Quick Tips: Setting Part Reorder Levels

Here is a few quick tips for you out there that wish to set up Part Reorder Levels. 

Reorder levels with Fishbowl

In this post we will go over the differences between Reorder Levels and Reorder Points, and how to create your Reorder Levels 3 Different Ways. As always if you have any questions related to Fishbowl don’t hesitate to call the office on 1300 785 755 in Australia and 0800 785 755 in New Zealand and one of our helpful support team members will be able to give you a hand.

Reorder Levels vs. Reorder Points

Reorder points are certain quantities of inventory that, when reached, trigger the process of purchasing more stock to reach a certain level. So when the total number of parts in stock gets down to the reorder point, you’ll know it’s time to reorder more of the parts.

Let’s make sure we’re all clear about the difference between Reorder Levels and Reorder Points.

Reorder Levels are made up of two things:

  1. Reorder Point: The minimum number of items in stock that marks the point at which they must be reordered to avoid running out.
  2. Order Up to Level: The maximum or preferred number of items that can be contained in stock. The reorder quantity shouldn’t be higher than this number.

You can run a Reorder Report from the Report module to produce a list of all the items in your inventory that have reached their reorder point. It will also show you how many to reorder to return to the proper level.

You can use reorder levels to automatically generate purchase orders for the necessary number of parts to get them back to the desired quantity through the Auto PO wizard. If you’re a manufacturer, you can also use reorder points to automatically generate manufacture orders for the desired quantity using the Auto MO wizard.

3 Ways to Create Reorder Levels

Here are the three methods by which you can create reorder levels:

1. Use a Reorder Levels CSV Import to create multiple reorder levels.

2. Use the Auto ROP wizard to automatically set multiple reorder levels at the same time.

3. Click the Inventory tab in the Part module to create and edit single items’ reorder levels.

Let’s delve into these three methods a bit more closely to give you an idea of how to do them and where to find them in the interface:

1. CSV Import

Click the File button at the top of the interface and then select the Import option. This will pull up a friendly Import wizard to guide you through the process of importing data on reorder levels via Excel spreadsheets. It tells you how to format the data and other essential things to follow

2. Auto ROP Wizard

The Auto ROP wizard is located in the toolbar on top of the interface. Simply click on it and it will bring up a new window to help you specify the right parts you’re looking for and calculate their reorder levels, based on a number of factors. I could spend an entire blog post explaining all of this, but to keep it brief I’ll just have to cut it short here and direct you to the Fishbowl Wiki for detailed instructions on using the Auto ROP wizard.

3. Inventory Tab

There are several tabs located at the top of the Part module, including General, Details, Accounts, and Inventory. Click the Inventory tab and you’ll be able to see detailed information about a particular part, including the number on hand, on order, allocated, committed, backordered, and so forth. You’ll also find a helpful section at the bottom with information about the item’s location, order up to level, and reorder point. You can adjust this information right there.

Look out for this Quick Tips Every Thursday where we delve into commonly asked questions and helpful hints to make sure you are getting the most out of Fishbowl inventory and manufacturing software.

How to: Measure Your Inventory Levels

Inventory performance metrics are essential to the running of your business. They help you measure how well you and your team are doing at managing your inventory. Here are three major points that you definitely need to know to equalise your inventory levels in the short and long term.

Inventory Turnover Ratio

The inventory turnover ratio tells you how well you are doing at selling your inventory and keeping it flowing at a healthy pace through your warehouse. Having a low inventory turnover ratio means you have high carrying costs and you may be overstocked on slow-moving items. Having an extremely high ratio may mean you’re not ordering enough and you’re struggling to keep enough on hand, potentially resulting in shortages.

To calculate your company’s annual inventory turnover ratio:

Divide the annual cost of goods sold by the average annual cost of inventory on hand.

Economic Order Quantity

The Economic Order Quantity (EOQ) is the number of items you should reorder each time you place a new order to maximize efficiency while keeping carrying costs and shipping costs to a minimum. Here is how to calculate the EOQ for each part and product in your inventory:

  1. Multiply annual fixed costs by the annual demand in units.
  2. Multiply that total by 2.
  3. Divide that total by the annual carrying cost per unit.
  4. Take the square root of that result.

Reorder Point

To calculate the reorder point for each product, you need to know four terms:

  • Lead Time: The number of days between a purchase order’s issue date to the product’s arrival at your warehouse.
  • Safety Stock: The number of days’ worth of a product you keep on hand to prevent emergency shortages.
  • Basic Stock: The number of days’ worth of a product you keep on hand as a part of your daily operations.
  • Unit Sales Per Day: The average quantity of a product that you sell on a daily basis.

Once you have those figures, plug them into this two-step equation to discover any product’s reorder point:

  1. Add the lead time, safety stock, and basic stock together.
  2. Multiply that total by the unit sales per day.

There you go. The inventory turnover ratio, EOQ, and reorder point will help you measure how well you’re doing at managing your inventory. These will generate concrete numbers you can track over time to see whether or not you’re progressing and how you can improve.

This post originally comes from Robert Lockard in the Fishbowl USA team

New Pages To Help With Your Inventory Software Questions

To better suit what peoples needs are when it comes to deciding on inventory management software, Fishbowl Australia has a few new pages to make the process all the more simple.

A new way to explore your options

The whole decision making process has been broken down to three main options. Under these options are some really helpful links and information to assist with wherever you sit in your decision making process.

Check out the links below to the three main options

left_but      I want to change my inventory software

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I am thinking about changing my inventory software

 

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Just browsing inventory software options

 

Don’t forget to check out the rest of the site while you are there, and also find and like us on Facebook.

 

 

 

 

5 Time-Saving Fishbowl Inventory Software Features

Fishbowl Inventory is a time-saving inventory software solution and comes loaded with great features out of the box.

Robert Lockard gives us a look at 5 features that should definitely be taken advantage of with your inventory software.

inventory_software_time_saving

Custom Fields

One of the most popular features in Fishbowl is its ability to add custom fields to various modules, including customers, vendors, products, RMAs, and parts. This is a big deal because it lets you modify the system to store data in text format, checkboxes, dates, quantities, monetary values, lists, and more. You will find many uses for this remarkable feature.

Search Function

When ordering from vendors or performing other tasks involving parts in your system, you can quickly select the right parts by entering the part number or description into the search bar. If you put in the right terms, it will instantly bring up exactly what you’re looking for. Then you simply click it and select how many to order. This search function can be used in other areas of the software, as well.

Accepting Payments

If you drop ship items or wait to order them until you receive an order from a customer, Fishbowl Inventory allows you to accept down payments or other forms of payment from customers while they wait for the transaction to be completed and their product delivered. Fishbowl Inventory simply credits a generic account in QuickBooks and attaches the payment information to the appropriate Purchase Order. Then it handles the details when the order is completed and QuickBooks needs to be updated again.

Cycle Counting

You don’t have to shut down your entire business for a few days to count all of your inventory. With Fishbowl Mobile, you can perform cycle counts. This means you go out into your warehouse and check how many parts you have in stock against your inventory records by using a wireless handheld device. If there are discrepancies, you can instantly update your records. Cycle counting is a better way to manage your warehouse.

Instant Updates

When multiple users are logged in to Fishbowl Inventory, you can see changes they make to inventory and orders in real time. That means that if you log in right after someone else to place an order, you can see if they have already done what you were about to do. This prevents double orders and other potentially serious problems.

Sign up for an inventory software demo today to see even more ways that Fishbowl Inventory can help your business right now.

Happy Australia Day!

Happy Australia Day

What does Inventory Management have to do with Australia Day?

With Australia Day just around the corner I thought it would be a good time to have a quick tongue in cheek look at the world of inventory management software relating to the Australian tradition of having a barbecue, and so on the 26th of January you might be able to avoid a terrible tragedy…

Running out of snags!

Companies rely on having stock when they need it, and that is why they invest in inventory management software like Fishbowl Inventory. Imagine as soon as you got low on sausages someone was off and grabbing another lot? That is what Fishbowl can do, by setting a reorder point the inventory software will automatically create a  purchase order for the stock needed.

No onions, extra sauce.

Now that you have the snags sorted out what about putting it all together? Will you remember who wants onions, no sauce or the tofu snag (there is always one)? Fishbowl handles this manufacturing process through a bills of materials. You can create a base product with options available that you can easily tick on and off, with your custom “recipe” all sorted in a list, to easily recall at a moments notice.

… Who hasn’t had one!

Everyone loves a good snag, and keeping an eye on who has and who hasn’t had one can get rather difficult, but Fishbowl Inventory does this with ease. Fishbowl can be used as standalone tracking software  and you can make sure that you never lose track of your stock again. Fishbowl Inventory also has expiry date tracking out of the box, and you can use this to use the stock closest to its expiry date, ensuring you will be as efficient with your stock as possible.  This only scratches the surface of tracking possibilities that Fishbowl Inventory is capable of, with barcode scanning, batch and lot tracking, it has never been easier.

From all of us here at Fishbowl Australia, enjoy the sun, sand and surf, and have a great Australia Day.

Fishbowl Inventory is the number one inventory management software for QuickBooks in the United States (Reckon Accounts in Australia and New Zealand).  To learn more visit our website:

Au: www.fishbowlinventory.com.au or call the office on 1300 785 755.

NZ: www.fishbowlinventory.co.nz or call the office on 0800 785 755.