Why Back to Back Order or Drop-Shipment ?

Why Back to Back Order or Drop shipment ?

In B2B Order the shipment process is completed throu Order Management as a standard order after the item is received againts a Purchase order

Example: A order X from B

B Order Item X from C

C ship Item X to B

B Ships Item X to A

B bills A for the Order, C bills B for the order

Drop shipment is a method of order fulfillment where the organization taking the order may or may not maintain their own inventory for the drop shipped product, but fulfill their orders though 3rd party vendors who directly ship to the end customer ordering for the product.

Example:A orders item X from B

B orders Item X from C

C Shps Item X to A

B bills A for the Order, C bills B for the order

In B2B the source is Internal, the item would be procured after the order is created or after the demand is made

In Drop Ship the Source is External, inventory not effected Logial receiving, logical receiving is done against the ASN received from Supplier

B2B can be used across all showroom retailers and wholesale type of business to cater to challenge of maintaining stocks to handle unexpected large demands from certain customers where it is not in the best interest of such organizations to stock for them.

Drop Ship is suitable for agency typ eof business where companies book orders on behalf of other manufacturers and businesses not willing to do by themselves , also Suitable for MNCs which have a central warehouse design to meet customer demand over a large geographical area.