Allocation Logic in Dear Inventory, explained
Dear Inventory has two order flows, Standard and Advanced. They both let you prioritise stock with soft and hard allocations if you use manual picking. The Advanced module has another option: authorised orders with no allocation at all. In this article, we see the differences between soft and hard allocations, and how to override soft allocations to prioritise which customers get scarce stock.
You can swap a Standard order to Advanced. An order created in the standard process can move to the Advanced process via the Convert button. See the picture below.
The Advanced flow gives an overview in one screen of the entire order process. In a nutshell, the Advanced Sales module is a new user interface which replaces the old tabbed view with a side-bar to the right of the screen, giving you immediate access to fulfillments, invoices, credits and additional attributes.
The Advanced flow lets you authorise an order without any allocation effect, if you want. The Standard flow always does a soft allocation when an order is authorised: this 'no allocation' option is a unique feature of the new module.
decrease available stock
soft allocations are part of the calculation to calculate reorder POs.
- they do not reserve stock for a particular order and do not block another order being picked
Hard vs Soft Allocations: Standard Order Process
In the standard order process, Dear will always allocate stock as soon as an order is authorised. This is different from some systems, such as Unleashed, which make this optional.
But if picking is not completed, you can actually use that stock for another order. This is a “soft allocation”. Once picking is complete, the allocation is irreversible and can’t be reallocated. In Dear you can set picking to be an automatic step when the order is authorised, which saves time. If you leave picking as manual, then you can take advantage of soft and hard allocations. You can undo picking, so even if you have automatic picking you can apply soft allocations case by case by undoing relevant picks.
If soft allocations are active, and a new order is entered, Dear will use the soft allocated stock when calculating if the new order has to be backordered. If there isn’t enough available stock, you’ll get the ‘Backorder to proceed’ dialog (see below). Do that: you can pick it if the allocated quantity is only soft-allocated.
So: accepting the Backorder is mandatory if existing stock is soft-allocated ... but if the existing stock is only soft allocated, the Backorder is not mandatory, because you can pick anyway. Of course, if the stock is hard allocated (that is, picked already), you can't proceed. You can't pick the same stock twice.
If you have picked an order but want to send the stock elsewhere, undoing the pick will be sufficient.
For Item 1001, there are 100 units on hand, and no orders.
Order 1 is authorised, for 100 units. But it is not picked yet.
Now Item 1001 is fully allocated.
Order 2 is entered, also for 100 units of the same item. When you try to authorise the order, you will be told you need to backorder to proceed. So backorder it.
You can still pick order 2, and you can pick 100 units. If you look at the Product Availability screen you will see total allocations of 200 units, meaning there is a negative quantity available.
This approach is a good compromise of showing total demand while still letting you prioritise who gets what stock.
Soft Allocations and Automatic Reorder POs
If you use Purchase -> Reorder Backordered Stock, Dear will propose a PO of sufficient quantity to cover the over-allocated stock. That is, as far as creating POs to cover insufficient stock, soft allocations and hard allocations are treated the same when calculating the stock shortfall.
If you want hard allocations, you must pick. If you set the Pick process to be automatic, hard allocations will be done first in, best dressed.
The setting General Settings -> Sales Process Customisation ‘Make Stock Allocation Optional’ does not apply to the Standard Sales Process.
Advanced Order Module
A setting in Dear allows a new allocation method in Dear, but only in the Advanced module.
The setting General Settings -> Sales Process Customisation ‘Make Stock Allocation Optional’ looks like this, and it defaults to unchecked.
If you don’t tick the ‘Make Stock Allocation Optional’, which is the default, the Advanced Sales Module behaves like the standard module. The item is ‘soft allocated’ when the order is authorised.
If you tick the box in settings, the Authorise Button for the Order has two options:
Don’t Allocate Stock
If you choose “Don’t Allocate Stock”:
Not even a soft allocation is done. This means that an automatic reorder PO does not consider this sales order at all. It also means quantity available is not affected. If you have an online portal and are sharing quantity available with customers, this may or may not be an advantage depending on how you want customers to respond to your stock levels.
But when the order is picked, you get a hard allocation
If you choose “Allocate Stock”:
This makes a soft allocation, the same as the standard module’s way of working. See above.
Tip for using the Advanced Inventory screen