Drop-Ship Warehouses

Hi!
I wanted to ask an opinion:
1) You can use a Drop-Ship Warehouse in a credit note to pay the incentives for Business Partners (so as not to move the stock )?
2) What problems could there be in the accounts?

Hi,
I guess ur questions will be answered better if posted in the SAP Business One Core forum(SAP Business One Application)
Vasu Natari.

Similar Messages

Can Drop Ship Warehouse be Utilized for Commission Only Business?

Our company has a small percentage of business where we act as a broker only. We process the customer orders, send the vendor POs and monitor the shipments, but we do not pay the vendor or collect the payment from the customer. The customer pays the vendor and then our company collects a commission from the vendor.
The documentation in the help file for drop ship warehouse seems to imply that this scenario is possible:
Drop Ship
Select this option to define the warehouse as a drop ship warehouse. Use when the company does not manage inventory, but receives commission for every order.
I have reviewed some webinars on Drop Ship warehouse. The scenarios shown culminated in creating A/P and A/R invoices which is not what we want to do. We are aiming for a Cashless transaction with commission being collected.
I have setup the drop ship items to have commission by item with the percentage in the Item Master.
Is this scenario possible in SAP B!? We have ver. 8.82 PL 05.
Thank you in advance.
Julie

Hi Julie
try this:
- one drop ship warehouse.
- items with commisions, all with warehouse by default.
- for these items you can create two prices lists, one with the sales prices and another with sales prices plus your commision.
- create a sales order; when your customer receives it you have to close.
- create a query to show you all closed sales orders between two dates, and the lines with two prices and the difference.
- now you know your commisions.
Kind regards.
Agustin Marcos Cividanes

Quantity appears in Sales Analysis Report when the Drop Ship Warehouse is used

Dear Experts,
We would like your help in the following case. We are using SAP Business One 9.0 (PL10)
When a Sales Invoice document is added to the system using the Drop Ship warehouse, then in the report 'Stock Posting List' it does not display the document, which is correct since a Drop Ship warehouse is used.
However, the report 'Sales Analysis Report' displays the Invoice, but it also shows the quantity that is used in the document, which is not correct.
Why is this happening? Is there any setting that excludes the display of the quantity of the document from the 'Sales Analysis Report', when the Drop Ship Warehouse is used?
Thank you in advance
Kind Regards,
Vassilis Korolis

Hi Vassilis,
Sorry, but in my opinion it's correct.
We also use Drop Ship and like you said in the Stock Posting List we don't have any document and it's perfect. In other way when we sell an item we want and it's true the quantity that B1 is showing.
We want to see the for a itemcode we sold 100qty qith the value of 1000.
There's no way to avoid this SAP B1 behaviour.
Kind regards,
Augusto

Drop-Ship Warehouse

Hi!
I wanted to ask an opinion:
1) You can use a Drop-Ship Warehouse in a credit note to pay the incentives for Business Partners (so as not to move the stock )?
2) What problems could there be in the accounts?

The downside might be:
1. No transparency for you inventory movement. What if someone made a wrong assumption to credit the wrong items they should be counted?
2. The essential problem might be: why do you need such transactions in the first place? Is it something related to RMA?
Please elaborate your business case so that we may have some other options.

Drop ship warehouse shows in stock quantities for some items

We have a customer using SBO 2007 A SP 01 PL 08. The inventory posting report shows the drop ship warehouse with onhand balances. We have tried to create reversing entries to remove these quantities and the system ignores the transaction as it should. We are not sure how these balances got in the drop ship warehouse, but we need to get them out. Some quantities are negative amounts and some are positive amounts. What is the best way to remove these? They have zero inventory in the drop ship warehouse. This happened to six items out of 2600. Thank you in advance for your suggestions.

These six odd items must have something in common. You need log a support message for the matter. It is beyond forum capability.
Thanks,
Gordon

Drop-ship warehouse Inventory Qty

Hello Experts,
I have made couple of transactions in Drop-ship warehosue / items (using GRPO document). I could not see the inventory quantity anywhere. Can you please guide me where could I check the inventory which is in DROP-ship warehouse ?
Thanks & Regards,

Thanks Sachin,
1. That means we can not use Dropship warehouse in any document on sales side other than Sales Order ?
Can you please guide me how can I keep the track / visibility of the inventory of my customer if I want to, without effecting my inventory value. Just quantity of my customer inventory need to be tracked... kindly help
Thanks & Regards

[Discussion] Effects of a Drop ship warehouse

Dear Experts,
I have done some brief testing with Drop ship warehouses, I only realized when we buy in stocks into the warehouse, the warehouse does not record quantities due to "Drop ship", and when we sell items from that warehouse, the system does not perform any "Minimum stock level" validation..etc
Apart from the above, is there any other effects and how we use Drop ship warehouse?
Much Thanks in Advance for your participation!
Chinho

The main advantage to using the drop ship designation on a warehouse is that you don't need to enter Goods Receipt PO's or Deliveries - you can go directly to the invoice documents. Also, there is no chance of having an inventory value on your books - even temporarily - when you don't really have that inventory in-house. As you have seen, the disadvantages are that there is no average or FIFO cost for the items, and no valid gross margin calculation (unless you calculate by a price list). There would be no purpose to using the negative or minimum stock validation, since there is never any stock in a drop-ship warehouse. Some companies choose to use the drop ship functionality, and some don't. I have one customer that uses a separate warehouse in each branch for drop shipments, but does not check the drop-ship flag. Instead, they have a UDF on the warehouse to indicate that is is for direct shipments. They can track drop ships that way without the disadvantages of the SAP functionality.

Edit back to back sales and purchase order with dropped ship warehouse

Hi
Our Client request to be able to edit back to back sales and purchase order with Drop Shipped WH which is frequently required according to their business nature in overseas trading.
Kedalene Chong

Hi Daniel,
In the PO Ship To address field, the database/company address will appear until a warehouse is selected. Once a WH is selected, that is the address that will appear. If there is no WH address, the company address is indicated in the field (note: no company name just the address).
If you want a different address/name, you can type it into the ShipTo address field and the PLD template will use whatever is in the field.
If it is because there is no company name on the PO - does this mean you want a different company name than the one in the PO header. If this is the case and the ShipTo address & company name is always the same, you can update the PLD template by changing the ST address field to Text and enter the company name & address you want on the PO. This will appear on every PO regardless of what is in SAP. If you want the company name to always be the same, add a text field above the ST address field and fill in the company name; the address will be pulled from the PO Logistics ST field (per the first paragraph above).
If this is not what you want, please explain in more detail what you would like to do.
Heather

Drop Ship and Consignment Warehouses.

Hi Everyone;
What is the main difference between a Drop Ship and a Consignment Warehouse. As per my understanding example for Drop Ship warehouse would be ebay, as if some company wants to sell it s products it will use ebay as a drop ship warehouse.
Consignment warehouse only has a accounting effect when the products is sold. so example of consignment warehouse will be like Honda selling it s cars through it s dealers..so if a dealer in new york sold one Honda car only then it will have an accounting and warehouse effect in it s headquarters in Detroit and Ny.
Please correct me if i am wrong as i always get confused in this. I am preparing for my B1 certification.
Thanks and Regards
Nitin

Your understanding is correct.
In addition to that, following is as per SAP Help Document
Drop Ship
Select to define the warehouse as a drop ship warehouse. Use when the company does not manage inventory, but receives commission for every order.
Drop ship warehouses cannot be used for serial or batch items.
Inventory Transfers as Customer Consignments
If you deliver items to your customer in the form of a consignment, you can use this function to enter the inventory transfer from your warehouse to the consignment stores in the system.
When items are withdrawn from the consignment stores at the customeru2019s site, you create an outgoing invoice for the appropriate quantity and specify that the items be delivered from the consignment stores.
You have to create a storage location for the consignment to enable the consignment inventory to be managed separately from the rest of your item inventory.
If you maintain consignment inventory for several customers, we advise creating a consignment store for each customer so that the inventory for each customer can be monitored more easily.
You can then display the consignment inventory using the warehouse reports.

Value Credits for Stock Items - is this a viable solution? (Drop Ship Whs)

Hi all
I seem to have a solution for a long standing problem and have tested it but not tried it for real so was interested in your comments. It uses a drop ship warehouse to achieve the result but I donu2019t want to implement on site if it might also be doing things that I am unaware of. It all started off with some testing of drop ship warehouses, which I think is pretty poor functionality in B1, extract from my report below:
"The disadvantages of SAP drop ship functionality all centre around the fact that it does not generate stock movements. You lose audit trail and some reports that users may rely on eg stock usage. Also because there is no stock movement the item cost is not updated (ave or FIFO). This also means that you do not get a cost of sale on the sales order or invoice, if you have set the GP Base Price to item cost, and no COS in sales analysis. The sales invoice journal generated also does not post COS, just sales, but note that as there is still no stock transaction it can be invoiced before the PO receipt or invoice. And as the purchase receipt does not generate a stock transaction there is no journal and therefore no accrual (GRNI). The AP invoice just posts an expense to P&L but only when the supplier invoice is received. So it screws stock movements, item cost, sales analysis, P&L, BS accruals and there is little in the way of control."
However, this set me thinking about using it for value credits, report extract as below:
I realised whilst I was testing that the drop ship warehouse could be used very effectively to deliver a solution for something that has caused me much grief over the years. When you use the drop ship warehouse stock movements are never generated. Consider a customer who has been overcharged for goods and requires a credit. Historically, the advice has always been to issue a u201Cserviceu201D credit against a GL code because an u201Citemu201D credit document would book stock back into the warehouse and reduce the reported quantity of goods sold, which is not required. The downside of the service credit is that whilst GL postings may be OK sales analysis is now incorrect. But using a drop ship warehouse on the credit note line we get a document against the itemcode, stock is not updated and the credit value does appear in sales analysis as well as GL. Perfect! So we could create a warehouse, marked as a drop ship warehouse but clearly labelled as u201CVALUE CREDITS ONLYu201D, to be used for this purpose
What does anybody think about this solution - are there any downsides?
Thanks
Bruce

Hi Bruce,
Your understanding of Drop Ship is mostly correct. The proposal sounds good. The main point of the Drop Ship function would be no stock involved. You really do not need to label it is bad or poor. It is only useful for people who need it. If you could utilize the function for your goal, go for it.
Thanks,
Gordon

Cost Carrying Over in Drop Ship Processing

Hello Experts...
When doing a drop ship sales order, this is the following situation. Item A has cost at Warehouse 01 (stock warehouse) of $400 and cost at Warehouse 03 (drop ship warehouse) of $425.
When doing a drop ship sales order, the correct cost of $400 from WH 1 is displayed initially until the WH is changed to WH 3, then it displays WH3 cost of $425. However, when the Purchase Order Confirmation Screen is displayed, the cost reverts back to $400. We have done a test 15 times in the Demo SAP B1 and even more information is not passed on using the "Copy To" function (for example, the Delivery does not pick up any costs - it is blank when processing a drop ship).
Of course it could be changed at the Purchase Order Confirmation Screen, BUT a real simple statement comes up of why does a Sales Person have to change it when the cost is in the system and is displaying correctly on the Sales Order. From a common sense perspective of financial matters and productivity, it takes the statement even further - why even put a cost on the Drop Ship Warehouse when the system does not pick it up. It gets even worse when the Gross Profit comes out to being 100%. The whole drop ship process seems to be a mystery in the SAP Documentation.
QUESTION: Is there some setting that needs to be changed so that the correct drop ship cost is carried throughout the system automatically and all of this wasted time is cut out?
The user guide published on Februrary 2009 covering this topic does not say anything about COMPLETE drop ship processing and cuts off at the display of the Purchase Order Confirmation Screen on page 6.
Thanks - Zal

Hello Julie - thanks for your reply...version is 2007 SP01 PL05...
Maybe the problem with the cost being carried over with "Copy To" was corrected in PL07? Will go to the release notes...
This is getting to be a comedy - again, I am using and testing this function on SAP's provided "vanilla" Demo database with no changes, so if SAP cannot set up drop ship functioning properly on their own Demo, who can???
OK - yes, the cost of the product is pulled from the associated vendor which is problem number one - for companies that sell both inventoried and drop ship items on a regular basis, the cost of that product is never the same. For vendors, onsies and twosies being shipped to our customers incurs a higher expense than a shipment to one site of 100 or 200 items and they will quote a different cost to cover those expenses. It just makes common sense that the vendor's incurred expenses to fill the drop ship versus shipment to our waregouse is going to be different, doesn't it? Therefore the actual cost and dollars paid for the product will be different from WH01 over WH03 (or any other area - Base Price versus Discount Purchase Price), and the gross profit is going to be different between the two versions of a sales process. Creating a thousand different price lists certainly is not the answer!
And this begs a very simple question then - why even put in an item cost on the Item Inventory Tab for the drop ship warehouse AND why does the system pull the WH 03 dollar amount into the Sales Quotation/Order Gross Profit Base Price field but not transfer it to the Purchase Order? Why create a constant flood of erroneous Gross Profit information on drop ship AR invoices unless you are happy to have wasted productivity?
I think the real problem is that this is obviously a very bad design for an SAP B1 function and folks are doing all of these workarounds and extra steps (at least in PL05 so far) to get their work done. I think it is hilarious that when trying to enter a ticket directly to SAP on this, I got the reply that "that is the way the system is designed" (albeit bad design and no effort to direct me to documentation) and had to post my question here according to new SAP B1 support standards.
I am going to close this question as there really is not an answer except "way the system is designed" and this thread is leading nowhere.
Many thanks to everyone who took the time to reply - lol - of course, thanks with points!!!
Take care all - Zal

Drop Ship logical receipt

Dear experts
when we place dropship sales order...
1)once customer receive goods from supplier how will know that customer received?
2) once customer received will place logical receipt means when we place receipt we need to give sub inv which sub inv will use? any set up required for sub inv(parameters)?
3) if we place logical receipt quantity will increse or not..what about account parts?
4) what exactly happening at receipt level (accounts wise and on hand qty wise)?
5) when customer place order how we understands that we have to use drop ship?

1) Most companies have a off-line communication that informs you when goods were received.
2) You typically define a new subinventory to capture DS transaction. Setup is similar to your Raw Material Warehouse subinventory.
3) Quantity will increase when you do the logical receipt. But Oracle does a shipment transaction right away. So quantity will go down right away.
4) Upon receipt, accounting is exactly similar to how the accounting is for a regular receipt. (i.e. inventory a/c value and payables accounts are affected.) But then you do the shipment transaction. Again, the accounting for that is similar to regular shipment. (i.e. inventory a/c value , sales account, AR account are fafected.)
5) There are a couple of ways. Most often, people mark the item as drop ship. On the item master screen, go to OM tab and set the source=EXTERNAL. This way, when an order is entered for that item, the source on that order becomes EXTERNAL. You can always change the default on order line.
Hope this answers your questions
Sandeep Gandhi
Independent Techno-functional Consultant

Drop Ship across OUs - Operating Unit not available during Requisition Import

Hi,
I am trying to execute Drop Shipment across OUs on Vision Instance R12.1.1.
1)      Responsibility - Order Management Super User, Vision Operations (USA)
         Create SO in Vision Operations. In Others tab selected Warehouse as D1 ( Singapore Distribution Centre ). Line Item Source Type is External.
         Order Booked. Order line status is 'Awaiting Receipt'.
2)      Responsibility - Purchasing Super User.
         Request - Requisition Import.
         Issue - The Operating Unit LOV for Requisition Import is listing only 'Vision Operation'. The OU 'Singapore Distribution Centre' is not listed.
The responsibility Purchasing Super User has access to Org D1.
Please refer to attached screenshots for details.
Kindly help me with this process.

user12214874 wrote:
We are on Oracle EBS 11.5.10 and the requirement is that the US OU wants to drop ship a SO from our supplier in Japan(not part of Oracle installation) directly to our OU in Canada. (part of same Oracle installation). As per as per Oracle Order management users guide 11i; pg 1-7 drop ship across OU's and SOB's is possible. (Introduction chapter.) However when I read metalink note 225434.1, this is not possible. This looks to be a drawback with Oracle EBS since it is a very common requirement with most business going global these days. However, I may be wrong and the flow might very well be supported. If anybody has an idea, and provide some insights if this is supported in oracle or if there is a workaround available it would be appreciated.
*****Update******** I could create a Drop Ship So with Receiving Warehouse in another operating unit; I could also create the Internal Requistion and PO in the shipping OU. Also, the Payables Invoices to Selling OU was created. AR invoice against the Drop SO billed to Shipping OU was created. However I am still stuck as to the generation of Intercompany AR invoice. Also, I am wondering why is there a need for Intercompany AR invoice when the AR invoice is issued against the Drop SO?
Edited by: user12214874 on Feb 16, 2012 12:34 PMMy question is why would US OU want to drop ship to Canada OU...why can't canada OU directly raise a PO to a supplier in Japan??

Drop ship purchase order creation using Pl/Sql code..

Hi,
We are creating the purchase order for drop ship orders.
1. Created order with line source as external and then we ran the workflow backround processor which created a requisition for the order, using this requisition we are trying to create a purchase order with autocreate functionality by using PO_INTERFACE_S. Is this the way to create a drop ship po from backend.
Can you please suggest any other way.
Thanks in Advance.
jagdish.

Hi,
You can customize the workflow such that it creates PO automatically, by selecting the attributes "Is PO Auto Creation Allowed?" to create PO after the requisition is created.
Requisition Import will call PO Create Documents w/f to create PO.
Plz get back to me if any clarification is needed.

Intrastat report in drop-ship process

Hi,
I have drop-ship scenario where plant country belongs to France ( FR) but actual shipment happens from Taiwan(TW).
Butin the sale order we use plant as France(FR) and shipping point as Taiwan(TW).Since these are drop ships dispatched from non EU countries i.e in my case Taiwan(TW), the intrastat report ignores it. i.e on the invoice document in the "Trade/Custom" tab both "Country of origin" and "Dispatch country" will show as France and the same is picked in Intrastat reporting.
But this is wrong since actual shipment has been done from Taiwan country . Therefore how can we change this to Taiwan i.e correct country. One way is change in the user exit of billing.
but is there any other way, i mean process wise ?. If we do third order sales process would this resolve problem. if so how can this be achieved.
What i have noticed is even in third party sales process it has the same problem.
Thankyou in advance

Thankyou for your reply.
even if i use Foreign Trade concept , but my plant in sales order is "France" and shipping point as "Taiwan", then the problem is instrastat will ignore Taiwan as a departure country , it shows only France as departure country , but it should be Taiwan. Therefore how can we resove this problem.
I dont want to change dispatch country as "Taiwan" using user-exit in invoice-> "customs/Trade" tab , because if i change this field then instrastat report will pick-up . But withoug user-exit how can we change via config or process wise.
Thanks in advance

Drop-Ship Warehouses

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