Assign NetSuite Lot Numbers to Automate Bulk Order Fulfillment

This article is relevant if you are using NetSuite and you want to enhance your order processing for lot numbering.

Background

NetSuite Lot Number functionality is a common inventory feature for distribution companies.  The ability to assign inventory lots to transactions provides more granular cost tracking and better inventory management.  Yet, additional cost tracking may mean you need to expend more effort to get good information.

During order fulfillment, lot numbers must be defined so that proper costing can be accounted for.  In NetSuite, an Item Fulfillment will setup the cost side of a sale transaction with a debit to cost of goods sold and a credit to inventory.   Revenue is captured during subsequent invoicing which will generally debit accounts receivable and credit sales.  When you use lot number cost tracking,  you can assign different costs across your inventory which will provide  you with more opportunities to produce better gross margin analysis.

However, for companies that use NetSuite’s lot tracking feature, ¬†they increase the demands on order management. ¬†Within the order management process,¬†a lot number must be assigned to commit an item fulfillment record. ¬†If you want to bulk process your Sales Orders to produce your Item Fulfillment records, you may find it won’t process because NetSuite needs lot assignment information ahead of time.

Overcoming Lot Number Item Fulfillment Assignments

The key to overcoming NetSuite’s Lot Number Item Fulfillment assignments is to define the lot number during the Sales Order process. ¬†Because an Item Fulfillment gets its information from the Sales Order, the lot number can be inherited (defaulted).

But not so fast. ¬†Sales Order entry and management is typically conducted by sales people or possibly automated from eCommerce or other electronic based sales. ¬†Sometimes knowing which lot number to assign may require some specialized knowledge ¬†— not to mention that assigning lot numbers during sales order entry may cause frustration and slow down busy sales staff.

Automating Lot Number Assignments to Sales Order

The key to this challenge is to automate the assignment of Lot Numbers to Sales Orders based on rules.   Recently, for one client, here is what we did to solve their bulk fulfillment concerns.  Your rules may be different but the theme should be relevant:

  1. We defined a custom default lot number assignment on the item record to give us control over the lots we want to pull from.
  2. When a Sales Order is entered, there is no need to enter the lot number assignment (keeps it nice and easy).  This works for phone-based sales (manual entry) or electronic orders (eCommerce, imported or integrated).
  3. When the Sales Order is committed and approved, the algorithm will lookup our default lot number definition to determine if there is any inventory assigned.  If so, we assign the lot number on behalf of the user.
  4. If there is no inventory available on the default, we then perform a custom first-in, first-out  (FIFO) algorithm to pick the next available lot number for assignment.  Because internal IDs are sequential, we use it as a way to sort our available inventory records to find the oldest (first) available quantity.
  5. Finally, if we can’t find any available inventory, we naturally can’t assign the lot number — looks like a back order and more work must be done to get inventory on hand.
Of course, our ¬†logic is intelligent to know what inventory type was assigned on the Sales Order’s line item list. ¬†We have rules in place to handle zero quantities and the like. ¬†Now all the Sales Orders have lot numbers and are in good shape for fulfillment.

Now we can leverage NetSuite’s Bulk Fulfillment processor against our updated Sales Orders which greatly speeds up the preparation of orders helping the warehouse staff pick, pack and ship without adding additional order processing burden to order entry staff.

NetSuite is Designed for Innovation

We believe this lot number automation is a great example of how you can innovate on the NetSuite platform.  If you are looking to streamline and improve your processing ability on your NetSuite account, contact us.  Perhaps we can refine these algorithms to meet your needs.

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Marty Zigman

Holding all three official certifications, Marty is Southern California's 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 25 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to setup a conversation.

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| Tags: , , , , , | Category: ERP, Management, NetSuite, Technical | 3 Comments

3 Comments

  1. Posted October 2, 2013 at 4:12 am | Permalink

    I like your key for order fulfillment. Actually we are also a small order fulfillment services provider in India and always want to get such kind of the best infos. Thanks for sharing Marty.

  2. Troy
    Posted July 13, 2016 at 1:07 pm | Permalink

    Hi Marty – do you have happen to have this as a bundle that one could purchase? We are looking at a similar need. Thanks!

  3. Posted July 16, 2016 at 5:34 pm | Permalink

    Hi Troy,

    We do not sell our bundles but we give them to our clients at no charge through professional services. Send me a note via this link to start a engagement conversation: http://www.prolecto.com/services/netsuite-care/

    Marty

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