This guide explains the demand-planning-related inventory management preferences available in NetSuite. Navigation: Setup > Accounting > Inventory Management Preferences
NOTE: To use this, you must enable the NetSuite feature "Advanced Inventory Management" under Setup > Company > Enable Features > Items & Inventory tab > Inventory section.
Use Lead Time and Safety Stock Per Location
You can set a lead time and safety stock level for each location on a NetSuite item record. The lead time calculation is based on receipt lines that show a location pulled from the purchase order.
If you use NetSuite Advanced Inventory Management and auto-calculate lead times, the vendor lead time is calculated based on item receipts for each location. This lead time is calculated for the receipt location and is based on the time elapsed between the date of the purchase order and the date of the item receipt.
Do you have a SuiteCommerce website? Check out this solution to display location-specific stock levels on your ecommerce store!
Default Lead Time in NetSuite
This NetSuite preference allows you to enter the number of Default Lead Time days. Lead time is the average number of days between ordering an item from a vendor and receiving it. Lead time is used when calculating the reorder point of an item if no reorder point is specified in the item record in NetSuite.
Note: If you track multiple vendors per item in NetSuite, lead time calculations are aggregated across all vendors per item, not per-vendor per-item.
Want a better way to manage your vendor relationships? Check out the vendor portal available through Advanced Entity Portals for NetSuite!
Default Safety Stock in NetSuite
To use this NetSuite inventory management preference, enter the default number of days worth of stock you always want to have on hand. Enter an amount as a buffer in addition to the preferred stock level so you do not reach a zero stock quantity. This number of days of safety stock is used when auto-calculating the suggested reorder quantity of an item if no safety stock is specified in the item record in NetSuite.
Good Stock Inventory Management relies on an accurate count. Learn how NetSuite Physical Inventory Count can help you achieve this.
NetSuite Default Prefered Stock Level
This inventory management preference in NetSuite enables you to enter the Default Safety Stock in days for an item you prefer to maintain in inventory. For example, enter 30 to default new items to a preferred level of 30 days' worth of stock.
This number of days supply is used when calculating the preferred stock level of an item if no preferred stock level is specified in the NetSuite item record. The preferred stock level is calculated using the formula (daily demand * number of days supply preferred).
Looking for a 30,000-foot view of Inventory Management practices? Check out this article on Inventory Management.
NetSuite Order Analysis Interval
With this inventory management preference, in NetSuite, you can enter the number of past months' sales you prefer to analyze to auto-calculate historical demand. The number entered is used when the seasonal demand for an item is not set. For example, if you enter 6, the past 6 months of sales order history in NetSuite is evaluated.
Wanting to use demand to drive your inventory stock practices? Get a refresher on Just-in-time Inventory and how you can implement it.
Seasonal Analysis Interval in NetSuite
To leverage this inventory management NetSuite preference, enter the number of months to analyze sales, starting one year ago. This interval is used to auto-calculate demand when the seasonal demand for an item is set in NetSuite. For example, enter 6 to evaluate the six months starting one year ago.
Are you looking for conceptual information about stock inventory? Check out this article on Stock Inventory Concepts, Methods, and Best Practices!
Estimated Demand Change in NetSuite
You can use this NetSuite inventory management preference by entering the default percentage of demand change to calculate the suggested reorder quantity for items if no demand change percentage is specified in a NetSuite item record.
For example, if you project that new customers will increase sales of items in the future, you can enter a 5% expected demand change to be added to previous sales totals in NetSuite.
Have questions about this inventory management preference? Our NetSuite consultants can help!
NetSuite Transactions to Consider
This inventory management preference in NetSuite will determine which transactions are used to calculate inventory demand:
- If you click Order, this will include approved, non-canceled sales orders and work orders to calculate demand for setting reorder points and preferred stock levels.
- By clicking Actual Sales, you designate cash sales, invoices, and assembly builds to calculate demand for setting reorder points and preferred stock levels in NetSuite.
This preference setting applies to NetSuite items that use Demand Planning, as well as items that use Advanced Inventory Management to calculate demand.
Note: If you use both sales orders and standalone cash sales/invoices, you should choose the Actual Sales option.
Use Unapproved Sales Orders In Item Demand Plans
In the above "Transactions to Consider" setting for NetSuite Inventory management, when you choose the "Orders" option, NetSuite will consider all approved sales orders as part of the demand planning calculation. Check the Use Unapproved Sales Orders in Item Demand Plans box to include unapproved sales orders in demand planning calculations.
If you have questions about this inventory management preference, contact us!
Day of Week to Perform Calculation
To use this NetSuite inventory management preference, select the day of the week you prefer to run inventory metrics calculations. You can choose to change this selection later if needed.
Note: In Save list, click Submit and Calculate to calculate inventory metrics. This will be performed the night you select it in NetSuite, and occurs in addition to the regular weekly calculation.
NetSuite Demand Time Fence
With this inventory management preference in NetSuite, you can enter the number of default Demand Time Fence days between zero and 365. This number is displayed in the Demand Time Fence field on the NetSuite item records you create. You can change this default number when you create each item record. This field defaults to zero.
Planning Time Fence in NetSuite
If you want to leverage this NetSuite inventory management preference, simply enter the number of days between zero and 365. The number you enter is the default demand time fence and is displayed in the Planning Time Fence field on the item records you create. You can change this default number if necessary when you create each NetSuite item record. This field defaults to zero.
Note: If the item record does not identify a planning time fence, NetSuite uses the default planning time fence value identified in these inventory preference settings.
If the Planning Time Fence field is left blank on the NetSuite item record and the Inventory Management Preferences page, no planning time fence is used.
Want to learn more about this inventory management preference? Get in touch with a NetSuite consultant!
Time of Day to Perform Calculation
This inventory management preference in NetSuite lets you select a time of day for inventory management calculations to run.
If you have questions about this or any other NetSuite inventory management preferences outlined in this article, contact our team!
Author: Danny Orsinger
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