Drop Shipment

[Former Member]

Hi ...

Wat exactly is 'drop shipment' scenario? Plz explain the cycle.. Is it same as third party order? If not, wats the difference. I know TPO process.

Thx

[JL23 · Accepted solution]

in help.sap.com the term is only used together with third-party.

in my first project in the USA we used the same term , when we had a sales order with a delivering plant different from the standard plant (e.g. Sales org USA had one plant in USA, if they delivered from Belgium plant directly to customer, then we used this term as well)

more: http://en.wikipedia.org/wiki/Drop_shipping

[Former Member]

Prashant,

Drop shipment is used in a scenario for example where you are in construction business and are constructing a warehouse/building and want to purchase materials like bricks for the building, you would purchase the brick from a vendor, however you would request the vendor to have the shipment go directly to the construction site rather than the your/contractor’s office who is buying the material for the construction.

Therefore, it’s a shipment address that is not associated with master data.

Hope it helps.

[Lakshmipathi]

Dear Prashant

The general terminology for drop shipment is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to wholesalers, who then ship the goods directly to the customer . The retailers make their profit on the difference between the wholesale and retail price.

I think this explanation is clear and answer your question.

Thanks

G. Lakshmipathi