NetSuite inventory management incorporates all the functions required by a supplier ofhysical products, fully integrated into the purchasing and sales order processing modules to save time and minimise error. It offers a comprehensive range of functions and features which can be selected at system set-up or invoked later.
It supports multi-location and bin management, bar coding and a variety of replenishment options. It is integrated with FedEx and UPS for ease of shipment and provides flexible pick, pack, ship process workflows. It also provides an efficient returns management facility and support for warranty and repair functions.
Items can be managed in groups, lots, serialised, handled as matrix items or as bills of materials to handle kits and assemblies.
Costing methods available include average, LIFO and FIFO and landed or other costs held against items. Multiple sales prices can be set automatically from cost price using a variety of options including price plus, quantity prices or pricing groups.
A range of standard reports are provided to help improve the profitability and accuracy of stock and inform management decisions.
Types and characteristics of stock items supported
NetSuite inventory management offers a range of item types. Units of measure are defined for each item, and it can be associated with multiple units of measure for purchase, stock, manufacture or assembly and sale. Therefore NetSuite can handle discrete products or components as well as ingredients such as liquids or cloth. The stock file can also hold non-inventory items such as service, gift voucher, description, that do not need to be managed in the same way as physical stock.
Items can be combined in groups, where the price of a group is determined by the component prices or packaged where the price of the package is separate from the component price. They can be part of a bill of materials, where components are assembled to create an end product. The matrix function allows stock with for example a variety of colours, sizes and styles to be recorded under a family structure where the parent identifies the similar aspects but each variation has an item number. This allows each variation to be tracked. For items where each variation need not be tracked, the transaction item options feature is available.
Each stock item can be recorded with a serial number or by lot number where a group of items need to be managed perhaps by date. Serialised and lot managed items can be generated automatically and can be used in assemblies.
Each item can have a default lead time and safety stock level (in units or days’ worth of demand) set against it to ensure stock availability. These can be set at different levels for each location.
NetSuite supports multi-locations which can be set at the item, transaction or individual line item level. This allows sales or purchase orders to be coded where the goods are expected to be delivered from or to. The system also allows the combination of transaction and individual line item locations in one transaction for businesses who for example wish to record that items were from different warehouses but within the same area of business e.g. Scotland or North England.
NetSuite also incorporates a bin management system that allows each item to have a defined preferred bin associate with it that can be updated later. Items can then be transferred to bins either during the fulfilment process or as part of a reorganisation of the warehouse. When items are received they can be allocated immediately into the appropriate bins or held to be put away in bins later. The system will create reports and can automatically remind warehouse staff of stock waiting to be put in bins. The picking note will include only the preferred bin number when there is sufficient stock in that bin to meet the order, otherwise alternative bins with some stock in will be included. There is no limit to the number of bins that can be created.
Sales and order fulfilment
On placing a sales order, the sales team (or customer if processed on line) can have access to stock availability to see whether an item is in stock, promised, on order or out of stock and can be automatically allocated to the sales order. Items can be reallocated manually to another sales order later if necessary.
Available to promise can be calculated using either a ‘discrete’ or ‘cumulative with look ahead method’. The former is more conservative as it treats each purchase, transfer or works order as a bucket from which existing sales orders are taken to determine the amount available to promise whereas the latter method accumulates projected available stock across. Purchases can be automatically created to meet sales where the item is not in stock or where an item is a special order.
Orders can be set for partial deliveries, either because there is insufficient quantity of one item or because not all items in the order are available. In those instances where partial deliveries are not allowed, stock of items available is usually marked as committed until the complete order can be satisfied, but this setting can be changed. Invoices can be created at the point of fulfilment or later, for example when received by the customer.
NetSuite allows the fulfilment process to be separated into three stages of pick, pack and ship. The system can maintain the status of each item through these processes. When selecting orders to be fulfilled the clerk can select on the basis of type of transaction or stock, location or status of the sales order i.e. whether all stock is available or partial deliveries are acceptable. There is a bulk fulfilment option. For orders shipped via UPS or FedEx there is an integrated label production feature.
The return management function provides a process to both manage the process efficiently and record all cases. It enables businesses to record what items are to be returned, whether they have been or are to be returned into stock and whether they are to be replaced or refunded. The process includes optional approvals and can be used to ensure that no unexpected returns arrive in the warehouse and that customer complaints are handled effectively.
NetSuite inventory management provides a range of options for replenishing stock. Suggested orders for items can be created manually, automatically when the stock level reaches a certain point to replenish to a defined level or based upon demand. Demand based replenishment in NetSuite is offered either via reorder replenishment and demand planning. Each of these methods can be used for different items or types of item.
The reorder replenishment method is usually set automatically to take place perhaps weekly or monthly and happens within the system overnight with no need for manual intervention. The demand planning method, on the other hand, is a process that includes manual intervention through its phases and is undertaken when required. Demand planning is useful for items whose demand varies as it can include sales forecast as well as historical sales data. It can also be reviewed and adjusted as necessary through the phases, e.g. the initial demand plan, generated supply plan. Demand planning is a useful tool for distributors who also undertake assembly as it provides a basis for planning the assembly process.
Demand based replenishment calculates default lead times based upon actual delivery against order times and historical sales data to calculate future demand, which can take into account seasonal adjustments. The length of time over which the historical data is to be analysed can be set for each stock item so that a fast moving item can be analysed over a shorter time than a slow moving item. Expected changes in demand can also be added, for example if an increase or decrease in demand of 10% is anticipated for an item.
NetSuite provides facilities to help the process of a physical stock take. Each item that is to be counted has a last inventory count, next inventory count date and inventory count interval recorded. When a stock take is planned, the system can create a list of all items due to be counted, which can be amended, or the manager can create a list for a specific item regardless of it’s next inventory count date in the system.
The physical counts for each item are then entered into the system and the system creates adjustment transactions as appropriate, which can be approved or rejected. An inventory count record is maintained that shows when counts were undertaken by who and all adjustments.