NetSuite Operations: Inventory, Manufacturing & Orders

NetSuite operations: a practical guide to the modules that run your business

Most companies buy NetSuite for the financials. But the operational modules — inventory, manufacturing, order management, warehouse, procurement — are where the platform earns its keep. When these modules work together, you get a single system that manages the full lifecycle from purchase order to customer delivery. When they don't work together (or when the wrong modules are enabled), you get expensive shelfware.

TL;DR: NetSuite's operational suite covers inventory management, manufacturing (work orders, BOM, MRP), order management, warehouse operations, supply chain, quality, and field service. Not every company needs every module. A distribution company might need Advanced Inventory, WMS, and Order Management but skip Manufacturing entirely. A manufacturer might need work orders and MRP but not Field Service. This guide walks through each operational area, explains what it actually does, what it costs, and helps you figure out which modules your business needs.

This is a pillar page. We go deep on each operational area below, and link out to dedicated guides where we've written thousands of words on specific topics. If you're evaluating NetSuite for operations or trying to get more from modules you've already licensed, this is the starting point.

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Inventory management

Inventory is the foundation. Every other operational module in NetSuite — manufacturing, order management, warehouse, procurement — reads from and writes to the inventory system. Get this wrong, and everything downstream breaks.

NetSuite's base inventory module is included with every license. It handles item records, basic stock tracking, and simple inventory transactions. But most operational companies need Advanced Inventory, an add-on that enables multi-location management, lot and serial tracking, demand planning, and more.

Item types

NetSuite supports multiple item types, and choosing correctly matters more than you'd think:

• Inventory items: Physical goods you stock, track, and sell. The workhorse item type.
• Non-inventory items: Products you sell but don't track in stock (drop-ship items, for example).
• Assembly items: Finished goods built from components using a bill of materials.
• Kit items: Bundles of items sold together but not physically assembled.
• Lot-numbered items: Inventory tracked by lot for traceability (food, chemicals, pharma).
• Serialized items: Each unit tracked individually (electronics, equipment, high-value goods).
• Matrix items: Items with variations (size, color) managed as parent-child records.

The distinction between assembly and kit items is one of the most common configuration mistakes we see. Assemblies consume components and create a new item record when built. Kits are just groupings — the components ship individually. Use assemblies when you manufacture; use kits when you bundle for sales purposes.

Multi-location inventory

With Advanced Inventory enabled, you can track stock across unlimited locations — warehouses, stores, trucks, consignment locations. Each location maintains its own quantity on hand, and you can set reorder points per location. Transfer orders move inventory between locations with full transaction history.

For companies operating retail locations alongside warehouses, multi-location inventory is essential. NetSuite tracks available, committed, on-order, and back-ordered quantities at each location, giving you real-time visibility without spreadsheet reconciliation.

Lot and serial tracking

Lot tracking groups inventory by production batch. Serial tracking assigns unique identifiers to individual units. Both are critical for industries with traceability requirements — manufacturing, food and beverage, medical devices, electronics.

NetSuite supports lot and serial tracking on receiving, transfers, and fulfillment. You can enforce "first expired, first out" (FEFO) for lot-tracked items, require serial scanning at fulfillment, and trace any unit back to its source purchase order or production run.

Cycle counting

Forget annual wall-to-wall physical counts. NetSuite supports cycle counting — counting a subset of inventory on a rolling schedule. You can configure count plans by:

• ABC classification: Count high-value A items weekly, B items monthly, C items quarterly.
• Location: Rotate through warehouse zones on a schedule.
• Item type: Prioritize items with high variance history.

Cycle count results post adjustments automatically, and variance reports flag items that need investigation. This is one of those features that sounds boring but saves operations teams dozens of hours per month.

Inventory costing

NetSuite supports multiple costing methods: average, FIFO, LIFO, standard, and specific identification (for serialized items). The costing method is set per item and affects COGS calculations, inventory valuation reports, and financial statements.

Most companies use average or standard costing. Manufacturers who need tight cost control often prefer standard costing, which lets you set expected costs and track variances. Importers dealing with freight, duties, and tariffs should look at landed cost to capture the true cost of goods.

What it costs: Basic inventory is included. Advanced Inventory runs $2,500-5,000/year depending on your license tier.

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Manufacturing

NetSuite's manufacturing capabilities range from basic assembly builds to full-blown MRP-driven production planning. The depth you need depends on what you make and how complex your production processes are.

At the simplest level, any NetSuite account can create assembly builds — take components, build a finished item, add it to inventory. But once you need work orders, production scheduling, routing, or material requirements planning, you're in add-on module territory.

Bill of materials (BOM)

The BOM defines what components go into a finished product and in what quantities. NetSuite supports multi-level BOMs (assemblies within assemblies), revision tracking, and effective dates so you can manage BOM changes over time without losing history.

A solid BOM is the foundation for accurate costing, MRP, and production planning. We see companies try to shortcut BOM setup during implementation and regret it for years. Take the time to get component quantities, scrap factors, and yield rates right from the start.

Work orders

Work orders are the transactional backbone of manufacturing in NetSuite. A work order authorizes production of a specific assembly item in a specific quantity. It consumes components from inventory, tracks labor and overhead, and receives the finished product back into stock.

NetSuite work orders support:

• Component backflushing: Automatically consume components when the finished good is received, rather than issuing them manually.
• Work-in-process (WIP) tracking: Track partially completed production with costs allocated to a WIP account.
• Scrap and yield tracking: Record scrap quantities and calculate actual versus expected yield.
• Operation sequencing: Define the steps involved in building the item and track progress against each operation.

For a deep dive on production scheduling and work order management, including how to handle routing and shop floor control, see our NetSuite production scheduling guide.

Material requirements planning (MRP)

MRP is where NetSuite looks at demand (sales orders, forecasts, minimum stock levels), checks supply (on-hand inventory, open purchase orders, open work orders), and generates planned orders to fill the gaps. It answers the fundamental manufacturing question: what do we need to make, what do we need to buy, and when?

NetSuite's MRP engine runs as a scheduled process. It produces:

• Planned work orders: Suggested production runs for assembled/manufactured items.
• Planned purchase orders: Suggested purchases for raw materials and components.
• Reschedule recommendations: Alerts when existing orders should be expedited or pushed back.

MRP is powerful but requires clean data. If your BOMs are inaccurate, your lead times are guesses, or your inventory counts are wrong, MRP will generate garbage recommendations. The system is only as good as the inputs.

Demand planning

Beyond MRP, NetSuite offers demand planning features that use historical sales data and trends to generate forecasts. These forecasts feed into MRP as a demand source alongside actual sales orders.

For wholesale distribution companies with seasonal patterns or long lead times, demand planning prevents the feast-or-famine cycle of reactive purchasing. You can maintain multiple forecast versions, adjust for known events (promotions, new product launches), and compare forecast accuracy against actual demand over time.

What it costs: Basic assembly builds are included. Manufacturing WIP, work orders, and MRP are part of the Manufacturing module, which runs $10,000-20,000/year. Advanced Manufacturing adds routing, work centers, and production scheduling for an additional fee.

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Order management

Order management covers the full order lifecycle: sales orders in, purchase orders out, fulfillment, returns, and everything in between. NetSuite's base edition handles standard order processing, but the Advanced Order Management module adds sophisticated allocation, routing, and fulfillment logic.

Sales orders

NetSuite sales orders capture what the customer wants, when they need it, and how it's getting there. Standard features include multi-line orders, pricing tiers, tax calculation, credit checking, and approval workflows.

Where things get interesting is in fulfillment routing. With Advanced Order Management, NetSuite can automatically determine which warehouse should fulfill each line item based on proximity to the customer, available inventory, or custom business rules. For companies with multiple fulfillment locations, this eliminates the manual decision-making that slows down order processing.

For a comprehensive look at NetSuite's order management capabilities — including drop shipping, blanket orders, and multi-channel order routing — read our NetSuite order management guide.

Purchase orders

On the procurement side, purchase orders can be created manually, generated from MRP recommendations, or auto-created from sales orders (for drop-ship or special-order workflows). NetSuite tracks PO status from creation through receiving, with three-way matching against the PO, item receipt, and vendor bill.

Purchase order features that matter for operations teams:

• Blanket purchase orders: Commit to buying a quantity over time at a negotiated price, then release against the blanket PO as needed.
• Multi-currency purchasing: Buy from international vendors in their currency with automatic conversion.
• Vendor-specific pricing: Maintain price lists per vendor with quantity breaks and effective dates.
• Approval workflows: Route POs through approval chains based on amount, department, or item type.

Fulfillment

Item fulfillment in NetSuite generates pick tickets, updates inventory, creates shipping labels (with carrier integrations), and triggers invoicing. The standard fulfillment process works well for simple operations, but companies with complex warehouse operations will want a dedicated WMS solution for pick/pack/ship efficiency.

Returns and RMA

Return merchandise authorization (RMA) handles the reverse logistics flow. Customers request a return, you issue an RMA number, receive the returned goods, inspect them, and process a refund or replacement. NetSuite tracks the full lifecycle and can automatically update inventory when returned items are restocked.

RMA processing connects back to the original sales order, so you have full traceability. Credit memos, replacement orders, and restocking fees can all be managed within the RMA workflow.

What it costs: Basic order management is included. Advanced Order Management is $5,000-10,000/year.

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Warehouse management

There's a meaningful gap between NetSuite's native inventory features and what a dedicated WMS provides. Native NetSuite handles bin management at a basic level — you can assign items to bins and track quantities by bin. But for high-volume warehouses that need directed putaway, wave picking, cartonization, or real-time barcode scanning on the floor, you need more.

Native bin management

NetSuite's built-in bin management (part of Advanced Inventory) lets you define bin locations within each warehouse, assign preferred bins to items, and track quantities at the bin level. This works for smaller operations with straightforward warehouse layouts.

You can define bin types (pick bins, reserve bins, receiving bins), set up default bins for items, and track inventory movement at the bin level. For warehouses with fewer than a few thousand SKUs and relatively simple pick processes, native bins may be sufficient.

WMS options

When native bins aren't enough, you have two paths:

NetSuite WMS (Oracle's add-on): A mobile-device-driven warehouse management system that adds directed work, barcode scanning, wave management, and real-time inventory updates. It's tightly integrated since it's a native module, but it's not as feature-rich as dedicated WMS platforms.

Third-party WMS: Solutions like RF-SMART, Infios (formerly SCM), or standalone WMS platforms that integrate with NetSuite. These offer deeper warehouse functionality — cartonization, labor management, slotting optimization — but add integration complexity and cost.

We've written a detailed comparison of the options in our best WMS for NetSuite guide, including when each option makes sense and what you should expect to pay.

Pick, pack, and ship

Regardless of which WMS approach you choose, the pick/pack/ship process in NetSuite follows a standard flow:

1. Pick: Generate pick tasks from sales orders or transfer orders. Workers pick items from assigned bins.
2. Pack: Group picked items into shipping containers. Record package weights and dimensions.
3. Ship: Generate shipping labels via carrier integrations (UPS, FedEx, USPS), mark items as shipped, and trigger customer notifications.

The level of automation varies dramatically by WMS choice. Native NetSuite requires more manual steps. A good WMS automates the entire flow with barcode scanning and directed work.

What it costs: Native bin management is part of Advanced Inventory ($2,500-5,000/year). NetSuite WMS is $5,000-15,000/year. Third-party WMS solutions range from $10,000-50,000+/year depending on warehouse size and complexity.

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Supply chain and procurement

Supply chain management in NetSuite isn't a single module — it's the combined effect of inventory planning, procurement, vendor management, and logistics features working together. The platform gives you the tools; the value depends on how well you configure and use them.

Vendor management

NetSuite's vendor records go beyond basic contact information. You can track vendor performance (on-time delivery rates, quality metrics), maintain multiple vendor sources per item with preference rankings, and manage vendor certifications and compliance documents.

For companies working with dozens or hundreds of vendors, the vendor portal (a SuiteCommerce or SuiteApp feature) lets vendors self-serve — check PO status, submit invoices, update lead times — reducing back-and-forth communication.

Purchase planning

Purchase planning combines demand signals (sales orders, forecasts, reorder points) with supply data (on-hand inventory, open POs, lead times) to recommend what to buy and when. This overlaps with MRP for manufactured items, but purchase planning also covers finished goods that you buy and resell.

Key configuration points:

• Reorder points: The inventory level that triggers a replenishment recommendation.
• Safety stock: Buffer stock to protect against demand variability or supplier delays.
• Lead times: Vendor-specific lead times that determine when orders need to be placed.
• Preferred vendors: Primary and alternate vendors with automatic PO routing.

Landed cost

For companies importing goods, the purchase price is only part of the story. Freight, customs duties, insurance, handling fees, and other costs need to be allocated to inventory to get an accurate cost of goods. NetSuite's landed cost feature captures these costs and allocates them to items based on quantity, value, weight, or custom formulas.

Without landed cost, you're either ignoring these expenses in your COGS (understating true product cost) or manually calculating and journaling them (error-prone and time-consuming). For importers, this feature is non-negotiable.

Inbound logistics

NetSuite tracks inbound shipments from vendors with estimated arrival dates, actual receipt processing, and quality inspection workflows. You can receive against purchase orders partially (common for large orders that ship in multiple containers) and track discrepancies between ordered and received quantities.

For wholesale distributors managing container shipments from overseas, the combination of purchase orders, landed cost, and inbound shipment tracking provides end-to-end visibility from when the container leaves the port to when inventory is available for sale.

What it costs: Basic procurement is included. Landed cost requires Advanced Inventory or the Manufacturing module. Advanced procurement features (vendor portal, purchase contracts) may require additional licensing.

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Quality management

Quality management in NetSuite handles inspection, testing, non-conformance tracking, and corrective actions. The native quality features are relatively new (added in recent releases) and suitable for companies with moderate quality requirements.

NetSuite quality management lets you:

• Define inspection criteria and acceptance standards per item or item group.
• Trigger inspections at receiving, during production, or before shipment.
• Record test results and automatically disposition items (accept, reject, quarantine).
• Track non-conformance reports (NCRs) with root cause analysis.
• Manage corrective and preventive actions (CAPA) with assigned owners and due dates.

For companies in regulated industries (medical devices, aerospace, food) that need full 21 CFR Part 11 compliance or advanced statistical process control, NetSuite's native quality features may not be sufficient. Third-party SuiteApps like QT9 or Qualio extend quality management capabilities significantly.

We cover the full landscape — native features, third-party options, and how to decide what you need — in our NetSuite quality management guide.

What it costs: Basic quality features are included with the Manufacturing module. Advanced quality SuiteApps run $5,000-20,000/year depending on the vendor and feature set.

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Field service management

If your operations extend beyond the warehouse — installation, maintenance, repair, on-site service — NetSuite's field service management capabilities connect back-office operations with field operations.

NetSuite field service covers:

• Service scheduling: Assign technicians to service calls based on skills, location, and availability.
• Work order management: Create and track field work orders with parts requirements, labor estimates, and completion status.
• Mobile access: Technicians can view assignments, update status, capture signatures, and record parts usage from mobile devices.
• Inventory management: Track van stock and field inventory, with automatic replenishment from the warehouse.
• Billing integration: Service calls flow directly into invoicing, including labor, parts, and travel charges.

The key benefit is eliminating the disconnect between field operations and the back office. When a technician completes a service call, inventory is updated, the invoice is generated, and the customer record reflects the service history — all without manual data entry.

For a detailed walkthrough of setup, scheduling, and best practices, see our NetSuite field service management guide.

Companies generating significant paperwork around service calls should also look at NetSuite document management to digitize service reports, inspection forms, and customer sign-offs.

What it costs: Field service management is a separate module, typically $5,000-15,000/year.

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Which modules do you actually need?

This is the question that matters. NetSuite's operational modules are sold separately, and buying everything "just in case" is a fast way to overspend on licensing you won't use. Here's a practical breakdown by company type.

Distribution companies

Core needs: Advanced Inventory, Order Management, basic procurement. Likely needs: WMS (native or third-party), landed cost (if importing). Probably don't need: Manufacturing, Field Service.

A wholesale distributor buying finished goods and reselling them needs rock-solid inventory management and efficient order processing. If you're running a warehouse with more than 10 people, invest in a proper WMS. If you import, landed cost is essential.

Manufacturers

Core needs: Manufacturing (work orders, BOM, WIP), Advanced Inventory. Likely needs: MRP, production scheduling, quality management. Probably don't need: Field Service (unless you also install/service what you make).

A manufacturer needs the full production suite. Don't try to fake manufacturing with inventory adjustments and journal entries — it doesn't scale and your costing will be wrong. Start with work orders and BOM, add MRP when you outgrow spreadsheet-based planning, and layer in production scheduling when shop floor complexity demands it.

Retail and e-commerce

Core needs: Inventory management, order management. Likely needs: Advanced Order Management (multi-channel, multi-location fulfillment), WMS. Probably don't need: Manufacturing, Quality Management.

Retail operations are all about inventory accuracy and fast fulfillment. If you sell through multiple channels (website, marketplaces, physical stores), Advanced Order Management's allocation and routing logic pays for itself quickly.

Service companies with inventory

Core needs: Basic inventory, order management. Likely needs: Field Service, document management. Probably don't need: Manufacturing, WMS, Advanced Inventory (unless you stock significant parts inventory).

If you're dispatching technicians and managing service calls, Field Service management is the key module. Pair it with document management for paperless service operations.

Hybrid operations

Many mid-market companies don't fit neatly into one category. A company that manufactures, distributes, and services its products might need Manufacturing, Advanced Inventory, WMS, Order Management, and Field Service. In these cases, prioritize: implement the modules that address your biggest operational pain points first, stabilize, then expand.

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Frequently asked questions

What is included in a base NetSuite license for operations?

Every NetSuite license includes basic inventory management (item records, single-location tracking, inventory adjustments), standard sales orders and purchase orders, basic fulfillment, and simple reporting. You can run a small operation on the base license, but most companies with physical inventory need Advanced Inventory at minimum for multi-location tracking, lot/serial numbers, and bin management. The base license does not include manufacturing, WMS, field service, or advanced order management.

How much do NetSuite operational modules cost?

Module pricing varies by your edition and user count, but typical annual costs are: Advanced Inventory $2,500-5,000, Manufacturing $10,000-20,000, Advanced Order Management $5,000-10,000, WMS $5,000-15,000, and Field Service $5,000-15,000. Third-party add-ons (WMS, quality management) can add $5,000-50,000/year. Implementation costs to configure these modules properly run 1-2x the annual license fee. These are estimates — get a quote from Oracle or your NetSuite partner for exact pricing.

Can I add operational modules after go-live?

Yes, and this is actually the recommended approach for most companies. Go live with your core modules (financials, basic inventory, order management), stabilize, then add manufacturing, WMS, or other modules in subsequent phases. Adding modules post-go-live requires additional configuration and potentially re-training, but it's less risky than trying to implement everything at once. Plan for 2-4 weeks of implementation work per module added.

Does NetSuite support make-to-order and make-to-stock manufacturing?

NetSuite supports both. Make-to-stock (MTS) uses standard work orders driven by inventory reorder points or MRP-generated demand. Make-to-order (MTO) links work orders directly to sales orders, so production starts only when a customer order is received. You can also configure engineer-to-order (ETO) workflows with custom BOM creation per order. The manufacturing module handles all three modes, though MTO and ETO require more configuration.

How does NetSuite handle multi-subsidiary inventory?

NetSuite OneWorld supports separate inventory tracking per subsidiary, with intercompany transfer orders to move stock between entities. Each subsidiary has its own item costing and valuation. Intercompany transactions automatically generate the appropriate accounting entries in both subsidiaries. This is important for companies with separate legal entities that share inventory or transfer goods between divisions.

What is the difference between NetSuite WMS and third-party WMS solutions?

NetSuite WMS is Oracle's native warehouse module — it's tightly integrated, supports barcode scanning on mobile devices, and handles standard pick/pack/ship workflows. Third-party solutions like RF-SMART offer deeper functionality: wave planning, cartonization, labor management, slotting optimization, and more granular control over warehouse processes. Choose native WMS if your warehouse operations are straightforward. Choose a third-party WMS if you have complex picking strategies, high order volume, or need advanced labor tracking. See our best WMS for NetSuite guide for a full comparison.