Inventory

Omnium can be main source of inventory for smaller customers. Monitoring and controlling the stock of products to ensure availability and avoid stockouts. For larger customers, ERP or WMS is usually managing inventory.

FIFO

FIFO principle is used to ensure that the oldest stock is sold or used before newer stock. This is especially important for perishable goods or items with limited shelf life. Receiving and Stocking: When new inventory arrives, it is received and added to the existing stock as new batch.

Sales and Consumption: When a customer purchases or consumes items from the inventory, the FIFO principle ensures that the oldest available batch is used. This means that the cost from the earliest received or produced batch added to order line cost price.

Virtual Stock Locations (VSLs)

Virtual stock locations in Omnium provide functionality for organizing and allocating inventories from a single physical warehouse to different sales channels.

By introducing virtual warehouses in Omnium (which are strictly fictive entities), it is possible to control how many items different sales channels can access and sell, even when being served by the same physical warehouse.

The concept is illustrated as follows. Without virtual warehouses, all stores connected to a warehouse will see all the inventory in the physical warehouse. After introducing virtual warehouses, the inventory of the physical warehouse is shielded behind the virtual warehouses, and the store will only be able to see and sell the inventory allocated to the virtual warehouses.

VSL Setup

Settings

Activate VSL functionality under the inventory configuration in Omnium.

Setting up store and warehouses

NB! The recommended approach for introducing virtual warehouses is to create new warehouses for the virtual warehouses and allow the existing physical warehouses to remain as they were. This ensures Omnium handles inventory and reservations correctly and avoids breaking functionality or displaying historical data incorrectly. Alternative approaches require careful consideration to prevent errors, overselling, or confusing inventory states.

The virtual warehouses should be marked as "Is virtual," and physical warehouses using virtual warehouses should be marked with "Has virtual stock locations." Link the virtual warehouses to the physical ones by setting the physical warehouse as the related warehouse on the virtual ones. Then, change the sales channels to point to the virtual warehouses instead of the physical warehouse.

For proper functionality, no sales channels should be directly linked to the physical warehouse once the virtual warehouses have been introduced. All stores served by a physical warehouse with VSLs should have one of the virtual warehouses as their available warehouse.

How It Works

Inbound Inventory Behavior - Purchase

Purchase Orders

When creating a purchase order for a warehouse with VSLs, the view will display the virtual stock locations where the ordered inventory can be allocated.

There are two behaviors for goods reception in Omnium (whether the goods reception is performed via the UI or API):

1. Fixed quantity goods reception
2. Rule-based allocation

On each line item, there is a switch to decide whether to allocate the inbound inventory by rules or not. If set to true, inventory rules will trigger upon goods reception and allocate inventory to the VSLs based on the configured rules and the inventory levels at the time of reception. The specified VSL allocations on the purchase order will be ignored.

If rule allocation is deactivated, the specified VSL allocations on the purchase order will apply, and the inventory will be distributed across the VSLs accordingly.

Inventory Updates

When an inventory change occurs in Omnium that is not related to a purchase order, the difference between allocated and unallocated inventory on a physical warehouse may change. This discrepancy will be shown as unallocated inventory in Omnium. As long as the unallocated inventory is positive, nothing will happen. Users can manage unallocated inventory in the UI. For more information, see unallocated inventory.

Outbound Inventory Behavior

Inventory Reduction from Orders

When an order is placed in Omnium causing a reduction in inventory, the inventory rule engine will check for dynamic rules. If any exist, redistribution between the VSLs may occur. For more information, see the rule section.

Negative Inventory Spikes

Negative spikes in inventory at physical warehouses will trigger reactions in Omnium to prevent overallocation of inventory on the virtual warehouses and prevent overselling. When a negative spike occurs in Omnium at a physical warehouse with VSLs, one of two things will happen:

1. If the amount of unallocated inventory is greater than the negative spike, the unallocated inventory on the physical warehouse will absorb the change. The unallocated inventory will be decreased along with the inventory level, while the VSL inventory levels remain the same.
2. If the amount of unallocated inventory is less than the negative spike, the following will happen:
   • Absorb as much of the negative spike as possible by reducing the unallocated inventory.
   • Reduce the inventory level on the virtual stock location with the highest inventory level. This reduction may be spread out over multiple VSLs if the reduction is large enough to eliminate the inventory difference.

This reduction behavior is handled by a scheduled task running every minute, so the correction may not be instantaneous but should be completed within a reasonable time.

Inventory Rules

Rule Structure

Inventory rules in Omnium are instructions to the inventory rule engine on how to allocate inventory across virtual stock locations.

Inventory rules consist of two parts:

1. Filters
2. Allocation Instructions

The inventory rule filters allow selection of which products the rule affects, including product categories, brands, or specific products.

The allocation instructions consist of 4 main parts and one optional part:

1. Specify which VSL the instruction targets.
2. Assign a priority that determines the execution order. Higher-priority allocations are performed first. Multiple allocations can have the same priority.
3. Define the allocation type. Omnium supports two allocation types:
   • Percent: Specifies what percentage of the total physical inventory should be allocated to the VSL.
   • Fixed: Specifies a target quantity to allocate to the VSL.
4. Specify the amount: either the percentage or fixed amount.
5. (Optional) Set a minimum quantity. If set, the rule engine will try to achieve this minimum quantity before applying the allocation type/amount logic.

Rule Execution Hierarchy

Inventory rules and allocation instructions both have priorities. The rule priority applies when evaluating which rules to execute. The allocation priority applies within a specific rule, allowing multiple instructions on the same VSL.

When the rule engine is triggered:

1. It selects all applicable rules for the SKU.
2. Orders the rules by priority.
3. Executes the rules in order of priority.

A lower-priority rule will only execute if all higher-priority rules are completed and there is still inventory left to allocate.

Dynamic Rules

Inventory rules are primarily used for inbound inventory to distribute it across virtual warehouses. However, the system can also apply a rule when negative inventory changes occur to maintain a given distribution. This is done by setting "Is dynamic" on an inventory rule.

Currently, dynamic rules trigger only on negative inventory changes caused by completed orders. If triggered, the rule engine reallocates virtual inventories across warehouses to maintain the balance specified by the rules.

Unallocated Inventory

Unallocated inventory is relevant only when using VSLs. It is the difference between the physical inventory level and the sum of inventory levels across virtual warehouses.

Unallocated inventory can be managed in Omnium's UI to allocate available inventory over the VSLs. For more information, see the user guides.