Abel ERP – Stock Reserves, Back Orders and Forward Orders.

Posted on 25.02.2020 by Rik

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…or how not to run out of stock

Abel’s demand, reserve, backorder and forward order features help you keep up with demand across multiple warehouses and production lines.

Abel captures demand from both Customer Orders and Manufacturing processes. Demand can also take into account: reserved stock, backordered stock, forward orders and goods on ships. Demand is used to calculate available stock (stock on hand less reserved and backordered) and is used for reorder and replenishment.

What does reserved stock mean?

Reserved Stock is stock that is needed for an in-progress customer order or manufacturing process. For inventory items that have a reserve configuration or a backorder configuration, Abel maintains a “stock allocation queue” so work higher up the queue gets the stock first.

Back Order records demand for a normally stocked item that is currently out of stock. Abel can calculate and store the backorder quantity when there is insufficient stock, so you can easily see the backorder requirements. Affected customer orders will be in the “stock allocation queue” for when stock becomes available.

Forward Orders and Cross Docking

Forward Orders initiate the manufacture or purchase of an item you don’t have in stock, or nominate outstanding supplier orders to fulfill demand. Forward Orders can be used when there is no current stock to satisfy the demand (either because the item is never kept in stock or because stock has run out).

For items that you never keep in stock, you can configure specific customer order line types to automatically create a supplier purchase order or a plant order when the customer order line is posted.  For items that are temporarily out of stock, you can manually create a forward order link to a supplier purchase order, giving certainty over when that order will be fulfilled.

Cross Docking is a technique that minimizes handling and storage for stock that is forward ordered. When the forward ordered stock arrives, it is immediately dispatched to the customer (rather than being received and stored in the warehouse) this is called cross-docking.

Here are some more questions we often get asked:

Do I have enough stock for an upcoming manufacture?

To see stock availability / shortage, use the Available Position screen. This screen forecasts the available stock as at the start date of the manufacture. This example shows the available position for a repair job. Stock availability / shortage is shown in the rightmost columns.

Image shows Reserve back order 1 - Abel ERP - Stock Reserves, Back Orders and Forward Orders.

What if I have an important job that I want to move up the queue?

Abel maintains a “stock allocation queue” for inventory that has a reserve or backorder configuration. You can change the reserve date to move a job up the queue. You must also manage those jobs that will be short of stock as a result. This example shows a queue of repair jobs that need a particular part. Abel predicts a shortage for the last two jobs in the queue:

What does over-reserved mean?  

If you see [Rov] on a line item, that means it’s “over-reserved” – you don’t have enough available stock to fulfill that line item. Over-reserve [Rov] can appear on Customer Orders, and on manufacturing documents. This example shows a repair job. Lines marked as reserved [Res] have enough stock, lines marked as over-reserved [Rov] have insufficient stock.

Those were some of the ways Abel ERP helps you see and manage your inventory demand. If you also want to use MRP to forecast your demand, see our MRP blog.

Since we first wrote about Stock Reserves, Back Orders and Forward Orders back in April 2014, it’s remained one of our most popular pages, so we hope you found this rewrite helpful.

To find out more about Abel ERP and how it can help your business, please contact us.

Until next time.