The Dropship Order Process in Oracle Cloud ERP is like a fast-track ride in an amusement park – it’s quick, efficient and gets you where you need to go without any fuss. Meanwhile, Global Order Promising can feel like waiting in a never-ending queue for a ride that may or may not be worth the wait.
Dropship Order Process is a process of product fulfilment that occurs when items are shipped directly from the manufacturer or wholesaler to the customer. A third-party retailer facilitates drop shipping through their website and digital marketing efforts and is able to profit off the margin created by circumventing the traditional retail supply chain.
The main difference between these two processes lies in their approach to handling inventory and customer orders. Global Order Promising operates under the assumption that inventory is always readily available and allows customers to order any quantity they desire. On the other hand, the Dropship Order Process acknowledges that inventory may not always be in stock and requires a bit of coordination between the customer, supplier, and company.
The biggest difference between dropshipping and the standard retail model is that the selling merchant doesn’t stock or own inventory. Instead, the seller purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfil orders.
Oracle Cloud ERP has simplified the configurations for achieving the dropship flow with minimum steps involved and to enhance the user experience while performing dropshipping with a complete view of the order status and the next steps to be taken.
Let’s go through the configurations required in Oracle Cloud ERP for setting up the dropship cycle and followed by the complete cycle from order entry to shipping to the customer.
- The following master Data has to be created and should be available prior to entering an order:
a. Customer and customer site
b. Supplier and supplier site
c. Item to be shipped to the customer
d. Oracle locations
e. Inventory organization
- Optionally create a Blanket purchase agreement with the supplier for automating the process of purchase order creation. The BPA is only required when the business does not want to manually create a purchase order.
- Setup up dropship financial flow in Oracle as shown below:
Navigator > Setup and Maintenance > Manage dropship financial flow
- Run the collections process for collecting all the order reference data which can be used onto the sales order.
Navigator > setup and maintenance > collect planning data
Once the above-mentioned data and configurations are performed, we can create the dropship order in order management and progress it through different stages of fulfillment.
Lets go through a complete cycle for drop ship as shown below:
Step 1. Drop order creation
a. Select the customer to whom the item has to be shipped
b. Select and add the item to the sales order line along with required quantity
c. Navigate to the supply tab and select the supplier and site
d. Submit the order
Step 2. Supply order view
a. Switch to the fulfillment view
b. Navigate the supply details tab
c. Click on the supply order hyperlink
d. View the current status of the supply order.
e. Depending on the BPA/procurement setups, user can view the purchase order number which is generated by system
Step 3. Creating an ASN against the purchase order
a. Oracle Cloud has made a business process change from Oracle EBS as within EBS a logical receipt and shipping activity was performed. Whereas in oracle cloud the receiving activity is completed once an ASN is created against the purchase order.
b. Navigate the inventory management > receipts
c. Create an ASN
Step 4. Once the ASN is created the order status will change to SHIPPED and will subsequently change to AWAITING BILLING.
With this, we have completed the process of Drop Shipping without Global Order Promising with the help of Oracle Cloud ERP implementations.
When using Global Order Promising, companies may face challenges with meeting customer expectations and keeping inventory levels consistent. This can lead to a lack of transparency in order fulfilment, customer frustration, and ultimately, a loss of revenue. However, by utilizing the Dropship Order Process, companies can ensure that customer orders are always fulfilled by coordinating with suppliers in real time and preventing the need for overstocking inventory.
In short, the Dropship Order Process in Oracle Cloud ERP provides a streamlined approach to managing customer orders, ensuring maximum customer satisfaction and efficient use of inventory. So, the next time you’re looking for a quick ride to your destination, look no further than the Dropship Order Process in Oracle Cloud ERP.