Drop Ship
There are three trends in business that require Oracle to enhance its support for outsourced manufacturing:
Increased reliance on contract manufacturers to supply some or all of their products to their customers.
Increased customer demand for mass customization, where the product is configured specifically to customer needs.
Increased globalization, where companies are doing business throughout the world. Companies often have global supply plans, and global contracts with suppliers, but have country specific agreements as to which subsidiaries and suppliers are authorized to provide products to which country.
Many companies, create separate local organizations for every country where they do business. These organizations are in separate ledgers, and own the right to sell and service hardware and software products in specific geographic regions or countries. There are separate legal entities that own the distribution rights for the products. Often, but not always, there is a physical distribution center associated with the distribution legal entity. For instance, companies may have one distribution entity in their home country and one for all international country organizations. For internationally sourced products, the local country organizations must place orders with the legal entity that owns the distribution rights for their region. These trends require Oracle to enhance the functionality for drop shipment, outside processing, and manufacturing collaboration.
Drop shipments may happen for several reasons:
Customer orders an item not normally keep in stock
Customer orders an unusually large quantity of an item
It is more cost-effective for the supplier to ship the item directly to the customer
Drop Ship Across Ledgers and Change Management
Drop Ship across ledgers, operating units, or legal entities. With the enhanced Drop Ship, functionality, you can choose a warehouse that belongs to a different operating unit (OU), legal entity, or ledgers than the order taking organization.
Enhanced Inter-company transactions between multiple Organizations (Operating Units or Legal Entities) which could be in the same or different Ledgers. Intercompany accounting is supported between multiple operating units.
Enhanced Change Management between Order Management and Purchasing. With enhanced Change Management support, changes in Order Management and Purchasing will be automatically synchronized.
Additional Sales Order Data Elements sent to Supplier. With the enhanced Drop Ship functionality, additional Sales Order Data Elements that are essential for the drop ship process are sent to the supplier.