Inventory reservation during order capture

Business requirements often mandate that product inventory is guaranteed for a customer and put on hold when the order is received. This is achieved by reserving inventory for a customer.

Reservation is the process of holding inventory for a customer who shows the intent to buy it later. This ensures availability of the desired items for the customer during order capture. An order can be reserved against an existing inventory reservation or an attempt can be made to make new reservations for the order.

When using an existing inventory reservation, a reservation must be created in the system for the specified item before the order is entered into the system. This reservation is then specified at the time of order creation. The inventory being held is then consumed by the order.

If a reservation does not exist for a specified item, the system attempts to check for inventory and reserves it for the order if it is available.

On similar lines, Capacity allocation can be done for Delivery and Provided Service Lines (similar to inventory reservation for Product items). Refer to section on Capacity Allocation during Order Capture for more details.

Note: Sterling Order Management System Software does not currently support order reservations for time sensitive inventory.

In addition to the reservation process described above, Sterling Order Management System Software enables you to perform the following:

  • Reserve on draft orders
  • Reserve on procurement node
  • Create order lines on reservation only

Reservation of draft orders

A draft order is an order that has had data created for it, but has not been confirmed in the system. These may be order proposals or orders that show an intent to buy on part of the customer. Order execution processes cannot be performed on a draft order until it is confirmed.

Sterling Order Management System Software provide the capability to hold inventory for draft orders through a reservation. If inventory is available in the system, a draft order can be created in 'Draft Order Reserved' status. When created in this status a 'Reserved' demand is created in the system.

Reservation on procurement node

Orders can be created with a specified procurement node. When a procurement node is defined for an order line, it must be procured (by means of purchase order or transfer order) from the node. In this scenario, the ship node defined for the order line receives inventory from the procurement node to fulfill the order.

When an order line is associated with a procurement node and requires reservation, inventory must be reserved at the procurement node. In this scenario, 'Reserved' inventory demand is created for the procurement node as well as the ship node. A supply is also created at the ship node depicting the incoming supply at the ship node from the procurement node. When the order is scheduled and a procurement order is created, the extra demand on the procurement node and supply at the ship node is removed.

Order line creation on reservation only

Occasionally an order or order line is only considered if inventory is available to fulfill the order. Sterling Order Management System Software supports this functionality by ensuring that an order line is created only if a reservation can be made for it at the time of order creation. After order creation, any change to the order line that requires an inventory check is only allowed if inventory is available for the changed attributes. A partial or multiple reservation to the order line is possible. It provides the ability to hold any reservation associated to the line irrespective of the node, the item, or the dates that are on the line. Reservations are allowed against different attributes from the order line. If the node on the line is Node1, reservations are accepted against Node2. The attributes on existing line reservations cannot be modified except for quantity. The quantity can only be reduced or the reservation can be deleted. (If reserving on the fly, we can also increase quantity).

Line level modifications such as quantity additions, node change, and so on do not impact the associated reservations. Only when the line is cancelled completely, its reservations are deleted. Once the line is released, no additional line reservations are allowed. However, prior to the released status, even if the line is scheduled, reservations can be added.

The inventory is reserved by each reservation other than reserving at a line level as each reservation has different attributes at the line itself. However, status on the line is still updated provided that the reservation attributes match the line attributes, for as much reserved quantity that matches the line attributes. In these cases, the order line reservations are rolled up into the line itself. For example, an order is made for a quantity of 10 units of ITEM1 from NODE1, two line reservations are passed, one for 7 units of ITEM1 from NODE1 and the other for 3 units of ITEM1 from NODE2 (perhaps procurement is an option). In this case, the quantity 7 reservation matches the order line attributes, so the reservation is removed from the order line reservation table and quantity 7 on the order line moves to "Reserved" status. The other 3 quantities is in open order status. This causes some reallocation, as the final picture of demand blocked by the order is 7 reserved at NODE1 which is done by the status, 3 reserved at NODE2 which is done by the order line reservation, and 3 open order demand at NODE1 done by the status. Reservations that do not match with the order line are reserved but not rolled up in to the order line. The schedule later looks at these reservations and determines their validity. However, until schedule runs the demand is blocked for the order line.