There are times when you absolutely, positively have to know the status of supply for a customer’s order and know with a very high degree of certainty that the supply is dedicated to that sales order.

Oracle’s ATO process allows you to have this confidence by hard pegging a sales order line to a work order or a purchase order.   In this article, we will focus on the SO-PO link which is sometimes called a back-to-back order.

The back-to-back process is similar to that for drop ship sales orders.  In summary, a sales order line will create a purchase requisition (or work order) which can then be autocreated into a purchase order either manually or automatically.

There are several key differences between a drop ship and back-to-back process.  The biggest one is the flexibility on the part of the CSR, Customer Service Rep., to control the method of supply for the sales order. 

With a drop ship, the CSR has the ability to change the default supply source, internal or external, on the line and can override the defaults for an item.

However,  back-to-back orders are controlled by the ATO and make/buy item attributes.  These controls can’t be changed on the sales order line.  This is a strength or weakness depending on the business requirements. 

Another key difference is the ship-to address for the supplier will be an internal warehouse as opposed to a customer location.  The sales order line will need to be picked and shipped after the PO has been received.

One of the great advantages to using back-to-back process over shipping from stock is that there is a clearly defined relationship between the sales order and purchase order.  This allows the CSR to know the status, expected delivery times, and confidence that the inventory will be used for the designated sales order line.

The mechanics for how to set up this process are similar to those that are described in the previous drop ship articles.  In summary:

1)     Create a saleable, buy item, that has the ATO attribute enabled.

2)     Setup a sourcing rule or BOD that sources the item to a vendor

3)     Also setup a quotation or ASL if you want to automatically create the PO with the correct price.

Like many things Oracle, this is a helpful tool when applied to the right situation. You  should have it in your supply chain tool box.

-Dean

Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal — a commitment to excellence — that will enable you to attain the success you seek. - Mario  Andretti
 

This entry was posted on Thursday, May 24th, 2007 at 4:26 pm and is filed under - Global Oracle Contractors Network, Supply Chain Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.