Monday, February 22, 2010

Difference between "Internal" and "External" Drop-Shipment

In Oracle Context External Drop-Shipping means your Oracle Order Management uses purchase orders to outside suppliers that are automatically generated from sales orders for goods supplied directly from the supplier. The “external” supplier ships the goods directly to the 3rd Party customer and confirms the shipment through the use of an Advanced Shipment Notice (ASN). Note: Oracle uses this ASN to record a receiving transaction into inventory followed by an immediate logical shipping transaction. From these transactions, conveyance of title takes place and the customer can be invoiced and the supplier’s invoice can be processed. Whereas “Internal” context Drop-Shipping functions in a similar fashion. The key difference is that no inventory transactions take place on the books of the selling operating unit; transfer of ownership of the goods from shipper to seller to customer with the only physical movement of the goods being out of the shipping organization.

Things not to forget in a Drop Shipment
ü      Release 11i/12 does not support Drop Shipment across operating units.
ü      Blanket PO’s will not used with Drop Shipment , the reason the PO must be created when OM notifies PO that a Drop Ship order has been created.
ü      You can’t cancel Drop Shipments once Oracle Purchasing obtains the receipt.
ü      Standard Items can be used for Drop Shipment.In 11i, PTO’s and ATO’s cannot be drop shipped

2 Responses to “Difference between "Internal" and "External" Drop-Shipment”

Unknown said...
December 4, 2015 at 10:27 AM

sorry can u be more specific about internal dropship I cant understand it.
Thank You

Jamie Mack said...
January 26, 2022 at 10:45 PM


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