Key considerations and potential changes across various areas need to consider if we turn on UOM feature:
Enabling the Multiple Units of Measure (MUOM) feature in a live NetSuite account will allow you to define and manage items in multiple units, making it easier to track and sell inventory in different units of measure. However, enabling this feature in an account that has been live for 2-3 years and already has established item and transaction data requires careful planning and understanding of the impacts. Here are the key considerations and potential changes across various areas:
1. Data Preparation and Impact on Existing Items
- Item Records: Once MUOM is enabled, all inventory, assembly, and service items (as well as non-inventory items if needed) can be associated with multiple units of measure.
- Default Units of Measure (UOM) Sets: You’ll need to define the UOM sets for items. A UOM set includes base and related units (e.g., a base unit of “Each” with related units like “Dozen” or “Box”). Each item type can have its UOM set.
- Existing Item Records: Previously existing items will default to a single base unit. You’ll need to review and potentially update UOM settings on existing items if you want to apply different UOMs. This could require significant data updates, especially if you manage inventory in various quantities.
- Item Naming Conventions and Descriptions: You may want to review and possibly update item descriptions to reflect new UOM options, as users will now see multiple UOM choices in transactions.
2. Impact on Inventory and Transactions
- Inventory Adjustments and Transactions: Transactions like inventory adjustments, transfers, and fulfillment now support multiple UOMs. If UOMs are added for existing items, users will need to select the correct unit for transactions.
- Purchasing and Sales Orders: Sales and purchase transactions will need to be reviewed to ensure they are set up correctly for the desired units. Users will need to select UOMs during transaction entry, which can impact data entry workflows.
- Historical Transactions: Existing transactions will not retroactively apply multiple UOMs, so these will remain in their original UOM. Only new transactions going forward can use multiple UOMs.
3. Pricing and Pricing Schedules
- Sales and Purchase Pricing: Enabling MUOM may affect your pricing, as each UOM can have different prices. NetSuite allows pricing by UOM, so you’ll need to review pricing schedules and update them if different units should carry different pricing structures.
- Price Levels: If you use different price levels (e.g., Wholesale, Retail), you will also need to define pricing for each UOM across these levels. This could mean additional setup and maintenance effort if you have multiple price levels.
4. Inventory Valuation and Costing
- Unit Cost Calculations: Costing (e.g., Average, LIFO, FIFO) will now need to factor in multiple UOMs for consistent inventory valuation. When transactions are created with a specific UOM, NetSuite will handle the cost in that unit. Ensure that cost reports, COGS, and inventory valuation reports align with your expectations in terms of UOM.
- Impact on Item Costing Reports: Reports like the Inventory Valuation report may look different since costs are now calculated in the base unit of measure, and users may need to convert mentally to understand their quantities in the new units if they’ve been using different units.
5. Accounting and Reporting
- General Ledger (GL) Impact: No direct impact on GL, as quantities do not affect the account balances directly. However, costs may vary slightly if unit costs are adjusted due to conversions.
- Reports and Saved Searches: Ensure that all relevant inventory and sales reports are adjusted or recreated to include the UOM fields. This might mean modifying saved searches, custom reports, and even KPI dashboards that involve units or quantities.
- Historical Comparisons: If you rely on reports that look at historical data, these reports may need modification to include new UOM data, and team members might need training to understand historical data that lacks UOM flexibility.
6. Integration with Third-Party Systems
- Data Integrations and Data Syncing: If you have integrations with third-party systems (e.g., warehouse management systems, e-commerce platforms), these systems may need to be updated to handle the new UOM data structure.
- Custom Scripts and Workflows: SuiteScripts or workflows interacting with item records or inventory transactions will need to be reviewed to ensure compatibility with MUOM. Scripts might need adjustments to handle the selected UOM appropriately.
7. User Training and Adoption
- User Training Needs: Training users to understand how and when to select the correct UOM for items in transactions will be crucial to avoid errors. Teams in purchasing, inventory, sales, and accounting will need guidance on this new feature.
- Process Changes: User workflows will be affected, especially for sales, purchasing, and inventory teams, as they will now have additional fields to consider when entering or viewing transactions.
8. Testing in Sandbox
- Testing Environment: Before enabling MUOM in production, enable it in a Sandbox environment. Test various scenarios, especially high-impact transactions like sales orders, purchase orders, and inventory transfers, to ensure they work as expected with multiple UOMs.
- Review Data Migration: If you plan to update item records with new UOM sets, test this data migration thoroughly in the sandbox to avoid disruptions in your live system.
Final Recommendations
- Create a Rollout Plan: Implement a detailed plan that includes steps for data preparation, system updates, user training, and post-rollout support.
- Back-Up Data: Have a backup of your current settings and item data before enabling the feature.
- Stakeholder Communication: Ensure all stakeholders understand the impact of enabling MUOM and have resources or support to adapt to the changes effectively.
Enabling MUOM can greatly enhance your inventory management flexibility, but a methodical, well-planned approach will ensure a smooth transition with minimal disruption to your current workflows.