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Oracle Transportation

Third Party Warehousing


An Oracle White Paper
June 2003

OVERVIEW

Third Party Logistics (3PL), or managed warehousing is the function by


which the owner of goods (supplier) outsources various elements of the
supply chain to a 3PL company that can perform the management function
of the clients inbound freight, customs, warehousing, order fulfillment,
distribution, and outbound freight to the client customers. Third Party
Warehousing is a subset of third party logistics and refers to the process
where a supplier requests an external third party warehousing entity to
perform the outbound shipment of goods to end customers. The third party
warehouse is used not only for the storage of goods but also particularly for
the distribution of goods.

Supporting third party warehousing involves the following:

Ability to communicate the shipment information from supplier to


the warehouse.

Ability to receive the shipment information in the warehouse.

Ability to process the shipment in the warehouse and respond to the


supplier with the exact information on what was shipped.

Ability to receive the shipment details by the supplier and record the
shipments accurately.

What to Ship

3rd Party
Warehouse

Supplier
What was Shipped

Figure 1.0

Third Party Warehousing Overview


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The communications between a suppliers system and warehouse system can


be via several different ways including EDI/XML/Flatfile. In ASC X12,
these transactions are the 940 transaction ( an outbound order from a
supplier to a warehouse, indicating what the warehouse needs to ship on
behalf of a supplier), and the 945 transaction ( the inbound warehouse
shipping advice, a response by the warehouse indicating what they shipped).

Sales orders may be maintained only in the suppliers system and when a
shipment is due to be shipped, the warehousing system is instructed with the
shipment information. The shipment is picked, packed and shipped in the
warehouse system. Shipping documents/Advanced Ship Notice (ASN) is
also generated from the warehouse system. The shipment is finally recorded
and accounted in the suppliers system when the shipment advice is
received. This document gives an overview of third party warehousing and
its implementation in a supply chain system. It also describes the user
procedure, setup for third party warehousing in Oracle Distribution
Application suite.

DEFINITIONS
Supplier/Shipper System

Oracle Transportation application for the supplier, which extracts the


shipment information, and send it to the Third Party Warehouse as a
Shipment Request outbound transaction.
3rd Party Warehouse System

The application in the warehouse, which receives the Shipment Request


outbound transaction from supplier. The third party warehouse instance
responds back to supplier instance with shipment information.
Oracle Workflow

Oracle Workflow is a process management tool used to seamlessly integrate


Oracle e-Business Suite business processes together.
Business Event System

This provides the ability to raise a business event to signal that something of
interest has occurred in the Oracle e-Business Suite.
Event Subscription

Event subscription defined to perform some activity when it detects an event


of interest has occurred. An event subscription is controlled by a rule
function. The result of the rule function determines whether the associated
Workflow process will be executed. The actual activity performed by the
event subscription is based on the Workflow process defined for it.
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A CLOSER LOOK INTO THIRD PARTY WAREHOUSING FLOW

Create Delivery

Shipper/Supplier selects the order lines to


be shipped and creates a delivery.

(Supplier)

Send Outbound
Shipment Request
(Supplier)

Pick, Pack, Ship


(Warehouse)

Send Shipment
Advice
(Warehouse)

Receive Shipment
Advice
(Supplier)

Update shipper
ERP system
(Supplier)

The shipper sends an outbound message to


the warehousing system. The message
includes delivery name, customer,
supplier, carrier, ship to, ship method, pick
up/drop off date and time, freight terms,
etc.
The warehousing system receives the
message, picks the delivery, weighs it,
applies freight rate, prints shipment
documents such as shipping label,
optionally assigns a tracking number to
the delivery, and ships it.
Warehouse sends the inbound ship
confirm message, which includes delivery
name, ship method, ship date, freight cost,
tracking number, vehicle info, etc.

The suppliers instance receives the


inbound ship confirm message, which
includes delivery name, ship method, ship
date, freight cost, tracking number, vehicle
info, etc.

The relevant modules of suppliers ERP


system is updated with the information
contained in the inbound ship confirm
message.

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Figure 2.0

Third Party Warehousing Flow

THIRD PARTY WAREHOUSING IN ORACLE DISTRIBUTION


APPLICATIONS

Oracle Transportation (Family Pack H and higher) supports seamless


integration capabilities with XML based 3rd party warehousing applications.
The warehousing system can be any applications as long as it can accept the
outbound XML message and respond with the inbound XML in the required
format. The following section describes the flow of data between the
supplier/shippers system i.e. the users of Oracle Transportation and the third
party warehouse system that performs shipments for them.
Information must be extracted from Oracle Transportation system to give the
Third Party Warehouse enough information to know what items need to be
picked and in what quantity, where the material must be shipped and by
when, and how the material is to be shipped. The XML ShowShipment
transaction (equivalent to the ASC X12 940 transaction) is used to transmit
this data to the Third Party Warehouse system. Once the Third Party
Warehouse has completed the shipment, they need to send back to the
suppliers system (Oracle Transportation) the details of the shipment,
including any item relevant information that is required to complete the
shipment on the Oracle Transportation (supplier/shipper) side. This
information includes the item detail information (lot number, serial number),
the location where the material was picked, the container information,
weight information, shipment information such as the Pro Number, BOL
Number, Vehicle identification, total shipment weight information. The
XML ShowShipment transaction (equivalent to the ASC X12 945
transaction) is used to transmit this data back to the Oracle Transportation
user.
Outbound Shipment Request

Show Shipment Outbound XML is used as the outbound delivery transaction


from Oracle Transportation to the warehousing system. It is XML equivalent
of ASC X12 940 transaction. The message contains all the details of the
shipment that are required to rate the shipment, determine freight costs, print
the required labels and shipping paperwork.. A synchronous CBOD
(Confirm Business Object Document) acknowledgment is expected from the
warehousing system. The outbound shipment XML may be individually
communicated for a delivery using the shipping transactions user interface.
Warehouse Shipment Advice

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Show Shipment Inbound XML is used as the inbound shipment advice from
the warehousing system to the suppliers. The response transaction (XML
equivalent of ASC X12 945 transaction) is used to confirm the shipment. A
synchronous CBOD (Confirm Business Object Document) acknowledgment
is provided by the suppliers system.

Outbound Shipment Request XML

Oracle
Transportation

Oracle
Shipping

Synchronous Acknowledgement

Oracle
XML
Gatewa
y

Warehouse Shipment Advice XML

3rd Party
Warehousing
System

Synchronous Acknowledgement

3rd Party
Warehousing System

Supplier System

Figure 3.0

Third Party Warehousing Overview Messaging

THIRD PARTY WAREHOUSING PROCESS FLOW IN ORACLE


APPLICATIONS

The following steps are a description of the detailed flow diagram on the
next page:

Oracle Transportation user selects the lines to be shipped by the


Third Party Warehouse, by manually selecting the sales order lines
on the Shipping Transactions form. The user assigns these delivery
lines to a delivery, and then chooses the action Send Outbound
Message, and selects Shipment Request.

A business event is raised that will in turn trigger the workflow to


extract the data for a shipment and creates the XML message. The
XML message contains all the necessary elements required by the
third party warehouse instance to ship the materials requested. This
message is sent through the XML Gateway to the Oracle Transport
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Agent (OTA). The OTA at the supplier system picks up the message
and sends it to the inbound queue of transport agent at the Third
Party Warehouse system.

The Third Party Warehouse Picks, Packs and Ships the Delivery
Number sent on the Shipment Request transaction and generates a
XML message. The transport agent at the Third Party Warehouse
system picks up the message and sends it to the inbound queue of
OTA at the Supplier system. The XML Gateway Engine at the
Supplier system consumes the message, and loads the data into the
Oracle Shipping interfaces. The appropriate Shipping APIs are
called to process the shipment.

The Shipping APIs update the delivery with the shipment


information and the item details, and Confirms the shipment. The
Order Management Interface and, if the items are transactable, then
Inventory Interface are submitted to complete the shipping process.

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Third Party Warehouse System

Shipper/Supplier System
(Oracle Transportation )

Create Picking
Batch

Auto-Create
Deliveries

Send Outbound
Shipment Request

Data Transmission
(XML)
Delivery Number
Customer Information
Ship To Information
Supplier Information
Intermediate Ship To Information
Pooled Ship To Information
Requested Pickup Date
Requested Drop Off Date
Ship Method
Transportation Method
Suggested Carrier
Freight Terms
Units Ordered
Delivery Gross Weight
Gross Weight UOM
Item Details:
Item and Customer Item Information
Requested Quantity
Packing Instructions
Delivery To Location Information
Load Sequence Number
Country of Origin

Receive
Warehouse
Shipping Advice

Submit Shipping
APIs to Update
Delivery Details
and Confirm
Shipment
Order
Management
Interface
Inventory Interface

Figure 4.0

Delivery Number
Carrier
Ship Method
Ship Date
Freight Rate
Total Freight Amount
Vehicle ID
Vehicle Number
PRO Number
BOL Number
Waybill Number
Seal Number

Receive
Warehouse
Shipping Request
XML

Pick

Pack

Ship

Send Warehouse
Shipment Advice
XML

Item Details:
Item
Subinventory
Locator
Lot Number
Serial Number
Revision Number
Quantity Shipped
Container Information
Seal Information
Tracking Numbers

Third Party Warehousing Process Flow

THIRD PARTY WAREHOUSING SETUPS IN ORACLE APPLICATIONS

The following setups are required in Oracle Applications for the suppliers
system:

1. Enable 3rd party warehousing for the ship from organization: Order
Management Super User/Inventory/Setup/Organizations/Parameters, find the
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shipping org, click on tab ATP, Pick, Item Sourcing, and check
Distributed Organization checkbox.

Distributed
Organization

Figure 5.0 Enable Organization for 3rd Party Warehousing

2. Setup Trading Partner for the ship from organization: XML Gateway/
Setup/Define Trading Partner. Use the following values:
Trading Partner Type = Internal
Trading Partner Name = Ship From Location for the Organization
Trading Partner Site = Address of Ship From Location
Company Admin Email = Ship From Location Contact
Transaction Type = FTE
Map: For Outbound Use = WSH_SSNO_OAG721_OUT
Map: For Inbound Use = WSH_SSNI_OAG721_IN
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Figure 6.0

Define A Trading Partner

3. Optionally define the code conversions for the trading partner: XML
Gateway/Setup/Define Trading Partner/Code Conversion. Code conversions
are performed on the receiving end of the transactions. The following
categories are provided to support the code conversions:

Code Conversion Categories


Category Name
INVENTORY_ITEM
UOM
CUSTOMER_ITEM
FOB
SHIPMENT_PRIORITY
CURRENCY_CODE
CHARGE_TYPE
Third Party Warehousing

Description
Inventory Item
Unit of Measure
Customer Item
Freight on Board Terms
Shipment Priority Code
Currency Code
Charge Type
Page

Code Conversion Categories


Category Name
WSH_SUBINVENTORY

Description
Subinventory

USER PROCEDURES FOR SUPPLIER REQUESTING SHIPMENT BY THIRD


PARTY WAREHOUSE

In Oracle Applications, on the Shipping Transactions form, the user


selects the delivery lines that will be shipped by the third party
warehouse, using selection criteria such as the order number, the
ship from organization, and the scheduled date/time. The Shipping
Transactions form displays the delivery lines.

The user selects the order lines they want to communicate to the
third party warehouse, and assigns the lines to a Delivery. There is
no restriction on how the user creates the delivery they can
autocreate or manually create the delivery. At this point, the delivery
lines have the status of Ready to Release (if the item is
transactable) or Not Applicable (if the item is non-transactable).

The user reviews the delivery, then selects action Send Outbound
Message.

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Figure 6.0
Form

Send Outbound Shipping Request using Transactions

A confirmation window pops up that asks the user what kind of


outbound message they want to send. The user selects Send
Shipment Request. The user hits OK, and the XML message is
sent to the third party warehouse.

The user can view the message history using action View Message
History. This takes them to a form that displays the workflow for
this XML message, and gives the status of the XML message. At
this point, the status of the message should be Sent.

The XML message is received and the shipment is confirmed in the


3rd party warehouse system. The 3rd party warehouse communicates
the shipment advice to the supplier system with details on what was
shipped.

The XML transaction is imported by the OTA (Oracle Transport


Agent) and is processed by the supplier system. The Delivery is
automatically ship confirmed, and the line statuses are updated to
Ship Confirm.

The XML response from Third Party Warehouse updates all of the
information on the delivery and delivery lines, such as serial
numbers, lot numbers, container ids, tracking numbers if the Third
Party Warehouse used carrier manifesting, the Freight Charges for
the delivery, and the actual weight of the delivery.

If the item is transactable, the Inventory Interface will process, and


decrement the on-hand balance. The OM interface will be triggered
to update the sales order line with the shipment information.

EXCEPTION HANDLING

The delivery and its associated lines will be planned and locked
after triggering the XML outbound message. Once an XML
message is sent for a delivery, users will not be able to update the
any of the attributes associated to the delivery/delivery lines that are
sent to the Third Party Warehouse instance.

If the Supplier wants to change any of the attribute sent on the


delivery and they have already sent the Shipment Request
transaction to the Third Party Warehouse, they must send a
cancellation message. They do this by selecting action Send
Shipment Cancel on the shipping transactions form, for the
delivery they want to cancel. This changes the status of the delivery
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to Shipment Cancellation Requested, and the user can make


changes, and send a new message to the Third Party Warehouse.

A response with zero shipped quantities from the Third Party


Warehouse system will cause the entire delivery to be backordered
on the supplier system.

If the response from the third party warehouse system does not
include all of the data required as per the inventory controls in the
supplier system, the delivery will not be able to be automatically
ship confirmed. The delivery will remain in the Shipment Advice
Received status, and the delivery lines will have a status of
Staged. The user needs to manually enter the required inventory
control information on the shipping transactions form, and then the
delivery can be ship confirmed.

If a Ship Confirm or General Credit Check Hold is placed on an


order after the Shipment Request message has been set, the delivery
will not be automatically ship confirmed. The delivery will remain
in the Shipment Advice Received status, and the delivery lines
will have a status of Staged. The user needs to manually remove
the Credit Check Hold in order to ship confirm the delivery.

DELIVERY STATUSES FOR THE SUPPLIERS DELIVERY


Delivery Statuses in the Suppliers System
Action
Before Outbound Shipment Request is sent
After Shipment Request is sent
After Shipment Advice is received
After Ship Confirm

Delivery Status
Open
Shipment Request
Shipment Advice
Closed

DELIVERY LINE STATUSES FOR THE SUPPLIERS DELIVERY


Delivery Line Statuses in the Suppliers System
Action
Before Outbound Shipment
Request is sent
After Outbound Shipment
Request is sent

Transactable Items

Non-Transactable Items

Ready to Release

Not Applicable

Ready to Release

Not Applicable

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Delivery Line Statuses in the Suppliers System


Action
After Shipment Advice is
received

Transactable Items

Non-Transactable Items

Staged -> Shipped ->Interfaced

Staged -> Shipped ->Interfaced

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Third Party Warehousing


June 2003
Author: Pradeep Kumar
Oracle Corporation
World Headquarters
500 Oracle Parkway
Redwood Shores, CA 94065
U.S.A.
Worldwide Inquiries:
Phone: +1.650.506.7000
Fax: +1.650.506.7200
Web: www.oracle.com
This document is provided for informational purposes
only and the information herein is subject to change
without notice. Please report any errors herein to
Oracle Corporation. Oracle Corporation does not
provide any warranties covering and specifically
disclaims any liability in connection with this document.
Oracle is a registered trademark, and Oracle Transportation is a
trademark(s) or registered trademark(s) of Oracle corporation.
All other names may be trademarks of their respective owners.
Copyright Oracle Corporation 2003
All Rights Reserved

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