New inventory allocation features
Reaching the optimal inventory levels to quickly service customer demand while not tying up valuable financial assets can be difficult, even when using NetSuite’s demand and supply planning features. Many companies will encounter situations where their inventory levels aren’t sufficient to immediately satisfy customer demand and will want to prioritize which customers are serviced first.
Building on the customer priority and inventory commitment features of past releases, the last two releases (2017.1 and 2016.2) bring greater flexibility and functionality to inventory commitment on orders (sales orders, work orders and transfer orders). These features enable you to direct limited inventory stores exactly where you want.
Basic Inventory Allocation
The basic allocation is generally set up in the accounting preferences where you designate a field for determining allocation priority (expected ship date, order priority or transaction date) and set your account to perform item commitment after the transaction is entered (Perform Item Commitment After Transaction Entry = Checked).
Advanced Inventory Allocation
If you need to allocate inventory to orders using more advanced logic, then you can uncheck the ‘Perform Item Commitment After Transaction Entry’ option. This allows you to allocate items in a few ways:
- Manually using the Reallocate Items page. This page allows item by item allocation per inventory location. It is best suited for low item and order volumes where business logic can’t easily be codified into an automated process.
- Manually using the Commit Orders page. This page allows you to set your order filters to find a subset of orders for inventory allocation each time you want to commit inventory.
- Automatically commit inventory using the Commit Schedule page. This page allows you to configure multiple order allocation schedules, each with their own criteria defined via saved search. Using Commit Schedules you can have NetSuite continually re-evaluate order allocation based on the criteria that are important to you.
An example of this would be to have a schedule that runs for your top priority customer orders, which allocates available inventory and sets it to ‘Firm’. A second schedule would run for lower priority orders and allocate inventory as available, but not set commitment to ‘Firm’. This allows inventory to be re-allocated to higher priority orders that come in before the lower priority orders are shipped.
Locking Inventory Commitment
Order lines will continue to be in the ‘available’ pool of inventory allocations until the lines are set to ‘Firm’. This setting locks the inventory in, so to speak, and shows on the sales order form as ‘Commitment Confirmed’. This is especially helpful if you have certain orders you want to keep inventory allocated to (your top priority customers, for example) while others orders may continue to have inventory allocated and removed to accommodate new orders from top priority customers.