Oracle Cloud’s Order Management and Procurement Solutions: Taking Your Supplier Drop Shipments to the Next Level

In today’s dynamic business landscape, finance professionals, accountants, procurement managers, and supply chain managers need robust tools to streamline their operations. Oracle Cloud’s Order Management and Procurement systems provide an integrated solution that optimizes business processes, increasing productivity and ensuring seamless transactions.

Supplier-sourced sales orders, commonly known as drop shipments, provide a way to fulfill sales orders directly from supplier to customer. This article will help you gain benefits beyond the standard drop ship solution by (1) diving deeper into available features within Oracle Cloud’s Order Management and Procurement to achieve greater automation and (2) taking a broader view across adjoining applications to secure more efficient end-to-end flows using Oracle Cloud solutions.

Why Integrate Order Management and Procurement?

Oracle Cloud’s Order Management and Procurement systems offer a comprehensive drop shipment solution that can handle complex transactions to enhance overall efficiency. Integrating these modules allows for better communication between sales and procurement teams.

Sales orders directly initiate procurement requisitions and purchase orders, leading to faster fulfillment times and reduced errors.  These transactions are directly linked, making it easy to associate a sales order line with its related purchase order line for inquiry and traceability purposes.  An internal change order process ensures that updates to quantities and dates on the sales order will automatically update on the purchase order and vice versa, depending on where the order is in its lifecycle.  This degree of integration ensures that all departments have the most up-to-date information, which enables more effective communication through consistent and accurate transactions.

Additionally, this integration helps in better managing supplier relationships. When your supplier is ready to fulfill the purchase order by shipping material directly to your customer, an Advanced Shipment Notice (ASN) must be created in Oracle Procurement.  An ASN is a transaction that resolves the purchase order and sales order lines simultaneously by receiving against the PO and generating the SO shipment to customer, while your business partner experiences a single, seamless event.

Traditionally, a warehouse manager would log into Oracle Inventory to create the ASN on behalf of the supplier. Instead, your supplier can sign into Oracle’s Supplier Portal page and enter or upload the ASN information directly.  By automating and streamlining interactions with suppliers in this way, you can ensure timely deliveries and maintain solid business relationships. This is particularly important for procurement managers who need to manage multiple suppliers simultaneously.

Now, let us take a deeper dive into features that can help deliver an even better drop ship solution using Oracle Cloud solutions.

The Power of Automation

One of the standout features of Oracle Cloud’s Order Management and Procurement systems is the level of automation available. From sales order submission to supplier purchase order creation and approval, this automation can significantly reduce manual labor and the risk of human error.

These two main flows can be broken down into more discrete steps, offering several opportunities for process automation:

• In creating sales orders, reduce data entry time by defaulting sales order data using Oracle Order Management extensions or transformation rules
• In pricing sales orders, derive the pricing strategy and price list from customer classification or the order’s sales channel through service mappings
• In scheduling sales order demand, enable the self-healing of scheduling interruptions by running the collections and order recovery programs regularly
• In generating purchase orders from requisition lines, use the Generate Orders program rather than building documents manually and enable grouping by sales order via the procurement business function
• In approving purchase orders, configure approval rules specific to the drop ship flow for purchase orders as well as the change order flow to maximize benefits from approval automation

Fig 1.  The Drop Ship Flow

Automation ensures that each step of the sales order and purchase order processes is executed efficiently, resulting in more consistent, repeatable processes that save time and enable your teams to focus on more strategic tasks.  Building in more automation also speeds up the overall time to closure. This is particularly beneficial for finance professionals managing cash flow throughout a truly end-to-end process.

Meeting Supplier Pricing Needs

Oracle Cloud’s systems excel at meeting your supplier pricing needs using features including blanket or contract agreements.  Yet there are times when your drop ship order requires more granularity in pricing.  By deriving purchase order line prices from factors captured on the sales order, you can ensure that the pricing information is consistent and accurate per specific requirements.

Through its service mapping feature, Oracle Order Management can pass information from the sales order directly into the procurement system. This means that a sales order-specific price that you negotiated with your supplier can be captured in a sales order line extensible flex field, passed automatically to the purchase requisition line’s price and ultimately become the purchase order line’s price, eliminating the need for manual intervention.  Include the Negotiated by Preparer Flag since pricing is coming from the order line and not an agreement or the item master.  Optionally include Note To Buyer when sending information through the Service Mapping to the purchase order line.

This feature is particularly useful for procurement managers who need to ensure that they are always getting the best possible deal from suppliers.  It also helps in maintaining accurate financial records, which is crucial for accountants and finance professionals.

Linking Legacy Purchase Orders to Drop Ship Purchase Orders

One of the challenges with converting open sales orders is associating the legacy purchase order with the new drop-ship purchase order

Oracle Order Management successfully meets this challenge through service mappings, similar to the technique described in the previous section.  By configuring a service mapping that passes the legacy PO number from an extensible flexfield on your sales order line to a descriptive flexfield on the purchase requisition line, Oracle will automatically copy it to a descriptive flexfield on the purchase order line if your Procurement profile option is set to allow this.  Ultimately this will enable you to directly associate the legacy purchase order and the new purchase orders coming from your sales order drop shipment.

Using Oracle Order Management service mappings in this way can deliver a clear trail of documentation for every transaction. It facilitates auditing and ensures that all financial records are accurate and easily traceable. This is particularly beneficial for finance professionals for maintaining compliance with regulations.

Enabling Efficient End-to-End Drop Shipment Flows

In figure above, stars represent automated processes

A smooth and efficient end-to-end flow can be a key differentiator for your business model.  Savy supply chain and financial leaders will look further downstream from Oracle Order Management and Procurement applications to derive even more efficiencies, ensuring that drop-ship business operations overall will be seamless and hassle-free.

Use Oracle Order Management to actively monitor the progress of drop shipments through the Manage Fulfillment Lines and Manage Return Fulfillment Lines user interface.  Starting with Oracle Cloud Release 24B there are enhanced capabilities for splitting drop ship lines into partial shipments, making it easier to disposition the remaining quantities while minimizing the need for cancellations.

Use Oracle Receivables to speed up the time to account for drop ship revenue and costs by configuring the Receivables transaction source for autocompletion of transactions and by scheduling Create Accounting process to automate posting to the ledger.

Use Oracle Payables to ensure that the payables invoice can be matched to the drop-ship purchase order and will automatically validate and approve.

Taken together, these features can result in an effective end-to-end solution for supplier-sourced sales orders, allowing for better planning and coordination with suppliers and more streamlined business operations.  It also ensures that financial transactions are accurately recorded and processed in a timely manner.

Providing Accurate Master Data

Accurate and up-to-date master data is crucial for ensuring that your operations run smoothly.  Equally important is that your master data is properly classified and categorized to facilitate rules-based automation and accounting.

Within Order Management, you may design your processes using features including order types, line types, orchestration processes, and transformation rules to maximize automation while accommodating specific needs by customer, product, or line of business.   For your processes to complete successfully, customer classifications, product attributes, product categorizations, organization structures, and account mapping sets must be accurate to drive correct system behaviors and provide robust financial and operational reporting.

For drop shipment scenarios, be sure to test a representative mix of master data with variations by order/return type, customer, product, or other relevant entity as early as your timeline will allow, to affirm that system transactions will generate the expected tax and accounting entries and dates.  By ensuring that your master data is accurately configured and converted correctly, you can significantly reduce errors and improve overall efficiency.

Enhancing User Experience

Oracle Cloud applications provide a user-friendly interface that enhances the overall user experience.  Features include home page “infolet” graphics with drilldown to transaction detail; user customizable searches that can be collapsed when not in use; a well-arranged global header with easy access to work notifications, watch lists, and navigation favorites; and a detailed view of sales order fulfillment line information including references to the linked drop ship procurement document line.  This ensures that all users can easily access and use the systems, improving overall efficiency.

Oracle Application Express (APEX) is a low code application development platform that can be used for creating a dashboard-style user interface to supplement the standard Oracle Cloud UI.  With click-through graphics for drilling down to report results, APEX adds actionable buttons so that users can perform functions directly on one or more business transactions at a time.  APEX allows a much more tailored experience by arranging features as needed for optimum business processing.

Specific benefits from a recent APEX implementation for Oracle Order Management include:

• One-click to release a paused sales order or multiple orders
• Direct return-to-vendor capability, vs the two step RMA-RTV process in Fusion UI
• Ability to submit multiple drop ship orders at one time
• Ability to fulfill a drop ship sales order in “bulk”, with quantities prepopulated
• Click-through report graphics to actionable transaction data

The supplemental dashboard ensures that all users can easily access and use the systems. It also ensures that all information is easily accessible, improving the overall efficiency of your operations.

Conclusion

By going deeper into the features of Oracle Cloud Order Management and Procurement you can gain greater speed and accuracy for your implementation.   At the same time, taking a broader perspective across adjacent applications will help you to provide a more effective business process flow that is truly end to end.

Looking for a partner that can help you maximize your tech stack? Let’s talk strategy for your Oracle infrastructure and beyond.