Synopsis:
- When are inventory items reserved? when are they removed from stock or released from reserve?
- Can I change when customer orders get reserved?
- Can I release reserved items?
- How does the reserve on an item change its behaviour?
Webinar transcript
APT University: Understanding Inventory Reserve
Hello and welcome to APTU – This week we’ll be taking a focused look at inventory reserves in AdvancePro – this is a feature that prevents over-commitment of stock by making sold units unavailable for other orders. We’ll be looking at when an item will become reserved, when it will be removed from inventory,and how to forcibly remove a reserve from an item.
We will be taking any questions at the end, so if you have a question, feel free to enter it tnto the gotowebinar control panel. Also – if you’d like to learn more about AdvancePro, you can see all our previous APTU episodes on localhost/apt, or on our youtube channel.
What is a reserve?
AdvancePro will track your inventory in a few different ways:
- First is your total inventory – this is the amount of items that should be in your warehouse, whether or not they’re reserved
- Then there is reserve inventory – the amount you’ve committed either to customers, work orders, or vendor returns, to be reserved, an item is typically on some kind of order or return.
- Finally there’s Available to sell – which is total inventory minus any reserves. This is the amount of inventory for an item that is not committed to any order or return – this is the stock level your salespeople will see – it’s also the stock level that will trigger your reorder alert levels if you’re using them.
First, how does an inventory item become reserved?
This typically happens one of four ways:
- You process a sales order for that item. – think of this as sold-but-not-yet-shipped.
- You process a work order to manufacture another item, using the reserved item as a component.
- You send a previously shipped item on an invoice back to picking (increases the stock and the reserve equally).
- You prepare a vendor return to ship
Each of these steps essentially prevents another member of your team from using the item you need for the work order or picking slip – so for example if you have only one unit of an item in stock, and it’s defective and needs to be shipped back to your vendor, when you create that vendor return, it will prevent anyone else from selling that same single unit, and in fact AdvancePro will automatically add future sales for that item to a purchase order so you can manage your backorders effectively.
Now typically Item reserves are cleared when an item is actually shipped or when a work order is finalized – whenever you consume the item, and the inventory is going to go down by the same amount you shipped. Occasionally you might have some reason for reversing an order or forcibly removing a reserve, and we’re going to touch on those functions now.
So the first option and best option is to find the order where the item is reserved, and reverse it. So for example, if you have an item on a sales order at the picking stage, you can see this by going to view products – edit product, reserves. Go to the pick ticket for that order in the warehouse, and send it back to open orders. This will remove the reserve, and if you need to ship this order later you’ll process the order over again. Now your reserve has been removed and you can move ahead. If you can’t find the order you’re looking for, check the date range filter on the upper right.
The same stands for a work order, you’ll need to actually go and cancel the work order out.
Now more often than not, you’ll actually find that the reason you feel you need to change the reserve is actually because your stock level is inaccurate, so you can always adjust your stock level in manage inventory as well.
Finally, if you absolutely need to remove a reserve for some reason, you can go to view products, click the E button to edit your product, and go to additional settings, you’ll see an option to clear reserves.
Be warned that if you then ship out an item from a picking slip where you’ve removed reserves, you could get some unusual behaviour, this is usually resolved by clearing reserves once again.
Now there is a safer way to clear your reserves that is relatively new to AdvancePro, and you’ll find it in Admin>site settings> site wide settings – and you’ll see there is an option to recalculate all your reserves – essentially this will clear up any errors with reserves that might come up, but it won’t clear a reserve for an order that’s still in place. I would always recommend this as a first method for clearing only a portion of your reserves – or dealing with any reserves that shouldn’t exist.
So this concludes today’s tour of the reserve feature and how it functions.