Following an Example of Inventory Flow

After you configure aACE for inventory tracking, it can display inventory counts and values in real time. You will see values and counts change in the various modules as stock is ordered, received, shipped, etc. 

aACE processes include a seven-step inventory flow, focused on line item codes (LICs) and inventory lots:

1. Line Item Code Screen Before Purchasing Inventory
2. Line Item Code Screen After Purchasing Inventory
3. Inventory Lot After Receipt and Payment of Inventory
4. Line Item Code Screen After Sales Order is Opened
5. Orders Against Hake Brush Inventory
6. Line Item Code Screen After Replenishing PO
7. Hake Brush Inventory Lot Allocation

As an example here, we trace how the system uses this workflow and the Last-In-First-Out (LIFO) method to track inventory for an inventoried item — the paint brush value pack.

1.  Line Item Code Screen Before Purchasing Inventory

At first, the Inventory Management tab shows that no inventory exists for this pack of brushes. However the Target field is set to 50 and the Replenish Balance is 10. These settings mean that any time the inventory balance for this LIC is 10 or less, aACE will automatically generate a purchase order that will replenish the balance to the target of 50. 

2.  Line Item Code Screen After Purchasing Inventory

A replenishment purchase order of 50 brush packs is generated and the purchase workflow is completed. These items have been received and are now available for order.

3.  Inventory Lot After Receipt and Payment

The purchase order for the brush packs also generated an inventory lot record (Main Menu > Inventory > Inventory Lots). The inventory lot shows the quantity and value for the number ordered, purchased, and currently in inventory. 

Note: No sales orders have been placed against the lot shown here. The total lot value is driven by purchases. If a purchase order had been placed, but then executed with two different purchases on two different dates at two different costs, that total value would show here. 

4. Line Item Code Screen After Sales Order is Opened

A new sales order for 30 brush packs is created. This demand is reflected as -30 brush packs. The LIC record's Inventory Balances tab shows the remaining 20 as still available.

5.  Orders Against Brush Pack Inventory

The initial sales order for 30 brush packs, plus a new sales order for 15, are listed on the Order Items module. Neither order has shipped yet, so the 45 brush packs currently remain in inventory.

This takes the available quantity of the product to 5. Because that is lower than the Target quantity for replenishment, aACE automatically generates a replenishment PO.

6. Line Item Code Screen After Replenishing PO

This screenshot shows the various inventory levels for the brush packs after a replenishing PO has been opened:

• On Hand — Displays the number of items in physical inventory
  In our example, 50 packs are still in physical inventory because the two orders from step 5 have not been shipped yet.
• Demand — Accounts for the 45 packs already assigned to orders
• Available — Shows the 5 packs in inventory that are not currently part of an order
• On Order — Displays that a purchase of 45 packs is already underway to replenish the total to the Target value
• Total — Displays the estimated count of items available in current inventory and on order 

7.  Brush Pack Inventory Lot Allocation

The inventory lots module now shows that LIFO inventory allocations have been placed against our initial replenishment purchase of 50 units (after the orders have closed and the COGS process has run).

aACE uses inventory for sales or production orders sequentially. In the example above, aACE used the inventory from the initial replenishment of 50 units before the second, auto-generated replenishment of 45 units. Once all the inventory has been used for the first replenishment of 50 units, aACE will close the inventory lot.

Tips

You can forecast inventory demand using reports from the report pack. Navigate from Main Menu > Order Setup > Line Item Codes > (select desired LIC) > Print > Open Report Selector > Bill of Materials Forecast (All Offices). This is most informative for assembly-type line items.