Module: Customer orders

Executive summary

Customer orders are orders from a customer for which the sale has not yet materialized.

There are two ways customer orders arise:

  • A customer wants to buy goods, but the product is not available in stock on hand. Thus, the customer order is submitted – and it is going to be filled once the product has been received to stock.
  • A customer knows that sometime in the future s/he wants to buy certain goods; to make sure s/he gets the goods, s/he creates a customer order with a future date. This order, then, is taken by STOCK as sales forecast with 100% certainty and the goods thus must be ordered.

Functional description

Using customer orders in STOCK

Customers orders are used in two areas in STOCK:

  1. As a substitute for sales: many of the STOCK’s computational modules see orders received from a customer in the past as a sale. These modules thus can treat orders as sales, hence, these orders can be cleaned of extremes, they can be forecasted, they can be a part of the ABC analysis or cleaning of sales.
  2. In the module Suggestion of orders: In this case, the customer orders received in the past lower the stock on hand – and those scheduled in future modify the forecast according to the configured mode.

Customer orders scheduled in the future can affect the forecast in three ways. The mode is selected for each customer order in SIDI by the accept_only_ofc_bigger_than_forecast field:

  • 0 – Additive: the customer order quantity is added to the original forecast. This mode is suitable for orders not captured in the forecast — for example, because they come from a new customer, or from a customer who orders sporadically and whose historical orders have been cleaned as extremes. Since the forecast has no knowledge of this demand, the order quantity is added on top of the forecast.
  • 1 – Blocking: the greater of the original forecast and the customer order quantity is used. The customer order therefore increases the forecast only when it exceeds it. This mode is suited for recurring, predictable orders from established customers whose purchases are already reflected in the forecast. It prevents double-counting while still covering any customer order quantity that exceeds the expected level.
  • 2 – Replacing: the customer order quantity replaces the original forecast. A quantity of zero also replaces the forecast with zero. This mode is suited for cases where customer orders represent confirmed demand for the entire day — for instance, when no other sales are expected on that date and the customer orders effectively serve as a confirmed forecast. The orders are thus treated as a reliable substitute for the calculated forecast.

When customer orders in multiple modes apply to the same delivery date, replacing orders are evaluated first, blocking orders can then increase the replaced value, and additive orders are added last.

Cleaning regular customer orders

When working with regular customer orders, one needs to pay attention to a potential duplication of an order in forecasts.

If there is a customer order for 10 pieces of a product each month and if this order then turns into a sale, the module learns to forecast these sales.

Subsequently, the module Suggestion of orders takes as its input not only sales forecast – that already include these sales – but also these orders from the customer directly. This results in a duplicate forecast.

Therefore, it is necessary to clean the sales from these regular customer orders already in the SIDI, in the table of transactions identified as extremes. Thus, these sales will not enter into forecasts – and we are guided only by what the customer orders.

Customer orders can be imported as “blocked”. This, in turn, means that they appear in reports, but they are not taken into account in the module Suggestion of orders.

Displaying customer orders

Orders can be viewed in the module Detail, at the level of product (not category) in the section Suggestion of orders / Customer orders.

Furthermore, it is possible to see orders in the reports: Analysis of customer orders and Report on customer orders.

Extensions

Sales at the time of a customer order

A typical use of this functionality is an e-shop order. Customers buy / order at a certain point, but the actual sale occurs later – typically after the order has been completed.

Alternatively, a product is in stockout and the next day the product is replenished, a huge sale emerges – but the orders were gathered for days, or even weeks.

In such cases, the present extension is indispensable: for the purposes of all computations and all views and displays in STOCK, the date of sale is taken to be the date of the order. The only exception from the rule is the module Computing historical stock levels.

However, this functionality can be turned on only when you can trace a date of order to a sale that originated from a customer order.