Understanding Inventory Management

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Last updated: Jul 17, 2017 by Former user (Deleted)
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What is Inventory Management?

Inventory Management is a process used to control the location and quantity of Physical Goods and to follow their movement.  Specifically, Inventory Management tracks:

  • The importation of new Physical Goods into Warehouses.
  • The location where Physical Goods are stocked and who their Supplier is.
  • The availability of Physical Goods Stock.
  • The inventory movements between Warehouses and customers.

Inventory Management  Glossary

TermsDescription
Physical Goods

A Physical Good is a tangible commodity which is offered to customers, such as cameras, decoders or magazines. In most cases, the customer has exclusive ownership of the purchased good. Physical Goods can be Traceable or Non-Traceable.

Installed ItemsInstalled Items are instances of Traceable Physical Goods.
Traceable Physical GoodsPhysical Goods that can be traced through a unique identifier which is usually a serial number.
Non-Traceable Physical GoodsPhysical Goods which are not traced to a single instance and are measured based on their quantity.
Product BundlesA collection of Physical Goods that can be provided as a single item.
WarehouseA location where Physical Goods are stored.
Warehouse TransactionsTransactions used to track the movement of Physical Goods from, to and in between Warehouses.
Stock In Warehouse TransactionA transaction used to move Physical Goods into a Warehouse.
Stock Out Warehouse TransactionA transaction used to move Physical Goods out of a Warehouse.
Stock Movement Warehouse TransactionA transaction used to move Physical Goods from one Warehouse to another.

Inventory Management Key Processes and Concepts

Processes / ConceptDescription

Preliminary Inventory Movements

Warehouse Transactions are used to maintain the stock within a Warehouse, which is increased or decreased, according to the Type of each Transaction. It is also possible to create Warehouse Transactions that do not update the stock of the Warehouse until it is confirmed that the correct quantities have been logged in the Transactions.

SAVED Warehouse Transactions are submitted as 'Posted' by default, updating the stock balance in the process. Transactions can be SAVED AS DRAFT, which does not update the stock balance. The Transactions can be posted at a later stage, once confirmation is received that the correct quantities and Physical Goods have been moved in or out of the Warehouse.

Importing a large number of Traceable Physical Goods into your Warehouse and distribute accordingly

Number of traceable physical goods placed into Warehouses are usually in the hundreds. In order to quickly manage the import of these Installed Items, a specific purpose Import Utility for Installed Items can be used.

A file with the pertinent information is provided which is used to generate Stock In Warehouse Transactions, resulting in the creation of all the Installed Items in the file and their placement in the correct Warehouse. Stock Movement Warehouse Transactions can then be used to move Installed Items between company Warehouses.

Only Traceable Physical Goods (Installed Items) can be imported through the Import Utility, but Traceable and Non-Traceable Physical Goods can be moved using Warehouse Transactions.
For more information view:
Managing Warehouse Transactions & Using Import Installed Items Run Definitions.

Physical Good Bundles

Hardware provided to customers can be defined as a collection of items. For example in the TriplePlay business, the customer must be provided with a Decoder, Smartcard and Modem. These three separate items can be combined into a single one and provided to the customer as a Bundle, enabling the use of a single serial number for identification and the provision of a fixed package sale price for the package.

CRM.COM provides this option through the creation of Fixed Product Bundles. Fixed Product Bundles can be created either for Traceable or Non-Traceable Physical Goods or a combination of the two.

Physical Goods Sales

AVAILABLE FROM CRM.COM R10.0.0

Physical Goods can be sold and subsequently returned to CRM.COM. Physical Goods can be only be sold through a Job and returned through a Job or an Accounts Receivable. CRM.COM handles the sale of Physical Goods purchased directly from a company or its partners. 

CRM.COM bills customers for purchases of Physical Goods resulting from Direct Sales but not from Indirect Sale (products bought from partners).

Different Warehouses are used to extract the Physical Goods resulting from sales made directly or indirectly, and these are distinguished by their classification:

  • Direct Sale
  • Indirect Sale

Even though Physical Goods sold are not supposed to be returned, there are cases where they might be replaced with new ones, free of charge, due to some issue such as a defect.
For more information view Understanding Warranty Policies.

In other cases (e.g. for Subscriptions), Physical Goods can be rented. In this case, the customers do not get billed for the Physical Good, which is returned once the Subscription comes to an end. Warehouses from where such Physical Goods are taken are classified as:

  • Rental

View Handling Sold Physical Goods for more information on related processes.

Inventory Management Access & Viewing Controls

Business Network Characteristics define the level of access for each record. i.e., whether it will be available for selection, for viewing or editing.

 

EntityNetwork CharacteristicsDescription
WarehousesWarehouses records can be accessed, viewed and modified by Users defined as members of the Warehouse Owned By Group, by Users that belong to a Group that collaborates with the Owned By Group, or by Super Users.
Warehouse TransactionsWarehouse Transactions records can be accessed, viewed and modified by Users that belong to the Group defined at the Owned By Group of the related Warehouse, or that belong to a Group that collaborates with the specified Group, or by Super Users
Installed ItemsInstalled Items records can be accessed, viewed and modified by Users that belong to the Group defined at the Owned By Group of the related Warehouse, Job, or Subscription (depending on their current location), or that belong to a Group that collaborates with the specified Group, or by Super Users

Inventory Management Related Modules 

EntityInteraction of Inventory Management with the Entity
SubscriptionsTraceable Physical Goods can be added to a Subscription, as well as removed or swapped.
When added through the Subscriptions module the Goods can only be 'rented'.
JobsTraceable and Non-Traceable Physical Goods can be added on a Job and also on a Subscription through a Job.
When added to a Subscription through the Jobs module the Goods can be 'rented' or 'sold'.
Accounts ReceivableSold Installed Item are owned by Accounts Receivable.

 

Inventory Management  - Business Examples

The following section provides business examples of how the CRM.COM Inventory Management module is used.

Company ZX wants to set up new Warehouses and generate transactions - AVAILABLE FROM CRM.COM R10.0.0

Company ZX wants to set up new warehouses and generate transactions

Business Requirement

Company ZX wants to set up different Warehouses from where Physical Goods will be extracted and returned to. Warehouses should be categorised based on the following:

  • Warehouses for Physical Goods sold directly from Company ZX.
  • Warehouses for Physical Goods sold by Company ZX partners.
  • Warehouses for Physical Goods rented to Subscribers.
  • Warehouses for Physical Goods that were sold directly from Company ZX and are returned once replaced through Warranty Policies.
  • Warehouses for Physical Goods that were sold by partners of Company ZX and are returned once replaced through Warranty Policies.
  • Physical Goods rented to Subscribers, returned to Company ZX once the customer cancels their Subscription.

Internal Sales Branch (Sales Branch 1) and Partner ZX (Partner 1) are two departments responsible for handling Physical Goods. Goods should be extracted from their original location and returned to the actual warehouse from where the came. Note that both Sales Branch 1 and Partner 1 can handle all Types of sales:

  • Direct
  • Indirect
  • Rentals
    For example, a new Subscriber registered from Partner 1 may select to rent or buy the Physical Good from Company ZX.

 

CRM.COM Solution

    1. Create the following Warehouse Types (refer to the instructions on Configuring Warehouse Types):
      1. Direct Sales WT
      2. Indirect Sales WT
      3. Rentals WT
      4. Returns of Direct Sales WT
      5. Returns of Indirect Sales WT
      6. Returns of Rentals WT

    2. Set up the Inventory Management Definitions as follows (refer to the instructions on creating Inventory Management Definitions):

      For AddingFor Adding During ReplacementFor RemovingFor Removing During Replacement
      Warehouse TypeClassificationWarehouse TypeClassificationWarehouse TypeClassificationWarehouse TypeClassification

      Direct Sales WT

      		Direct SalesDirect Sales WTDirect Sales

      Returns of Direct Sales WT

      		Direct SalesReturns of Direct Sales WTDirect Sales

      Indirect Sales WT

      		Indirect SalesIndirect Sales WTIndirect Sales

      Returns of Indirect Sales WT

      		Indirect SalesReturns of Indirect Sales WTIndirect Sales

      Rentals WT

      		RentalsRentals WTRentals

      Returns of Rentals WT

      		RentalsReturns of Rentals WTRentals

       

       
    3. Create one Warehouse per Warehouse Type owned by Sales Branch 1:
      1. Direct Sales WT: Sales Branch 1 Direct Sales
      2. Indirect Sales WT: Sales Branch 1 Indirect Sales
      3. Rentals WT: Sales Branch 1 Rentals
      4. Returns of Direct Sales WT: Sales Branch 1 Returns of Direct Sales
      5. Returns of Indirect Sales WT: Sales Branch 1 Returns of Indirect Sales
      6. Returns of Rentals WT: Sales Branch 1 Returns of Rentals

    4. Create one Warehouse per Warehouse Type owned by Partner 1:
      1. Direct Sales WT: Partner 1 Direct Sales
      2. Indirect Sales WT: Partner 1 Indirect Sales
      3. Rentals WT: Partner 1 Rentals
      4. Returns of Direct Sales WT: Partner 1 Returns of Direct Sales
      5. Returns of Indirect Sales WT: Partner 1 Returns of Indirect Sales
      6. Returns of Rentals WT: Partner 1 Returns of Rentals

For more Information on the process refer to:

 

Company ZX wants to set up Installed Items

Company ZX wants to set up installed items and installed item categories

Business Requirement

Company ZX wants to set up Smartcards and Decoders as Traceable Physical Goods (Installed Items) so as to track them with a unique identifier, and cables and Remote Controls as Non-Traceable Physical Goods so as to only track their quantity.

CRM.COM Solution

    1. Create the following Products classified as Traceable Physical Goods (see Products):
      1. Smartcards
      2. Decoders
    2. Create the following Products classified as Non-Traceable Physical Goods (see Products ):
      1. Cable
      2. Remote control
    3. Create the following Installed Item categories:
      1. New
      2. Used
      3. Repaired
    4. Create an Installed Item:
      1. Select a Product. The available Products are the following:
        1. Smartcard
        2. Decoders
      2. Specify a Serial number.

Company ZX wants to use Stock In Transactions to import new Cards and Boxes in the System

Company ZX wants to use stock-in transactions to import new Cards and Boxes in the system

Business Requirement

Company ZX wants to add in the System a new batch of Smartcards and Set Top Boxes which it received. They don't want to import them as there are only a few units and the agent must check each one individually as it is passed in the System (Alternatively, a Barcode scanner could be used to obtain the Serial Number).

CRM.COM Solution

  1. Navigate to Warehouse Transactions.
  2. Click on NEW > STOCK-IN TRANSACTION.
    1. Provide the Warehouse where the items should be placed.
    2. Provide the Product Type and the Product
    3. Provide the serial number of each card and Set-Top Box (Barcode scanner can be used here).
    4. Submit the Warehouse Transaction. 
  3. Navigate to the Stock Balance screen and confirm that the Balance for each Product in the Warehouse has been updated accordingly.

Movement of Items between Warehouses

Movement of Items between Warehouses

Business Requirement

Company ZX imports all new Physical Goods into a Central Warehouse for an initial stock-taking and then distributes them to the other Warehouses.

 

CRM.COM Solution

Use Stock In Warehouse Transactions (preferably for Non-Traceable Physical Goods) and Import Installed Items Utility (preferably for Traceable Physical Goods) to import all Goods in the Central Warehouse. Use Stock Movement Warehouse Transactions to move the Physical Goods to the correct Warehouse.

    1. Import all Installed Items into Temp Warehouse using the Import Utility.
    2. Import all Non-Traceable Physical Goods into Temp Warehouse using a Stock- In Warehouse Transaction.
    3. Navigate to Temp Warehouse.
    4. Click on ACTIONS > NEW STOCK MOVEMENT TRANSACTION.
      1. Specify the Target Warehouse that Goods will be moved to.
      2. Specify the Product Type and the Product  of the Installed Items that are being moved
        1. Either type or scan the Installed Items.
      3. Specify the Product Type and the Product of the Non-Traceable Physical Goods that are being moved.
        1. Specify the Quantity of the Non-Traceable Physical Goods.
      4. Save the Warehouse Transaction.
    5. Check the Stock Balance to ensure that the correct Traceable Physical Goods and quantities of Non-Traceable Physical Goods have been moved.

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