If you sell items you do not have in stock, it is more efficient to have the items delivered to your customer directly. By so doing, you will save on transportation and storage costs. You order the items with your supplier/producer and instead of first delivering the items to you, they are delivered directly to your customer. The (purchase) invoice of the producer/supplier will be sent to you and of course you will invoice the customer yourself. This method is called ‘Drop ship’ and this article will explain how this works in Exact Globe Next.
Necessary master data and settings
In the order settings, you can check the option ‘Drop ship’ under the section ‘Entry’. If you wish to work with this method, this setting should be checked. You can then add the column ‘Drop ship’ to the sales order via define columns. In this column, you can indicate whether you want to mark the relevant order line as drop ship line.
In warehouse maintenance, the option ‘Drop ship’ has been added that you can use to mark a warehouse as drop ship warehouse. You can only check this option while creating a new warehouse. Once the option is checked, you cannot uncheck it.
- Warehouse location
While adding a warehouse location to a drop ship warehouse, the fields in the sections ‘Status’ and ‘Attributes’ are not active because these do not apply to drop ship warehouses.
A drop ship warehouse can only be merged with another drop ship warehouse. If this is not the case, the field will turn red and a tool tip will show up with the notification: “Must be equal to Drop ship warehouse” or “Must be unequal to Drop ship warehouse”.
While maintaining items, you can link one or more warehouses to the item under the tab ‘Inventory’. In the first section ‘Warehouses’, you can add the column ‘Drop ship’. The drop ship warehouses will show a green tick that will allow you to quickly view which of the warehouses linked to the item are drop ship warehouses.
Labour hours, machine hours, assets items and costs items cannot be assigned to a drop ship warehouse. If you delete a warehouse at the maintenance of a warehouse, a check will be performed whether any transactions are present for the warehouse/item. If this is the case, the warehouse in those transactions will be recoded to the main warehouse. If you wish to delete a drop ship warehouse, you can only do so if the main warehouse is a drop ship warehouse, because it is not allowed to use the same warehouse for normal transactions and drop ship transactions. The same applies when you wish to delete a normal warehouse. In that case, the main warehouse should also be a normal warehouse.
- Warehouse per supplier
In the items per supplier screen, the option ‘Drop ship’ has been added, which you can use to indicate whether the supplier can deliver the item drop ship. You can open this screen from maintenance if the item on the tab ‘Purchase/Sales’ by selecting a supplier and clicking edit by means of this icon: .Furthermore, the same screen will be opened while adding suppliers that are not new by means of this icon:. On top of that, you can add the column ‘Drop ship’ on the tab ‘Purchase/Sales’ in the section ‘Suppliers’ that you can use to quickly view which drop ship suppliers there are for said item.
- Copying items
If the main supplier of the item is a drop ship supplier, and if you check the option ‘Main supplier’ while copying, then the supplier will also be linked as a drop ship supplier with the new item.
- Updating items
To update items, you can find the option ‘Items per supplier’ in the section ‘Data selection’. If you select this option, you can edit several values from the items per supplier screen (including the option ‘Drop ship’) for various items at once.
Entering sales orders
While entering sales orders, the columns ‘Drop ship’ and ‘Allocated’ are present. The columns are not present by default, but can be added by you by adjusting the columns in a sales order.
In the column ‘Drop ship’, you can indicate whether you wish to mark the relevant order line as drop ship line. If you have selected a warehouse in the main line for which the option ‘Drop ship’ has been checked, and you select an item that is indicated as drop ship, then this option will be automatically checked. For order lines that have this option check, the following applies:
- A warehouse can only be selected for which the option ‘Drop ship’ is checked.
- The column ‘Serial/Batch numbers’ is not active in this line.
- No stock control is being performed for this line.
- If the order settings indicate that order performance dates are being used, then the time of delivery of the main supplier will be used. For drop ship lines, only the purchase order lead time and the lead time of the warehouse apply. In most situations, the lead time for a drop ship warehouse is 0.
The column ‘Allocated’ applies to all order lines and not just the drop ship lines. If the order line has been allocated to stock, a purchase order or production order, this will be indicated by means of a tick. This way, you can quickly view whether an order line has already been allocated.
If you then generate a purchase order for the drop ship order, the delivery debtor of the sales order will be filled in as delivery debtor of the purchase order. The supplier will then deliver the purchase order directly to your customer.
Stock control screen
In the stock control screen, the button ‘Drop ship’ is present. This button is only enabled for items to which a drop ship supplier is defined. If an item has insufficient stock, you can mark the order lines as drop ship using this button.
Generate purchase order
While generating orders from the condition screen of a sales order and from [Purchase, To be process, Back to back order], you have the option ‘Drop ship’. If you check this option, only the items will be showed to which drop ship applies. All drop ship order rules that are shown have been sorted per main supplier, purchase price and delivery time.
You can then only adjust the columns ‘Selected, ‘Blanket PO’ and ‘Advice’. The advice cannot be higher than the allocated ordered quantity. If this is the case, then a notification will appear and you will not be able to continue. When the advised quantity is lower than the quantity in the order line, you will also be informed by means of a notification, but you will have the option to continue.
If you have added an instruction in the order line, this will be copied to the generated order.
Fulfil a sales order
While fulfilling the drop ship sales order to which a purchase order has been allocated, the following applies:
- While fulfilling a drop ship sales order, the allocated purchase order will be automatically received.
- In the fullfilment screen, you should enter the serial/batch numbers for the serial/batch items.
- All sales order lines should be allocated to purchase orders.
- All allocated purchase orders should be processed. If this is not the case, the field ‘Actuals’ will turn red and the tool tip “Not processed: Linked purchase order <order number>” will appear.
- While processing the fulfilment, all dates, warehouse locations, serial/batch number information will be added to the automatically created receipt. You will not be able to print a receiving slip or delivery note note and order shipment will not be performed.
- While fulfilling drop ship items, only the drop ship order lines will be fulfilled and not the returns.
- Multiple fulfilments are not supported for drop ship orders.
Receiving a purchase order
While receiving the purchase order that is allocated to a drop ship order line, the following applies:
- If it concerns a serial/batch number, it is obligated to link the serial/batch number upon receipt, regardless of the purchase setting ‘Assign serial/batch numbers’. Because fulfilment is not possible without serial/batch numbers, it is in this case obligated to state this upon receipt.
- It is not possible to receive more than was ordered.
- You cannot add any extra lines with other items in the receipt screen.
- Every line from the purchase order should be allocated to a sales order line.
- All allocated sales orders should be confirmed. If this is not the case, the field ‘Realisation’ will turn red and the tool tip “Not confirmed: Linked order <Order number>” will appear.
- While processing the fulfilment, the items will be delivered immediately. All dates, warehouse locations, serial/batch number information will be added to the fulfilment. You will not be able to print a receiving slip or delivery note note and order shipment will not be performed.
Below, you will find an example to clarify working with drop ship.
Make sure the following is set up in your company:
- Check ‘Drop ship’ in the order settings.
- Create a warehouse where you check the option ‘Drop ship’.
- Link this warehouse to an item you wish to use for drop ship deliveries.
- Add the supplier to this item and check the option ‘Drop ship’.
Follow these steps to fulfil an item by means of the drop ship method:
- Create a sales order and fill in the drop ship warehouse in the header.
- Add the column ‘Drop ship’ to the sales order via ‘define columns’ using this icon: .
- Enter the drop ship item.
- Make sure the column ‘Drop ship’ is checked in the sales order line. The column is automatically checked if a drop ship warehouse and a drop ship item have both been filled in.
- Generate the order using the condition screen of the sales order by means of the button ‘Purchase’.
- Process the purchase order.
Now your debtor will be listed as delivery debtor in the purchase order and the order can be delivered immediately by your supplier to your debtor. If you fulfil the sales order in the system, the purchase order allocated to it will be automatically entered as received with the same characteristics (dates, warehouse locations, serial/batch number information) as the sales order. Or, if you receive the purchase order in the system, the sales order allocated to it will be automatically fulfilled with the same characteristics (dates, warehouse locations, serial/batch number information) as the purchase order.