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Differences

The document discusses the difference between back-to-back order management and drop shipment order management in Oracle. Back-to-back involves purchasing material for a sales order that is received into the company's warehouse and undergoes additional processing before being shipped to the customer. Drop shipment involves purchasing material for a sales order that is directly shipped from the supplier to the customer without going through the company's warehouse or additional processing.

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Shivaraj N
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25 views

Differences

The document discusses the difference between back-to-back order management and drop shipment order management in Oracle. Back-to-back involves purchasing material for a sales order that is received into the company's warehouse and undergoes additional processing before being shipped to the customer. Drop shipment involves purchasing material for a sales order that is directly shipped from the supplier to the customer without going through the company's warehouse or additional processing.

Uploaded by

Shivaraj N
Copyright
© © All Rights Reserved
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Difference between back to back and drop shipment

flow in Order management


Conceptual Difference:

Back to back flow - A business scenario where the material is specially purchased for a
particular sales order and the material needs to be received into one of the warehouses of
the selling group of companies, is referred as "Back to back" cycle. Back to back Purchase
order is hard linked to the sales order until it is received. Please note highlighted words here.
Since, the material is received into the warehouse, the sales order needs to follow additional
picking/packing/shipping process only after which the goods are sent to the customer.

Drop Shipment flow - A business scenario where the material is specially purchased for a
particular sales order and the material is directly sent from the supplier to the customer, is
referred as "Drop Shipment" cycle. Drop shipment purchase order is also hard linked to the
sales order until is received. However, in this case the material is never received in the internal
warehouse. Also, no additional picking/packing/shipping is involved by the selling company.
Hence, when such purchase order is received it is directly shipped without any physical shipping
process.

Technical different in Oracle

Phase Back to back Drop shipment


Sales order line Sales order line ORDER Sales order line ORDER SOURCE
source SOURCE should be internal should be External
Import purchase Back to back requisition data is Drop Ship requisition data is NOT
requisitions immediately pumped into immediately pumped into
requisition interface table after requisition interface table after
PROGRESS ORDER action in PROGRESS ORDER action in
sales order sales order. Workflow background
process needs to be run to insert
data into requisition interface tables
Reservations Back to back purchase Drop ship requisition is reserved to
requisition is reserved to the the sales order in special table
sales order in called
MTL_RESERVATIONS table. OE_DROP_SHIP_SOURCES. This
Same process is following by is a unique process followed only
oracle for all sales order for drop shipment
reservations.
Purchase orders It does not have “Drop Ship” tab It has “Drop Ship” tab in the PO
in the PO Shipments form Shipments form
Purchase order Deliver To location in purchase Deliver to location in purchase
delivery location order shipment is set to the order shipment is set to “Customer
internal warehouse address Ship To address”
Sales order line status Line status changes on Progress Line status does NOT change on
Order, Requisition Creation, Progress Order and Purchase Order
Purchase Order Approval & Approval.
Purchase order receipts
E.g. Awaiting Receipts – only
e.g. Requisition Requested, status until PO is received
Requisition Open, PO Open
Viewing PO Available in sales order line- Available in Sales order line-
reservations Actions>Reservation details >Actions->Additional Line
screen information
PO receipt Physical receipt of the material Only logical receipt of the material
happens
Flow of purchased Material is received inside the Material is never received in the
material warehouse and then shipped warehouse, it is shipped directly
from supplier to the customer
After receipt Stock of the goods received Stock is received and immediately
increases, stock gets reserved to shipped out by the system. Sales
the sales order automatically order status changes directly to
“Shipped”
Sales order status changes to
“Awaiting Shipping”
Sales order delivery Delivery lines are created in No delivery lines are created, since
lines/delivery shipping when PO is received shipping process in the system is
skipped

a.* In Drop Ship orders, material is directly shipped to the customer from
the supplier. Thus, inventory is not affected. In this case, only logical
receiving is done. But in the case of Back-to-Back orders, material is taken
from inventory.
b. Drop Ship orders may have many Purchase Orders connected to them. In
Back-to-Back orders one PO is tied to one Sales Order.
*Also for more info on Dropship (drop ship), check out the following in
Metalink.*
These notes cover most of the question related to Drop Ship.
*Note:749139.1* Drop Ship Sales Order Cycle In Order, describes the process
step by step and it includes useful screenshots.
Describing process/giving steps
- *Note.168083.1* Simple Drop Shipment Flow => describes a simple drop ship
flow and gives
references.
- *Note:749139.1* Drop Ship Sales Order Cycle In Order Management =>
describes the Drop Ship SO
cycle, contains screenshots.
Internal Orders in simple language pertains to the transfer of material that
is "intra-org", meaning you are transferring material/goods from one
inventory organization to another within your enterprise. You normally
execute this process through a IR/ISO processSimples scenario of this may be
when an inventory org needs to fulfill a customer order and does not have
sufficient inventory.

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