This guide details the inventory management preferences related to demand planning available within NetSuite.
To navigate to these settings, go to: Setup > Accounting > Inventory Management Preferences.
NOTE: To use this functionality, ensure that you enable the NetSuite feature "Advanced Inventory Management" under Setup > Company > Enable Features > Items & Inventory tab > Inventory section.
Setting Lead Time and Safety Stock Per Location
You can configure lead time and safety stock levels for each location on a NetSuite item record. The lead time is calculated based on receipt lines sourced from the purchase order, indicating a specific location.
If you utilize NetSuite Advanced Inventory Management and opt for auto-calculation of lead times, the vendor’s lead time will be determined by item receipts at each location. This lead time reflects the duration between the purchase order date and the date the item was received.
Do you operate a SuiteCommerce website? Explore this solution to showcase location-specific stock levels on your e-commerce store!
Default Lead Time in NetSuite
This preference allows you to specify the number of Default Lead Time days within NetSuite. Lead time reflects the typical duration from when you order an item from a vendor until you receive it. This measure is employed to calculate the reorder point for an item unless a specific reorder point is defined in the item record.
Note: If you monitor multiple vendors for each item in NetSuite, lead time calculations will be consolidated for all vendors associated with that item, rather than being vendor-specific.
Looking for enhancements in managing vendor relationships? Discover the vendor portal available through Advanced Entity Portals for NetSuite!
Default Safety Stock in NetSuite
To leverage this NetSuite inventory management setting, enter a default number of days’ worth of stock that you strive to keep on hand. This amount acts as a buffer in addition to your desired stock level, preventing you from running out of stock. This safety stock duration is factored in when automatically calculating the suggested reorder quantity of an item if no specific safety stock is recorded in the item record.
Effective Stock Inventory Management relies on maintaining an accurate count. Understand how the NetSuite Physical Inventory Count can assist you in achieving this.
NetSuite Default Preferred Stock Level
This inventory management setting allows you to input the Default Safety Stock in days for an item that you wish to retain in inventory. For instance, you can enter 30 to set new items to a default of 30 days' worth of stock.
This stock supply duration is used when determining the preferred stock level of an item unless a specified preferred stock level exists in the NetSuite item record. The preferred stock level is calculated using the formula (daily demand * number of days supply preferred).
Seeking a higher-level overview of Inventory Management practices? Check out this article on NetSuite Inventory Management.
NetSuite Order Analysis Interval
With this inventory management preference, you can specify the number of previous months' sales you want to analyze to automatically calculate historical demand in NetSuite. The value you input is utilized when the seasonal demand for an item is not determined. For example, entering 6 would assess the sales order history from the past 6 months.
Interested in using demand to shape your inventory practices? Review Just-in-time Inventory and consider how you can implement it.
Seasonal Analysis Interval in NetSuite
For this NetSuite inventory management preference, indicate the number of months you wish to analyze for sales, starting from one year prior. This interval is utilized to auto-calculate demand when seasonal demand for an item is established in NetSuite. For instance, entering 6 would evaluate the six months commencing from one year ago.
Are you seeking conceptual insights regarding stock inventory? Refer to this article on Stock Inventory Concepts, Methods, and Best Practices!
Estimated Demand Change in NetSuite
You can apply this NetSuite inventory management preference by indicating the default percentage change in demand when calculating the proposed reorder quantity for items, if no demand change percentage is specified in a NetSuite item record.
For example, if you anticipate that new customers will boost sales for items, entering a 5% expected demand change can be added to past sales totals in NetSuite.
Have inquiries about this NetSuite inventory management preference? Our NetSuite consultants are here to assist!
NetSuite Transactions to Consider
This setting will determine which transactions are counted to assess inventory demand in NetSuite:
If you select Order, this includes approved and non-canceled sales orders and work orders to calculate demand for establishing reorder points and preferred stock levels.
By choosing Actual Sales, you will include cash sales, invoices, and assembly builds for demand calculations to set reorder points and preferred stock levels in NetSuite.
This setting is relevant to NetSuite items using Demand Planning, along with items employing Advanced Inventory Management for demand assessments.
Note: If both sales orders and independent cash sales/invoices are utilized, it’s advisable to select the Actual Sales option.
Include Unapproved Sales Orders in Item Demand Plans
In the previously mentioned "Transactions to Consider" setting for NetSuite inventory management, selecting the "Orders" option means that all approved sales orders will be included as part of the demand planning calculation. By checking the box for "Use Unapproved Sales Orders in Item Demand Plans," you ensure that unapproved sales orders are factored into demand planning calculations.
If you have questions about this inventory management preference, we are here to help!
Day of the Week to Execute Calculation
To take advantage of this NetSuite inventory management preference, choose the specific day of the week you want inventory metrics calculations to be performed. You may adjust this selection later if necessary.
Note: In the Save list, click Submit and Calculate to initiate the inventory metrics calculations. This will occur on the night you select it in NetSuite, alongside the routine weekly calculation.
NetSuite Demand Time Fence
With this inventory management preference in NetSuite, you can specify the default number of Demand Time Fence days, choosing a value between zero and 365. This number will be shown in the Demand Time Fence field on the NetSuite item records created. You can modify this default figure during each item record creation. By default, this field starts at zero.
Planning Time Fence in NetSuite
To utilize this NetSuite inventory management setting, simply indicate the number of days from zero to 365. The chosen number will serve as the default demand time fence displayed in the Planning Time Fence field for the item records you create. This default can be changed as needed during each item record creation. If left blank on the item record and the Inventory Management Preferences page, no planning time fence applies.
If you want to explore more about this inventory management preference, consider engaging with a NetSuite consultant!
Time of Day to Execute Calculation
This NetSuite inventory management preference allows you to select a specific time of day for running the inventory management calculations.
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