MANAGING INVENTORY

This document is a general overview of how inventory works in opentaps/OFBiz. The more
financial aspects of inventory valuation is covered in the Financials module documentation.
Change Log

July 31, 2006 Updated about how reserve inventory flag

June 19,
2006

Updated about how inventory reservation works

April 27,
2006

Updated for opentaps version 0.9

March 9,
2006

Updated to reflect how InventoryItem defaults will work.

2006 Open Source Strategies, Inc. All Rights Reserved.

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MANAGING INVENTORY
Special Notation
For the purpose of this document, [Facility] > [Facilities] means choose a facility from the list on
the Facilities tab first.
Managing Inventory with the Facility Manager
Inventory management is handled by the Facility Manager, which is the Facility tab on the
appbar. (Note to developers: the facility manager is not its own application but rather, along with
the Catalog Manager, one of the two webapps in the product application.)
A facility is a generic term which could apply to any warehouse or manufacturing plant used to
house inventory. Note that inventory belonging to multiple owners can be stored at one facility.
Click on [Facility] and you will see a list of facilities. Select a particular facility, and you will see the
buttons for creating and viewing inventory at this facility.
Creating New Facilities
Click on [Facility] > [Facilities] >> [Create New Facility] to create a new facility. Owner is used
as the default owner of the facility's inventory items. Default Weight Unit is used for shipping.
Default inventory type is used for determinig whether inventory items are, by default, received
as serialized or non-serialized. Facility type, square footage, name, and description are for
informational purposes only.
Facility Groups
Facility groups can be used to group several related facilities together. To create a facility group,
go to [Facility] > [Facility Groups]. Then, to associate a facility with a group, go to [Facility] >
[Facilities] >> [Groups].
Inventory Item Defaults
When creating inventory items, whether from screen or from item receipt, if unitCost is not
specified, the system will use the standard cost. If no ownerPartyId is specified, it will use the
Facilitys ownerPartyId. If no currencyUomId is specified, it will go and use the owner partys
baseCurrencyUomId.
If no currencyUomId, ownerPartyId, or unitCost were available, either from user input or from
above defaults, the inventory item cannot be created.
WARNING: Avoid using the [Facillity] > [Facilities] >> [Inventory] >>> [Inventory Items] >>>>
[Create New Inventory Item for this Facility] to create new inventory items, as it is not supported
by the Financials module. Instead, use the [Facility] > [Facilities] >> [Receive Inventory] to
receive or create new inventory items.
QOH versus ATP Inventory
Quantity On Hand (QOH) records how much of an inventory item is in your facility physically.
Available To Promise (ATP) records how much of it is available for selling to customers. ATP =
QOH items on orders which have not been sold but not shipped out.
Selling Products without Inventory

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MANAGING INVENTORY
When you place a sales order, an InventoryItem with negative ATP and QOH is created. Then,
when you receive a purchase order, the newly receive InventoryItem offsets the existing ones.
When you finally ship the original sales order, the QOH will be brought down. (See negativeinventory-4 through -7 screen shots.)
Avoid shipping inventory that you really don't have in stock (qoh < 0). It may cause slight
discrepancies between your COGS and Inventory accounts (in addition to violating laws of
Nature.) This is because once an InventoryItem has been shipped out, even if it is negative, a
newly received InventoryItem will not be balanced against it (see negative-inventory-1 through
-3.png)
Serialized versus Non-Serialized Inventory
Serialized inventory allows items to be tracked with discrete serial numbers. This is useful for
products such as computers that have serial numbers. Non-serialized inventory is for products
that do not have serial numbers.
Serialized and non-serialized inventory are handled differently. Serialized inventory can only be
recorded in discrete units (1, 2, 3, 4...) and each unit is created as a separate InventoryItem.
There is no separate QOH/ATP count for serialized inventory items. Instead, each item has a
status which denotes whether it is available, shipped out, or damaged (no longer in inventory).
Non-serialized inventory is received in blocks. Each InventoryItem can be several units of the
product. The count of units can be fractional (1.5). Each InventoryItem has a QOH and an ATP
quantity associated with it, and the act of receiving, shipping, or physical variance changes those
quantities.
Lots
Lots or batches are currently not supported. Do not enter Lot Id when creating new inventory
items.
If you are trying to create serialized inventory, create the inventory item and then enter the serial
number.
Receiving Inventory and Currencies
When you receive a purchase order, there must be a currency conversion available from the
currency of the PO to the currency of the organization which owns the facility or warehouse.
Otherwise, the system will generate an error. You can set currency conversion rates in
[Accounting] > [Companies] >> [Admin] >>> [Exchange Rates].
Reports
[Facility] > [Facilities] >> [Inventory Items] and you will get this report:

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MANAGING INVENTORY

You can get a report by product type, category, supplier, or for products whose QOH-Min Stock is
below a set level. This is very helpful for seeing which items are low stock.
How Inventory is Reserved for Orders
When a product store is set up in the Catalog Manager ([Catalog] > [Stores]), you can define a
facility or warehouse for the store and whether and how inventory should be reserved
(LIFO/FIFO). If reserving of inventory is turned on, then when the order is created (storeOrder
service), the reserveStoreInventory service is called, and the available inventory from the
warehouse or Facility associated with the store is reserved for the order and stored in
OrderItemShipGroupInvRes entity. You can see the inventory reserved for an order under the list
of order items in the order managers order view page.

2006 Open Source Strategies, Inc. All Rights Reserved.

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