NetSuite Supply Allocation Guide
Redefining the Rules of Inventory
Imagine companies, large or small, trying to expand while struggling with supply systems that are neither robust nor unified but flimsy and dispersed.
That was life before NetSuite Supply Allocation — and it wasn’t easy. It was downright difficult.
Companies grew attached to bloated systems that complicated the simplest tasks and made it difficult for procurement to talk to sales and sales to talk to everyone else.
And lacking a robust system capable of interconnecting such vital processes, companies resorted to devising their own internal schemes, which, often unworkable, forced them into making predictions based on inaccurately compiled data.
Even for clients already on NetSuite prior to its Supply Allocation functionality, they never possessed the ability to define the rules of how their inventory was prioritized.
Instead of taking full control over the what, when, and how of allocation, companies relied on manual controls and siloed departments. The result? A weaker governance of supply allocation overall, and no ability to define the rules around allocation or to allocate future inventory.
In other words, a companywide struggle to view the BIG PICTURE for lack of a system BIG enough to manage that level of complexity.
Back then, Supply Allocation was simply:
- Inventory comes in
- Inventory gets allocated
- Inventory goes out
And companies hoped for the best — while simultaneously coping with the unmitigated disasters caused by manual errors and misplaced inventory.
The What, When, and How of Supply Allocation
With the advent of NetSuite Supply Allocation, companies can redefine the rules by which their supplies are structured by leveraging an array of preferences and custom prioritizations.
For instance, a company looking to establish a solid first-in/first-out channel can easily arrange one by setting their Supply Allocation functionality to register the date and doc number and align an allocation sequence.
But let’s step back.
What is Supply Allocation, actually?
What Is Supply Allocation?
Simply put, Supply Allocation is the system that drives and prioritizes your current, on-hand inventory allocation and your future inventory.
It syncs with purchase orders, transfer orders, and inbound shipments to provide a single source of truth and governance over inventory.
The key is prioritization.
How Does NetSuite Supply Allocation Work?
NetSuite Supply Allocation allows companies to set preferences and dictate how they want their inventory allocated. Whether it’s first-in/first-out allocation you’re after, or you simply need to prioritize orders based on sales channels, every base is covered.
Additionally, and specific to B2B companies that lean into handling larger quantities on order and repeat orders, they can leverage different Supply Allocation mechanisms to allocate that.
At the end of the day, Supply Allocation is the ability to control how, when, and what gets allocated.
Order allocation tells you “what” in the form of available and/or future inventory. While on top of that, you can also define one or many order allocation strategies and associate individual customers to it — all of which will source to the specific sales order.
In terms of the “when”, you can control the timing of both current and future inventory based on the Supplier Required By Date, allowing you to work in tandem with MRP to help drive the expected ship date on either sales or transfer orders.
Now we come to “how” the inventory gets allocated.
With an order allocation strategy, you typically have two options:
- 1) Either manage with reserved allocation
- 2) with firmed allocation — meaning, if a specific order has a strategy, as soon as the order comes through, that strategy will firm it so that it cannot be tampered with.
You can also define rules to allocate future inventory telling the system to assess your existing inventory against future inventory and, if a lack of inventory threatens fulfillment, telling the system to reallocate accordingly.
Or you can effectively eliminate siloed departments by coordinating all data across sales, purchasing, and production orders so that you can achieve full visibility.
By managing order allocation strategies and enabling two-way visibility into sales and purchasing, your company can redefine the rules that previously governed what you could or couldn’t accomplish through inventory allocation.
SCS Cloud and Supply Allocation
Helping companies reimagine the scope of their Supply Allocation functionality, SCS Cloud has seen a major increase in companies utilizing orders-out and the ability to manage complex inventory systems.
Our deep understanding of Supply Allocation allows us to install customized control mechanisms and add extra layers of security.
We understand industries from the ground up and take great pride in maximizing Supply Allocation for anyone’s NetSuite instance:
Our specialties include the following:
- Establishing interconnectedness between Sales and Purchasing
- Defining and prioritizing how inventory is allocated
- Building automation between reallocations and firming inventory
- Setting up order reservations to allocate future inventory
Every client represents a unique use case, which is why SCS Cloud has developed superior expertise in the field of Supply Allocation and NetSuite itself — so that we can build and tailor solutions that work for you.
Supply Allocation Case Study
Take a recent customer of ours who requested customizations on all their orders. While not native to NetSuite, we were able to align inventory allocation by line item and design a custom 3PL release status to address their need. It was a success and a testament to how deep customizations can go.
Streamline Your Business Operations With SCS Cloud
Supply and inventory allocation continues to be a prominent demand across industries.
Meeting that demand requires NetSuite Supply Allocation and a top-tier solution provider like SCS Cloud to implement within your company.
Contact SCS Cloud Today for a Free Evaluation