In our previous blog, we looked at demand planning in NetSuite. A good demand plan, however, should feed into a supply plan. After all, knowing the demand for your items is really only valuable to you if you can use that information to impact when you order more of your items and how much you order. Let’s take a look at NetSuite supply planning.
NetSuite Supply Planning Overview
So what exactly does a supply plan do in NetSuite? Why would a company choose to use it? While the demand plan provides helpful information, supply plans enable you to act on that information without wasting time on manually creating purchase orders. With a good supply plan in place for your items, NetSuite will create the necessary purchase orders for you, and all you have to do is review and edit them. NetSuite takes several factors into account when putting together your supply plans, including the safety stock level for the items, their lead time, and the expected demand for those items. This ensures that the items will arrive in your warehouse right when you need them, rather than being ordered when you need them.
Creating an Item Supply Plan
There are a couple different ways you could create item supply plans. First, you could generate supply plans in bulk for items in a specific location. Otherwise, you could manually create a supply plan for a single item.
Supply Plans in Bulk
How do you create item supply plans in bulk in NetSuite? It’s pretty simple. Navigate to Transactions > Demand Planning > Generate Item Supply Plan.
If your company uses OneWorld, then on this page you’ll need to choose the subsidiary where this supply plan will apply. Once you’ve chosen a subsidiary, all the items associated with that subsidiary will appear in the list. Then, you’ll need to choose a location within that subsidiary to further narrow down your results. Alternatively, you could select the checkbox Plan Through Distribution Network to include all your distribution locations for that subsidiary. This option is available when you use the Distribution Resource Planning feature.
Then, you’ll need to choose a start date and an end date. The supply plan works by creating future purchase orders according to the expected demand for items. So the start date signifies the earliest date when purchase orders can be created for items on this supply plan, while the end date signifies the latest possible date when purchase orders can be created.
In the list of items that are in the location you have selected, you can choose specific items that you want to run the supply plan on. If you plan to use this supply plan on all the items in this location, then select the Mark All button at the top of the list. Once you have made your selections, hit Submit.
Single Supply Plans
In addition to generating supply plans in bulk, you could create supply plans for individual items manually. To do that, navigate to Transactions > Demand Planning > Item Supply Plans > New. This will open a page where you can manually enter the information you need for the supply plan, including the subsidiary and location of the item, the item itself, and the item’s unit of measure. Under the Orders subtab, you would also enter the order date and receipt date, the order type, and the quantity that you would like to order for the item. Then save the supply plan.
Using an Item Supply Plan
Once you’ve gotten the basic NetSuite supply plans, then what? If you need to edit any of the details that affect your supply plans, you can do that by pulling up the Item Supply Plan record. You can view and/or edit these records by navigating to Transactions > Demand Planning > Item Supply Plans > List.
But what about the actual purchase orders for these items once their supply plans have been calculated? When a supply plan prompts NetSuite to create a purchase order for the item, you can easily view, edit, and process that purchase order. Simply navigate to Transactions > Inventory > Order Items. At the top of this page, you will be able to set some filters. Then, in the Time Phased Items subtab, NetSuite will show a list of all the purchase orders that need to be created.
In the list of items, you can view and edit the purchase order information, including things like the vendor being used for the item, the currency, the quantity you are purchasing, and the rate for the items. Then, select the checkbox to the far left of the item and hit Submit. Doing this will automatically create a purchase order for the item.
Supply Plans for Assembly Items
So far, we’ve been looking at creating supply plans for regular inventory items. But you can use the NetSuite supply planning features for assembly items as well. With assembly items, demand is tracked for the individual components rather than the entire assembly item. That way, NetSuite takes into account the total demand for any of the component items, even if those items are sometimes ordered individually.
In addition to creating purchase orders for the component items based on their supply plans, you can also easily create work orders to assemble those items by navigating to Transactions > Inventory > Mass Create Work Orders.
Conclusion
Item supply plans can be an immense asset to companies, saving both time and resources. If you’re in distribution and you want to learn more about these kinds of distribution processes in NetSuite, be sure to subscribe to our mailing list below to receive each of our blogs right in your inbox each week!