Overview

Drop Ship Purchasing automates the order creation and transaction process for distribution-oriented businesses who purchase goods directly against Sales Orders, and then have these goods shipped directly to end Customers. The functionality is roughly divided into two main areas. The first, which is available in the PostBooks Edition, is the ability to link a Sales Order line item directly to a Purchase Order line item in the same way that Work Orders are linked to Sales Orders. In addition, Purchase Orders support the designation of specific Ship-To Address information that, in the case of drop ship orders, match the Ship-To Address entered on the Sales Order that generated it. The second half of functionality is specific to the commercial editions of xTuple ERP (Standard and Manufacturing). This second half facilitates the option to flag a Purchase Order item for "Drop Ship."  When the receipt transaction for the Purchase Order item is performed for a drop shipped Item, the Item will be automatically issued to Shipping, shipped,  and selected for billing--effectively saving several transactional steps for end users.

New Terms and Definitions

• Drop Ship
  
  • A designation that indicates sold items will be purchased from a Vendor and shipped directly to the end Customer. 
• Releasing Purchase Orders
  
  • Previous to xTuple 3.5 there was a notion of Purchase Orders being "Unposted" and "Posted."  This has been misleading because it suggests that the posting of Purchase Orders may generate a General Ledger transaction (which in fact it doesn't do). Beginning with 3.5, the notion of posting a purchase order was replaced with the act of  "Releasing" a Purchase Order. Releasing effectively changes the status of a Purchase Order from "Unreleased" (U) to "Open" (O), in exactly the same way as posting Purchase Orders did previously, and Transfer Orders do currently in the commercial editions.

Drop Ship Features

The following sections describe the specific areas in the application where users will encounter Drop Ship Purchasing features.

Configure Purchase

On commercial editions only, the Configure Purchase window includes an option to "Enable Drop Shipments."  When this option is selected, another option to "Select Drop Shipped Orders for Billing on Receipt" is enabled for selection as well; otherwise it is disabled. The use of these flags should be self-explanitory, but is discussed in additional detail below. To prevent users from creating a conflict by disabling drop shipment when drop shipments are in progress, the "Enable Drop Shipments" checkbox will be selected and disabled if any open Purchase Orders are found that are enabled for drop shipment.

Item Sources

The Item Source window includes a check box to designate the "Default" Item Source, as pictured. Select this option to distinguish an Item Source from other Item Sources for the same Item Number. If selected, the default Item Source will be selected automatically when releasing Purchase Requests or creating drop shipments. If no default Item Source is specified, users will be asked to select Item Sources from a list of available Item Sources when releasing Purchase Requests or creating drop shipments. When this box is selected and saved, any other Item Sources for thisI tem flagged as the default will be unchecked.

Item Sites

The Item Site screen is pictured below.  The "Site can purchase this Item" is a check option which must be enabled for any Items you want to drop ship. The option to either "Create Purchase requests for Sales Orders" or "Create Purchase Orders linked to Sale Orders" are mutually exclusive. When "Create Purchase Orders" is selected, a check box option to "Drop ship items by Default" will be enabled beneath the "Create Purchase Orders." However, this option will only be visible when Drop Shipments are enabled in Configure Purchasing. If the user selects any of the create Purchase Orders or Request check boxes, the application will check for valid item Sources. If none are found, they should be presented with a warning:

Sales Orders

The Sales Order Item screen is designed to create Purchase Orders linked to Sales Orders. If that option is checked on the Item Site screen for an Item, the "Create Purchase Order" and "Drop Ship" check boxes will be made visible if Drop Shipping has been configured for Purchasing.  As with Purchase Requests created from Sales Order demand, the user will be provided the ability to enter an over-ride purchase price if desired. The application will also check to make sure there are valid Item Sources available.  If not, the user will be presented with a warning:

If that message has been displayed, the "Create Purchase Orders" group will be unchecked and disabled.

If the "Create Purchase Order" check box is successfully checked, the application will attempt to create the Purchase Order when the line item is saved.  First, it will determine if there is a default Item Source for the Item. If a default Item Source has not been designated, the user will be prompted to select an Item Source using the same screen that is used to select Item Sources when a Purchase Request is released. This holds true for Kit Items when they are drop shipped, also. Each component of a Kit must have its own Item Source. Once the Vendor is determined by the Item Source selection, the application will look to see if a Purcahse Order exists for this Sales Order. If "Drop Ship" is checked on (commercial editions), it will specifically check for a Purchase Order linked to this Sales Order with a matching Ship-To address as well. If a match is found, a new line item will be created for the existing Purchase Order. If not, a new Purchase Order will be created linked to the Sales Order. If the line item is drop shipped, the Purchase Order will inherit the Ship-To Address and Contact information from the Sales Order.

When the Sales Order Item screen is subsquently opened in Edit or View mode the Purchase Order number line number, status, due date and quantity will be displayed. This information is inferred from the Purchase Order linkage information stored on the coitem table. If a Purchase Order has been created, the "Create Purchase Order" group will be checked disabled.  Breaking the Purchase Order links must be done from the Purchase Order window by deleting the Purchase Order line item.

When a user edits a quantity or date of a Sales Order Item linked to a Purchase Order item that is open, the Purchase Order Item will be updated with the new quantity and date. However, if a user attempts to modify the quantity or date of a Sales Order Item linked to a Purchase Order, and the Purchase Order Item is closed, the user will be given an error message:

When a Sales Order item is linked to a Purchase Order item, and the Sales Order Item is cancelled, the user will receive a warning that linked Purchase Order will not be affected, and that it should be closed or deleted manually if necessary.

Sales Order Header

Because different items may have different Vendor sources, one Sales Order may be linked to multiple Purchase Orders. Furthermore, this set up allows for the case where one Item may be drop shipped and another may not for Items from the same Vendor. In this case, two Purchase Orders would be created, one for the Vendor to ship to the receiving warehouse, and another for the Vendor to ship directly to the Customer's address.

Right-click options on the line item list enable you to jump to an associated Purchase Request, Purchase Order, or Work Order.

Deleting a Sales Order line will delete the links between the Sales Order and the Purchase Order. However, the following rules apply:

• If the Purchase Order line is Unrleased, it will be deleted automatically. If afterward the Purchase Order contains no more line items, the header will be deleted automatically.
• If the Purchase Order line is Open, with no receipts, the user will be notified that the Purchase Order will remain open and must be deleted separately if desired.
• If the Purchase Order line has receipts or is closed, the user will be notified that they may not delete the Sales Order line, but instead must cancel it.

Clicking "Cancel" to exit a newly-created Sales Order will delete any Purchase Orders created by it the same way Work Orders are deleted when a new Sales Order is cancelled.

Purchase Orders

Purchase Orders can have three different statuses: unreleased, open, or closed. The default for new Purchase Orders is "Unreleased," but users can change the status to "Open" or "Closed" from within the main window. Once a Purchase Order has been saved as "Open," it may not be changed back to unreleased. All line items are  made "Open" if the header status is changed to "Open."  Likewise, all line items are closed if the header status is changed to "Closed."

A Sales Order cluster appears on the Purchase Order header. Linkage for this cluster is created when users opt to create a Purchase Order from a Sales Order.  Users will be able to jump to the Sales Order using the Info (?) button on the Sales Order cluster. Sales Order linkage may only be established by creating the Purchase Order from the Sales Order Item window, and never the other way around.

The Address information uses Contact and Address clusters. When selecting a Vendor Address, the user may select from any Address using the Address cluster search. The Vendor's primary Contact will populate in the Contact cluster by default when a Vendor is selected. It will be set to search on the Vendor CRM Account so that if a user chooses to search for another Contact, they will at first be limited to the list of Contacts associated with this Vendor.

Selection of the recieving Site causes the Contact and Addres information from that Site to populate the Purchase Order Ship-To Address information. This may be manually over-ridden by the user. A "Drop Ship" check box will be visible if Drop Shipments are enabled in Configure Purchase; however, it will only be enabled and checkable if the Purchase Order is linked to a Sales Order.

The Purchase Order window will be altered so that the Purchase Order line list will have two new columns hidden by default:  Demand Type and Order. The Demand Type column will display "SO" or "WO" depending on the supply linkage. The order column will contain the Sales Order Number concatenated with a hypen and the line number, or the formatted Work Order number (with hyphen) accordingly.

Purchase Order Item

The Purchase Order Item window will include a tab labeled "Demand"  that will show linked Sales Order or Work Order numbers respectively.  The labels should change to reflect the type of order they represent (i.e. "Sales Order" or "Work Order").  If there is no demand linkage, the demand tab will be disabled. The quantity and date of a Purchase Order should not be editable if the header is linked to a Sales Order.

List Open Purchase Orders

The list of open Purchase Orders allows you to show both unreleased and open Purchase Orders. Open Purchase Orders are Purchase Orders that have been released, making them available for receiving. Formerly, Purchase Orders were unposted or posted. However, the new release and open terminology was introduced to support drop shipping.

Receiving

If Configure Purchase has Drop Shipments enabled, the receiving window will display a new read-only informational "Drop Ship" checkbox that will be checked when the selected order is a drop ship Purchase Order.  Drop shipped receipts will be processed through shipping automatically when posted. There is also a configuration option in Configure Purchase to select drop shipped Orders for billing after they've been shipped.

Purchase Order Returns

If Configure Purchase has Drop Shipments enabled, the Purchase Order Returns window will show when a Purchase Order is flagged for drop ship, as pictured below.  Purchase Order returns will not reverse shipping transactions for Drop Shipped Purchsae Orders. Users will be provided an informational message to that effect if they choose to return a drop shipped Purchase Order: