Oracle Fusion Order Management – Drop-Ship Interview Questions & Answers

Oracle Fusion Order Management – Drop-Ship Interview Questions & Answers

1. What is Drop-Ship in Oracle Fusion Order Management?

Answer:
Drop-Ship is a fulfillment method where the supplier ships the product directly to the customer instead of going through the company’s own warehouse. The sales order triggers a purchase order to the supplier, who then ships the item directly to the customer.

2. How do you enable Drop-Ship in Oracle Fusion?

Answer:

  • Navigate to the Order Management Parameters and enable the drop-ship option.

  • Define a Drop-Ship Business Unit that represents the supplier or supplier location.

  • Associate suppliers with the drop-ship business unit and link items that are drop-ship enabled.

  • Configure the orchestration process to handle drop-ship lines.

3. What setup is required on the item level for Drop-Ship?

Answer:

  • Items must be flagged as drop-ship enabled in the item master.

  • Associate approved drop-ship suppliers with the item.

  • Define supplier details such as lead times and shipping locations.

4. What happens during the order orchestration process for Drop-Ship orders?

Answer:

  • Sales order is created with drop-ship lines.

  • Oracle Order Management automatically creates a linked purchase order to the drop-ship supplier.

  • The supplier ships the product directly to the customer.

  • Shipping confirmation is received, and the sales order is updated accordingly.

5. Can Drop-Ship be combined with other fulfillment methods in a single sales order?

Answer:
Yes, a single sales order can contain multiple lines with different fulfillment strategies, such as drop-ship, pick-to-order (PTO), or back-to-back.

6. How does Oracle Fusion handle billing in Drop-Ship orders?

Answer:
Billing is typically done after shipment confirmation. Invoice creation in Accounts Receivable happens based on the shipped quantities. The system handles supplier invoicing separately in Payables.

7. What are common challenges faced during Drop-Ship implementations?

Answer:

  • Synchronizing purchase order creation and supplier shipment dates.

  • Handling supplier delays or partial shipments.

  • Managing accurate tracking and visibility of drop-ship items.

  • Ensuring correct accounting for inventory and cost since items bypass physical inventory.

8. How do you track Drop-Ship orders in Oracle Fusion?

Answer:

  • Use the Order Management work area to view order statuses.

  • Monitor linked purchase orders and shipment confirmations.

  • Integration with supplier systems or portals can enhance tracking visibility.

9. Can you explain the impact of Drop-Ship on inventory?

Answer:
Drop-Ship items do not enter company inventory; thus, inventory valuation and physical stock are not affected. Cost of Goods Sold and revenue recognition occur only after shipment confirmation.

10. How do you configure the Purchase Order generation for Drop-Ship lines?

Answer:

  • Set up Purchase Order defaults for Drop-Ship business units.

  • Configure automatic PO creation rules linked to sales orders.

  • Define supplier details and approval workflows if needed.

11. What Oracle Fusion tools or reports assist with Drop-Ship order management?

Answer:

  • Drop-Ship Order Inquiry page.

  • Purchase Order and Receipt Tracking reports.

  • Orchestration Process monitoring dashboard.

  • Integration reports for supplier status updates.

12. How do you handle returns in Drop-Ship orders?

Answer:
Return Material Authorization (RMA) process is used. Since items do not enter inventory, returns are managed directly with suppliers or through specific return arrangements.

13. Is it possible to customize the Drop-Ship orchestration process?

Answer:

Yes, Oracle Fusion allows you to customize orchestration processes by modifying or creating new process definitions to handle special business rules for Drop-Ship. 

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