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1
Shipment Tolerances for Sales Orders
Enablement, Setups and Feature Highlights

Sandeep Kurur Madhu Punuganti

Senior Principal Product Manager, SCM Cloud Senior Principal Product Manager, SCM Cloud
Safe harbor statement

The following is intended to outline our general product direction. It is intended for information
purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any
material, code, or functionality, and should not be relied upon in making purchasing decisions. The
development, release, timing, and pricing of any features or functionality described for Oracle’s
products may change and remains at the sole discretion of Oracle Corporation.

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Why do we need Shipment Tolerances?
Overshipment Tolerance

• Industry specific requirements

• Flexibility in order fulfillment Ordered Quantity
• Revenue maximization
• Reduced inventory carrying costs
Undershipment Tolerance

Ordered Quantity UOM Overshipment Tolerance Shipped Quantity

100 Tons 20% 116 tons

Ordered Quantity UOM Undershipment Tolerance Shipped Quantity

100 Tons 20% 82 tons

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Setting up Shipment Tolerances – Feature opt-in
Before order transactions with tolerances
• Order Management feature
• Manage Shipment Tolerances for Sales
Orders
• Need for caution
• Irreversible once transactions are created

5 Copyright © 2020, Oracle and/or its affiliates After order transactions with tolerances
Setting up Shipment Tolerances – Item attributes

• Manage Items - Order Management

Specifications
• Set up overshipment and undershipment
tolerance values for the item in the item
validation organization

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Setting up Shipment Tolerances – Order Management Parameters

• Order Management Parameter – Default

Value for Overshipment Tolerance and
Default Value for Undershipment Tolerance
• Set up default shipment tolerance values for
each business unit

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Setting up Shipment Tolerances – Order Management Parameters

• Order Management Parameter - Source

for Shipment Tolerance Values
• Default shipment tolerance values from
• PIM item attributes as set up in the Item
validation organization
• Shipment Tolerances Parameters for default
tolerance values

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Setting up Shipment Tolerances – Order Management Parameters

• Order Management Parameter –

Quantity to Invoice for Overshipment
• Set up quantity to be sent to
Receivables when the order line is
overshipped
• Invoice ordered quantity
• Invoice shipped quantity

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Tolerances on Order Line

• Default tolerances while creating order

from
• Order Management UI
• File Base Data Import
• Order Import Services
• Pass tolerance values on lines to
Shipping
• Handle responses from Shipping and
decide whether the order fulfillment line
should be split

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Support for Tolerances in Shipping

• Create and manage sales order type lines with shipment tolerances
• Always tries to allocate requested quantity but users are allowed to over pick and over ship
within tolerances
• Disallows shipping material beyond the specified over tolerance
• Choose the shipment tolerance behavior for an organization
• Under tolerance
• Requested quantity
• Tolerance behavior is evaluated and applied for the order line at the time closing a
shipment

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Support for Tolerances in Shipping

• Close line for shipping as

soon as the shipped
quantity equals or exceeds
requested quantity

• Close line for shipping as

soon as the shipped quantity
equals or exceeds under
tolerance
• Default behavior for existing
and new organizations

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Support for Tolerances in Shipping

• Under and over shipment

tolerances displayed on
shipment lines
• Expected to be set and sent
from OM
• Not allowed to be entered in
Shipping

• Enter a quantity within

tolerances when using quick
ship

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Support for Tolerances in Shipping

• Allows entering picked

quantities greater than
requested quantity

• Maximum quantity the

user is allowed to pick
based on tolerances, other
existing picks, and
quantity already staged
• Available to print on pick
slip reports to help users
doing paper picking

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Support for Tolerances in Shipping when Integrating to a WMS/3PL

• Ensures the order line is filled using a single execution system – Fusion Shipping or WMS
• Expects WMS to adhere to tolerances for shipment lines individually in case of splitting
• Expects WMS to decide when the shipment line is considered fulfilled but only when a shipment is
made
• Allows WMS to override the tolerance behavior for the organization
• Disallows shipping material beyond the specified over tolerance for the line
• Allows WMS to backorder the line when a shipment can’t be made
• Backordered lines can be re-sent on outbound shipment request

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Points to consider

• Shipment tolerances are not supported for the following flows:

• Dropship, Return material authorization, Transfer order, Return transfer order, Return to vendor and Outside
processing
• Shipment tolerances are not supported for configurations, kits, coverages and subscriptions
• You cannot associate a coverage item to a covered item line that has shipment tolerances on it
• The order line total is not updated based on the shipped quantity. So in the case of overshipment or
undershipment the order line total will be different from the corresponding invoice line total
• Order Management doesn't do credit check during shipping, so an overship or undership on an
order line affects the overall credit limit when compared to the authorized credit limit
• If your tax authority requires you to create a tax invoice before you ship the sales order, then
consider how setting the Quantity to Invoice for Overshipment system parameter to ordered
quantity affects your tax compliance requirements
• You can't opt out of the Manage Shipment Tolerances for Sales Orders feature after you create a
sales order that includes a shipment tolerance value that isn't empty or zero. At this point, you're
committed to using the feature

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Points to consider

• System will not ship more than ordered quantity when using pick release in a single step fashion by
enabling the options for auto pick confirm and auto ship
• Requires a shipment to occur to close the fulfillment line
• Requires manual steps to move the additional material back to storage when multiple operators over
pick material simultaneously in paper picking scenario
• Use split line action to create another line to ship additional quantities when lines are staged
automatically
• Assumes no impact to OTM integration and may require manual steps to handle any exceptions
• Assumes no impact to GTM integration and may require manual steps to handle any exceptions

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Additional Resources

Resource Name Link

Readiness Training from 20A Manage Shipment Tolerances for Sales Orders

User Guide Shipment Tolerances

Implementation Guide Shipment Tolerances

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Thank you

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