Set Up Drop Shipment Sourcing Rules

To properly plan for drop shipments, you must first define the drop shipment sourcing rules that determine which supplier sites support drop shipments.

These are sourcing rules with a buy from supplier and supplier site source. When defined, you can assign the drop shipment sourcing rule to various aggregate levels of item and customer location. Valid item levels are item and category. Valid customer location levels are customer site, region/zone, and all locations. When you assign a drop shipment sourcing rule, you determine which supplier sites can drop ship to which customer sites.

You can apply drop shipment sourcing rules only to the independent demands. The demand sourcing hierarchy is applied for drop ship cases. If a level 1 rule is found for an item and customer or customer site, then that rule is used. Otherwise, if the highest level rule is assigned to a category-customer level, then that rule is used.

The following table lists the ranking of various demand sourcing hierarchies:

Rank	Demand Sourcing Hierarchy
1	Item - Customer or Customer Site
2	Item - Customer
3	Item-Demand Class
4	Item - Region
5	Category - Customer or Customer Site
6	Category - Customer
7	Category - Demand Class
8	Item
9	Category - Region
10	Category
11	Customer or Customer Site
12	Customer
13	Demand Class
14	Region
15	Global

If an assignment set contains drop shipment rules that are already assigned to an item or a category, then you must define organization-specific rules for an item or category that's both drop shipped and also shipped to an inventory organization. If the sourcing rule for the drop ship demand includes a transfer from source or a make at, the transfer from source and make at is ignored. If there are multiple buy from sources, then the buy from sources are reapportioned to equal 100%.

Create Drop Shipment Sourcing Rules

To create drop shipment sourcing rules:

1. Define a global sourcing rule and specify a buy from supplier, supplier site, and supplier source system.

2. In the assignment set, assign the global sourcing rule to an assignment level that includes an item or a category. Assign the global sourcing rule to a customer or a zone as required, but you can't assign the rule to an organization.