Inventory Basics

First, about the numbers:

  1. Ordered. You can order containers or counted units (like bales). Purchase in bales; Sell in containers.

  2. Assigned. A quantity that has been ordered and is assigned to a shipment (the same or smaller than above).

  3. Fulfilled. A quantity that has been ordered and has been fulfilled by a cargo or work order.

  4. Raw Inventory. Always in units. Negative numbers remove from inventory. Positive numbers add to inventory.

  5. Processed Inventory *. Always in units. Negative numbers remove from inventory. Positive numbers add to inventory.
    * Typical ERP systems would convert from SKU-A to SKU-B since there are two different products. For     easier traceability, we use the same SKU.

Here are some common scenarios:

Incoming Product - can happen in these ways:

A: Most commonly, product is purchased via a purchase contract, and Cargo is fulfilled against the contract and received into Raw Inventory using a SKU (positive values). Fulfillment is typically in bales (positive values unless returning/rejecting product).

B: Product is received directly (without a purchase agreement) and Cargo is received with Raw Inventory using a SKU (positive values). There is no fulfillment of a purchase agreement here. This is typically for custom press scenarios.

C: Product is fulfilled against a contract, but not brought into inventory. No SKU is used, but the Item Reference Number is used instead to find the contract line item. This useful for back-to-back trades, where the on-site inventory is not needed. Fulfillment here is typically in containers.

Outbound Product - can happen in these ways:

A: Processed directly into a container. Cargo is fulfilled against a sales order, and Raw Inventory is removed (negative values). Fulfillment is typically in containers.

B: Processed for a particular order, but back-stocked or pre-processed while waiting for a container. This uses a Work Order, which removes from Raw Inventory (negative values) and adds to Processed Inventory (positive values).

When the container arrives, it is loaded from the Processed Inventory (negative values), and fulfilled against the sales order.

C: Product is fulfilled against an order, typically in containers. This is for back-to-back trades, like C from above. Also, typically there are two fulfillments on one container: one for purchase and one for sales.

D: Product is shipped directly from the supplier. This is a special case where there is both fulfillment of purchase (positive values, typically bales) and fulfillment of sale (positive values, typically containers).

Another variation is for custom processing, where the sold item is a service (processing) instead of a product. This sometimes requires adjustment to documentation, depending upon how much documentation is done by the processor vs. the shipper.