This article is relevant for those looking to manage their inventory in NetSuite by breaking apart or disassembling inventory items, offering an effective alternative to the standard use of Assembly items.
Background
In most distribution scenarios, our clients, such as those in the jewelry industry, manage their products as standard inventory items. This approach aligns well with their business model, particularly in how they procure items from external creators.
However, situations arise where it becomes necessary to deconstruct these items into their constituent components. For example, a diamond ring might need to be separated into the diamond and the ring setting.
When not utilizing NetSuite’s Assembly items feature, which provides a sound mechanism for Unbuilding Assemblies, one must resort to making inventory adjustments. These adjustments are essential to accurately reflect the disassembly process. This same process can be used to break apart case quantities as well.
Yet, inventory adjustments are tricky to get right. What if we could have a tool to help make this operation more streamlined?
Introducing a Break-Up / Make-Up Inventory Utility
Naturally, after discussing the modeling of this challenge with our client, we suggested considering Assembly items. In their minds, the changeover was not worth it due to the overhead of migrating item types and because the target break-up structure sometimes would not be known exactly before the need to do it.
Instead, they wanted a simple utility to make this easier for the staff. As we contemplated the options, we realized that if you can ‘break up’ an item, you can also ‘make up’ an item with a very similar pattern.
Designing a NetSuite Break-Up Suitelet
We developed a Suitelet focusing on an intuitive user experience with the following essential design elements:
- Break-Up Target Items: Central to our design is the capability to disassemble an item into its components. This necessitates that the new target items be already constituted in the NetSuite database. Since these are discretionary, management could think about what the target items are going to become and then define them accordingly.
- Costing: Breaking up an item with an existing cost requires us to determine the cost allocation for each new item created. Without historical data at hand, this process relies on management’s judgment. Our utility prompts for the assigned cost and quantity for each target item. Any discrepancies between the total of these costs and the original item’s average cost are allocated to a variance account.
- Auto-Generate Inventory Adjustment: Upon inputting the breakup parameters, the utility automatically generates an inventory adjustment. It decreases the count of the original item and increases those of the target items, with costs assigned accordingly.
- Make-Up an Item Function: Leveraging the above process in reverse, this function allows for the creation of new items from existing sources. Knowing the average cost of source items, the utility only requires the number of new items to be created and the quantity of source items utilized.
The utility completes its task by providing the user with a reference to the auto-generated inventory adjustment transaction, signaling a successful operation.
Watch a Video of the Inventory Adjustment Tool (3:37)
The following video (3:37) is a demonstration of the specialized tool. Click this link to watch the video separately.
Exercising Judgment in NetSuite Application Design
This application highlights the principles we uphold at our firm. It begins with grasping the business intent underlying a challenge. We ensure a comprehensive understanding of the issue and then evaluate whether NetSuite’s inherent capabilities can effectively address it. Modeling is fundamental. If gaps in native functionalities are identified, we explore third-party tools or SuiteApps for solutions.
An integral part of our approach involves leveraging the Prolecto Labs Repository, a collection of license-free algorithms. These accelerator algorithms are instrumental in adding value, and when it’s prudent, we innovate within the NetSuite Platform, judiciously deciding in favor of initiatives that promise tangible business returns.
Our clients appreciate our Labs offering for its role as a catalyst in tailoring NetSuite to their specific needs, free from the concerns of licenses or ongoing fees. The true depth of value lies in partnering with a firm skilled in optimizing NetSuite not only for current needs but also for future aspirations, ensuring both effective execution and a solid return on investment. Our clients express gratitude for finally finding and working with a firm that organizes around ethics and competence.
If you found this article relevant, feel free to sign up for notifications to new articles as I post them. If you would like to solve your item break-apart challenge, 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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