Overcoming Supply Chain Disruption with NetSuite

For product-based companies, it’s crucial to have a supply chain agile enough to obtain supplies as needed while reducing the risk of stock-outs and high inventory holding costs.

Reviewing and reassessing NetSuite’s Inventory Management Settings can help here.

2 Ways NetSuite’s Inventory Management Settings Help Overcome Supply Chain Disruptions:

1. Reduce stock-outs

By using Reorder Point as the Replenishment Method in NetSuite, the system will generate a Purchase Order or Work Order to restore inventory to the preferred stock level once inventory falls below the reorder point.

When set to auto calculate, NetSuite will consider historical data values such as item demand from sales, lead time from the suppliers, and company defined safety stock.

With that in mind, now is a great time to reassess these thresholds and potentially update, as we’re in a business environment where supplier’s lead times are increased, and demand is volatile.

These values must reflect the current business environment to help reduce stock-outs and the inability to meet customer demand.

2. Reduce Inventory Holding Costs

With supply and demand different now than in the past, companies need to reassess how they’re selling.

Two ways NetSuite can help to reduce Inventory Holding Costs are through the Drop Shop and Special Order functionalities.

Maybe your supply chain hasn’t been disrupted, but demand has decreased, resulting in higher holding costs. By using the Drop Ship feature, once an order is approved, NetSuite can coordinate the purchase and shipment of the product without it ever touching inventory.

With the Special Order feature, NetSuite autogenerates a Purchase Order once a Sales Order is approved, and there is no need to hold inventory until a sale is made.