Basic Order Allocation is a rules-based mechanism for allocating the available inventory to outstanding sales and is another “must have” with any robust Warehouse Management Systems (WMS)

Prior to order allocation, a short discussion should be examined with the relationship between order management, your Enterprise Resource Planning (ERP) System and Warehouse Management Systems (WMS).

Sales orders placed by phone, fax or email are typically entered into your ERP system manually using some sort of WMS Sales Order Entry function. Orders may also be placed using a B2B (Business to Business) e-commerce web-site, remote sales through mobile devices or by EDI.  As a result of sales orders being entered into your ERP system, the warehouse management software is immediately updated.

The WMS Software is now responsible for orchestrating the order management activities. This is the prioritization of stock allocation and the assignment of work in the warehouse. The effectiveness of these tasks is critical to the efficiency of the warehouse and the service level that it provides.

Order management is a dynamic process that requires the flexibility to accommodate many different warehousing styles. Some sales orders need to be immediately released for today’s pick run. Some may be held for a future date with or without stock reservations. Orders may be prioritized by back order status, preferred customer status, fill rate, pick-up time, and truck route or by date. There are countless criteria by which orders are prioritized, allocated and released for picking.

Warehouse allocation is responsible for the logical reservation of product for sales orders. Allocation may be based on specific criteria such as FIFO, LIFO, FEFO, batch, pack-size, zone and warehouse.

As items are received into the warehouse, they are immediately available for order allocation, eliminating any time delay or sequencing issues between receipts, confirmation and pick-list creation.

While orders may be allocated on a first come first serve basis, the warehouse manager will more likely want to assert control over the warehouse process by prioritizing which orders are selected for allocation using a Sales Order Grid in the Warehouse Software.

After an order is allocated it will fall into one of several statuses, depending on the availability of inventory and where the inventory is located in the warehouse for example:

  • Held Short – There is not enough stock to satisfy the order
  • Ready to Wave – There is enough stock and the order is ready for picking
  • Held for Replenishment – There is enough stock, but there is not enough units in pick locations to fill the order, a replenishment task needs to be completed before the order can be picked.

Next Steps: Visit our Warehouse Management Systems (WMS) Page for further WMS Functionality

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Posted By: iCepts Technology Group, Inc.-An Accellos One Warehouse Management Systems Partner in Pennsylvania