NetSuite Supply and Demand Planning
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Easily Balance Demand and Supply
Throughout Your Supply Chain
NetSuite Supply and
Demand Planning
NetSuite Demand Planning supports both
demand and supply planning capabilities.
Key Benefits
NetSuite Supply and Demand Planning helps
• Increase forecast accuracy.
balance supply and demand in a way that
provides businesses the right combination of • Eliminate obsolete inventory.
cost control, accurate lead times and service • Ensure product availability.
level. Using inventory management and demand • Minimize inventory carrying costs.
planning techniques combined with a robust
• Eliminate delays in production due to lack of
scheduling engine and predictive analytics, availability of materials.
NetSuite Supply and Demand Planning helps
• Optimize ordering with planning rules and
businesses to make informed decisions which
order pegging.
ensure product availability while keeping excess
inventory to a minimum.
www.netsuite.com
The Demand Planning Process
Calculate Generate Calculate Generate
Approve
Demand Demand Plans Supply Supply Plans
Demand Planning • Item Setup
NetSuite Demand Planning predicts future One of the most critical areas to the planning
inventory needs based on historical demand, process is defining the parameters that affect
seasonality, open opportunities and/or sales each item. This defines the item as being
forecasts. The demand planning process includes available to demand planning, establishes an
calculating demand, generating demand plans, alternate source item (if you are trying to plan a
calculating supply, generating supply plans, and new item with no sales history), and establishes
finally executing purchase orders, transfer orders which distribution network and category it might
and work orders. By pinpointing when to reorder belong to if you are using the DRP (distribution
items and in what quantities, you can optimize resource planning) functionality so that you can
stock levels, improve forecast accuracy, and transfer inventory between locations. You can
enhance supply chain planning. NetSuite Demand also set additional planning parameters that
Planning ensures you have the right amount affect either how demand is evaluated or how
of stock on hand to fill orders without having the planned orders are generated.
overstock sitting idle on warehouse shelves.
Item Setup
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• Forecasting • Multi-Location Inventory
With the demand planning process, demand Easily define multiple inventory locations with
can be evaluated and presented in a number of real-time visibility. Locations can be organized
different ways including: hierarchically—for global businesses the country
◦ Linear Regression – Use previous demand can be defined. During the planning process,
to project future inventory based on the the system can be set up to automatically create
ordinary/least-square regression method. transfer orders between locations as necessary.
◦ Moving Average – Use the moving average • Allocation Exceptions Management
of historical demand to calculate the overall To respond to supply shortages and VIP
average stock level needed and then project customers, you can review all sources of
future stock levels using that overall average. supply and order allocations to ensure that
high priority sales orders ship complete and on
◦ Seasonal Average – Use previous demand to time. To minimize the effect on all orders, the
examine the seasonal trend of inventory flow system provides intelligent supply reallocations
and then project a similar seasonal trend for recommendations designed to take the
future stock levels. resources from multiple unallocated orders and
◦ Sales Forecast – When using NetSuite fulfill priority orders first. It can also generate
for your sales operations, this option uses alternate recommendations, reducing the
forward looking sales forecast data (such time to find, review and execute reallocations
as opportunities, estimates, etc.) to project and automatically re-aligns the supplies to the
inventory demand. affected orders.
Multi-Location Inventory
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Supply Planning Reorder Points
NetSuite Supply Planning determines how to Using Reorder Points, NetSuite generates a
best fulfill demand plan requirements to balance purchase order, work order or transfer order to
supply and demand and fulfill customer orders as restore inventory to the preferred stock level when
promised. The objective is to balance supply and it falls below the minimum threshold, referred to
demand to achieve your organization’s financial as the reorder point. When set to auto calculate,
and service objectives. Supply plans generate NetSuite will consider historical data values such
a recommended schedule for purchasing or as item demand from sales, lead time from the
manufacturing items and list the recommended suppliers, and company-defined safety stock to
purchase orders and work orders based on lead define the reorder point.
times and expected demand. This all ensures Timed-Phased Planning
products are available to fulfill customer orders. NetSuite Time-Phased Planning is used to plan
NetSuite Supply Planning takes demand plans demand when the repurchasing cycle is known.
and generates them into purchase, work and If a supplier always delivers on a particular day of
transfer orders to ensure product is available to the week, it makes sense to plan for this material
fulfill customer orders using three based on the cycle in which it is delivered. In this
planning methodologies: case, NetSuite can calculate all supply needed to
cover demand in the current cycle and it can be
ordered and delivered together. You will not be
able to reorder until the following delivery date.
Supply Plans
© Oracle | Terms of Use and Privacy Page 4Material Requirements Planning scenarios and identify if it’s possible to speed
NetSuite Material Requirements Planning, up delivery by, for example, making changes
commonly referred to as MRP, gives businesses to where goods ship from and when. With
visibility into inventory requirements needed to NetSuite MRP, you can set supply planning
meet demand, helping your business optimize criteria, including the planning horizon, included
inventory levels and production schedules. One items, locations and planning rules at the plan
of the standard methods for balancing supply and level vs. the item level. This allows businesses to
demand, NetSuite MRP accelerates the production build multiple hypothetical plans and run what-if
process by determining what raw materials, scenarios to understand how changes will affect
components and subassemblies are needed, inventory levels and their ability to meet demand.
and when, to assemble finished goods based on • Planners Workbench
demand and bill of materials (BOM). The Planners Workbench helps users highlight
NetSuite MRP increases supply planning insight and situations that require attention, allowing them
efficiency, enabling businesses to efficiently manage to prevent both shortages and excess supplies,
inventory, schedule production, and deliver the right and provides what-if analysis capabilities for
product—on time and at optimal cost. simulating multiple plans. By focusing on
actions, exceptions, aggregation and execution,
• What-If Scenario Planning
planners can monitor, firm up or release orders
What-if analysis gives you the tools to understand
for approval and aggregation; review and accept
how to best use your inventory. Using scenario
action/exception messages individually or in bulk;
planning, businesses can mock-up multiple
Planning Workbench
© Oracle | Terms of Use and Privacy Page 5and gain visibility into the allocation of demand to • Allocation Exceptions Management
supply. The analysis is delivered in a logical layout To respond to supply shortages and VIP customers,
that supports the decision-making process. sources of supply and order allocations can be
NetSuite MRP offers full pegging support, so reviewed to ensure highest priority sales are
planners are also able to drill into supply and fulfilled first. To minimize the effect on all orders,
demand across locations for an item. the system provides intelligent supply reallocation
• Supply Allocation recommendations, designed to take the resources
As a part of the supply allocation functionality, from multiple unallocated orders and fulfill priority
you’re able to allocate inventory that has already orders first.
been received, and also inventory that you System generated reallocation recommendations
anticipate receiving, whether that’s on a work reduce the time to find, review and execute
order, transfer order or purchase order. You’re reallocations. After you accept a recommendation,
also able to allocate inventory that’s coming in the system automatically re-aligns the supplies to
on an inbound shipment, which is basically a the affected orders. However, if the generated
collection of purchase orders that are managed recommendations are not suitable, you can
on an individual shipment basis. This allows generate a new set of allocation recommendations.
customer service reps validate supply and You can then review reallocation scenarios until
identify the earliest date an order can be filled. you define a solution. After you approve an
allocation, the system returns you to the order.
Order Execution
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