Multi-Step NetSuite Dropship Purchase Orders

This article is relevant if you are using NetSuite and you need a multi-step dropship purchase order generated based on many sales orders.

Background

NetSuite supplies distributors fundamental abilities to create a drop ship or special order against a sales order. I have written multiple NetSuite purchase order articles that illustrate innovations to the fundamental capacity.

1. Learn how to Consolidate Multiple NetSuite Sales Orders to One Purchase Order
2. Solved: NetSuite Drop Ship Purchase Accruals

In this discussion, we worked with a client who is in the food production and delivery business. In their business model, they need to coordinate a number of vendors to produce fresh food, pick and pack (package) the food for customer consumption, and ultimately deliver the goods to retail locations all within a narrow window of time. While this looks like a dropship purchase order practice, it really represents a purchase order coordinated supply chain logistic practice.

The Multi-Step Dropship Purchase Order Challenge

A traditional dropship purchase order works well for the acquisition of goods where a vendor delivers goods to the end customer on your behalf.  In addition, the conventional wisdom is that the purchase order may also contain a story for how to ship those goods through carriers and shipping methods. Yet, what if you need to coordinate different vendors to act on different fulfillment aspects of the goods?

Consider our client’s scenario.  The client needs to produce and deliver fresh food to a chain of retail stores across close proximity geography (e.g., city) for a given morning. From their customer’s perspective, they simply want to order the goods and expect receipt on the planned delivery day at each retail store.

However, it takes time to produce the food and organize it so that it can be distributed.   Contemplate the following:

1. Production Operations: Food needs to be manufactured at a commissary into consumable units across multiple customer orders. Thus, to produce the array of goods, sales order items need to be consolidated across different customer orders into a single request for each commissary.  This aspect of the operation most closely looks like conventional NetSuite “stock-based (non dropship)” purchase order flows yet this can be optimized into a single operation as we did in this article.
2. Pick and Pack Operations: Goods across commissaries need to be organized so that they can actually be delivered to each store. Organizing food into delivery batches may require picking up goods from each producer and bringing them to a location so they can picked-and-packed into shippable units.
3. Deliveries: Now that the goods are picked and packed, they can be delivered. However, we want the delivery service to get one purchase order with all the deliveries required with information about the goods to be picked up and the delivery address.

Consider that each of these steps, Production, Pick and Pack, and Delivery have lead times which mean that we must be able to assess the feasibility of making the customer expected ship date by knowing when we must start the ordering process and ensuring that all the steps are done within sufficient time.

Further consider that some operations may require a vendor to move the good to the next step, whereas another vendor may need to go pick up the goods so they can produce their respective service. Perhaps customers have their own delivery service and they plan to pick up their own goods? Perhaps one set of vendors can do more than one part of the narrative?  The mixture of potential combinations will quickly overwhelm any analyst — let alone handle these concerns at scale.

Sales Order Purchase Order Supply Chain Narrative

To achieve the objective, the customer sales order represents the opening move. Simply, the goods need to arrive on time at the right destination (e.g., ship-to address).  Thus, each sales order line can contain a story about the related purchase orders that can be harnessed to request third-party vendors to fulfill.  With a linking of these purchase orders, a narrative emerges.  So long as each vendor delivers on its promises, the supply chain is reliable and effective.

Purchase Order Generation

NetSuite’s conventional purchase order generation would not stand a chance to handle this complexity. Yet, leveraging previous tools we have created for fast and flexible NetSuite bulk generators, we are able to present a consolidated story to the order manager to allow the generation of intelligently linked purchase orders.  Click here to see a sample of the multi-step purchase order PDF.

Purchase Order Presentation

By leveraging our Content Renderer Engine technologies, we were able to create powerful NetSuite purchase order documents that contain just the narrative elements needed for each vendor to act.  If a vendor were to supply more than one service, the purchase order was multi-part.

Multi-Step Purchase Order Generation Video (11:31)

To help understand the multiple-step purchase order generator used in a dropship operation, the following video (11:31) demonstrates the application.

NetSuite Innovation and Leadership

I designed the application for our client and asked one of our senior technical analysts, Boban D., to produce the final deliverable.  Each time I review the outcome of this application, I am struck by the power that the client gained by leveraging the logic and set up of our application. When any type of scalable NetSuite-driven supply chain operation has many “moving parts” to coordinate and can be streamlined by software innovation, a competitive advantage for time savings and ability to consistently deliver will enhance enterprise value and the profit-producing potential of the organization.

Indeed, is not the deeper potential of the NetSuite platform to make more money by lowering cost and expanding revenue?  This potential is unlocked when working with professionals that can powerfully synthesize business requirements, command the technical platform, and ultimately deliver the tool and practices that support its realization.

If you found this article relevant, feel free to sign up for notifications to new articles as I post them. If you hesitated to solve your NetSuite-related sales order or purchase order challenge as you assessed it was “too complex”, it does not have to be that way; let’s have a conversation.

Marty Zigman

Holding all three official certifications, Marty is regarded as the top NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 30 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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