A big feature of modern ERP systems is the ability for the system to forecast inventory demand and build replenishment plans to meet this demand. The systems MIBAR implements offer some competitive functions in this area. The core capability is for the ERP to calculate the quantities of each item to purchase, and ease the ability for the user to generate purchase orders. However, each system brings certain capabilities to the table. 

NetSuite has reorder point and time phased inventory replenishment for its automated methods. Reorder point on an item means that when inventory dips below a threshold (the reorder point), the system recommends a quantity up to the preferred stock level. These can be auto-calculated at a global level, but not at a warehouse level (at a warehouse level they need to be manually calculated but then the system will make the recommendations). 

NetSuite auto calculates preferred stock level by calculating average daily demand and then multiplying it by the defined preferred stock level days (this variable is user input). NetSuite’s “safety stock” is calculated the same way (safety stock level * Average daily demand).

Acumatica takes the same calculation a step further. It auto calculates the reorder point based upon (Average Daily Demand * Average Lead Time) + Safety Stock. It calculates Safety Stock as NormService (a % defined by the user) * Square Root of (Average Lead Time * (Standard Deviation of Daily Demand)^2 + (AverageDaily Demand * Standard Devaition (Lead Time))

Acumatica thus offers a way of filtering out some of the “exceptional demand”, or even “Exceptional lead time” since it factors in the standard deviation and the lead time deviation into its reorder point calculation. 

Furthermore, for time phased items, NetSuite allows you to use a “seasonality calculation” by selecting seasonality as a method when calculating forecasted demand. Acumatica takes this a step further by allowing the user to define specific start and end dates for seasonality, and even applying multiple seasonality records to the same item. 

In either system, purchasing departments still need to determine how inventory should be forecasted and configure item records accordingly. However, a little bit of elbow grease up front can provide years of benefits in terms of optimal replenishment forecasting. 

Want to learn more about Acumatica and NetSuite? Visit the Acumatica and NetSuite page.

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