Reduce Inventory When a Sales Order Doesn't Require Picking or Shipping

Reduce the amount of on-hand quantity in your warehouse to fulfill sales orders that you submit in Order Management.

Use this feature to help you reduce on-hand quantity in your warehouse, allocate cost and recognize cost of goods sold when you don't pick, pack, and ship your sales orders. For example, when you deliver the item through an over-the-counter transaction that doesn't require picking and shipping, or when you create and fulfill a sales order in Order Management for a point-of-sale transaction that you already finished.

Here's how it works.

What the Numbers Mean

1. Oracle Order Management validates and submits a sales order to fulfill it from your warehouse without picking or shipping, then sends the order details and a request to reduce inventory to Oracle Inventory Management.

2. Order Management sends the sales order to Oracle Accounts Receivable.

3. Receivables invoices the sales order.

4. Inventory Management reduces the amount of on-hand quantity to fulfill the sales order. The transaction type is Direct Sales Order Issue.

   • Reduces it immediately after Order Management sends the order line to inventory, or in the background.

   • Reduces it on the current date or on a date that already happened.

5. Inventory Management sends the finished transaction for the inventory reduction to Oracle Cost Management, then Cost Management allocates cost for the transaction.

6. Receivables recognizes the revenue, then sends revenue details to Cost Management. Cost Management recognizes the cost of goods sold. As an option, you can use Oracle Revenue Management to recognize revenue, then send revenue details to Cost Management.

7. If a change in ownership happens from one business unit to another business unit, then Inventory Management sends a Direct Sales Order Issue transaction to Oracle Financial Orchestration. Financial Orchestration orchestrates financial details, processes the transaction, then sends the transaction to Cost Management.

You can realize these benefits.

• Reduce the amount of on-hand quantity that you need to fulfill each sales order when you don't pick and ship the item that you're selling.

• Avoid having to manage details about picking and shipping transactions when you don't pick and ship the item.

• Reduce the number of steps and the time that you need to process and fulfill sales orders from your warehouse.

• Fulfill a large volume of sales orders, increase revenue, and increase customer satisfaction.

• Manage change on the sales order.

• Return an order line that has an inventory transaction in the same way that you return an order line that doesn't have an inventory transaction.

For end-user details, see Manage Transactions That Reduce Inventory.

To get a presentation that includes a demonstration, see Presentation to Reduce Inventory. You can also download the slides for this presentation.