Assessing Stock Levels
You can access inventory data to see real-time information. This includes how much you have, how much you need, and the value of your stock on hand. Then, determine how your stock levels are affecting your inventory workflow.
For example, if stock of an item is too low, then your order-to-delivery cycle time increases, and this can negatively affect customer service. If stock of an item is too high, then your overhead is increased by having money tied up in items sitting on shelves.
When you view item data, quantities are defined as follows:
|
Quantity/Level |
Definition |
|---|---|
|
Quantity Available |
Quantity On Hand less Quantity Committed
Note:
Quantity Available is never tracked as a negative quantity. An item is either non-available (quantity 0) or available (a positive quantity). You cannot commit items in an underwater state. |
|
Quantity On Hand |
Quantity currently stocked, including Quantity Committed |
|
Quantity Committed |
Quantity promised to customers on approved sales orders that are not yet fulfilled |
|
Quantity On Order |
Quantity on approved purchase orders pending receipt from the vendor |
|
Quantity To Order |
Preferred Stock Level less Quantity Available |
|
Quantity Backordered |
Quantity committed to sales for which there is no stock to fill the order |
|
Reorder Point |
Quantity level at which you need to place an order to replenish stock, or build more of this item. |
|
Preferred Stock Level |
This is the optimum quantity to maintain in stock of an item. The ideal quantity is the amount you need to fulfill orders in a timely manner without either running out or overstocking. This quantity is used to determine your replenishment needs on the Order Items page. It is the quantity you want to have in stock after an order is placed. The preferred stock level you set is used to calculate the quantity of items to be ordered on the Order Items page. |
|
Safety Stock |
This is a measure of the amount of stock you want to keep on hand to account for variations in demand so that you do not run out. It is a buffer amount of an item you prefer to keep in stock at all times so that you do not run out. |
Questions you may ask during this process are:
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Do I have items at or below their preferred stock level or reorder point?
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How many backorders do I have?
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Do I need materials to assemble items?
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What quantity should I order?
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What is the lead time to receive items?
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Has demand increased or decreased for an item?
Your answers to these questions determine how you order your items and materials. In general, many companies order inventory with the goal of keeping inventory at an optimum level rather than keeping many extra items on hand.
It is ideal to keep enough goods to service customers by fulfilling orders in a timely manner without having extra stock on hand. Extra stock reduces funds tied up in idle stock.
To assess stock information and determine your replenishment needs, identify information about your items and materials. For example, stock available and customer demand. Then, you can determine the quantities of items you need.
When you view item stock status on item records or on the item list, you can use these quantities to determine inventory replenishment needs. For example, you could determine that:
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An item with a quantity available below the preferred stock level and a quantity on order of zero may need to be ordered.
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An item with a large quantity available and large quantity on order may need to be ordered less often.
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An item with a low preferred stock level and a high quantity backordered may need to be ordered more frequently or in higher quantities.
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An item with any quantity backordered and a quantity on order of zero may need to be ordered.
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An item that is backordered in one location, but has high quantities in another location may need to be redistributed.
There are several ways to access item information in your account:
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To View an Item List, go to Lists > Accounting > Items.
View an Individual Item Record
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Go to Lists > Accounting > Items.
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Click View next to the item.
View Inventory Reports
You can also view inventory reports to access item information. For details, read the following topics:
Utilize Stock Replenishment
NetSuite can also automatically assess item replenishment needs and make suggestions for purchases. After you enter stock information an item record, NetSuite can suggest when to reorder the item and how many to purchase. This can be done using the following features:
By assessing item stock levels and sales information in reports, you can determine the optimum stock levels for your items and streamline your inventory.
If you use the Multi-Location Inventory feature, see Inventory Replenishment and Withdrawal. This topic provides information about taking surplus items out of one location and move them into another location with too few.