This article is relevant if you use NetSuite and the creation of items (products or others) is an obstacle to estimating, quoting, purchasing, and sales order creation.

Background

Many distribution-oriented businesses offer a deep catalog of products that others manufacture or supply.  It is quite common for the depth of the products to be continually growing and changing as the variety and richness of manufacturer offerings keep up with the competitive market.

Consider an electrical equipment distributor who may offer a wide range of products to their customers in solution-based selling.  In this model, the end customer needs a specific configuration for their facility application. The end customer may use architects, engineers or designers who will work with the electrical equipment distributor to craft a set of products that work well together to satisfy the end-use application.

In these selling models, the electrical equipment distributor may have never sold the desired products before.  Nonetheless, their distribution selling model affords them a strategic capacity for customer education and guidance with a rich and deep catalog that takes knowledge to navigate well.

In these models, there is pressure to have a larger, fast-changing, central database of items.

Working with NetSuite Items That Do Not Yet Exist

Like most ERP systems, NetSuite makes a major underlying transaction model assumption: the items or products must exist before you can begin crafting estimates, quotes, sales orders or purchase orders.

Yet, as many NetSuite-based Product Managers understand, item setup is no simple task without some forethought-based specialty algorithms.  Thus, most organizations fret at the thought of crafting products/items unless they must.

Spreadsheet Based Selling

Naturally, with all the cumbersome item setup requirements, almost by default, crafty sales organizations revert to using spreadsheets to build out proposals (estimates/quotes).  The typical method is to craft a spreadsheet with the following freeform line elements:

1. Supplier/Vendor
2. Manufacturer Part Number (MPN)
3. Purchase Cost
4. Description
5. Product Category
6. Selling Price

With these minimum data elements, an organization can make inquiries from suppliers about product availability and acquisition prices. Then, with pricing policies in hand, spreadsheet quotes are assembled, packaged and distributed to prospective customers.

Spreadsheet Selling Considerations

While the spreadsheet gets the job done, it suffers from significant organizational drawbacks:

1. Historical Reference: the first spreadsheet works well, but every subsequent spreadsheet that is derivate from a predecessor naturally becomes an item detail lookup challenge.  Professional salespeople revert to remembering to open up previous spreadsheets to copy and paste information.
2. Revision/Version Control: we all know what it is like to save files that go through iterative versioning. When quoting, it is natural to be in this back-and-forth cycle. Because there is no standardized enforcement, each individual makes up their own revision process.  Inconsistent practices are error-prone.
3. Visibility: Because there simply is no central repository of quotes and their respective revisions, management has very limited visibility of their sales organization efforts.  This exacerbates the sensation of “flying blind” thwarting leaders’ best intentions to make grounded assessments.
4. Business Rules Compliance: with spreadsheets, it’s difficult to enforce business policies such as margin requirements and credit limits.

The Classic Generic Item Symptomatic of Spreadsheet Practices

As a result of the spreadsheet selling practices, when the customer commits, we now need to get the Quote (or Sales Order) into NetSuite.  For the more ambitious, they will develop CSV file uploads to help create items and then do the same thing with the creation of Quotes/Estimates or Sales Orders. Many have turned to our firm looking for supercharged ways to upload data into NetSuite.  See my 2020 article, Fully Automate Complex NetSuite Data Imports, for background.

Yet, we often see the “Generic” or “Dummy” item in the database acting as a placeholder for the real item.  In this model, the description is used to hold the distinguishing information about each item. Thus, if there are 10 different parts on a quote, NetSuite sees 10 lines of the same “Generic” item with different custom prices and descriptions.

We then get complaints of the following under this model:

1. Costing: the database can not offer any help with costing and item level margin because the average cost calculations are incorrect as they are comingled between mixed nature items.
2. Purchase Prices: there is no capture of individual purchase prices because there are no distinguishing parts for each item.
3. Price Lookups: the only way to see previous prices is to look up old sales orders or invoices; the item catalog can not hold distinguishing information.

Streamlining Quoting and Item Generation

To solve this problem, is to go beyond NetSuite’s (and other ERP) approaches. I discuss the overall approach in detail in my 2022 article, A High Performance Alternative to NetSuite’s Configure Price Quote (CPQ) Add-On. Here, I am focusing on the problem’s core: the difficulty in defining items and the surrounding consequential spreadsheet/workaround practices.

To solve this challenge, we leverage the NetSuite Platform to build a Quoting and Proposal practice that takes advantage of the spreadsheet convenience and speed, but does the work of constituting items only when it makes sense.

In the streamlined model, we chose to modify the language used to conceptualize items into product sets which we call Configs and Sub Configs. The major idea is to generate a configuration (Config) for a prospective customer that gives us all the power of the database but very fast data entry/management.  In this model, the key features are to work quickly as follows:

1. Part Number: freeform part numbers, typically offered by the manufacturer (MPN), can be used to distinguish items.
2. Vendor Identification: If we already use the vendor, simply select it. Else, use a freeform vendor name.
3. Auto Item Linking: without stopping for lookup, link to an existing database item if it is found. Instantaneously bring forth costing, descriptions and other attributes; else, continue in a freeform fashion.
4. Costing and Pricing: continue with adding costing information if known from the supplier; if already linked, bring forth the last purchase price. Likewise, enter a freeform price to offer the customer. Yet, if the customer and item are already identified, bring forth the price from the database.
5. Branded Proposal Generation: with information gathered quickly, produce a branded quote with all the richness of PDF generation, thanks to Prolecto’s free-for-client-use Content Renderer Engine.  No compromises and consistent brand presentation.
6. Latent Validation: what matters is if the prospective customer commits. At that point, we do further validation to ensure all matters are in order to automatically get to a Sales Order.  Please read my article, Learn How to Build Scalable NetSuite Sales Order Practices, for those interested in this topic.
7. Auto Generate Items: once we have a validated quote, we now can automatically create all the items in the database. We can set all the defaults that will meet the organization’s policies using application settings. Complex information, such as preferred vendor and cost information, is automatically crafted.

Hence, the meaningful work of crafting traditional record structures simplified through well-defined modelings and respective automation, such as items and sales orders, only comes forth when a customer is committed to purchasing.

Optimized Item Generation and Quoting Discussion and Demonstration (12:45)

As mentioned earlier, this discussion is a subset of a more complex narrative demonstrated in my article, A High Performance Alternative to NetSuite’s Configure Price Quote (CPQ) Add-On. Here, I interview our Inventory Practice Manager, Mathieu M., about the solution we offered a client during their “re”-implementation of NetSuite (yes, we have helped numerous clients re-implement NetSuite after they had poorly modeled configurations).

Click here to watch the (12:45) video.

Subsequent Related Advanced Article Topics

Addendum: In a 2024 subsequent article, I brought forth more complex related topics that are meaningful for organizations that address enterprise requirements:

1. Revision and Version Management: how do we handle all the revisions that get created? How do we handle proposal expirations and renewals?
2. Multi-Party Elements: when selling solutions into complex configurations, multiple parties may be participating while we don’t know who the final buying customer will be. How do we keep things straight?
3. Internal Coordination: when producing complex proposals, multiple agents act in collaboration for the customer solution. How does each party hold the narrative while responsibly acting to produce and deliver on the commitment?

Model Business Problems First to Subsequently Exploit Software Development

This discussion is an excellent example of our Firm’s delivery philosophy. We must first fundamentally understand our clients’ business ambitions. We can then become advocates to take advantage of every NetSuite capacity available to offer our clients. Whether it is built-in or we can leverage a free-for-client-use accelerator bundle, we should craft a platform solution that helps our clients keep costs low and expands their capacity to build greater customer confidence.

If you found this article relevant, feel free to sign up for notifications to new articles as I post them. If you are done with spreadsheet quoting and generic items and wish to enjoy scalable business practices, 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.

More Posts - Website - Twitter - Facebook - LinkedIn - YouTube