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  11. Sales order allocations

Sales order allocations

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In DC1, commitments to customers are made against the time-axis, which is a time-phased view of what is available to promise. If time-axis is configured for a product, and availability checking is configured for an order type, then sales orders will only be accepted for delivery at a date that can be met according to the available to promise view.

In practice a number of things can happen to compromise promised dates. For example:

  • if a sales order is dependent on an incoming purchase order, and the purchase order is delayed.
  • if stock is damaged in the warehouse and insufficient good stock remains.
  • if other order types are configured that do not check availability.

In all these cases, the orders that are picked first get the available stock and any promised orders have to be re-scheduled.

To cater for the situation where there is a shortage of stock and commitments to customers must be prioritized, the sales order allocation functionality allows you to efficiently control when certain goods are dispatched, to which customer and in what quantity. The following alternatives exist in DC1 to control the allocation of stock:

  • Manually create sales order allocation proposals
  • Perform an automatic allocation of stock to customers (also known as Firm allocation) at order entry.

No order can then be sent for picking unless the order has been allocated, or there is sufficient stock available over and above the total allocated quantity. Additionally, items may be flagged as allocation items. In this case, orders must be allocated before they can be sent for picking.

Sales order allocations can be used for handling the distribution of goods that are stocked in low quantities or can be activated for a particular item in the event of a shortage in stock. The routine is also flexible enough to handle the distribution of goods that have not been defined as order allocated items; for example, if a purchase order comes in before planned arrival time the routine can be used to distribute the items across several sales order lines. Most importantly, it is a powerful tool that enables the allocation of goods that are in great demand but in short supply, i.e. special edition, promotional or perishable items, to be distributed first to your best customers.

Manual creation of sales order allocation proposals

With manual creation of sales order allocation proposals the available stock is allocated to specific customers according to priority or other criteria in situations when there is a shortage of stock and commitments to customers must be prioritized. No order can be sent for picking unless the order is allocated or there is sufficient stock available over and above the total allocated quantity.

The Sales order allocation functionality also allows you to:

  • Automatically allocate stock to sales order lines that are included in an allocation proposal by using auto-allocate or fair share handling.
  • Provide special treatment, in terms of delivery service, to your best customers by using priority handling for both sales orders and back orders.
  • View the current stock situation.

Sales order allocation proposals allow you to correctly analyse the current availability of stock and the dispatch situation of a warehouse. When a sales order allocation proposal is created, it groups together the sales and back order lines that were entered for either an allocated item or a non-allocated item (depending on selection).

An allocated item is an item whose supply needs to be rationed out and its distribution selectively processed. An item is defined as allocated in the Item file. The reason why you would define these can vary, but primarily, this would apply to popular items that are in short supply and in great demand. You would only define an item as allocated when you need to control when it is dispatched, in what quantity and to which customer. This way the distribution situation is managed in the most optimal manner by ensuring that, either:

  • Your best customers get the items first and in the quantities that they ordered, or that
  • Your available stock is distributed fairly among all the customers that have ordered it; this way everyone gets something.

Once you have defined an item as allocated you will have to perform this additional routine in order to be able to dispatch it.

Priority codes
The available stock can be automatically distributed among your customers according to the sales order date and priority. Priority codes allow your customers to be ranked by level of importance, this ensures that special and individual treatment is provided to them in terms of delivery service. For example: If a high priority customer orders an allocated item after a low priority customer has ordered it, then the item will be allocated first to the customer with the highest priority.

Sales order lines
For each sales order line included in a proposal a quantity of stock has to be allocated. Depending upon the availability of the item, the total that is allocated can either be equal to, or less than, the quantity of goods your customer has ordered. Note: Sales order lines that are included in an allocation proposal are referred to as sales order allocation proposal lines.

The manner in which items are allocated also depends upon the dispatch options defined for the customer and the sales order dispatch codes.

For example:

If the Complete delivery field has been set to NO in the Business partner file, Customer file panel then the customer will be able to receive a partial delivery of the sales order, a backorder will then be created for the remaining quantity (assuming the system is set up to handle backorders). If the Complete delivery field has been set to YES, then only the complete delivery of all of the sales order lines in the order is allowed.

The dispatch codes are pre-loaded values defined in the Dispatch code table. These codes determine how the delivery of the goods on the sales order line is processed.

The dispatch codes are the following:

Code Description
1 Complete order delivery (i.e. deliver everything on all order lines or nothing). This means that the total quantity of the sales order line must be allocated if the sales order is to be processed.
2 Partial order delivery, but complete line (i.e. deliver everything on line level or nothing). This means that if the total quantity of the sales order line is not allocated the sales order can still be processed. The sales order line will then be automatically back ordered according to its back order priority.
3 Partial line delivery (“anything”, but not zero on line level). This means that if customers order goods that are in great demand but in low supply, stock can still be dispatched even though it is less than the quantity entered on the sales order line. The remaining quantity will then be back ordered according to its back order priority.
4 No delivery requirements. Print any pick list line regardless of available quantity in stock.

Back order lines
If only a partial delivery of the ordered quantity of goods has been allocated, a new sales order line for the remaining quantity will be automatically generated when the pick list is confirmed if the system is set up to handle back orders). This means that a sales order line can be split into two deliveries; the second delivery being the back order quantity. The priority code used by the back order line will be the back order priority assigned to the customer. Back orders are allocated in the same manner as sales orders.

Confirm the sales order allocation line
Once the allocated quantity is entered it must be confirmed via this routine.

Pick list print out
Only after you have confirmed the allocated quantity can you print the pick list as you normally would through the Print pick list routine.

See Work flow for Sales order allocation proposal processing for more information.

Automatic allocation of stock (Firm allocation)

With automatic allocation of stock for customers (also known as Firm allocation), a sales order allocation is created and confirmed automatically assuming all the set-up conditions are met. It is not required to flag the item as allocated (i.e. the Order allocation field on the Item file maintenance, Warehouses panel does not need to be set to YES manually). Rather, a different approach of prioritizing the customer is followed. With this functionality, which is extended functionality to the existing Sales order allocation routine, there is no need to manually create the order allocation proposal. Instead, the order allocation will be created automatically if the following is true:

  • The sales order (header level) is flagged for firm allocation. The sales order header will automatically be flagged for firm allocation if the sales order type and customer for the order have been defined for firm allocation. You can also manually set an order to be firm allocated, (i.e. change the Firm allocation flag on the order header before any lines are registered), regardless of the settings for the customer and sales order type. The settings on customer and sales order type level simply allow for a pre-defined set-up.
  • The dispatch date for the order line is within the time horizon. Flexibility exists when defining the time horizon. You can base it on each items individual planning time or a manually entered number of days.
  • The entire quantity is available.

The result is that stock will automatically be allocated for the customer for all applicable sales order lines on a sales order, entered manually or received electronically. Thus, these orders will have first call on available stock. It cannot be used for any other order unless the allocation is deleted. You can view/track the automatically created sales order allocation via the Work with sales order allocation routine. If the reserved quantity is to be released, then the allocation needs to be deleted.

Note: Any sales order lines that had a dispatch date outside the allowed time horizon (i.e. the items planning time or a manually entered number of days) when the sales order allocation was created will not be firm allocated. For such order lines, a scheduled overnight (firm allocation) job can be run via Job control to create the order allocation once the dispatch date has moved inside the time horizon.

An exception report can also be generated to print the sales order lines that were flagged for firm allocation but could not be allocated due to insufficient available quantity (i.e. nothing in stock or the entire quantity was not available for a successful allocation).

See Work flow for automatic allocation of stock (Firm allocation) processing for more information.

Enquiries and printouts

  • Allocation log enquiry: This enquiry program displays the details of changes to sales allocations that were both manually created , via the sales order allocation proposal routine, and automatically created for the customer for firm allocations (i.e. automatically allocate stock for the customer if the dispatch date is within the time horizon and the entire quantity is available).
  • Firm allocation exception report: The purpose of this report is to print the sales order lines that were not automatically allocated for the customer (i.e. nothing in stock or the entire quantity was not available for successful allocation). It prints the sales order lines that were flagged for firm allocation but could not be allocated due to insufficient available quantity.

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