On hand, reserved, committed and awaiting quantity

Understanding inventory count in ERPAG

As everyone already knows, inventory in ERPAG is located under inventory > products and services.

The list of products and services is a conjoined list of all entered products, services, consumption products, KITs, bill items, variable products and products based on bill of materials.

There are 4 columns that represent quantity: On hand, Reserved, Committed and Awaiting.

On hand inventory is the total number of items in your warehouse, available for selling or loading into work orders.

If we create a Sales Order that requires 8 pcs of part a, the on hand quantity will still be 10 (since we didn't pack the SO yet), while the reserved and committed quantity will be equal > 8.

Committed quantity is the total number of 'part a' required on all sales orders!

Quantity is automatically reserved by the oldest entered document (sales order or work order).

If we increase the quantity on our Sales order to 12, the on hand quantity will still be 10 (since the SO is not packed yet), the reserved quantity will be 10 (since that is how many we have on hand), while the committed quantity will be 12 (that is how many we have on our Sales order now).

Once we generate the Purchase order for 2 pcs of our part a (since that is how many we need in order to fulfill this order), the awaiting quantity will be 2, while the rest of the numbers will remain the same. (The purchase order can be created manually or generated through the fulfillment option under purchasing module).

Once we receive the purchase order, the awaiting quantity will be 0, while the on hand, reserved and committed quantity will be equal > 12.

If we receive 6 more pcs of 'part a' from our supplier, only our on hand inventory will increase, because we will have 6 pcs in stock that are not required by any sales order or work order.

If we create a transfer document for 2 pcs of 'part a' from one warehouse to another, our on hand quantity will remain the same, while the reserved, committed and awaiting quantity will be equal > 2. Reserved and committed - because the items are reserved and committed for the transfer document, and awaiting - because the items are awaited in another warehouse.

Once we 'pack' the items for transferring, the on hand quantity will decrease by 2, the reserved and committed quantity will be 0 (it's not committed or reserved anymore, it's packed and ready to be shipped), and the awaiting quantity will remain to be 2 (because we didn't receive that items yet in our other warehouse).

Once we receive the transferred items and complete the transfer document, our on hand inventory will again be 6, while the reserved, committed and awaiting quantity will be 0.

The inventory on hand is 6 because the products and services list is the list that represents quantity in all warehouses. If we open a product and click on the info button, we will see that 4 pcs are in our main warehouse, while 2 pcs are in our FIFO warehouse.

It's a bit different when it comes to work orders and how they are generated!

  1. If we create a work order through the manufacturing project, we will have a 'launch button':

In this case, our inventory count will be left as is:

2. If we create a work order through manufacturing > work orders, there is no 'launch button':

The system goes automatically through your SKUs upon saving the work order, tags the WO quantity as 'available quantity' and puts the reserved and committed quantity as 1 (that is how many we need for our work order).

We still have 6 on hand, because we didn't load the material yet. Once we load the material into our work order, the on hand inventory will decrease by 1, while the reserved, committed and awaiting quantity will go back to 0.

3. If we go back to our work order that is generated through the manufacturing project and click on the 'launch' button, ERPAG will go through the inventory, mark the work order with 'in process' tag and highlight the work order with 'available quantity'.

The on hand quantity will remain the same, while reserved and committed quantity will be 1.

Once we load the material in our work order, just like in our previous case, the on hand inventory will decrease by 1, while the reserved and committed will go back to 0.

In both cases, our product 'sub a+b' will have awaiting quantity (1 for each entered work order), and that quantity will remain until we 'deliver the finished goods' and place the finished product to our stock.

Summary

To sum it all up once again, in words, without screenshots:

  1. On hand is all inventory you have in stock, visible physically in front of you. This number decreases only when a sales order is packed, transfer document is packed, material is loaded into a work order. This number increases when a purchase order is received, transfer document is received, or the goods are delivered through the work order.

  2. Committed quantity is quantity that is required an all entered sales orders, transfer documents, and launched/entered work orders (depends whether you create a work order directly, or you go through the manufacturing project). This number decreases when the sales order is packed, transfer document is packed, material is loaded into the work order. This number increases only when you create a new sales order, transfer document or a work order. This number can be higher or lower than your on hand inventory.

  3. Reserved quantity is quantity that appears on sales orders, transfer documents, launched/entered work orders (again - depends whether you create a work order directly, or you go through the manufacturing project). This quantity does not have to be equal to the committed quantity (since all sales orders, transfers and work orders in total can demand more quantity than what you have in stock), but it will always be equal to the on hand quantity (since you can't reserve more than you have - duh!). This number decreases when the sales order is packed, transfer document is packed, material is loaded into the work order. This number increases only when you create a new sales order, transfer document or a work order.

  4. Awaiting quantity is quantity that is on purchase orders and transfers that are not yet received, and work orders that didn't deliver the finished goods yet. This number decreases when a purchase order is received, transfer document is received, or goods are delivered through the work order (output items). This number increases upon creating new purchase orders, transfer documents, and work orders (output items).

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