When it comes to purchasing in Fishbowl Inventory, Reorder Levels can go a long way to help ensure that you have the on-hand quantities that you need, while at the same time, helping you to keep from over-purchasing inventory that will tie up your cash flow.
Reorder Point (Minimum Quantity)
When creating your reorder levels, you will need to choose a Reorder Point, or as some people call it: minimum quantity. The Reorder Point allows you to set the quantity at which point you will need to re-order your inventory to be able to fulfill the demand for that item. Our advice is that you keep enough inventory on hand to be able to fulfill all sales and manufacturing activities that happen from one order period to another. This quantity can vary widely from one item to the next, depending on your sales and use of those items. For that reason, it may be wise to monitor your activities over a period of time so that you can have a more educated approach to setting your Reorder Points.
Order Up To Level (Maximum Quantity)
On the other side of the spectrum, you will need to determine what your Order Up To Level will be. In other words, this is the maximum quantity that you can have on hand for any given item. When you reorder your parts, one of the difficulties of maintaining your warehouse is the fact that you need to have space to put everything that is coming in. If you are forced to put inventory into spaces where it doesn’t belong, there can be a ripple effect that can cause problems in other areas of the warehouse. Before long, you could be facing a time-consuming, expensive fix that could have been avoided.
By Location Group, or Company-Wide
There are two options when using Reorder Levels:
- Company-Wide. This option will allow you to set one Reorder Point and one Order Up To Level for each of your parts. This is a simple and effective option if you only have one Location Group in Fishbowl, or if you want to keep track of overall inventory rather than separating it by Location Group.
- Location Group. This option allows you to create Reorder Points and Order Up To Levels for each of your parts for each Location Group. You will be able to set varying inventory levels for each of your warehouses to account for the different sizes or capacities within those warehouses.
After you have set up your Reorder Levels, you can now use the Reorder Report, and the Auto-PO function more effectively.
The Reorder Report (a standard report that comes with the Fishbowl Inventory installation) will show you what inventory needs to be purchased in order to fulfill current demand. When you set up Reorder Levels, those numbers are included on the report in order to help you keep the right amount of inventory on hand at all times.
The Auto-PO function will also take the Reorder Levels into consideration when calculating the quantities that need to be reordered. This feature of Fishbowl Inventory can work without having Reorder Levels set up, but, much like the Reorder Report, you will be prompted to order enough inventory to keep your warehouse properly stocked if you have set up your Reorder Levels.
Remember: Fishbowl Inventory also has the option to automatically calculate your reorder levels based on historical transactions. Make sure you have plenty of transaction history (3 to 6 months) in Fishbowl Inventory before you go down this road, though. Otherwise, your reorder levels could be skewed.
As always, feel free to comment below, or contact us with any questions.