A Process to Execute a Mid-Life Item Changeover to Matrix or Serialized in NetSuite ERP

This article will be relevant for you if your company is using NetSuite ERP, uses standard inventory items and a new business requirement arises where you now need the functionality of Serialized or Matrix for an existing item.

The Business Case

NetSuite offers great functionality and flexibility for you to leverage when determining how best to import and configure the goods and services your company needs to transact. If for example you choose to load something as a standard Inventory Item and at some point down the road there arrises a need to issue and track warranties for those items in detail, or perhaps you need to matrix a group of items by size and color variations you would find that it is necessary to deprecate the use of the original Inventory Item and rebuild it as a Serialized Item or as a member of an Item Matrix. After doing so, transaction histories will be fractured in reporting and so it will be necessary to tie them together for some period. In this article I will offer an overview of steps in an approach to achieving a mid-life item changeover from a NetSuite Inventory Item to a Serialized Item.

Note that there is a NetSuite SuiteIdea #149882 registered by the community with votes requesting that this functionality be added as native. Although it is quite old, I still encourage you to please go and vote.

A Critical Component to Success

The most critical component to the success of any project is Communication and Executive Sponsorship. Please do not do this for the first time in your production environment and be sure to recruit for testing and validation, a team member from finance, order to cash, procurement, shipping and receiving and marketing. Hence the executive sponsorship. Items are typically part of every transaction in the system. A series of planning meetings will be necessary and a practice round for the team in the sandbox will go a long way in flushing out unintended consequences.

An Execution Process:

1. Cycle count and reconcile inventory quantities for all items to be converted.
2. Build new Serialized Items one for one and add some temporary prefix like "new-" to the name. For a quick process and concise build, I like to use a series of 4 saved searches to extract everything and upload at once with a single CSV import. Usually 4 searches of related data... [i. Item master data, ii. Related pricing, iii. Related vendors, iv. Related locations]
3. Validate the master data (new serialized version vs legacy non serialized version)
4. Capture a (Before) snapshot of financials. BS & PL. Note amounts for inventory value & write-off account.
5. Build Adjustments to write down the non serialized and write up the serialized versions. Be sure to populate actual serial numbers and exact item unit cost. Once the posting period closes, there is no going back.
6. Validate each adjustment for net $0 effect.
7. Capture an (After) snapshot of financials. A small adjustment may be necessary due to rounding.
8. Add a prefix like "zz-" to the legacy non serialized items being replaced.
9. Remove the prefix "new-" from new Serialized Items. This will make the change more seamless at order entry.
10. Review open transactions, sweep & clean
11. User acceptance testing

Have each member of your team test and validate this first test execution in the SandBox. A partial list of what to watch out for includes: EDI Item mappings, legacy items on Saved Searches used as conditions in promotions, reporting, Customer Item pricing. Legacy items left on partially fulfilled Sales Orders, legacy items on Partially Received Purchase Orders. Open Estimates, budgets to name a few.

NetSuite gives you all the tools necessary to leverage your software investment to realize process efficiencies for your team and overall business. Should you find a need to engage with a firm that understands business process optimization, don't hesitate to reach out.