Having the right inventory available for the right order and at the right time, can be one of the most challenging tasks to manage in any ERP, even in a comprehensive ERP like NetSuite. This is especially the case with companies who seek to provide their customers with high quality customer service while carefully managing their inventory to avoid stock-outs and freeing up capital for other critical business investments. The Supply Allocation feature from NetSuite introduces a suite of tools to help businesses better align demand to supply. One of the tools I’d like to introduce you to in this blog is order allocation schedules which can add business value by automating the allocation and reallocation of inventory based on shifting business needs.
What is an Order Allocation Schedule?
An order allocation schedule is an automated system-driven method to allocate supply to demand based on a set of defined business criteria. A properly configured order allocation schedule can add value to a business by automating the process of reassessing inventory allocation to achieve the following key goals:
- Financial Efficiency:
- Reduce the amount of capital tied up in holding inventory due to stock-out concerns.
- Reduce the amount of money spent on expedited shipping costs due to missed commitments.
- Operational Efficiency:
- Improve demand forecasting by more accurately forecasting what is needed and by when.
- Streamline warehouse operations, by prioritizing the right orders.
- Improved on-time delivery.
How to Setup a Schedule
An Administrator can configure a new order allocation schedule by navigating to Transactions > Order Management > Allocate Orders > Schedule. At a high level, the order allocation schedule can be configured in several ways:
- You select the orders you want to allocate.
- You select a saved search containing your sales orders which the system runs and uses to allocate. This is the recommended method as it allows full saved search flexibility while minimizing maintenance.
- You create a saved search within the schedule. Like option two, but I still recommend option two as it allows you to verify the saved search output before adding it to the schedule.
Regardless of which method you choose, you’ll want to configure the following as well:
- Recurrence Frequency
- This effectively determines how frequently the allocation will be performed. In most instances it will be daily but can be hourly if needed in quick-turnaround businesses.
- Next Date
- This determines when the schedule will run next, and this value will be updated automatically as the schedule runs.
- Set Order Line to Firm
- This checkbox is worth noting, as toggling it will set all allocated and committed inventory to ‘commitment confirmed’. An item that has been set to ‘commitment confirmed’ will NOT be reallocated by the system and serves as a way to protect inventory that has been committed to a sales order.
Figure 1 The Order Allocation Schedule allows users to define what, when, and how sales orders will be allocated.
Once saved, order allocation schedules will begin to run automatically and require minimal maintenance. In addition, you still retain the ability to manually reallocate business as needed.
Allocation schedules in NetSuite represent a significant step beyond simple inventory commitment; they offer a dynamic, configurable rules-based approach to help you align your unique business needs with strong automated controls. By properly setting up these schedules, you move from a reactive cycle of managing stockouts and manual reallocations to a proactive process that leverages the ERP you are paying for to directly optimize working capital, lower shipping costs, and improve customer satisfaction.
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