In our related article “Challenges for suppliers of CNC consumables – accurate inventory management”, we discussed some of the challenges faced by suppliers of the machine tools industry. Here we explain how NetSuite can help with accurately managing inventory, including consignment stock.
The prevalence of inventory control offerings within the machine tool supply industry is growing, particularly through the use of vending machines deployed to customer sites. These are designed to serve all the tools and consumables needed on-site to conduct that customer’s business.
Although very beneficial to the user, these can lead to a large administrative overhead for the supplier. Even if the vending machines are modern enough to provide a daily report on what has been consumed, there is still the process of restocking and invoicing for, the worst case, small numbers of many different types of items.
This is in addition to the accounting requirement that whilst these goods are still in the vending machine, they still belong to the supply company, so must remain on their balance sheet.
Using the NetSuite platform this process becomes very straightforward. By leveraging in-built multi-location functionality and tied to SuiteScript, NetSuite will do the following:
- Input a stock-take: This can either be typed in, imported via CSV, or a direct link can be created to your vending machine portal for real-time dispatch.
- Create a sales order: Calculate the difference between what is there now and what was there before, and create a sales order for the difference. You may choose to do this per stock-take or on a monthly or quarterly basis.
- Transfer to location: Create a transfer order to bring up the inventory level from what it is now, to a level set within a profile for that item.
- Receive at location: Confirm receipt of the items to the dispensing location, whilst showing them as “on order” at the target location.
- Create an invoice: If you are doing multiple transfers per month, but just one invoice, these are then consolidated.
Since we are using a huge amount of native NetSuite functionality, it can also benefit from the seasonal demand function within ‘Advanced Inventory’ or the more advanced supply chain abilities within the ‘Demand Planning’ module.
In doing so this removes a very time consuming but vital activity for the supply of machine tools, computer numerical control (CNC) consumables, and other engineering consumables.
If you would like to find out more about how NetSuite could help with the challenges associated with accurate inventory management, then please don’t hesitate to get in touch with one of our experts.
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