Set up a drop-ship workflow

Drop ship is a workflow that lets you ship orders directly from a vendor to your customer, potentially saving you inventory costs. This topic shows you how to set up this feature to work in your company.

The following sections outline the steps for setting up the drop-ship workflow.

1. Create or identify transaction definitions

You need at least one Order Entry and one Purchasing transaction definition to set up drop ship. In another step, you will define relationships between the transaction definitions so that the system knows which purchasing transaction should be created from which sales transaction. Keep the following requirements in mind as you identify your Order Entry and Purchasing transaction definitions for drop ship:

• You can map multiple sales transactions to the same purchasing transaction.
• You can map a sales transaction to only one purchasing transaction.
• Choose one sales transaction per workflow to be the drop-ship initiator. For example, Sales Workflow A is: Sales Order A --> Sales invoice A. In this scenario, do not map both Sales Order A and Sales invoice A to a purchasing transaction, because you could end up with two purchasing transactions. Only map one sales transaction in a given workflow to a purchasing transaction. Learn how to view transaction definition workflows.
• For multi-entity, shared companies: If you are setting up the transaction definition mapping relationships at the top level, you can only map transaction definitions that were created at the top level. If you are setting up mapping relationships at the entity level, you can only map transaction definitions that were created at the entity level.

Transaction Definition	Requirements
Order Entry	To avoid negative inventory, the best practice is to set the Order Entry transaction definition to not affect inventory quantity or value (the inventory totals table in the Inventory Control section of the transaction definition should be empty). Optional. Allow editing of the Ship to contact. This allows the user to select a different Ship to contact other than the default when creating the sales transaction. The system uses the Ship to contact in the sales transaction to populate the Return to contact in the purchasing transaction. Learn how to create an Order Entry transaction definition.
Purchasing	Must have a valid Numbering sequence defined in the Transaction numbering section. Must have Create policy set to New document or convert. Must have a Purchasing price list defined as the Initial price list. See Step 5. Updating the Purchasing price list. Optional. Should not have Edit policy set to No edit. If it is set to No edit, the user won't be allowed to change the purchasing transaction after it is created by the system. Optional. Set a Default AP term to use if a selected vendor does not have an AP term defined. Optional. To avoid confusion on the purchase transaction, change the Contact title from Return to to Ship to. Learn how to create a Purchasing transaction definition.

2. Configure Purchasing

The option for deliver-to contact at the line level must be enabled on the Configure Purchasing page before buy to order can be enabled.

1. Go to Purchasing > Setup > Configuration.

2. In the Enable functionality section, select Enable deliver-to contact at the header level.

   Two fields appear.

3. Use the Deliver to dropdown menu to select default deliver-to contact
   When creating your deliver-to contacts, give them a name that makes them easy to find in the Buy-to-order deliver to dropdown list, which lists all your contacts. For example, prefix the name with "Deliver to" or "BTO".
4. Select Enable deliver-to contact at the line level
5. Select Save.

3. Configure Order Entry

You will do the following in the Configure Order Entry page:

• Enable drop ship
• Define the Order Entry transaction definition relationships to Purchasing transactions
• Enable the vendor dimension

In a multi-entity, shared environment, you enable drop ship at the top level. You can then map transaction definitions at the top level, the entity level, or both.

1. Go to Order Entry > Setup > Configuration.

2. In the Drop ship subsection of the Enable functionality section, select Enable drop ship.

   A mapping table appears.

3. In the Sales transaction definition column, use the dropdown list to select a sales transaction definition that you created or identified in 1. Create or identify transaction definitions.
4. In the Purchasing transaction definition column, use the dropdown list to select the purchase transaction that will be created from the corresponding sales transaction.
5. Leave the Active checkbox selected to activate the mapping or deselect the checkbox to make the mapping inactive. For example, you might want to leave a mapping inactive while you complete the configuration.
   If you create at least one drop-ship transaction from a mapped transaction definition, you cannot change or delete the mapped relationship. However, you can deactivate it. See Turn off drop ship for more information.
6. Repeat steps 3-5 for each desired transaction definition relationship.
7. In the Dimension setup section, select the Vendor checkbox and then select Save.
   If you do not see the vendor dimension in this section, enable the vendor dimension in the General Ledger and then try enabling the vendor dimension in Order Entry.

   To enable the vendor dimension in the General Ledger:

   1. Go to General Ledger > Setup > Configuration.

   2. In the Dimension settings section, select Enable next to Vendor and then select Save.

4. Update items

Each item that you want to drop ship needs to be updated to set the Available for drop ship option to true. After Order Entry is configured for drop ship, the Available for drop ship checkbox appears in the Item information page for items where the item type is inventory or non-inventory.

The following procedure assumes that the items exist in your system. If the items do not exist, create the items before proceeding.

1. Go to Order Entry > All > Items.

2. In the Items list, find the item and select Edit next to it.
3. In the Sales section of the Item Information page, select Available for drop ship and select Save.
   The Available for drop ship checkbox only appears for Inventory or Non-inventory item types.
4. Repeat steps 2-3 for each applicable item.

5. Update AP terms for vendors

The system uses the AP term to populate the payment Date due in the purchasing transaction, counting forward the applicable number of days from the sales Transaction date. Each vendor for whom you want to be able to create purchase transactions from a sales transaction should have a default AP term associated with it.

If the system does not find an AP term for a selected vendor, it uses the default AP term from the applicable purchasing transaction definition. If the purchasing transaction definition does not have a default AP term associated with it, the system will throw an error and the user won't be able to save the sales transaction that is initiating the purchasing transaction.

1. Go to Purchasing > All > Vendors.

2. In the Vendors list, find the vendor and select Edit next to it.
3. In the Vendor Information page, select the Payment information tab, use the dropdown to select the Term, and select Save. Repeat steps 2-3 for each applicable vendor.

6. Update Purchasing price lists

A drop-ship item must have a price defined in a Purchasing price list for the system to create the purchase order from the sales order with purchase prices that aren't a zero amount. The Purchasing price list must be associated with either the Purchasing drop-ship transaction definition or with the selected vendor. The best practice is to associate a default Purchasing price list with the Purchasing drop-ship transaction definition. If the system finds a price list on the selected vendor, the vendor price list takes precedence over the default price list.

1. Go to Purchasing > Setup > Price > Lists.

2. On the Purchasing price lists page select Details next to the applicable price list.

3. Select Add.

4. Use the dropdown list to select the desired Item, then complete the rest of the fields as applicable. See Price list entries for information on these fields.
5. Select Save.
6. Repeat steps 3-5 for each applicable item.

Optional customizations

The following optional customizations can help simplify your drop-ship workflow:

• Enable the customer dimension in Purchasing
• Customize the sales transaction form layout
• Create a document template for drop-ship purchasing transaction definitions
• Create a custom drop-ship history report

Turn off drop ship

If you enable drop ship and use it for at least one transaction, you cannot disable it. However, you can deactivate the transaction definition mapping relationships. This removes the Drop ship field from the sales transactions so that users cannot create purchase transactions from sales transactions.

You also cannot change or delete a mapped relationship if you have created at least one drop-ship transaction from the mapped transaction definition. To change a mapped relationship, deactivate the current relationship, then add a new transaction definition relationship to the table using the applicable transaction definition.

Deactivate transaction definition mapping relationships

1. Go to Order Entry > Setup > Configuration.

2. In the Drop ship subsection of the Enable functionality section, deselect the Active checkbox in each applicable row of the drop-ship transaction definition mapping table.
3. Select Save.