Vendor Shipment Processing

A vendor shipment is when goods are drop-shipped directly from your vendor to your customer due to low stock, large order size or other conditions. Vendor shipments are processed separately from stocking or special order items. PO requisition lines are created for vendor shipments automatically during sales order entry and these requisitions are assigned or linked to specific sales order lines at the time they are created. Requisitions for vendor shipments are converted into purchase orders using the Requisition Management program. A purchase order for a vendor shipment may consist of multiple lines or items but all lines or items must be from the same sales order. This allows information from the vendor ship sales order (including the customer PO number, ship to address, etc.) to be automatically carried through into the purchase order(s) created for the sales order.

An individual item can be identified as either a stocking or a special order item. In addition, each inventory item has a vendor shipment “flag” that can be set three ways. If the vendor ship flag is set to Y, the item can only be vendor-shipped. If the vendor ship flag is set to “N” the item can never be vendor shipped. If the vendor ship flag is left blank, the item can be shipped from stock or vendor shipped at the discretion of the operator entering the sales order. If an item is identified as a special order item and the vendor ship flag on an order line is set to “Y” then the vendor ship flag overrides the special order flag on the item and the order line is treated as a vendor shipment. If an item is identified as a non-stock item, it must be purchased manually and cannot be identified as a special order item or as a vendor shipment. These rules are illustrated below.

Item Type	Stk Flag	Special Flag	Inventory Vendor Ship
Stocking	Y	N	Blank (can be changed to vendor ship in order entry by setting order flag = “Y”)
Non Stock	N	N	Blank or “N” – vendor ship not supported
Special Order	Y	Y	Blank – If set to “Y” in inventory, item is treated as a vendor shipment item, if order flag is set to Y then order line processed as vendor ship.
Vendor Shipment	Y	N	Blank or “Y”. If flag is left blank, item may optionally be vendor shipped, if flag set to “Y” then item can only be processed as a vendor shipment.

Once the replenishment methods for the items in your system have been determined, the system allows you to create requisitions or purchase orders for the items. The following sections provide a brief overview of how each type of item is processed by the system. For more information about each of these replenishment methods, or the programs used by each method, please refer to the Purchasing Procedures Guide and the Program Reference section of the Purchasing Manual.

Vendor Shipment - Processing Overview