use_Code,
ras.location Cus_Loc
from po_location_associations pla,
hr_locations hr,
ra_customers rac,
ra_addresses_all raa,
ra_site_uses_all ras
where
pla.location_id = hr.location_id
and pla.customer_id =rac.customer_id
and pla.address_id = raa.address_id
and pla.site_use_id =ras.site_use_id
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Process Flow
Create a Sales Order with a source type of
external and a receiving organization. When the
Order Entry Status has been changed to
Booked, it can be purchase released.
Before you can run the Purchase Release
process, the Sales Order must have the cycle
status of Purchase Release Eligible.
(Navigate à Order, Returns and select the View
button. Click on the line and select the Cycle
Status button). The cycle status will change to
“Purchase Release Eligible” after the order has
been booked.
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The Purchase Release request form runs two
processes. The first is the Purchase Release
concurrent program which creates rows in the
Requisition Import table in Purchasing. The
second process is the Purchasing Requisition
Import which creates the requisitions. When the
Purchase Release concurrent program
completes successfully, the Order Cycle action
and result will be changed to “Purchase Release
Interfaced”.
This cycle result does not mean a requisition
has been created. This only means that the
Purchase Release program has successfully
added the record to the
PO_REQUISITION_INTERFACE table. The
order cycle status is not updated when the
requisition import is run and a requisition is
created.
To view the log files created by the Purchase
Release and Requisition Import processes,
check ‘Save Output Files’ when running either
process.
Example of a log file from the Purchase
Release program:
Example of the Requisition Import output:
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After the requisition has been imported to
Purchasing, the Drop Ship Sales Orders and In Purchasing, use the autocreate function to
Purchase Requisitions/Purchase Orders are create a Purchase Order or Purchase Order
linked to one another using the Blanket Release from the imported requisition.
SO_DROP_SHIP_SOURCE table. The column
header_id is equall to so_headers_all.header_id. Example of a autocreated purchase release:
Requisitions that are created from a Drop Ship
Order will have the column
po_requisitions_headers_all.
interface_source_code equal to ORDER ENTRY
and interface_source_line_id will be equal to
drop_ship_source_id in the
so_drop_ship_sources table.

SQL> descr so_drop_ship_sources

Name Null? Type
----------------------------- -------- ----
DROP_SHIP_SOURCE_ID NOT NULL NUMBER
HEADER_ID NOT NULL NUMBER
LINE_ID NOT NULL NUMBER
CREATION_DATE NOT NULL DATE
CREATED_BY NOT NULL NUMBER
LAST_UPDATE_DATE NOT NULL DATE
LAST_UPDATED_BY NOT NULL NUMBER When you receive shipment confirmation, enter
LAST_UPDATE_LOGIN NUMBER
ORG_ID NUMBER a receipt in Oracle Purchasing. The
DESTINATION_ORGANIZATION_ID NUMBER subinventory must be an asset subinventory.
REQUISITION_HEADER_ID NUMBER To verify this, go to Inventory responsibility:
REQUISITION_LINE_ID NUMBER
PO_HEADER_ID NUMBER SetupàOrganizationàSubinventory. For
PO_LINE_ID NUMBER accounting purposes, you must perform the
LINE_LOCATION_ID NUMBER receipt. This will create the inbound and
PO_RELEASE_ID NUMBER
outbound material transactions in the
application. The receipt transaction will change
When Viewing the Sales Order detail, use the
the Purchase Release order’s cycle action to
Special Menu à Purchasing Information to find
Confirmed.
the requisition/ Purchase Order number.

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 The inventory issue to the sales order is
performed internally in the application. The
user is not required to manually issue the item
to the Sales Order. The application deliverers
the item to the inventory’s subinventory using
the application’s standard functionality. The item
is issued to the sales order by inserting a row
into the MTL_TRANSACTIONS_INTERFACE
table. The Material Transaction Interface
Manager will then process the row. If the item
has not been issued out of the inventory
subinventory, then check the Material
Transaction Interface form.

The Material Transaction and Material

Distribution forms will show the receipt and
sales order transactions.

After the receipt is recorded, run the

Receivables Interface and AutoInvoice
programs to generate an invoice to your
customer.

About The Author

Lee Ewertz is a Senior Technical Analyst for

Oracle Worldwide Customer Support in
Orlando, Florida. Lee has been with Oracle
Corporation since 1997. Before joining Oracle
he spent 16 years developing and implementing
various Manufacturing systems.

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