Any business that keeps an inventory knows the importance of managing that inventory well. The inventory management in NetSuite ensures that businesses are able to keep up with their inventory efficiently and accurately.
Transactions and Inventory
One of the ways that NetSuite provides efficiency and accuracy in inventory management is by connecting transactions with inventory. Because of this connection, when a user creates a transaction that would affect inventory, the inventory adjusts accordingly. At any point in time item records accurately reflect the quantity of the inventory, and users can access to up-to-date inventory reports. Users will also know valuable details about the items in inventory, such as whether they have been committed to be sold, have already been packed, or have already been shipped. This information, in turn, helps users know exactly when to order more of any given item.
Key Advanced Inventory Features
NetSuite provides a large collection of advanced inventory management features for businesses. Many of these features can be found and enabled in Enable Features. Five of these features, in particular, are essential to understand for the SuiteFoundation exam.
Multiple Units of Measure
The Multiple Units of Measure feature can be enabled on the Accounting tab of Enable Features. Turning this feature on, however, is only the first step. You would also need to set specific unit types as well as create each unit of measure that exists in each type. To create a new unit type, navigate to Lists > Accounting > Units of Measure > New.
On this page, name the new unit type and specify all the details for each unit of measure in that type, including each unit’s name, plural name, abbreviation, and conversion rate. The conversion rate is relative to the base unit, or smallest unit, for that unit type. For example, an inch would be the base unit for units like foot or yard, while a box might be the base unit for units like pallet or truckload. If a unit is the base unit for that unit type, then you would check the Base Unit box next to the unit and set the conversion rate to 1. Having multiple unit types and individual units enables you to use different units for purchasing, stocking, and selling your items.
Multi-Location Inventory
Businesses that have more than one facility involved in inventory transactions should use the Multi-Location Inventory Feature. This feature can be enabled under the Items & Inventory tab of Enable Features. When this feature is turned on, you can connect items and transactions to specific locations. At any given time, you can know the specific details about the stock in each location. Multi-Location Inventory is especially important for serial-numbered items. Because of the nature of serial-numbered items, where each item has a unique identifying serial number, it is imperative for these items to be tracked by location. Whether you are purchasing or selling a serialized item, you would need to mark the correct location for that item on the transaction record. This allows you to know exactly where each individual serialized item is in the order fulfillment process.
Bins
Bins are an inventory feature that track the location of your inventory within your warehouse. To use bins, you would need to enable Bin Management and Advanced Bin/Numbered Inventory Management, both of which are located under the Items & Inventory tab of Enable Features. These features have similar functionality, but the Advanced Bin/Numbered Inventory Management feature is more comprehensive since it enables you to use bins for serial and lot numbered items. If you plan to use bins to track locations in your warehouse, then you need to name and define those bins by navigating to Lists > Supply Chain > Bins > New.
Once you have set up the bins you need, you can start associating items with specific bins in your warehouses on purchase and sale transactions. As a result, your warehouse staff will always know where to place incoming items and where to retrieve outgoing items.
Assemblies
Assembly items are individual items comprised of multiple components. To allow for assemblies, you would need to turn on the Assembly Items feature under the Items & Inventory tab of Enable Features. You can define the components of an assembly item on an assembly item record, which you can create by navigating to Lists > Accounting > Items > New and choosing Assembly/Bill of Materials. Then you would document each newly built assembly item on an Assembly Build record (Transactions > Manufacturing > Build Assemblies).
Assembly items can introduce a bit of complication into inventory management since you don’t sell the items in the same form you bought them in. As a result, you need to track the purchase of the individual components, the stock of both the individual components and the assembled items, and the sale of the assembled items. The stock you have of the individual components and the assembled items are directly connected, so that as you create more of the assembled items your inventory count for the components used will automatically decrease.
Kits/Packages
A final key inventory management feature is the ability to create kits and packages. Kits and packages are units that are composed of certain individual items. These items, grouped into a kit, are all sold together. The value of a kit or package is that you can adjust the price of the entire kit without regard for the prices of the member items. Consequently, revenue is posted for the entire kit rather than the member items. But because the member items are all bought separately, member items are tracked in the inventory rather than the entire kit.
Conclusion
With the variety of options that are available to users, inventory management in NetSuite ensures both efficient as well as accurate handling of any business’s inventory. If this post helped you understand NetSuite better, be sure to subscribe to our mailing list below to receive future posts directly in your inbox once a week!