capabilities in NetSuite offers Optimize inventory levels, increase turns, reduce costs with order consolidation, simplify the ordering process, and Workflow approvals. Purchase manager can quickly measure the product demand based on historical demand, sales forecasts, trends and seasonal fluctuations.
For businesses to achieve best-in-class inventory management, they must maintain the right amount of inventory to effectively meet anticipated demand. NetSuite provide the Demand Planning module, which helps to solve these challenges by enabling purchasing and inventory managers to determine the demand projection of items in the coming months based on historical data and trends or sales forecast information. It delivers the insights that managers need to plan inventory accordingly, and create purchase and work orders to meet anticipated demand.
NetSuite offers four demand planning methods:
- Linear Regression: Use previous demand to project future inventory
- Moving Average: Use the moving average of historical demand to calculate the overall average stock level needed.
- Seasonal Average: Use previous demand to examine the seasonal trend of inventory flow for future stock levels.
- Sales Forecast: This option uses forward looking sales forecast data (such as opportunities, estimates, etc.).
Demand Plan and Forecasting
Using NetSuite, you can select the timeframe of historical data or future forecast data to be used in determining seasonal fluctuations in inventory. In addition, you can incorporate preferred stock levels on a company or item/s when generating the demand plan. Projections are calculated on a per-location basis, giving you the flexibility to accurately project demand in a given area.
You can review and edit the individual inventory needs for a particular time period of the plan. For instance, you may want to increase the inventory level for July if you plan to run a promotional campaign that month.
Supply Plan (Streamlined Replenishment)
NetSuite Demand Planning module provides you with a list of recommended purchase orders or work orders based on parameters set on the item record, such as re-order point and lead time. If purchase orders are generated, the preferred vendor from the item record is used on the purchase order. When assembly items are involved, the supply plan factors in all levels of a multi-part assembly and plans the work orders for all sub-components of the build, as well as purchasing of required raw materials, giving you the flexibility needed for even the most complex of demand planning environments.
Supply plan also enables you to select which items to automatically calculate ordering requirements, providing flexibility when different methods might be required. During this process, the system automatically considers outstanding quantities in non-posting transactions (purchase orders, transfer orders, work orders) and quantities in posting transactions (item receipt, item fulfilment, cash sale, invoices), ensuring that the supply plan accurately reflects existing inventories and orders.
Gross Requirement Inquiry (Modeling Inventory Levels)
Another key feature of the NetSuite Demand Planning module is gross requirement inquiry, which allows you to model how expected sales and purchase orders will affect future inventory levels. This feature is critical to ensuring that you can model different aspects of your business and understand the impacts.
Leveraging NetSuite Demand Planning, your can achieve best-in-class inventory management, maintain the right amount of inventory to effectively meet anticipated demand and achieve that delicate balance of the “right” inventory. By doing so, you can avoid tying up too much capital in excess inventory or carrying too little inventory, and minimize the risk of missed sales or customer dissatisfaction because of stock-outs.