My name is Aakash Shah, and I am a NetSuite consultant specializing in the Manufacturing and Wholesale Distribution spaces. I have recently been working with a client that distributes product that is manufactured overseas from their United States Headquarters. They sell primarily through two channels: their ecommerce platform and via EDI to their wholesale partners. This client places a higher priority on their ecommerce orders for same day shipment rather than the bulk orders coming in from their wholesale customers. There is a common warehousing location that houses inventory for both the ecommerce and wholesale orders, and they tend to reserve stock of several items for ecommerce orders in the event that inventory is running low.
NetSuite Supply Allocation and Sales Channel Allocation Features
I believed these requirements to fit perfectly within the context of the ‘Supply Allocation’ and ‘Sales Channel Allocation’ features in NetSuite (Setup > Company Enable Features > Items & Inventory). The ‘Supply Allocation’ feature allows for the user to configure Supply Allocation Strategies for specific sales channels (in this case, ecommerce and wholesale). These strategies can be set up for the allocation of inventory from future supply orders (i.e., inbound purchase orders, transfer orders, work orders) and/or on-hand inventory. For this client, we are only considering on-hand inventory. Furthermore, depending on how the ‘Supply Allocation’ strategies are configured, inventory can either be considered a firm commitment or can be automatically reallocated from one channel to another based on customer priority – more on this shortly.
NetSuite Order Reservation Record
With the ‘Sales Channel Allocation’ feature comes the ability to create ‘Order Reservation’ records. At its core, this record enables the user to reserve a defined quantity of a given item (and time period, if desired) for a particular sales channel. For this client, we are able to utilize the Order Reservation record to reserve inventory for the ecommerce sales channel.
Three Approaches to the Reallocation of Inventory in NetSuite
At face-value, these features seem to fit this client’s requirements like a glove. Unfortunately, as I went through configuration and testing, I came to realize a couple issues with these features. I want to first circle back to the reallocation process that was mentioned above. There are three approaches that the user can take when it comes to the reallocation of inventory.
First, inventory can be reallocated manually using the ‘Reallocate Items’ screen (Transactions > Order Management > Reallocate Items) or directly from a demand order line using the ‘Reallocate Items’ popup window.
Secondly, inventory can be reallocated on a scheduled basis using the ‘Order Allocation Schedule’ screen (Transactions > Order Management > Allocate Orders > Schedule). These schedules essentially utilize saved searches and sorting conditions to reallocate inventory.
Finally, inventory can also be reallocated in real-time. To set up the system to use the real-time reallocation, the following preference on the Setup > Order Management > Supply Allocation screen must be enabled:
As the name of the preference suggests, inventory should be reallocated based on the defined allocation strategies whenever a demand order is entered, updated, or deleted. This final option was our preferred approach. In an ideal world, every time an ecommerce or wholesale order was created or updated inventory would be allocated accordingly. For example, let us suppose a wholesale order was created referencing a certain item with an on-hand quantity of 5. If an ecommerce order was created subsequently for the same item for a quantity of 5, the inventory should be immediately reallocated from the wholesale to ecommerce order given a higher priority for the ecommerce sales channel. However, configuring the system for real-time inventory reallocation yielded different results. I was never able to get the system to auto-reallocate in the way I would expect. In speaking with NetSuite Support, they indicated that the real-time option is an enhancement request, and that functionality does not currently exist. Furthermore, they indicated that if it was functioning as expected, it would only work for orders being managed through the UI. This also proved to be problematic as the majority of ecommerce orders are entered via Shopify and integrated using a 3rd party tool. The wholesale orders also are being integrated with a 3rd party EDI provider.
NetSuite Support and Optimization From MIBAR
This left us with the alternative of using the scheduled reallocation. Although this was not a problem. It is still worthwhile for those implementing NetSuite to be aware of the limitations that come with the ‘Supply Allocation’ and ‘Sales Channel Allocation’ feature, as these fundamental issues are not expressed in NetSuite’s supporting Help Documentation. That’s why you need a team like MIBAR. Our NetSuite experts and support team can provide ongoing maintenance, troubleshoot issues, provide training, and more. Contact us today for NetSuite support or optimization.