How Much Historical Sales Data is Needed for NetSuite Supply Planning (MRP)?

Historical Sales Data:

A minimum of two to three months of sales transaction history is required, with the default configuration set for six months. Six months is considered a more realistic and reliable period for accurate forecasting. The quantity of items sold in each transaction is paramount, not the monetary value of the sales. NetSuite analyzes item sales quantities over time to estimate future demand.

Seasonal Variations:

Businesses with significant seasonal fluctuations must carefully select the historical period for import and configure NetSuite's Supply Planning (MRP) accordingly to ensure accurate forecasts.

Lead Time Calculation:

If NetSuite is configured to estimate lead times, both purchase and receipt transactions must be imported. The critical information here is the quantity of purchases over time, and the receipt data helps determine the elapsed time between purchase order creation and item receipt into inventory.

Transaction Types for Import:

The records required for import are either the invoices/cash sales or the sales orders; NetSuite can be configured to analyze either. These transactions can be simplified for import, but dates, item information, and quantity are critical. For example, customer and payment details do not provide relevant information for demand planning analysis, but NetSuite needs to know how many items were sold on the transaction and when. Selecting to import invoices/cash sales or sales orders depends on the business model and which transaction more closely represents the dates of the inventory movements.

Implementation Approaches:

• Some companies opt not to invest in extensive historical data imports, especially if they are new to formal demand planning. They may choose to build a sufficient sales history within NetSuite over six months to a year before fully relying on its Supply Planning (MRP) capabilities.
• Other organizations, for whom inventory management is a critical business challenge, are prepared to invest the necessary time and resources to import comprehensive sales history from the outset.

Comparison with Advanced Inventory Management:

NetSuite's Supply Planning (MRP) offers greater flexibility in controlling demand planning analysis compared to the simpler inventory replenishment features included in Advanced Inventory Management.