A Detailed Guide on NetSuite Inventory Management (2024 Updated)

Most businesses struggle to manage inventory across multiple warehouses. Are you one of those businesses? 

It’s tough to balance stock levels and ensure timely restocking without the right tools. This is where inventory management tools come in. 

Efficient inventory management is key to cutting costs and boosting customer satisfaction. and NetSuite can be your best partner. 

Here, explore how NetSuite’s complete solution simplifies multi-warehouse inventory management, simplified operations, and offers real-time insights. 

Lets understand how NetSuite optimizes your inventory management and transforms business operations seamlessly.

What is NetSuite Inventory Management?

NetSuite Inventory Management is a complete set of tools and processes integrated within the NetSuite ERP system. It helps businesses oversee and control their inventory operations efficiently. This system allows companies to manage stock levels, track inventory movements, and optimize supply chain processes across multiple locations in real-time.

For example, a manufacturing company uses NetSuite Inventory Management to maintain control over raw materials and finished goods across its production sites and warehouses. Features like instant visibility, automatic order restocking based on demand forecasts, and seamless integration with order processing ensure smooth operations and informed decision-making.

The software operates on a cloud-based platform, making it accessible and scalable for businesses of all sizes. This flexibility is essential, where agility and real-time responsiveness are important for staying ahead in the market.

Why Is NetSuite Inventory Management Important?

Effective inventory management is important for businesses aiming to optimize operations and meet customer demands. NetSuite’s Inventory Management stands out for several key reasons:

  1. Real-Time Visibility

NetSuite provides an instant view of inventory across all locations and channels. This allows businesses to make quick and informed decisions. This capability ensures accurate stock levels, reducing the risk of running out of stock or holding excess inventory.

  1. Cost Savings

By adjusting stock levels and automating processes, NetSuite helps businesses cut down on extra inventory costs, storage expenses, and manual labor. This cost-efficiency improves profitability and operational efficiency.

  1. Efficiency Enhancement

Automating inventory tracking, restocking, and cycle counting reduces errors and boosts overall operational efficiency. This improvement lets businesses focus more on strategic tasks rather than routine operations.

  1. Scalability

NetSuite’s cloud-based setup allows organizations to expand their operations smoothly by adding modules and capabilities as needed. This scalability ensures that businesses can grow without being held back by their inventory management system.

  1. Comprehensive Features

System offers advanced features like demand planning, forecasting, and warehouse management, which streamline inventory operations and enhance customer satisfaction. These comprehensive tools help businesses meet market demands effectively.

  1. Integration with Other Functions

This management system smoothly connects with essential business functions such as sales, procurement, and financials. This integration provides a complete view of the supply chain, helping businesses make better decisions and align operations efficiently.

What Challenges NetSuite’s Inventory Management Module Solve?

NetSuite’s inventory management module addresses key challenges faced by businesses, ensuring operations run smoothly and efficiently. These challenges include:

  1. Striking the Perfect Balance: 

NetSuite allows companies to maintain optimal inventory levels, balancing stock availability without the risk of overstocking or understocking. This involves forecasting demand, monitoring inventory movements, and strategically setting reorder points.

  1. Minimizing Manual Processes: 

Automating inventory tracking, order management, and sales processes streamlines operations and minimizes errors throughout the inventory lifecycle.

  1. Reducing waste and maximizing inventory usage

Through careful tracking of lot and serial numbers, NetSuite optimizes inventory fulfillment strategies, reducing waste and ensuring efficient inventory utilization.

  1. Addressing Common Inventory Management Issues: 

NetSuite’s complete system resolves common issues such as stock level discrepancies, item tracking complexities, and challenges in order fulfillment. Effective troubleshooting techniques, such as error identification and detailed inventory analysis, empower businesses to overcome these hurdles effectively.

Key features of NetSuite Inventory Management

1. Real-Time Inventory Visibility

NetSuite provides a live view of inventory levels across all locations and sales channels. This visibility helps businesses make informed decisions quickly, avoid stockouts, and reduce excess inventory. By monitoring stock levels and tracking inventory movements, businesses can fulfill orders more accurately. 

For example, a retail company uses NetSuite to check inventory across multiple stores. When an online order is placed, the system verifies stock in real time and can transfer items between stores if needed. This process ensures timely delivery and enhances customer satisfaction while reducing inventory costs.

2. Advanced Warehousing

NetSuite supports complex warehousing operations, including managing multiple warehouses, bin locations, and advanced putaway and picking strategies. These features help businesses optimize warehouse space, improve workflows, and enhance order fulfillment accuracy. With NetSuite, businesses can track inventory within specific bins and shelves, reducing the time needed to locate items. 

For example, a distribution company uses NetSuite to manage inventory across several warehouses. The system assigns the best storage locations for incoming products and guides warehouse staff in picking routes for efficient order processing. This structured approach reduces errors, speeds up fulfillment, and makes the best use of warehouse space, ensuring that operations run smoothly and efficiently.

3. Demand Planning and Forecasting

NetSuite uses historical data and trends to predict future demand, helping businesses plan inventory purchases, reduce carrying costs, and ensure timely availability of products. The system analyzes past sales data, seasonal trends, and market conditions to generate accurate forecasts. 

It also allows for changes based on upcoming promotions, product launches, or external factors like economic shifts or supply chain challenges. NetSuite’s demand planning tools suggest best order quantities and timings, assisting in effective inventory management. Accurate demand prediction helps prevent overstocking and stockouts, improving cash flow and customer satisfaction. 

This proactive approach supports informed decision-making, ensuring that inventory levels meet market demand for enhanced efficiency and profitability.

4. Order Management

NetSuite simplifies the entire process of managing orders, seamlessly handling tasks from order entry to fulfillment. This feature ensures efficient management of customer orders across various sales channels and locations. By automating order processing, businesses enhance accuracy and expedite order fulfillment.

NetSuite integrates smoothly with inventory and warehouse systems to ensure orders are fulfilled promptly from the nearest available stock, improving delivery times and customer satisfaction. Furthermore, the system provides real-time updates on order status, enabling businesses to proactively manage customer expectations and promptly resolve issues.

Through centralized order management, NetSuite helps businesses maintain consistency and reliability in meeting customer needs, boosting operational efficiency and supporting growth in competitive markets.

5. Procurement and Supplier Management

NetSuite simplifies supplier management and purchasing processes, enabling businesses to effectively track and manage supplier relationships. This capability makes purchasing activities more efficient, optimizes inventory levels, and ensures timely delivery of goods.

For example, a manufacturing company uses NetSuite to monitor supplier performance and maintain consistent inventory levels. The system automates purchase orders based on set inventory limits and supplier agreements, ensuring materials are always available for production. 

By consolidating supplier data and purchasing processes, NetSuite helps businesses reduce purchasing costs, minimize supply chain challenges, and build strong supplier relationships.

6. Lot and Serial Number Tracking

NetSuite tracks inventory using lot and serial numbers, ensuring accurate tracking of each item from start to finish. This feature improves inventory accuracy and meets regulations. Businesses can trace the origin, movement, and expiration of products, which is important for industries like pharmaceuticals and food. 

NetSuite makes recall management, quality control, and warranty tracking easy by keeping detailed records of each lot or serial number. This tracking helps prevent issues with expired or defective products and supports efficient inventory management by showing stock levels and product history. 

Additionally, it helps meet regulatory requirements and improves customer satisfaction by ensuring only high-quality products reach the market.

7. Multi-Location Inventory Management

NetSuite manages inventory across multiple locations, helping businesses track stock levels at different sites. This feature ensures that businesses can move inventory efficiently between locations to meet demand. 

For example, a retail chain uses NetSuite to monitor stock in various stores and transfer products from one store to another as needed. NetSuite provides real-time visibility into inventory levels at all locations, helping to balance stock and avoid shortages or excess inventory. 

Businesses can also set rules for automatic stock transfers based on predefined limits, ensuring proper stock levels across all sites. This capability reduces stockouts and overstock situations, improves overall inventory management, and ensures customers can find the products they need at any location.

8. Automated Replenishment

NetSuite automates the reordering process by setting up rules based on inventory levels, lead times, and sales forecasts. This feature ensures that businesses always have the right amount of stock on hand. 

For example, when inventory drops below a certain level, NetSuite automatically generates a purchase order to restock the item. This automation reduces the risk of stockouts and overstocking, helping businesses maintain proper inventory levels. 

Automated reordering also saves time and reduces manual errors, allowing staff to focus on more important tasks. Additionally, NetSuite provides alerts and notifications to keep inventory managers informed of reorder points and pending orders. 

9. Cycle Counting

NetSuite supports cycle counting, a method of regularly auditing inventory in smaller, manageable batches rather than conducting a full inventory count. This approach ensures ongoing accuracy of inventory records and facilitates quick identification of discrepancies. 

Businesses can schedule these audits based on product value, turnover rate, or criticality. By focusing more frequently on high-demand or valuable items, cycle counting reduces the need for extensive shutdowns to check inventory. It also minimizes disruptions, enhances inventory management efficiency, and enables real-time adjustments to stock levels. 

NetSuite’s cycle counting feature helps businesses maintain precise inventory control and effectively meet customer demand.

10. Barcoding and Scanning

NetSuite supports barcoding and scanning, allowing businesses to automate data entry and improve inventory accuracy. This feature speeds up the receiving, picking, packing, and shipping processes by using barcode scanners to track inventory movements.

Employees can quickly scan items to update inventory levels, reducing manual errors and saving time. For example, when receiving new stock, a warehouse worker scans the barcode on each item, and NetSuite instantly updates the inventory records.

Barcoding and scanning also help in faster order fulfillment, ensuring that customers receive their products quickly and accurately. This technology enhances overall efficiency and reduces the possibilities of mistakes in inventory management.

11. Return Management

NetSuite simplifies the process of handling returns, enabling businesses to efficiently manage product returns from customers. This feature optimizes the entire return lifecycle, from authorization and inspection to refund processing, ensuring seamless operations. Businesses can easily track returned items, assess their condition, and promptly initiate refunds or replacements within the NetSuite system.

For example, a retail store using NetSuite can quickly process customer returns by scanning the item’s barcode, verifying its condition, and initiating the return authorization directly in the system. This capability improves customer satisfaction by providing timely handling of return requests and maintaining transparency throughout the process. 

Additionally, NetSuite’s analytical tools enable businesses to analyze return trends, identify potential issues, and implement strategies to reduce return rates and enhance overall customer experience.

12. Integration with Other NetSuite Modules

NetSuite smoothly integrates with essential modules like sales, purchasing, and financials within the platform, ensuring smooth operations across all business functions. This integration allows real-time data sharing and updates between modules, providing a unified view of business operations.

For example, sales data from the CRM module directly affects inventory levels and purchase decisions, ensuring stock levels meet customer demand. Financial transactions automatically sync with inventory records, directly impacting order fulfillment processes.

This integrated approach simplifies workflows, reduces data duplication, and enhances decision-making capabilities across the organization. Businesses can use these integrations to maintain efficiency, accuracy, and flexibility in responding to market demands and customer needs effectively.

13. Customizable Dashboards and Reports

NetSuite allows businesses to customize dashboards and reports to meet specific operational needs. Users create personalized views of critical metrics like inventory levels, sales performance, and financial data. 

This customization happens through easy drag-and-drop features and adjustable widgets, enabling organizations to design dashboards that provide detailed insights into various parts of their operations. Managers and executives can monitor key performance indicators (KPIs), including revenue trends, inventory turnover rates, and customer satisfaction metrics. 

These tools make data-driven decisions clearer. Customizable reports also help teams analyze business performance deeply, identifying growth opportunities, optimizing processes, and mitigating risks effectively.

14. Global Inventory Management

NetSuite’s global inventory management feature helps businesses manage their inventory across multiple locations and countries. This feature ensures real-time visibility into inventory levels, allowing companies to monitor stock at different sites effectively. 

NetSuite supports various currencies and languages, making it easier to manage international operations. With global inventory management, businesses can transfer stock between locations easily, minimizing stockouts and overstock situations. 

Businesses can also set up regional warehouses to serve specific markets better, reducing shipping times and costs. This feature allows for better planning and forecasting, ensuring that the right products are in the right place at the right time.

15. Item and Asset Management

NetSuite’s item and asset management feature helps businesses track and manage their items and assets efficiently. This feature provides a centralized system for monitoring the status, location, and value of inventory items and fixed assets. Businesses can categorize items, track their lifecycle, and manage asset depreciation.

With this feature, companies can schedule maintenance for assets, ensuring they remain in good working condition. They can also track the usage and movement of items, reducing the risk of loss or theft. NetSuite’s system supports barcode scanning, making it easy to update item and asset records in real-time.

Benefits of using NetSuite Inventory Management

1. Ensure Optimal Stock Levels

NetSuite helps businesses maintain the right amount of stock by providing real-time inventory visibility and demand forecasting. This ensures that companies have enough products to meet customer demand without overstocking. It reduces storage costs and minimizes waste, allowing for more efficient inventory management and better customer satisfaction.

2. Increase Profit Margins

NetSuite helps businesses increase their profit margins by optimizing inventory levels and reducing the costs associated with excess stock and stockouts. Efficient inventory management reduces holding costs, minimizes markdowns, and improves cash flow. By simplifying production schedules and inventory purchases, businesses can lower production costs and increase profitability.

3. Reduce Cost of Goods Sold

NetSuite’s inventory management features help businesses lower the cost of goods sold (COGS). It optimizes purchasing decisions and improves supplier relationships. By tracking inventory costs and analyzing supplier performance, companies can negotiate better terms and reduce buying expenses. This leads to lower overall COGS and better financial performance.

4. Increase Operational Efficiency

The system improves operational efficiency by automating inventory management tasks such as order processing, restocking, and keeping track of stock levels. This automation reduces manual work and errors, freeing up staff to focus on more strategic tasks. For example, a logistics company can use NetSuite to automate warehouse operations, ensuring accurate orders and faster delivery times, which boosts overall efficiency.

5. Enhance Customer Satisfaction

NetSuite enhances customer satisfaction by ensuring products are always available when needed. It achieves this through efficient inventory management and efficient order fulfillment processes, which minimize stockouts and delays. Businesses using NetSuite align inventory across sales channels, providing accurate product availability information. This consistency enhances customer experience and builds loyalty

Optimising/Managing Inventory Levels in NetSuite

Effectively managing inventory levels in NetSuite involves using several key strategies:

  1. Real-Time Inventory Tracking: NetSuite provides instant visibility into stock levels across all locations, helping businesses make informed decisions and adjust inventory as needed to avoid shortages or excess.
  2. Setting Optimal Reorder Points: NetSuite calculates precise reorder points based on past sales, lead times, and market trends. This ensures inventory is restocked at the right time to meet demand without accumulating too much stock.
  3. Maintaining Safety Stock: NetSuite allows businesses to establish ideal safety stock levels to handle supply chain uncertainties. This prevents shortages while avoiding tying up excessive capital in inventory.
  4. Inventory Classification: Using ABC analysis in NetSuite prioritizes high-value (A) items for closer management and simplifies oversight of lower-value (C) items.
  5. Automating Stock Restocking: NetSuite’s automated stock Restocking features send alerts and generate purchase orders to maintain optimal inventory levels across locations, improving efficiency.
  6. Demand Forecasting: NetSuite employs advanced analytics for accurate demand forecasting, helping businesses predict future sales and plan inventory accordingly. This reduces the risk of overstocking or understocking and optimizes inventory management.

By using these capabilities in NetSuite, companies can optimize inventory levels, reduce costs, and ensure customer satisfaction through better product availability.

Best Practices of NetSuite Inventory Management

Effective implementation of NetSuite inventory management involves adopting several best practices to optimize operations and enhance efficiency. It includes:

  1. Real-Time Inventory Tracking: Maintain accurate visibility of inventory across all locations in NetSuite to adjust stock levels. It also helps prevent stockouts, ensuring consistent availability of products.
  2. Automated Restocking: Use NetSuite’s automated features to simplify and speed up the restocking process. It helps ensure optimal inventory levels without manual involvement.
  3. Demand Forecasting: Use advanced analytics in NetSuite to predict demand accurately. It allows proactive inventory planning and minimizing costs from excess stock.
  4. Cycle Counting: Implement regular cycle counting using NetSuite’s tools to maintain precise inventory records and reduce errors, improving accuracy without disrupting daily operations.
  5. Cross-Functional Integration: Integrate NetSuite’s inventory management with sales, finance, and customer service functions to bring operations together, simplify decision-making, and enhance overall efficiency.
  6. Customer Feedback Integration: Include customer feedback into NetSuite’s inventory strategies to effectively predict demand trends, match inventory levels with customer needs, and optimize product availability.
  7. Performance Metrics Tracking: Define and monitor KPIs within NetSuite to assess inventory management performance, identify areas for improvement, and continuously enhance operational efficiencies.

By focusing on these best practices in NetSuite inventory management, businesses can improve operational agility, reduce costs, and enhance customer satisfaction through efficient inventory control and strategic decision-making.

Cost of NetSuite Inventory Management

The cost of NetSuite Inventory Management depends on the size of your business, the number of users, and the specific modules you need. Here are some general guidelines:

User License Costs:

  • Each user costs about $129 per month.
  • For 15 users, the total monthly cost is 15 x $129 = $1,935.
  • The annual cost for 15 users is $1,935 x 12 = $23,220.

NetSuite Editions:

  • Starter Edition: For smaller businesses with fewer than 10 users or limited needs. Starts at about $1,000 per month.
  • Mid-Market Edition: For mid-sized organizations with more than 10 users and/or multiple entities. Starts at around $2,500 per month.
  • Enterprise Edition: For large enterprises with extensive demands. Starts at about $5,000 per month.

Implementation Costs:

  • Can range from $10,000 to over $100,000, depending on the complexity of analysis, customization, development, system integration, and training.
  • A rough rule of thumb for implementation is 1-2 times the license cost.

Customizations and Integrations:

  • Customizations cost $150-300 per hour, depending on complexity.
  • Integrations can cost $0-$4,000+ annually, with an additional one-time setup fee.

Training and Support:

Ongoing training and support range from $2,000 to $15,000, based on the number of employees, training depth, and duration.

These costs may change based on specific business needs and the chosen NetSuite Solution Provider.

How can we help you in Inventory Management using NetSuite?

At ERP Peers, we provide customized solutions to improve your inventory management using NetSuite. Our approach ensures your business makes the most of NetSuite’s capabilities. We start with a detailed review of your current inventory processes, identify areas for improvement, and match them with your business goals. Our experts work closely with you to understand your specific needs and challenges, ensuring a personalized implementation plan.

We guide you through every step of the process, from planning and data migration to customization and configuration. We ensure a smooth changeover to NetSuite, minimizing interruptions to your daily operations. We customize NetSuite to fit your needs, adjusting workflows, reports, and dashboards for better visibility and control. Our solutions help you maintain the right inventory levels, set accurate reorder points, and keep ideal safety stock levels.

ERP Peers integrates NetSuite with your existing systems, like ERP, CRM, and e-commerce platforms, ensuring smooth data flow and consistent information across all departments. We regularly review your inventory management processes and system performance, finding opportunities for further improvement. Partnering with ERP Peers ensures expert guidance and support at every step, helping you achieve greater efficiency, lower costs, and better customer satisfaction through effective inventory management.

Conclusion

NetSuite’s inventory management module provides a complete set of tools for efficient and accurate inventory control. Real-time tracking, automated restocking, and demand forecasting help businesses optimize inventory levels, reduce costs, and enhance customer satisfaction. Additionally, NetSuite’s integration capabilities ensure smooth data flow across all business functions. With scalable solutions for businesses of all sizes, NetSuite is a valuable tool for effective inventory management.

 

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