Optimize Inventory Levels through Re-Order Point Processing in Sage X3

The re-order point (ROP) is a critical concept in inventory management, as it represents the specific level at which if the stock of a particular item reaches, it needs to be replenished.

Mastering the inventory ROP is a game changer in equipping you with knowledge and tools that enhance stock level optimization, help prevent stockouts, and maintain a fluid supply chain.

We will consider an example below by setting up the requirements for re-order point and see the impact it has when our stock levels start dipping below that set level.

ROP Setup:

Under the planning tab, consider that the reorder mode should be set to ‘By ROP’ and the highlighted fields should be filled with the required quantities for the product.

To set up the ROP reorder mode navigate to: Common data> products> product-site

Reorder threshold: the stock level from which reordering is triggered.

Safety stock: it features an additional stock implemented to be able to face a longer deadline to obtain stock or a request higher than the average request.

EOQ (Economic order quantity): the minimum reorder quantity from a supplier.

The system will now use the defined values to raise suggestions for ordering when the stock levels start falling below the reorder point.

Statistical reordering:

Every so often, a prudent stock manager will run the statistical reordering function to determine reorder suggestions for products that have been set up with a reorder threshold as cited above. The order suggestions in this case are determined by the data at the product site level.

To run this function, navigate to: Stock> reorders> statistical reordering

Key in the required criteria for running the function such as the site, product(s) and click ok.

A log reading will be generated for the suggested orders referencing to the data at the product site level and the stock available for the product.

Proceed to the enterprise planning function to view the suggestions generated and choose the next course of action where necessary.

Navigate to: Purchasing> Supply> Enterprise planning

Taking into consideration our example in the first screenshot above, our reorder threshold was set to 350 units.

Currently, our stock levels are at 50 units therefore, running the statistical reordering resulted in a purchase order suggestion of an additional 300 units to ensure we maintain our minimum required level of 350 units.

Consider the screenshots below:

On the vertical ellipsis at the line level, select the ‘plan/order’ option to convert this suggestion to an actual purchase order.

Note that the suggested purchase quantity is 300 units. Click ‘order’ at the top right of the screen and a log reading will be generated with the Purchase order number created.

Also, take note that now the WIP status changes from ‘suggested’ to ‘firm’ and the entry type from ‘suggestion’ to ‘purchase order’.

Once again you can drill down on the ellipsis to view the created purchase order and adjust for any other details required.

NB: the suggestion will be converted to a complete order as long as details for the supplier and price of the product have already been defined and linked to the product beforehand. However, necessary adjustments can still be made once the order gets generated.

The key to successful ROP management is continuous and consistent monitoring and adjustment in line with the prevailing business dynamics.

Effective ROP implementation will help streamline your inventory management and operations, enhancing customer satisfaction and maintaining a competitive edge in the market.

About Us:

Greytrix Middle East Subsidiary of Greytrix India Pvt Ltd, Headquartered in Mumbai. It is a leading Sage business partner and ISV Partner offering Consulting, Implementation, and development services for Sage X3, Sage 300 People (HRMS), and Sage Intacct, which covers Dubai, Saudi Arabia, and Qatar region.

Our methodology involves a techno-functional expert team to analyze the client’s business processes, workflow, current system situation, and plans. Then, based on the analysis, we propose solutions that meet their requirement regarding the product consideration. In addition, we ensure to serve our clients with robust, future-proof, business-critical solutions that deliver best practices, processes, and functionality designed specifically for the business and its people.

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Optimize Inventory Levels through Re-Order Point Processing in Sage X3