Overcoming hurdles and gaining insight with NetSuite

By Ianic Brisson

My childhood image of a warehouse is that of the last scene of “Indiana Jones and the Raiders of the Lost Ark”—an endless building filled with wooden crates of all shapes and sizes. Thankfully this idea was fiction, and after working for years in the manufacturing world, I now know better. Nonetheless, managing warehouse inventory is no small task and involves many complex processes and logistics. Though NetSuite does not pretend to be able to manage my childhood image of a warehouse, it provides a robust inventory management environment for small to medium-sized businesses in the wholesale distribution vertical.

To effectively use NetSuite for wholesale distribution, it must be tailored to specific requirements. A successful implementation will provide the means to track the inventory accounting value and the ability to leverage the data to understand a business’s processes and activities. This is achieved by implementing NetSuite to provide meaningful inventory information in real time. However, “meaningful” also implies business-specific, which out-of-the-box NetSuite is not. This contradiction is resolved by providing an extensive customization toolbox including a powerful reporting tool called Saved Searches.

Saved Searches are the lever against which a business can push (with the weight of their expertise) in order to lift meaningful insight from inventory data. But just as a lever is useless without a fulcrum, the successful use of Saved Searches pivots around creating the right ones and knowing how to integrate them into the various NetSuite contexts.

Retrieving, structuring, and displaying the raw data so that it provides insightful information can require advanced technical knowledge or imaginative solutions. For example, businesses using Lot Numbered/Serialized inventory do so because traceability adds value to their product—it’s required for certifications or regulations that provide a competitive edge. The information needs to be readily accessible and is often transmitted to customers. Custom transaction history reports need to be created through Saved Searches and configured so they can be viewed or transmitted in the context of a Customer Record. The challenges with such a Saved Search include defining the right criteria, understanding the complexity that Lot/Serial Numbers add to the data structure, and knowing the inventory impact of various transactions.

Where and how data is displayed impacts employee effectiveness in performing their tasks. An employee in a distribution company making key decisions about sensitive item procurement requires inventory visibility at a glance—availability across several warehouses, orders ready to ship, costing/pricing information, and so on.

Building Saved Searches varies greatly in complexity. In their simplest form, Saved Searches allow knowledgeable users to retrieve and format the information they need, but more advanced queries require SQL knowledge. At other times, a mix of hyperlinks and NetSuite data structure knowledge is needed to link different Saved Search components together. They can also be used to create process-specific reminders, email alerts, and key company metrics. Any inventory information that can be summarized into a single value over a period of time can be turned into a key performance indicator by a Saved Search and displayed in comparative tables or graphs.

Inventory does not sit still. Out with the old, in with the new—but how much should be coming in? NetSuite uses historical analysis methods to determine how to replenish inventory. Although you could use Saved Searches to travel back in time and generate the needed analytics, NetSuite provides an out-of-thebox solution that comes in two paid formats: Advance Inventory (inventory replenishment) and Demand Planning.

In its simplest form, NetSuite will propose the creation of purchase orders when an item’s inventory level falls below a configured value. NetSuite manages this information for each item on a per-location basis, and provides additional fields to tweak proposed ordering quantities. The Advance Inventory feature analyzes the past six months of sales history to determine the minimum inventory level that must be reached to trigger the proposed replenishment orders. Other options include automatic lead time calculation from purchase history, and the possibility of defining inventory levels in days rather than quantities.

The Demand Planning feature provides more control and visibility on the historical and replenishment analysis. The feature can calculate each item’s inventory demand over specific periods of time. Four calculation methods are available; the results can be reviewed and manually tweaked. The demand plan is then used to calculate a supply plan, which can also be reviewed and manually adjusted. Inventory replenishment is performed by visiting and executing the proposed supply plan on a regular basis.

The use of analytics allows NetSuite to integrate increasingly powerful tools to improve inventory management. Still, the current functionalities may not fulfill some business requirements, i.e., replenishment across a business’s various locations. A screen is provided to facilitate the process, but it largely remains manual.

It’s therefore mandatory for a company to understand its inventory management processes and requirements, and validate them against the NetSuite offer. With this a user can match the needs to the right price tag while making any gaps stand out. These can be filled by additional customization, but a SuiteApp from a third party with different (or more powerful) functionalities may already exist. Established inventory management solutions can also leverage NetSuite’s different APIs to integrate directly into NetSuite.

A word of caution here. Having the possibility of using analytics for inventory management in NetSuite and making it a reality are two different things. This area of ERP implementations is complex, requires thoughtful planning, and must not be underestimated. Bridging the gap between the conceptual and the practical is difficult. It is critical that an important volume of real-life data be used to validate proposed solutions against business processes.

Inventory data is at the core of wholesale distribution, but it should not be considered the only relevant data that such a business should analyze to improve itself. The data captured and maintained by NetSuite encompasses a broad range of business processes. Inventory information, employee activity, forecasted and substantiated revenue, or the expenses generating a flow of outgoing funds can all be used in analytic tools and provide insight into a business’s operation.

By monopolizing on NetSuite’s features, key decision makers can be provided with performance metrics summarized on personalized dashboards. Although the tools are available, the experience and knowledge required to create and understand the key performance indicators are outside the purview of a software platform. Two expertise fields are required: technical knowhow in data digest and seasoned business entrepreneurship. The latter identifies the source data and derived metrics most important to a company’s progress and sphere of activity. The former is the craftsman that transforms raw data into meaningful indicators. NetSuite’s target audience are young, growing enterprises that shoot for better performances. In our experience, they often lack one or both when it’s not their core competency or other concerns monopolize entrepreneurial skills.

Specialized consulting firms can provide the skills and help secure the next level, but they are typically proficient in only one area. ERP Guru recognized that its customer base would benefit from these services and worked to bring together a new approach. The Business Monitoring Suite provides a combination of a specialized dashboard and management advisory services offered in a lightweight consulting approach with heavy-hitting results.

NetSuite is an exceptional opportunity for fast-growing wholesale distribution companies. It provides an integrated ERP platform capable of scalable inventory management. NetSuite’s various analytic features allow users to leverage financial and operational data and gather business performance insight. Recognizing and optimizing this edge will help identify the opportunities to improve performance.

About Author

Ianic Brisson has 15 years of experience in IT consulting. His career led him from the manufacturing world, where he led PLM implementations, to the ERP universe three years ago when he joined the ERP Guru team. He is part of the technical gurus, leading the company’s fast-paced growth. His creativity, dedication, and knowledge sharing skills contribute to ERP Guru’s outstanding success.

The statement and opinions contained herein are those of ERP Guru and not of NetSuite. NetSuite has not verified any statements or claims herein and assumes no responsibility for such statements or claims.