How to generate Purchase recommendations for distributed products in Sage X3

Typically in companies not using an ERP tool, purchase planning and ordering for distributed products are managed in Excel or based on reports from the underlying accounting system. Distributed items are those items that are normally purchased, stocked and sold. Reordering is based on historical sales data and the lead time to procure and turn over stock.  Sage X3 provides the means to automate the purchase planning seamlessly. Products stored at different warehouses can have individual planning parameters defined which drives the recommendation specific to warehouse and product combinations.

There are two types of reordering available in Sage X3. One type of reordering is based on the reorder point or reorder level where as the other one is based on period. Warehouse and Product is either defined as ROP (Reorder Point) or Periodic. When a product is defined as ROP, the recommendation is triggered when the on hand quantity goes below the ROP level. The on-hand quantity is typically the physical stock – allocations to orders.

All the parameters that are used for reordering are defined under the planning tab of Product-site as in the screen below.

• Reorder Mode: There are several ways reorders can be done and one of the methods is By ROP.

• Suggestion Type: This is based on whether the product is to purchase or manufacture.

• Reorder Threshold: The reorder point or reorder level to trigger the recommendation when the stock level goes below this point.

• EOQ: The minimum order quantity for the suggested purchase order

• Purchase Lead Time: Number of days it takes to receive the ordered items from the supplier from the date of Purchase Order.

Statistical Reordering (Navigation: Stock→Reorders→Statistical Reordering) is run to generate the purchase reorder recommendations based on reorder point.

The generated recommendations are viewed in Enterprise Planning or Planning Work Bench. Suggested orders are reviewed, changes made if required and then created as Firm Purchase Orders.

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