Stock reordering

Stock reordering is a calculation that matches your supply of components, raw materials and stock items with current and future demand for your released and other items to identify stock shortages, and to generate recommendations to satisfy these stock shortages.

The initial results list stock items that meet the request criteria that are replenished when the stock level drops to the reorder point. The run request then matches your supply of components, raw materials and stock items to the demand, and generates a suggestion for the items where the potential requirements exceed any supply.

For each result, you can analyse what to purchase and/or manufacture. You can initiate your procurement or production processes directly from the suggested results, creating purchase orders and work orders quickly and easily with the direct links to Purchasing and Manufacturing. This is an effective way of ensuring suggested materials are available at the required times.

You should regard stock reordering as an integral component of your stock management. By only ordering items when there is a requirement for them keeps stock levels and associated stock overhead costs to a minimum.

Run a stock reorder request

1. Enter your request criteria. You can run a stock reorder request for:

   • A Company or a production Site, but not both

     If you select a company, all sites for the parent company are included.

   • A single company or multiple production sites, but not both

   • Manufactured and purchased items

     A single manufactured or purchased item, a range of items, or all manufactured and purchased items.

2. Enter the last date to include in the demand forecast.
3. Select Search to list stock items that meet the request criteria that are replenished when the stock level drops to the reorder point.
4. Select Run to start the calculations and generate the suggestions for the listed items.

Review the calculation results

When the reorder calculation is completed, review the results.

Suggested order quantities are calculated as:

(Total supply + Starting stock) – Total demand – Safety stock

The suggested Order date is from the calculated due date. Purchasing suggestions consider the item-site Purchase lead time; production suggestions consider the item-site Production lead time.

You can create purchase orders from the generated suggestions to replenish stock from an external supplier and work orders to replenish stock from in-house production. The item-site Preferred process determines if the Purchase lead time or Production lead time will be considered.

Create a purchase order for an external supplier

1. To create a purchase order from the reorder suggestion, select the More actions icon then select Create purchase order. This action can be available from the More actions icon for a Purchasing and a Production suggestion.

2. The supplier name is displayed by default. You can change the Supplier.

   If the Supplier is blank you need to enter or select the supplier.

3. Leave the Purchase quantity of the Item.

   The Purchase quantity represents the quantity that the reorder calculations suggest is the best quantity to order, subject to the specified item-site replenishment rules and request criteria.

4. Leave the Gross price for the Item.

   The Gross price is calculated automatically from the supplier prices if the Supplier name is displayed by default. You can increase or decrease the default price per unit.

   If the Gross price is zero or blank, enter the price per Stock unit for the item.

5. You can leave the remaining fields as the default values or you can enter your own values:

   • Order date: The default planned Order date is the current date.
   • Expected receipt date: The date that the item needs to be available to meet the demand.

6. Create the purchase order.

   When you select Create, the item and associated prices are loaded to the purchase order automatically. The purchase order Status is set to Draft. You can add attributes and dimensions, edit the order line and submit the purchase order for approval on the Purchase order page. Go to the Purchase order documentation for further information.

Create a work order for in-house production

1. To create a work order from the reorder suggestion, select the More actions icon then select Create work order. This action can be available from the More actions icon for a Production and a Purchasing suggestion.

2. Leave the Quantity to produce of the Released item.

   The Quantity represents the quantity that the reorder calculations suggest is the best quantity to order, subject to the specified item-site replenishment rules and request criteria. You can increase or decrease the suggested order quantity.

3. The default planned production start date is the current date. You can enter or select a different date if production needs to start at a later date.

4. You can leave the remaining fields as the default values or you can enter your own values:

   • Category: The Category of work order to create.

   • Type: The work order Type. This also sets the initial status for the work order.

     If you leave the initial status of the work order as Planned, you cannot track progress for the work order.

     If you set the initial status of the work order as Firm, you can track production progress and component consumption for the work order.

   • Name: Enter the name commonly used at your production site for the Released item or leave the default value to use the Released item name.

   • Work order number: Leave the field blank to generate the next sequential work order number or enter your own work order reference.

     If you enter your own custom work order reference, it needs to be unique.

5. Create the work order.

   When you select Create, the Category determines whether the routing and/or the list of components required to produce the Released item are loaded to the work order automatically. On the Work order page, you can add attributes and dimensions, reserve stock for production, generate serial numbers for the planned production quantity, and print documents in PDF format for your workshop teams to use on the shop floor. Go to the Work order documentation for further information.

Working with stock reordering calculations and results

Refer to the list of questions in this section for guidance on how to use your Sage Distribution and Manufacturing Operations solution to carry out day-to-day planning tasks.

• When should I request a stock reorder calculation?
• Can I request a stock reorder calculation for a single production site if my organisation has multiple production sites?
• I want to request a stock reorder calculation for some of our production sites but not all of them. Can I do this?
• What constitutes demand for the stock reorder calculation?
• What constitutes supply for the stock reorder calculation?
• Does stock reordering analyse requirements for the levels in a bill of material?
• Does stock reordering nominate a preferred supplier for a suggested purchase order?
• What types of transactions does the stock reorder calculation ignore or exclude?
• A suggestion has been generated for an item that has not been ordered by a customer. Why?
• An item is being ignored by the stock reorder calculation, why?

When should I request a stock reorder calculation?

You can request a stock reorder calculation at any time. There are no strict rules. Decide how often to request a reorder calculation by considering the following points:

• How much information is needed
• How often the information is needed
• How much of an overhead stock reordering is to run
• How frequently sales orders, work orders and purchase orders are processed, and stock levels change

You can request a stock reorder calculation at regular intervals:

• Daily: A daily request might not be worthwhile as the results might only differ slightly.

• Weekly: A weekly request could generate more useful results than a daily request.

  If you use a weekly production schedule you should request a reorder calculation at least weekly.

• Monthly: Requesting a reorder calculation on the same date each month could generate more useful results than a weekly request if demand is light.
• Yearly: Requesting a reorder calculation once a year is quite feasible.

You can request a stock reorder calculation in response to ad hoc changes, such as changes to the components of a bill of material.

Can I request a stock reorder calculation for a single production site if my organisation has multiple production sites?

Yes. Leave the Company request criteria blank and enter or select a Site. The stock reorder calculation assesses the potential component requirements for the selected site only.

I want to request a stock reorder calculation for some of our production sites but not all of them. Can I do this?

Yes. Leave the Company request criteria blank. You can enter or select each production Site to include in the stock reorder calculation from a list of sites. The stock reorder calculation assesses the potential component requirements for all the selected sites.

What constitutes demand for the stock reorder calculation?

Demand comes from:

• Sales orders, and any demand for components and raw materials
• The item-site Safety stock level
• Demand transactions with a due date in the past

The stock reorder calculation matches your supply of components, raw materials and stock items to the demand, and generates a suggestion where the potential requirements exceed any supply. The reorder calculation also checks the Safety stock level. If the calculation takes the quantity of Accepted stock below the safety stock level it generates a suggestion. If there is insufficient stock available, the reorder calculation generates:

• A Production suggestion if the item is manufactured and the item-site Preferred process is Production
• A Purchasing suggestion if the item is purchased and the item-site Preferred process is Purchasing

You can create a work order or purchase order as suggested directly from the reorder results.

What constitutes supply for the stock reorder calculation?

Supply is used in the stock reorder calculation to work out whether current or future stock levels can meet demand from your sales orders, and any demand for components and raw materials. Supply is calculated from the following:

• Starting stock levels

  Accepted stock is calculated for each released item and component item-site record.

  Starting stock is calculated from the total quantity of Accepted stock on the calculation request run date.

  Supply and demand transactions with a due date in the past are also included in the starting stock level calculations. These are considered to be supplies not yet received and demand not yet delivered, both of which affect the starting stock on the start date of the calculation.

• Purchase orders
• Work orders

• Supply transactions with a due date in the past.

  These are considered to be supplies not received on the reorder calculation run date.

Does stock reordering analyse requirements for the levels in a bill of material?

No. The stock reorder calculations only determine if stock of the released item is in shortage.

Does stock reordering nominate a preferred supplier for a suggested purchase order?

Yes, if the item to order is listed as an item that the supplier provides.

If the supplier is the default supplier for the item, the supplier is nominated when creating the purchase order. You can change the nominated supplier to a different supplier.

If multiple suppliers supply the item, a supplier is nominated. You can change the nominated supplier to a different supplier.

If the Supplier records fail to nominate a supplier, you need to select the supplier manually when creating a purchase order from a generated suggestion.

What types of transactions does the stock reorder calculation ignore or exclude?

• Subassemblies, components and raw materials of a released item are excluded from the stock reorder calculation.
• External sales forecasts, sales quotes and purchase requests are ignored by the stock reorder calculation.
• Items that are in the same item group as the demand item are ignored by the stock reorder calculation.

A suggestion has been generated for an item that has not been ordered by a customer. Why?

The stock reorder calculation generates a suggestion where potential requirements exceed your supply of components, raw materials and stock items. As the reorder calculation also checks the Safety stock level it could have generated a suggestion because the quantity of Accepted stock fell below the safety stock level. So although there appears to be no demand from a specific order, the suggestion could have been generated because there is insufficient stock of the item. If there is insufficient stock available to meet demand, the reorder calculation generates:

• A Production suggestion if the item is manufactured and the item-site Preferred process is Production.
• A Purchasing suggestion if the item is purchased and the item-site Preferred process is Purchasing.

An item is being ignored by the stock reorder calculation, why?

There are many factors that can prevent an item from being included in the stock reorder calculation.

• Check the following item-site data:

  • Replenishment method needs to be set to By reorder point
  • Preferred process
  • Accepted stock level from inspection and quality control
  • Safety stock level
• Subassemblies, components and raw materials of a released item are excluded from the stock reorder calculation.