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Oracle E-Business Suite: Creating Items in Inventory

Oracle E-Business Suite 12 Financials is a solution that provides out-of-the-box features to meet global financial reporting and tax requirements with one accounting, tax, banking, and payments model, and makes it easy to operate shared services across businesses and regions.
we will start with recipes for creating Items.
 We will cover:
                  — Creating Items

  • Exploring Item attributes
  • Creating Item templates
  • Exploring Item controls

Introduction

An organization’s operations include the buying and selling of products and services. Items can represent the products and services that are purchased and sold in an organization. Let’s start by looking at the Item creation process.
The following diagram details the process for creating Items:

1. The Item Requester (the person who requests an Item) completes an Item Creation Form, which should contain information such as:

  • Costing information
  • Pricing Information
  • Item and Product Categories
  • Details of some of the Item attributes
  • The inventory organization details
  1. Once complete, a message is sent to the Master Data Manager (the person who maintains the master data) to create the Item. The message could be sent by fax, e-mail, and so on.
  2. The Master Data Manager reviews the form and enters the details of the Item into Oracle E-Business Suite by creating the Item. Once complete, a message is sent to the Item Requester.
  3. The Item Requester reviews the Item setup on the system.

Let’s look at how Items are created and explore the underlying concepts concerning the creation of Items.

Creating Items

Oracle Inventory provides us with the functionality to create Items. Sets of attributes are assigned to an Item. The attributes define the characteristics of the Item. A group of attributes values defines a template, and a template can be assigned to an Item to automatically define the set of attribute values.
An Item template defines the Item Type. For example, a Finished Good template will identify certain characteristics that define the Item as a finished good, with attributes such as “Inventory Item” and “Stockable” with a value of “Yes”. Let’s look at how to create an Item in Oracle Inventory. We will also assign a Finished Good template to the Item.

Getting ready

Log in to Oracle E-Business Suite R12 with the username and password assigned to you by the System Administrator. If you are working on the Vision demonstration database, you can use OPERATIONS/WELCOME as the USERNAME/PASSWORD:

  1. Select the Inventory Responsibility.
  2. Select the V1 Inventory Organization.

How to do it…

Let’s list the steps required to create an Item:


 Navigate to Items | Master Items. Please note that Items are defined in the Master Organization.

  1. Enter the Item code, for example, PRD20001.
  2. Enter a description for the Item:

 Select Copy From from the tools menu (or press Alt+T). We are going to copy the attributes from the Finished Good template:

 

  1. We can also copy attributes from an existing Item.
  2. Enter Finished Good and click on the Apply button (or press Alt+A) and click on the Done button.
  3. Save the Item definition by clicking on the Save icon (or press Ctrl+S).

How it works…

Items contain attributes and attributes contain information about an Item. Attributes can be controlled centrally at the Master Organization level or at the Inventory Organization level.

There’s more…

Once the Item is created, we need to assign it to a category and an inventory organization.

Assigning Items to inventory organizations

For us to be able to perform transactions with the Item in the inventory, we need to assign the Item to an inventory organization. We can also use the organization Item form to change the attributes at the organization level. For example, an Item may be classified as raw materials in one organization and finished goods in another organization.

  1. From the Tools menu, select Organization Assignment.
  2. Select the inventory organization for the Item. For example, A1–ACME Corporation. Click on the Assigned checkbox.


 Save the assignment.

Assigning Items to categories

When an Item is created, it is assigned to a default category. However, you may want to perform transactions with the Item in more than one functional area, such as Inventory, Purchasing, Cost Management, Service, Engineering, and so on. You need to assign the Item to the relevant functional area. A category within a functional area is a logical classification of Items with similar characteristics.

  1. From the Tools menu, select Categories.
  2. Select the Categories Set, Control Level, and the Category combination to assign to the Item:       

Save the assignment.

Exploring Item attributes

There are more than 250 Item attributes grouped into 17 main attribute groups. In this recipe, we will explore the main groups that are used within the financial modules.

How to do it…

Let’s explore some Item attributes:
Search for the Finished Good Item by navigating to Items | Master Items:

  1. Click on the Find icon. You then enter the Item code and click on the Find button to search for the Item.
  2. Select the tabs to review each of the attributes group:

  1. In the Main tab, check that the Item Status is Active. We can also enter a long description in the Long Description field.
  2. The default value of the primary Unit of Measure (UOM) can be defined in the INV: Default Primary Unit of Measure profile option. The value can be overwritten when creating the Item. The Primary UOM is the default UOM used in other modules. For example, in Receivables it is used for invoices and credit memos.


In the Inventory tab, check that the following are enabled:

  • Inventory Item: It enables the Item to be transacted in Inventory. The default Inventory Item category is automatically assigned to the Item, if enabled.
  • Stockable: It enables the Item to be stocked in Inventory.
  • Transactable: Order Management uses this flag to determine how returns are transacted in Inventory.
  • Reservable: It enables the reservation of Items during transactions. For example, during order entry in Order Management. 

   

 In the Costing tab, check that the following are enabled: 
Costing: Enables the accounting for Item costs. It can be overridden in the Cost Management module, if average costing is used.
Cost of Goods Sold Account: The cost of goods sold account is entered. This is a general ledger account. The value defaults from the Organization parameters.

  1. In the Purchasing tab, enter a Default Buyer for the purchase orders, a List Price, and an Expense Account. Check that the following are enabled:
    • Purchased: It enables us to purchase and receive the Item.
    • Purchasable: It enables us to create a Purchase Order for the Item.
    • Allow Description Update: It enables us to change the description of the Item when raising the Purchase Order.
    • RFQ Required: Set this value to Yes to enable us to require a quotation for this Item.
    • Taxable: Set this value to Yes with the Input Tax Classification Code as VAT–15%. This can be used with the default rules in E-Tax.
    • Invoice Matching: Receipt Required–Yes. This is to allow for three-way matching.
  2. In the Receiving tab, review the controls.


 In the Order Management tab, check that the following are enabled:

  • Customer Ordered: This enables us to define prices for an Item assigned to a price list.
  • Customer Orders Enabled: This enables us to sell the Item.
  • Shippable: This enables us to ship the Item to the Customer.
  • Internal Ordered: This enables us to order an Item via internal requisitions.
  • Internal Orders Enabled: This enables us to temporarily exclude an Item from internal requisitions.
  • OE Transactable: This is used for demand management of an Item.


 In the Invoicing tab, enter values for the Accounting Rule, Invoicing Rule, Output Tax Classification Code, and Payment Terms. Enter the Sales Account code and check that the Invoiceable Item and Invoice Enabled checkboxes are enabled.

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Oracle E-Business Suite: Creating Item templates

An Item template is a set of attributes that enable the ‘quick’ creation of an Item. In this recipe, we will create an Item template that can be used to create many similar Items. We will copy from the Finished Good template to our new template called ACME Finished Good.

Getting ready

Log in to Oracle E-Business Suite and select the Inventory responsibility.

How to do it…

Let’s list the steps required to create an Item template:

  1. Navigate to Setup | Items | Templates.
  2. Select the Inventory Organization.


 From the Find Item Templates form, click on New button or press Alt+N.

In the Template field, enter the name of the new template; for example, enter ACME Finished Good.
In the Description field, enter a suitable description, for example, enter ACME Finished Good Template.

  1. Select Copy Template from the Tools menu.
  2. We can use this form to select the attributes groups that we want to copy from the Finished Good template.
  3. Click on the Apply button.
  4. Click on the Done button.
  5. In the dialog box presented to us, with the message “Do you want to save the changes you have made?”, click on the Yes button.

How it works…

Item templates can be created from scratch. To make the template creation process easier, Oracle has provided us with a number of seeded templates as a starting point to copy from. We can also combine templates and manually amend the attributes to define our template. When we copy from an existing template, we have choices that determine how the copy will occur.

The three main choices are as follows:

  1. Overwrite: All selected attribute values are copied to the new template and any values that we have manually created will be overwritten.
  2. Append: Attributes that have no value will be copied across to our template. This mode is useful if you are using a combination of templates.
  3. Overwrite Not Null: Only the selected attributes that contain values will be copied.

There’s more…

Let’s amend the template to allow us to automatically populate the template with some default values. Let’s create an Item and apply the amended template to the Item.

Amending the template

Let’s search for the template and amend the templates to include some of the default values:

  1. Search for the ACME Finished Good template by navigating to Setup | Items | Templates.
  2. Enter ACME Finished Good in the Template field and click on the Find button.
  3. Click on the Open button to view the template.


In the Attributes Group region, select Purchasing and enter some default values, for example:

  • Default Buyer: Stock, Ms. Pat
  • Input Tax Classification Code: VAT-15%
  • Taxable: Yes
  • Allow Description Update: Yes
  • Receipt Required: Yes

 Save the template.


 In the Attributes Group region, select Receiving and enter some default values, for example:

  • Over-Receipt Qty Action: Warning
  • Receipt Routing: Direct Delivery
  • Days Early Receipt Allowed: 5
  • Days Late Receipt Allowed: 2
  • Receipt Date Action: Warning

Save the template.
In the Attributes Group region, select Invoicing and enter some default values, for example:

  • Accounting Rule: Immediate
  • Payment Terms: Immediate

Save the template.

Creating an Item and applying the template to the Item

Let’s create an Item and apply the template to the Item:
Navigate to Items | Master Items.
Enter the Item code and description.
Select Copy From in the Tools menu.

 
Click on the Apply button.
Click on the Done button. This action will validate the template created.

 
Click on the Purchasing tab to review the default values of the attributes assigned automatically by the template.
Save the Item.

Exploring Item controls

During the creation of Items, we may decide to restrict the use of the Items by controlling Items within an Inventory Organization. When an Item is defined, it is defined in the Item Master Organization and can then be assigned to other Inventory Organizations. Items are then held in Subinventories, which can contain Locators. Locator, Serial number, Lot number, and Revision number within a Subinventory can be used to control Items. In this recipe, we will explore some of the control parameters for Items.

Getting ready

Log in to Oracle E-Business Suite and select the Inventory responsibility.

How to do it…

Let’s explore the following Item controls:

  1. Item Status
  2. Item Attribute

The Item Status is the status of an Item and it determines the actions that can be performed on an Item. For example, an obsolete Item may not be sold to the customer, but can be used as parts for repairs and can still be stockable. Let’s create an Item status for obsolete Items.
Navigate to Setup | Items | Status Code. 

In the Status field, enter Obsolete and ACME Obsolete in the Translated Status field.
Enter a Description, for example, ACME Obsolete Items.

 Enable the following attributes:
  • BOM Allowed
  • Stockable
  • Transactable

Save the form.

The levels that the attributes can be controlled at are set in the Item Attribute Controls form. Let’s look at some of the Item Attribute Controls:
     Navigate to Setup Items | Attribute Controls|
     From the menu, select View | Query By Example | Enter (or press F11 on the keyboard).
     In the Group Name field, enter Main%. 

     From the Menu, select View | Query By Example | Run (or press Ctrl+F11 on the keyboard).
     Observe that some attributes are controlled at the Master Level and some at the Org Level.
     Close the form.

There’s more…

Items are stored in a Subinventory and can be controlled using a locator. Items can be identified by lot and by serial numbers.

Storing Items by Subinventories

Subinventories are distinct separations of Items within an Inventory Organization. Subinventories can be physical or logical. Items within an Inventory Organization must reside in a Subinventory.
Transactions are performed from the Subinventories. Examples of Subinventories include: finished goods, van, stores, staging area, and fast moving goods. Let’s create a finished goods Subinventory and restrict an Item to the Subinventory.
    Navigate to Setup | Organizations | Subinventories.
    Click on the New button. 
        In the Name field, enter ACME-FG.
        In the Description, enter ACME Finished Goods.
        In the Locator Control field, select Item level. This will enable the Inventory transactions for 

         this Subinventory to use locator control, which we define at the Item level.
Save the record.
 Let’s restrict an Item to the Subinventory:
      Navigate to Items | Organization Items.
      Search for the PRD20001 Item.
 Oracle E-Business Suite: Creating Items in Inventory
Select the Inventory tab and select the Restrict Subinventories checkbox.
d.

    In the Tools menu, select Items Subinventories.
    Select ACME-FG in the Subinventory field.

    Save the record.

Storing Items by locators

Stock locators identify the physical areas where Items are stored. Additional controls can be placed on the Items in stock locators. For example, we can control the shelf life of an Item with stock locators. Stock locators are usually defined as Row, Rack, and Bin. Let’s create three stock locators for the ACME Finished Goods Subinventory and restrict an Item by locator control:
Navigate to Setup | Organizations | Subinventories. 

Search for the ACME-FG Subinventory (press F11 on the keyboard, and enter the search mask ACME%, then press Ctrl+F11 on the keyboard).
Click on the Locator button to enter the locator details.

   Enter A1.1.1 in the Locator field.
   In the Description field, enter ACME FG 1.
   In the Type field, select Storage Locator.
   Enter another row for A1.1.2, ACME FG 2, with Storage Locator in the Type field.
   Repeat for A1.1.3, ACME FG 3, with Storage Locator in the Type field.

Save the record. 

The structure of the stock locator is defined in the stock locator Flexfield structure and can be defined to fit your business requirements. Locator Control can be “prespecified” before they are used or can be defined dynamically as Items are received or shipped.
Let’s restrict an Item to the Locator:
    Navigate to Items | Organization Items.
    Search for the PRD20001 Item.

 
     Select the Inventory tab, select the Restrict Locators checkbox, and then select the Locator Control as Prespecified.
Save the record.
In the Tools menu, select Items Subinventories.
Select A1.1.1 in the Locator field.
Save the record.

Identifying Items by lot control

A lot of numbers can be used to identify Items that share the same specifications. For example, lot numbers can be used to specify the expiry period of an Item. Let’s look at how to use lot numbers to control Items. We will impose a shelf life of 30 days on the Item and assign lot numbers to the Item:
     Navigate to Items | Organization Items.
     Search for the PRD20001 Item.

Select the Inventory tab.
In the Lot Expiration (Shelf Life) region, select the Control field and select Shelf Life Days.
Enter 30 as the number of days.
In the Lot region, select Full Control in the Control field.
Save the record.

Tracking Items using serial control

Serial numbers can be used to track an Item. A serial number is assigned to each unit of the Item, if serial control is used:
Navigate to Items | Organization Items.
Search for the PRD20001 Item.

Select the Inventory tab.
In the Serial region, select the Generation field, and select At Receipt. This will allow us to specify the format of the serial numbers at the time of receipt.
Save the record.

Controlling Items using revisions

Items can have versions. Item versions are controlled using revisions. For example, we can decide to make the PRD20002 revision controlled, and have another version of the Item. Let’s change the attribute to revision controlled and add a revision B to the Item:

Navigate to Items | Organization Items.
Search for the Item PRD20002.

In the Inventory tab, enable the Revision Control checkbox.
In the displayed message, select OK.
Save the Item.

From the Tools menu, select Revisions.
Add a line for Revision B of the Item with the description Revised Widget.
Save the record.

Summary

This article included recipes for creating Items and exploring the Item attributes. It then continued with creating Item templates and exploring Item controls.

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O2C Flow SQL Query Link

select ooha.order_number,ooha.org_id,
       hca.account_name,
       hp.party_name “Customer Name”,
       hcasab.orig_system_reference      BILL_TO_ORIG_REF,
       hpsb.status                       BILL_TO_STATUS,
       ‘ADDRESS1 – ‘||bill_loc.address1||’,’||CHR(10)|| ‘ADDRESS2 – ‘||bill_loc.address2||’,’||CHR(10)||
       ‘ADDRESS3 – ‘||bill_loc.address3||’,’||CHR(10)|| ‘CITY     – ‘||bill_loc.city||’,’||CHR(10)||
       ‘POSTAL CD- ‘||bill_loc.postal_code||’,’||CHR(10)|| ‘COUNTRY  – ‘|| bill_loc.country  BILL_TO_ADDRESS,
       hcasas.orig_system_reference      SHIP_TO_ORIG_REF,
       hpss.status SHIP_TO_STATUS,
       ‘ADDRESS1 – ‘||ship_loc.address1||’,’||CHR(10)|| ‘ADDRESS2 – ‘||ship_loc.address2||’,’||CHR(10)||
       ‘ADDRESS3 – ‘||ship_loc.address3||’,’||CHR(10)|| ‘CITY     – ‘||ship_loc.city||’,’||CHR(10)||
       ‘POSTAL CD- ‘||ship_loc.postal_code||’,’||CHR(10)|| ‘COUNTRY  – ‘|| ship_loc.country  SHIP_TO_ADDRESS,
       oola.inventory_item_id,oola.ordered_item,
       msib.description item_description,
       wnd.name delivery_number,
       rct.trx_number “AR Invoice Number”,
       acr.receipt_number “AR Receipt Number”,
       gjh.ledger_id,
       gjh.name
  from oe_order_headers_all ooha,
       oe_order_lines_all oola,
       hz_parties hp,
       hz_cust_accounts hca,
       hz_party_sites hpss,
       hz_party_sites hpsb,
       hz_locations bill_loc,
       hz_locations ship_loc,
       hz_cust_acct_sites_all hcasab,
       hz_cust_acct_sites_all hcasas,
       hz_cust_site_uses_all hzsuab,
       hz_cust_site_uses_all hzsuas,
       mtl_system_items_b msib,
       wsh_delivery_details wdd,
       wsh_new_deliveries wnd,
       wsh_delivery_assignments wda,
       ra_customer_trx_all rct,
       ra_customer_trx_lines_all rctl,
       ra_cust_trx_line_gl_dist_all rctld,        
       ar_cash_receipts_all acr,
       xla.xla_transaction_entities xte,
       xla_events xe,
       xla_ae_headers xah,
       xla_ae_lines xal,
       xla_distribution_links xdl,
       gl_import_references gir,
       gl_je_batches gjb,
       gl_je_headers gjh,
       gl_je_lines gjl
 where ooha.order_number = :SalesOrderNumber –Right click :RequitionNumber from Toad Enable Prompt For Substitution Variables
   and ooha.org_id = 204
   and hca.cust_account_id    = ooha.sold_to_org_id
   and hp.party_id            = hca.party_id
   and hpss.party_id            = hca.party_id
   and hpsb.party_id            = hca.party_id
   and bill_loc.location_id = hpss.location_id
   and ship_loc.location_id = hpsb.location_id
   AND hcasas.cust_account_id  = hca.cust_account_id
   AND hcasab.cust_account_id  = hca.cust_account_id
   AND hcasas.party_site_id    = hpss.party_site_id
   AND hcasab.party_site_id    = hpsb.party_site_id
   and hzsuas.cust_acct_site_id = hcasas.cust_acct_site_id
   and hzsuab.cust_acct_site_id = hcasab.cust_acct_site_id
   and hzsuas.site_use_id = ooha.ship_to_org_id
   and hzsuab.site_use_id = ooha.invoice_to_org_id            
   and wda.delivery_id        = wnd.delivery_id(+)
   and wdd.delivery_detail_id = wda.delivery_detail_id
   and wdd.source_header_id   = ooha.header_id
   and wdd.source_line_id     = oola.line_id
   and wdd.organization_id    = msib.organization_id(+)
   and wdd.inventory_item_id  =msib.inventory_item_id(+)
   and rct.interface_header_attribute1 = to_char(ooha.order_number)
   and rct.org_id = ooha.org_id
   and rctl.customer_trx_id = rct.customer_trx_id
   and rctl.sales_order = to_char(ooha.order_number)
   and rctld.customer_trx_id = rct.customer_trx_id
   and rctld.customer_trx_line_id = rctl.customer_trx_line_id
   and acr.receipt_number = ‘G-1001’
   and acr.pay_from_customer = rct.sold_to_customer_id
   and acr.org_id = ooha.org_id
   and acr.customer_site_use_id = rct.bill_to_site_use_id
   and xte.transaction_number = acr.receipt_number
   and xte.entity_code = ‘RECEIPTS’
   and xe.entity_id = xte.entity_id  
   and xah.event_id = xe.event_id
   and xal.ae_header_id = xah.ae_header_id
   and xal.accounting_class_code = ‘CASH’
   and xdl.ae_header_id = xah.ae_header_id
   and xdl.ae_line_num = xal.ae_line_num
   –and xdl.source_distribution_id_num_1
   and gir.reference_5 = xte.entity_id  — Entity Id
   and gir.reference_6 = to_char(xe.event_id) –Event Id
   and gir.reference_7 = to_char (xah.ae_header_id) — AE Header Id
   and gir.gl_sl_link_id = xal.gl_sl_link_id
   and gir.created_by = 1318
   and gjb.je_batch_id = gir.je_batch_id
   and gjh.je_batch_id=gjb.je_batch_id
   and gjh.je_header_id = gir.je_header_id
   and gjl.je_header_id=gjh.je_header_id
   and gjl.je_line_num= gir.je_line_num
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Order Management Tables and its details

Order Management Tables. Entered
oe_order_headers_all 1 record created in header table
oe_order_lines_all Lines for particular records
oe_price_adjustments When discount gets applied
oe_order_price_attribs If line has price attributes then populated
oe_order_holds_all If any hold applied for order like credit check etc.
Booked
oe_order_headers_all Booked_flag=Y Order booked.
wsh_delivery_details Released_status Ready to release
Pick Released
wsh_delivery_details Released_status=Y Released to Warehouse (Line has been released to Inventory for processing)
wsh_picking_batches After batch is created for pick release.
mtl_reservations This is only soft reservations. No physical movement of stock
Full Transaction
mtl_material_transactions No records in mtl_material_transactions
mtl_txn_request_headers
mtl_txn_request_lines
wsh_delivery_details Released to warehouse.
wsh_new_deliveries if Auto-Create is Yes then data populated.
wsh_delivery_assignments deliveries get assigned
Pick Confirmed
wsh_delivery_details Released_status=Y Hard Reservations. Picked the stock. Physical movement of stock
Ship Confirmed
wsh_delivery_details Released_status=C Y To C:Shipped ;Delivery Note get printed Delivery assigned to trip stopquantity will be decreased from staged
mtl_material_transactions On the ship confirm form, check Ship all box
wsh_new_deliveries If Defer Interface is checked I.e its deferred then OM & inventory not updated. If Defer Interface is not checked.: Shipped
oe_order_lines_all Shipped_quantity get populated.
wsh_delivery_legs 1 leg is called as 1 trip.1 Pickup & drop up stop for each trip.
oe_order_headers_all If all the lines get shipped then only flag N
Autoinvoice
wsh_delivery_details Released_status=I Need to run workflow background process.
ra_interface_lines_all Data will be populated after wkfw process.
ra_customer_trx_all After running Autoinvoice Master Program for
ra_customer_trx_lines_all specific batch transaction tables get populated
Price Details
qp_list_headers_b To Get Item Price Details.
qp_list_lines
Items On Hand Qty
mtl_onhand_quantities TO check On Hand Qty Items.

Payment Terms
ra_terms Payment terms

AutoMatic Numbering System
ar_system_parametes_all you can chk Automactic Numbering is enabled/disabled.
Customer Information
hz_parties Get Customer information include name,contacts,Address and Phone
hz_party_sites
hz_locations
hz_cust_accounts
hz_cust_account_sites_all
hz_cust_site_uses_all
ra_customers
Document Sequence
fnd_document_sequences Document Sequence Numbers
fnd_doc_sequence_categories
fnd_doc_sequence_assignments
Default rules for Price List
oe_def_attr_def_rules Price List Default Rules
oe_def_attr_condns
ak_object_attributes
End User Details
csi_t_party_details To capture End user Details

Sales Credit Sales Credit Information(How much credit can get)
oe_sales_credits

Attaching Documents
fnd_attached_documents Attched Documents and Text information
fnd_documents_tl
fnd_documents_short_text

Blanket Sales Order
oe_blanket_headers_all Blanket Sales Order Information.
oe_blanket_lines_all

Processing Constraints
oe_pc_assignments Sales order Shipment schedule Processing Constratins
oe_pc_exclusions
Sales Order Holds
oe_hold_definitions Order Hold and Managing Details.
oe_hold_authorizations
oe_hold_sources_all
oe_order_holds_all

Hold Relaese
oe_hold_releases_all Hold released Sales Order.

Credit Chk Details
oe_credit_check_rules To get the Credit Check Againt Customer.
Cancel Orders
oe_order_lines_all Cancel Order Details.
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Order Management Drop Shipment, Functional Setup and flow

 E-commerce site like ebay, ubid.com and amazon.com which are very common place in advance countries like USA, UK & Singapore where people can sell or buy there product. Have you ever think ,what is similar situation in real world , when the the word ‘drop shipment’ comes to your mind. ……a business situation when the retailer or trader has no stock himself, instead giving customer details directly to the seller, and then saler than fills the order and send it to customer directly.How its sounds…
In other words, Drop Shipment is a process where the customer places a purchase order on a company and this company instructs its supplier to directly ship the items to the customer. A Drop Shipment occurs when a customer order is sourced from and delivered by a supplier.Order Management sends information to the Purchasing Application to create that PO, and then when that PO is received (to indicate shipment from the supplier to your customer), the order line is automatically updated to indicate that it was fulfilled. In this process, the company running Order Management is modeled as the company to whom the end customer places the original order.
We need to make sure these are attribute setup Correctly:
Item Attributes
Purchased : Enabled
Purchasable : Enabled
Transactable : Enabled
Stockable : Optional
Reservable : Optional
Inventory Item : Optional
Customer Ordered : Enabled
Customer Order Enabled : Enabled
Internal Ordered : Disabled
OE Transactable : Enabled
Shippable : Optional
And We do set up for Order Source Type as External.
Drop Shipment Setup checklist
Ensure you have created your Order Management Transaction Types and linked your Transaction Types to order and line workflows that support drop shipments.
Ensure the Oracle Workflow Background Engine is running.
Ensure all Drop ship locations you will use to perform drop shipments have the Ship To Site and Receiving Site defined.
Ensure you have defined the Internal Ship To Locations for your drop shipment customers (Oracle Receivables Standard Customer window, Business Purpose Details Tab).
Ensure your standard items have an associated List Price defined within your PO Inventory organization (Oracle Payables Financial Options window, Supplier-Purchasing Tab).
Drop Shipment – Process Steps
Create a Sales Order with line where the line source is External
Book and Schedule the Sales Order
Run Requisition Import Process
Now the line status will be in Awaiting Receipt
Login to the Receiving Organization (Purchasing) who has been setup as an Approver
Run Requisition Import
Create Purchase Order from the Requisition
Approve the PO
Receive the full quantity
Run Auto Invoice
Verify Invoice in Sales Order
Check the details here .

Things not to forget in a Drop Shipment

Release 11i/12 does not support Drop Shipment across operating units.
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.
You can’t cancelled Drop Shipments once Oracle Purchasing obtains the receipt.
Standard Items can be used for Drop Shipment.
In 11i, PTO’s and ATO’s cannot be drop shipped

Difference between “Internal” and “External” Drop-Ship

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. where as “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.

Parallel Pick Release

Parallel pick release enables multiple pick release processes to run simultaneously as child processes through the Pick Release SRS Parameters window and Release Sales Orders window through the concurrent mode. Parallel pick release is available when pick releasing from the Tools menu on the Shipping Transactions form through the concurrent mode.
Parallel pick release enables you to set a default number of child processes by defining the profile option: WSH: Number of Pick Release Child Processes.
Ship sets and ship models are processed first during pick release. They are included as part of the child processes.
Parallel pick release can be run from the Shipping Transactions form Tools menu. It cannot, however, be executed from the Shipping Transactions form action Launch Pick Release. Parallel pick release does not run when Pick Release is executed Online.

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