NetSuite Inventory Commitment Options

If you maintain a perpetual inventory system, you understand the challenges involved with managing inventory commitment. Having a strong inventory commitment strategy can be an important key factor in maintaining customer retention and preventing lost sales due to inventory shortages or delayed ship times. Having software that supports your business needs is important, and you may be interested to know what NetSuite can offer out of the box.

Out of the box, NetSuite comes with functionality to help you commit inventory to sales orders. At a high level, inventory commitment can happen manually (user driven) or automatically (system driven). Although there is a scheduled commitment option which I will cover below.

Commitment Options

• Manual Commitment
  • With manual commitment, you are behind the wheel and your input drives all inventory commitment. Your direct input drives what customers get what inventory and how much. NetSuite allows you to manage all manual commitment through the Commit Orders page shown below. With this being a manual process, it does not tend to scale well with order volumes as inventory is not committed until a real person acts. This can lead to order fulfillment delays or increased fulfillment lead time. At worst, it can lead to lost sales from dissatisfied customers.

The Commit Orders page contains some handy filters and sorting options to help manual inventory commitment easier to manage.

• Automated Commitment
  • NetSuite does offer automated commitment, and this is where most clients I work with tend to gravitate. With automated commitment, NetSuite performs on the fly commitment and reallocation as sales orders are entered or updated. The benefit here is it does not require a person to manage all commitment, and instead that person can manage exceptions which this setting allows through the reallocate inventory function. We will keep it fairly high level here, but the following criteria can be leveraged to control who gets inventory first:
    • You can control whether all available inventory is committed, or whether inventory is only committed if it can fully satisfy the customer’s order requirement.
    • You can prioritize inventory commitment by Transaction Date, Order Priority, or Expected Ship Date.
• Scheduled Commitment
  • Finally, NetSuite also provides the functionality to create Commit Order Schedules. These are automatic in that you can create a scheduled automation to commit or reallocate inventory based on a defined saved search (you can create a search to target specific orders or customers). These can be useful if you have more involved commitment scenarios that the automated process cannot cover.

For more advanced business needs, you can consider the native NetSuite Supply Allocation add-on module which allows you to allocate future inventory (inventory on purchase orders not yet received), create order reservations based on sales channel, among other more advanced functionality.

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