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Ever find yourself stressing about running out of stock? Or in some cases, having too much? NetSuite Demand Planning might just be the perfect solution for you! What is it exactly? NetSuite Demand Planning is a key component of NetSuite’s ERP software that focuses on forecasting and managing product demand so you can achieve overall NetSuite inventory management and supply chain optimization.
In this article, we will explore how the NetSuite Demand Planning module can be helpful to businesses like yours. If you think it is the right solution for your needs, we have included a NetSuite Demand Planning user guide in this article just for you!
What Is NetSuite Demand Planning Module?
It’s hard to rely on spreadsheets when things are moving so quickly. The NetSuite Demand Planning module allows you to have all the materials when you need them, where you need them. It is a predictive analytics tool that enables you to predict future inventory needs by analyzing historical sales data, market trends, seasonality, and other metrics to help you generate an accurate sales forecast. Plus, the module can be integrated along with NetSuite’s order management and financial modules giving you a holistic approach to business operations.
The Key Features and Benefits of NetSuite Demand Planning
Features and Capabilities of Netsuite’s Demand Planning
Demand Forecasting
This feature allows you to generate a demand forecast based on historical data and present that information in a multitude of ways.
Stock Replenishment Planning
The system provides automated stock replenishment capabilities through timed-phased planning. First, when the inventory level falls below the reorder point, a replenishment order is automatically generated. Second, depending on the lead time required for procurement or production, replenishment orders are placed in advance.
Supply Allocations Management
The system is designed to provide you with supply reallocation recommendations to proactively redirect resources from unallocated orders if there is a need to fulfill high-priority orders first. Once you accept the recommendation, the system automatically reallocates supplies to the affected orders. This ensures efficient demand fulfillment and optimal allocation of resources to meet customer needs while minimizing operational disruptions.
Safety Stock Management
Safety stock is a buffer maintained to manage variability in demand and lead times. This feature allows you to set and manage safety stock levels to prevent stockouts.
Multi-location Inventory
You can have real-time visibility of your inventory across multiple locations. This feature allows you to define multiple inventory locations that can be organized hierarchically especially if your business runs in multiple countries. It is also worth noting that while NetSuite offers real-time visibility of your inventory quantities, it also allows you to create transfers between locations as necessary.
The Benefits of NetSuite Demand Planning Module
Avoid Excess Inventory
With the ability to forecast demand based on historical data, you can have just the right amount of inventory to meet customer demand. This accuracy minimizes excess stock which ultimately reduces carrying costs.
Increase Inventory Turnaround
With the automated stock replenishment feature, you will never have to worry about going out of stock as it ensures inventory availability based on lead time and reorder points.
Reduce Costs and Increase Profitability
Businesses can reduce carrying costs by lowering order cycle times and minimizing overstocking of products that will only go unsold or discounted.
Should You Invest in NetSuite’s Demand Planning Module?
Now that we have laid out the key features and benefits, you get a better idea of what current business challenges NetSuite’s Demand Planning module can help you with. We know the pain of making strategic decisions with so many moving components and missing out on orders here and there. To save you some headaches, it can be helpful to invest in demand planning software that can take these responsibilities for you and more!
If you’re not yet convinced, here are some key considerations to help you determine if NetSuite’s Demand planning can have a good return on investment for your business:
Current Challenges
Identify the challenges you face when it comes to demand forecasting, inventory management, and supply chain optimization. If NetSuite's Demand Planning module addresses these pain points, it may be a suitable solution.
Scalability and Flexibility
Having a flexible system that can adapt to changes in demand patterns and market dynamics is crucial. If you are a growing business, the module's scalability can accommodate your evolving needs.
Cost-Benefit Analysis
Compare the benefits of NetSuite's Demand Planning module such as reduced inventory carrying costs, streamlined operations, and satisfied customers against the investment. If the benefits prove to outweigh the costs, you no longer have to think twice!
The Return-On-Investment of Demand Planning With NetSuite
Investing in NetSuite’s demand planning capabilities gives you the power to handle significant amounts of data. Now, you are able to identify trends and patterns that a human might never be able to do. Your demand planner can then use these insights to make adjustments on the fly ultimately optimizing profit margins, cash flow, capital expenditures, capacity planning, and more!
Ultimately, the decision to invest in NetSuite's Demand Planning module should align with your business. Book a meeting with us today so we can help you decide if this is the right solution for you!
How To Set Up NetSuite Demand Planning
Here are the steps to setup NetSuite Demand Planning:
Enable features
To enable features for demand planning:
- Go to Setup > Company > Enable Features.
- On the Items & Inventory subtab, check the Demand Planning box.
Set Inventory Preferences
Once the Demand Planning feature has been enabled, consider setting up the preferences below depending on the functions you need:
Transactions to Consider
- Go Setup > Accounting > Inventory Management Preferences.
- On the Inventory Management Preferences page, choose a setting for the Transactions to Consider preference:
- Orders: To use approved, non-canceled sales orders to calculate demand.
- Actual Sales: To use cash sales and invoices to calculate demand.
Note that inventory demand calculations consider only transactions that decrease an item's stock level. If you use both sales orders and standalone cash sales/invoices, choose the Actual Sales setting.
Allow Purchase of Assembly Items
- Setup > Accounting > Accounting Preferences > Order Management.
- Check this preference to allow NetSuite to create purchase orders instead of work orders when making supply recommendations for assemblies. You can also define purchase pricing on assembly item records. This enables you to add assembly items to purchase orders, vendor bills, checks, credit card transactions, and vendor credits.
Demand Planning and Allocation
If you use the Demand Planning feature, consider using automated allocation. For more information, see Demand Planning and Inventory Allocation for more information.
Demand Planning and Routing
If you also use the Manufacturing Routing and Work Center feature, see Setting Routing Preferences for more information.
Demand Time Fence
Enter a value between 0-365. This number is used as the default demand time fence and shows in the Demand Time Fence field on item records you create.
Planning Time Fence
Enter a value between 0-365. This number is used as the default demand time fence and shows in the Planning Time Fence field on item records you create.
Set up Demand Planning on Item Records
Set the replenishment method to time-phased on the item record.
Note: New customers should use the new Material Requirements Planning (MRP) solution over time-phased planning. Existing customers should develop a plan to move from time-phased Planning to the new solution.
NetSuite Material Requirements Planning Features
As part of NetSuite’s continuous enhancement, MRP solution replaces time-phased planning with more features and better performance. Here are some key features of NetSuite’s MRP:
What-If Scenario Requirement Planning
This feature allows you to explore multiple hypothetical plans and generate what-if scenarios to understand how certain changes affect inventory dynamics. With this feature, we can create mock-up scenarios to identify if, for example, we can speed up delivery if we make changes to when and where goods are shipped from. This also allows you to set supply planning criteria such as planning horizon, items, locations, and planning rules at the plan level vs. the item level.
Planners Workbench
The Planners Workbench allows us to spot scenarios that require attention to prevent both supply shortages and excess. With this, planners can monitor, hold, or release orders for approval and aggregation. They can review and accept action/exception messages individually or in bulk and gain visibility into the allocation of demand to supply. Finally, they are also able to drill into supply and demand for an item across multiple locations.
Supply Allocation
Another function of MRP is that you are able to allocate inventory that has been received or anticipate receiving, whether on a work, transfer, or purchase order. You’re also able to allocate inventory in an inbound shipment which is a collection of purchase orders that are managed on an individual shipment basis. This gives customer service representatives the ability to validate supply and identify what date an order can be filled.
How Seller Universe Can Help
There is no doubt that NetSuite’s Demand Planning module has many powerful features that can benefit many businesses. Many logistics and transportation companies especially use demand planning while many stand to benefit from NetSuite Outsourced Manufacturing to forecast demand.
At Seller Universe, we have the best NetSuite consultants who have a broad range of experience and expertise in the aspect of demand planning. We are here to understand your needs and offer you the right solution that will work for you! I
If you want to learn more about how we do things, here are the essential steps to implementing NetSuite you need to know, or simply reach out to us today!
