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DropShip Scenario Configuration

The document describes how to configure drop shipping within SAP. Key steps include: 1) Configuring item category determination to recognize third-party items; 2) Setting up the third-party vendor master; 3) Setting up info records with vendor and lead time details for procured materials; and 4) Maintaining the item category group in the material master. Once configured, the order processing cycle with third-party shipment involves automatic purchase requisition creation, conversion to a purchase order, goods receipt upon shipment notification, customer invoicing, and vendor invoice verification and payment.

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smiti84
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875 views

DropShip Scenario Configuration

The document describes how to configure drop shipping within SAP. Key steps include: 1) Configuring item category determination to recognize third-party items; 2) Setting up the third-party vendor master; 3) Setting up info records with vendor and lead time details for procured materials; and 4) Maintaining the item category group in the material master. Once configured, the order processing cycle with third-party shipment involves automatic purchase requisition creation, conversion to a purchase order, goods receipt upon shipment notification, customer invoicing, and vendor invoice verification and payment.

Uploaded by

smiti84
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Configuring Drop Shipping Within SAP:

Using the below steps, you can configure the drop shipping within SAP. The steps have relevant

screenshots along with them.

1. Configuring the Item Category Determination

For SAP to recognize that a line item in Order is a third-party item, you need to set up item

category determination. Standard SAP provides TAS as the third-party item. You can view the

item category determination in transaction VOV4. In the screen given below the determination

happens based on order document type and Item Category group.

2. Setting up the Vendor Master:

You must have the third-party set up as a vendor within SAP. This is done with transaction XK01.

In our case, we are using a vendor 100 as shown below.


3. Setting up Info Records:

As per the info, records are shown below, material R-1000 is procured from vendor 100 and the

associated lead times are shown below.

4. Maintaining Material Master:


To trigger the third-party procurement, you must maintain the item category group as per the

one maintained in step a (which was for BANS). This needs to be done in Sales Org 2 view of

material master.

Once these steps are done, we are ready to see how drop shipping works with the ordering to

fulfilment cycle.

Order Processing with Third-Party Shipment:

1. Order Creation

Once an order is created with the corresponding order document type and material, it would

automatically determine the item category as TAS (third party item). Also on going to the

schedule line, you will find that on the placement of order, an automatic purchase requisition is

created within the system.


2. Purchase Requisition to Purchase Order Conversion:

As mentioned above on creation of order, a purchase requisition (PR) is automatically created

within the system to procure the item. This can be seen within a schedule line of the SAP order.

The PR can be converted to purchase order using standard SAP transaction ME57.

3. Shipment Notification from Third-Party and Statistical Good Receipts:

Once the vendor notifies that the shipment has been done, a statistical goods receipt will be

done within SAP.

4. Invoicing to the Customer

The order will be invoiced to the customer using standard SAP transaction VF01. Point to note is

that no invoicing will be sent by the third-party to the customer.

5. Invoice Verification and Vendor Payment


The third-party will be sending an invoice to the company. The same will undergo verification

and payment cycle using standard SAP transaction MIRO.

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