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How NetSuite Shortens Lead Times and Reduces On-Hand Inventory

Nov 28, 2018
By: Reed Klinkhammer

How NetSuite Shortens Lead Times and Reduces On-Hand Inventory 

Demand and supply planning can be crucial for manufacturers, and there are many reasons why. If you have long lead times, a seasonal business or unpredictable demand, or even unpredictability within your supply chain, planning can help you both shorten lead times and prevent missed deadlines to customers. Understanding what to procure, when to procure it and when to produce it so you can meet customer demand also helps you reduce your on-hand inventory costs.

NetSuite’s Demand Planning is designed to help manufacturers optimize inventory levels and simplify the ordering process and workflow approvals, all through an easy, four-step planning process:

Calculate Demand

Predicting what inventory you will need at any given time becomes much easier with NetSuite. Once you set up your items, NetSuite takes into account historical demand, current orders and sales forecasts, as well as tracks master data such as safety stock, reorder points, demand sources and seasonality, in order to calculate demand.

Generate a Demand Plan

After calculating demand, you can create a demand plan that lets you know what items you need to acquire and when you need to acquire them. NetSuite can also generate planned purchase orders, transfer orders and work orders as needed.

The below demonstrates NetSuite’s demand plan for an item using sales forecasting. It shows the calculated weekly demand over a 52-week period.

How NetSuite Shortens Lead Times and Reduces On-Hand Inventory


Calculate Supply

NetSuite tracks your current supply, orders and demand in order to generate a supply plan for how you will meet the expected demand over a certain period of time.

Generate a Supply Plan

After creating and editing your demand plans, creating a supply plan is a one-click process that uses item settings to control how orders are created. Depending on the parameters you’ve set, timelines (such as how long it takes a purchase order to get to you) and approval workflows, NetSuite generates planned, firm or released orders.

The below supply plan (for the same item shown in the demand plan above) displays purchase orders that will be created by demand per week.

How NetSuite Shortens Lead Times and Reduces On-Hand Inventory

Over time, NetSuite can help you calculate your optimal safety stock levels and reorder points. As it collects and enters more data into the system, it becomes even better at predicting demand. And with its enhanced automation capabilities, you can save time by automating the planning and purchasing process.

Overall, NetSuite enhances the level of strategy you can employ in making purchasing decisions. While a lot of purchasing has been based on a person’s gut intuition and their extensive experience as a purchaser, NetSuite backs up decisions based on many levels of data, which can tell you what demand will be like and how to beat it on the supply side. By optimizing your planning process with NetSuite, you can streamline your procurement process, prevent excess inventory from sitting in your warehouse, turn inventory over faster and reduce lead times.

Rely on a Team of NetSuite Specialists

When it comes to implementing NetSuite, you can also get the specialized knowledge and experience your business needs with the right firm. Wipfli’s NetSuite-certified team takes you through the full implementation process — including customizing, configuring, integrating with other systems, testing, on-going support and even training. If you have questions about NetSuite or would like to learn more, contact us today.


Reed Klinkhammer
Senior Consultant
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