Easily Balance Demand and Supply
Throughout Your Supply Chain

NetSuite Supply andDemand Planning

NetSuite Demand Planning supports both demandand supply planning capabilities. NetSuite Supply and
Demand Planning helps balance supply and demand ina way that provides businesses the right combinationof cost control, accurate lead times, and service level.
Using inventory management and demand planningtechniques combined with a robust scheduling engine
and predictive analytics, NetSuite Supply and DemandPlanning helps businesses to make informed decisions
which ensure product availability while keeping excessinventory to a minimum.

Key Benefits• Increase forecast accuracy.
• Eliminate obsolete inventory.
• Ensure product availability.
• Minimise inventory carrying costs.
• Eliminate delays in production due to lack ofavailability of materials.
• Optimise ordering with planning rules andorder pegging.

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The Demand Planning Process

Calculate
DemandGenerate
Demand Plans

Calculate
SupplyDemand Planning
NetSuite Demand Planning predicts future inventory
needs based on historical demand, seasonality, openopportunities, and/or sales forecasts. The demandplanning process includes calculating demand,
generating demand plans, calculating supply, generating
supply plans, and finally executing purchase orders,transfer orders and work orders. By pinpointing when toreorder items and in what quantities, you can optimise
stock levels, improve forecast accuracy, and enhance
supply chain planning. NetSuite Demand Planning
ensures you have the right amount of stock on handto fill orders without having overstock sitting idle on
warehouse shelves.

Generate
Supply Plans

Approve

Item SetupOne of the most critical areas to the planning process
is defining the parameters that affect each item. Thisdefines the item as being available to demand planning,establishes an alternate source item (if you are trying toplan a new item with no sales history), and establishes
which distribution network and category it might belong
to if you are using the DRP (distribution resource planning)
functionality so that you can transfer inventory between
locations. You can also set additional planning parametersthat affect either how demand is evaluated or how theplanned orders are generated.

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Page 2ForecastingWith the demand planning process, demand can beevaluated and presented in a number of different
ways including:• Linear Regression – Use previous demand to project
future inventory based on the ordinary/least-square
regression method.
• Moving Average – Use the moving average of historicaldemand to calculate the overall average stock levelneeded and then project future stock levels using that
overall average.
• Seasonal Average – Use previous demand to examine
the seasonal trend of inventory flow and then project asimilar seasonal trend for future
stock levels.
• Sales Forecast – When using NetSuite for your sales
operations, this option uses forward looking sales
forecast data (such as opportunities, estimates, etc.) toproject inventory demand.

Multi-Location Inventory
Easily define multiple inventory locations with real-time
visibility. Locations can be organised hierarchically — forglobal businesses the country can be defined. During
the planning process, the system can be set up toautomatically create transfer orders between locations
as necessary.
Allocation Exceptions Management
To respond to supply shortages and VIP customers, you
can review all sources of supply and order allocations toensure that high priority sales orders ship complete andon time. To minimise the effect on all orders, the systemprovides intelligent supply reallocations recommendations
designed to take the resources from multiple unallocatedorders and fulfil priority orders first. It can also generatealternate recommendations, reducing the time to find,review, and execute reallocations and automatically realigns the supplies to the affected orders.

Multi-Location Inventory© Oracle | Terms of Use and PrivacyPage 3Supply Planning
NetSuite Supply Planning determines how to best fulfil
demand plan requirements to balance supply anddemand and fulfil customer orders as promised. The
objective is to balance supply and demand to achieve
your organisation’s financial and service objectives.
Supply plans generate a recommended schedule
for purchasing or manufacturing items and list therecommended purchase orders and work orders basedon lead times and expected demand. This all ensures
products are available to fulfil customer orders.
NetSuite Supply Planning takes demand plansand generates them into purchase, work, and transferorders to ensure product is available to fulfil customer
orders using three planning methodologies:

1. Reorder Points
Using Reorder Points, NetSuite generates a purchaseorder, work order, or transfer order to restore inventory
to the preferred stock level when it falls below theminimum threshold, referred to as the reorder point.
When set to auto calculate, NetSuite will consider
historical data values such as item demand from sales,
lead time from the suppliers, and company-definedsafety stock to define the reorder point.
2. Timed-Phased Planning
NetSuite Time-Phased Planning is used to plandemand when the repurchasing cycle is known. Ifa supplier always delivers on a particular day of theweek, it makes sense to plan for this material based on
the cycle in which it is delivered. In this case, NetSuitecan calculate all supply needed to cover demand in
the current cycle and it can be ordered and delivered
together. You will not be able to reorder until thefollowing delivery date.

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Page 4

3. Material Requirements Planning
NetSuite Material Requirements Planning, commonlyreferred to as MRP, gives businesses visibility into
inventory requirements needed to meet demand,
helping your business optimise inventory levels, andproduction schedules. One of the standard methods
for balancing supply and demand, NetSuite MRP
accelerates the production process by determining
what raw materials, components, and subassemblies
are needed, and when, to assemble finished goods
based on demand and bill of materials (BOM).
NetSuite MRP increases supply planning insight andefficiency, enabling businesses to efficiently manage
inventory, schedule production, and deliver the rightproduct — on time and at optimal cost.
• What-If Scenario Planning
What-if analysis gives you the tools to understand how
to best use your inventory. Using scenario planning,businesses can mock-up multiple scenarios andidentify if it’s possible to speed up delivery by, forexample, making changes to where goods ship fromand when. With NetSuite MRP, you can set supply
planning criteria, including the planning horizon,
included items, locations, and planning rules at theplan level vs. the item level. This allows businesses
to build multiple hypothetical plans and run whatif scenarios to understand how changes will affectinventory levels and their ability to meet demand.
• Planners Workbench
The Planners Workbench helps users highlightsituations that require attention, allowing them toprevent both shortages and excess supplies, andprovides what-if analysis capabilities for simulating
multiple plans. By focusing on actions, exceptions,aggregation, and execution, planners can monitor,
firm up, or release orders for approval andaggregation; review and accept action/exception
messages individually or in bulk; and gain visibility
into the allocation of demand to supply. The analysis
is delivered in a logical layout that supports thedecision-making process. NetSuite MRP offers full
pegging support, so planners are also able to drill into
supply and demand across locations for an item.

Planning Workbench© Oracle | Terms of Use and Privacy

Page 5• Supply Allocation
As a part of the supply allocation functionality,
you’re able to allocate inventory that has alreadybeen received, and also inventory that you anticipate
receiving, whether that’s on a work order, transferorder, or purchase order. You’re also able to allocate
inventory that’s coming in on an inbound shipment,
which is basically a collection of purchase orders thatare managed on an individual shipment basis. This
allows customer service reps validate supply andidentify the earliest date an order can be filled.
• Allocation Exceptions Management
To respond to supply shortages and VIP customers,sources of supply and order allocations can bereviewed to ensure highest priority sales arefulfilled first. To minimise the effect on all orders,
the system provides intelligent supply reallocation
recommendations, designed to take the resourcesfrom multiple unallocated orders and fulfil priority
orders first.
System generated reallocation recommendations
reduce the time to find, review, and execute
reallocations. After you accept a recommendation,
the system automatically re-aligns the supplies tothe affected orders. However, if the generated
recommendations are not suitable, you cangenerate a new set of allocation recommendations.
You can then review reallocation scenarios until you
define a solution. After you approve an allocation, thesystem returns you to the order.

Order Execution

To find out more, contact NetSuite on
Infoapac_WW@oracle.com

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