Sterling Selling and Fulfillment Foundation processes drop-ship orders.
Drop-ship orders are processed as follows:
Order Create
If the unit cost is not overridden on the sales order line, the standard cost factors are subtracted from the unit cost before Sterling Selling and Fulfillment Foundation transfers it to the unit price of the chained purchase order.
Order change
Ship confirmation
Invoice creation
The following illustrates how Sterling Selling and Fulfillment Foundation processes drop-ship orders.
A customer places an order for a quantity of 2 pieces of item DEF. The order is priced according to pricing rules for the customer. The product is sourced from Supplier1 and shipped directly to the customer. The expected cost, based on the primary supplier of DEF is retrieved from the replacement cost for DEF. The order is scheduled and released. This generates a "chained" PO for Supplier1 to ship 2 pieces of DEF to the customer. Supplier1 ships DEF to the customer and sends an invoice to the Enterprise. The recording of the invoice triggers a shipment confirmation against the "chained" PO which in turn propagates a shipment confirmation against the original sales order.
When the shipment confirmation event is issued against the chained order, a receipt is simulated in the financial application. Also, A/P and COGS general ledger entries are made at this point. These entries are made based on information on the chained PO line. An invoice is created for the original sales order and is published for the financial applications. This is posted into A/R and Sales.
If the unit cost has been overridden (specifically set on the sales order line), the unit cost from the sales order line becomes the unit price on the chained PO. At this point, the unit price is locked for the chained PO. If the unit cost has not been overridden, the Order is priced according to the price list defined by the seller. For logical kit items, the unit cost from the sales order is not propagated to the PO. From this point until shipment confirmation of the PO, the PO unit price can be maintained either:
Though no inventory has been received at the enterprise, a receipt is used to match against the supplier invoice. It contains the PO line detail to satisfy financial application integration.
For the sales order line, Sterling Selling and Fulfillment Foundation creates an invoice line that is used for creating A/R entries