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Vision Demo - R12.1 OPM Case Study on Drop Shipment across Operating Units under Lot Cost Type (Doc ID 2063668.1)

Last updated on MARCH 17, 2021

Applies to:

Oracle Process Manufacturing Financials - Version 12.1.3 and later
Information in this document applies to any platform.

Purpose

Drop Shipment across multiple OUs

Physical Flow:
PYX/PENNY-OU -> External Customer
Financial Transaction Flow:
PYX/PENNY-OU -> PR1/PRU -> External Customer

In this typical scenario, a sales order is placed against the operating unit (PRU) associated with the local sales organization (PR1), and with a shipping warehouse (PYX) of the factory (PENNY-OU). Once this sales order is booked and its line is with status of 'Waiting Shipping', its delivery line will be split into multiple delivery lines in Shipping Execution, and grouped into one delivery for pick release and ship confirm.
Upon shipment of the material from the factory (PYX), ownership for the material automatically transfers to the local sales organization (PR1), and finally to the customer (Bigmart).

In Oracle Applications, this is achieved by having the physical shipment from the factory (PYX) to the customer (Bigmart) automatically trigger a logical shipment from the factory to the local sales organization (PR1).
A logical receipt is followed by a logical shipment in the local sales organization (PR1), and finally a logical shipment in the local sales organization to the customer (Bigmart).
These transactions are accounted, but inventory valuations in the local sales organization (PR1) are not affected.
The factory (PYX) then invoices the local sales organization (PR1) which in turn invoices the customer (Bigmart).
The internal intercompany invoices are done at the item cost since PPV for Internal Order in Event Fiscal Policies setup is Item Cost (PPV)
Cost Type to Legal Entity of PENNY-OU is lot cost.

Details

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