With Contributing Author: Costinel Stanila

Concepts

The Drop-Shipping process allows products to be sent from the wholesaler directly to the customer.  A selling company (for example e-commerce or on-line selling) externalizes the shipping process to a third-party drop-shipping company in order to reduce costs / overhead of warehousing/shipping processes.

The main steps of drop-shipping are described below:

  1. The selling company signs the agreement with the drop-shipping company.
  2. The end customer places the on-line order to the selling company.
  3. The customer receives the order confirmation which the selling company forwards to the drop-shipping company.
  4. The drop-shipping company is performing the shipping of the ordered goods to the customer.
  5. Finally, the customer receives the ordered products.

 

EBS 12.2.14 new feature

Prior 12.2.14 EBS version, drop ship deliver transactions were not possible if the total on-hand quantity was negative. However, since the drop ship process is neutral to the inventory on-hand, the drop ship should be possible even if total on-hand quantity is negative.

The Drop Ship PO receipt cand be successful when the profile “INV: Allow Drop Ship PO Receipt for Negative Availability” is set to “Yes”,  and it fails when the same profile is set No.

 

Pre-Requisite:

Set Profile “INV: Allow Drop Ship PO Receipt for Negative Availability” to Yes in order to enable this feature.

 

This can be verified in the following scenarios.

  • 1. Have some negative on hand at org level by having set the profile – INV: Override Neg for Backflush to Yes
  • 2. Create Sales order with Source Type as External i.e., Drop Ship
  • 3. Run Purchase release > Requisition Import > Auto Create PO based on Requisition > Approve PO
  • 4. Receive the PO with existing Negative on hand balance.

 

Reference: Allow Drop Ship Receipt With Negative On-hand (Doc ID 3024804.1)