This article is relevant if you are seeking to develop a simplified method to plan to order more inventory to avoid stock out situations.
Background
One of our clients in the distribution industry sources inventory from overseas and must account for long delivery lead times. They are concerned about insufficient stock to satisfy demand especially because it can take a couple of months to have goods manufactured and delivered from overseas.
NetSuite offers a powerful Demand Planning module which allows you to organize an item demand forecast independent of actual orders, estimates and opportunities. From the item forecast, the module will suggest a supply plan intelligently accounting for assembly bill of material components and lead time ultimately driving the creation of purchase orders. The module requires implementation planning and relatively mature organizational practices to gain the value of the tool’s suggested methodology.
While our client was contemplating the moduel, instead, they wanted to keep things simple. Their inventory is maintained in multiple warehouses designed to serve customers in different locations. For each item location, NetSuite offers a “Reorder Point” variable that can be used to help know if an order must be placed to acquire more goods. The client wanted to see if we could use this built-in capacity to drive item supply management in their business.
Leverage Saved Search on Inventory Location Reorder Point
We discussed the development of a saved search that would alert them of the need to order more goods. At the most simple level, an inventory analyst determines what the item location reorder point is that would be give them enough time to order goods and take delivery. Much could be said about how to come up with that number. Yet, the calculation of the reorder point was not their concern; instead, they needed a way to easily pay attention that they indeed had operational item supply concerns that demand attention.
To achieve help them achieve the low-cost objective, we developed a color coded saved search that will be emailed to appropriate individuals daily. We produced an item available warning (yellow) threshold of 125% over the reorder point to get an early indication that they needed to take action. If the item supply was under the reorder point, we change the color to red. The absence of a record means matters are in good shape.
On a daily basis, an email is sent out to the inventory analyst and key management. If all is well, no email is generated. Here are some screen shots (click image to enlarge) to help you see how the saved search criteria and output is crafted.
Getting More out of NetSuite
NetSuite’s saved search is one of the more powerful capacities offered by the platform. Learning how to use the tool and advanced features such as row highlighting and email notification can go a long way to help drive business operations. If you are not satisfied that you have exploited NetSuite’s platform power, 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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