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How to set up reorder rules
How to set up reorder rules

Guide to configure purchase order settings and reordering

Updated over a week ago

SKULabs makes creating purchase orders easy and accurate by auto-filling the "Quantity" you need to reorder using a customizable reorder rule formula.

How to set a reorder rule

Your account features a primary reorder rule that will be used by default when creating POs. To edit:

  1. Go to the Purchase Order Settings page.

  2. Enter the re-order rule.

  3. Click save at the top right of the page.

You can also make quick adjustments to override the default rule when adding items to your PO:

  1. Start a new PO.

  2. When adding items to the PO click the filters button.

  3. Next to the "Use suggested quantity" option, click "edit rule".

Reorder Rule Variables

Adjust your accounts rule to suit your reordering strategy with the following variables:

  • free: Net available stock (on_hand - reserved).

  • on_hand: Current physical stock.

  • reserved: Stock reserved for open orders.

  • incoming: Stock expected for receiving on open purchase orders.

  • alert: The desired threshold to replenish stock.

  • sold: Total quantity of an item sold based on "# days sold" filter selected on the PO Add items window.

Advanced Variables coming June 2023!

  • velocity: This is sold / (days_on_sale || num_days_sold || 1)

  • num_days_sold: The number of days that contained sales in the reporting period. Great for products you always sell out of quickly to help forecast true demand if you were in stock full-time.

  • days_on_sale: This reflects the number of days from the first sale identified within the reporting period and is good for new products that launched within the reporting period which mostly remained in stock throughout the reporting period.

  • days_left: This is free / velocity but takes into account incoming POs due to arrive before you stock out.

  • contiguous_free: This is days_left * velocity. You can use this for a realistic view of the future inventory for this SKU without ever stocking out based on current velocity and incoming POs.

  • num_days: The number of days selected in "# days sold" filter on the PO Add items window.

Num days / num days sold / days on sale help

If today is January 30th, but I went in-stock on January 15th and had a sale on January 16th, a sale on January 20th, and a sale on January 30th, then with "30 days sold" selected in my filter dropdown:

num_days_sold = 3

days_on_sale = 15

num_days = 30

Note: The replenishment transfer order tool can only utilize a subset of these parameters but reach out to us in chat for help improving your replenishment orders.

Recommended strategies

Every company has different reordering strategies. Here are some common recommendations:

NEW! 30 days of inventory less existing POs

Reorder 30 days of forecasted sales across all products minus currently available inventory and ALL open POs. Make sure your "# days sold" filter matches when creating POs. This rule safely prevents over-ordering.

Math.max((velocity * 30) - free - incoming, 0)

NEW! 60 days of inventory minus inventory you'll receive before you stock out.

We will soon support calculating your lead time and shipping time per SKU! Before then, this rule reorders 60 days of forecasted sales across all products minus the total inventory you have and the inventory expected by your calculated stock_out date. Make sure your "# days sold" filter matches when creating POs.

This rule can cause over-ordering but is a powerful tool to ignore POs due next year when you're calculating inventory for today.

Math.max((velocity * 60) - contiguous_free, 0)

Set and target a reorder point

Use your items stock alert levels to set to a desired "reorder point" and target that quantity when creating POs.

Your "reorder point" should be the quantity of stock needed to meet the maximum sales demand over the maximum time it could take for stock to arrive from suppliers. NOTE: Always account for safety stock, especially with a lean inventory strategy.

Math.max(alert - (free + incoming), 0)

Target backordered stock

Reorder the stock needed to fulfill open orders for out-of-stock products. Safe against over-ordering.

Math.max(0 - (free + incoming), 0)

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