Order allocation

How order allocation works

When an order is released to the warehouse, each line is matched against available stock. The allocation engine looks at stock that is sellable, in the right status and owned by the right client, then chooses which units to reserve using rules.

For example, an order asks for 6 bottles of OIL-008. The pick face holds 4 units of lot LOT-0826, expiring in March. Reserve holds 10 more of LOT-0826 and 30 of a lot expiring in June. With first-expired-first-out and pick-face-first rules, the system allocates the 4 from the pick face and 2 of LOT-0826 from reserve, and leaves the June lot untouched.

Common allocation rules

Allocation rules decide which units go out first. Most warehouses combine several.

• FEFO: first expired, first out. The default for anything with a shelf life.
• FIFO: first received, first out, for stock without expiry dates.
• Pick face first: take from forward locations before reserve, to limit walking.
• Whole LPN: ship a full pallet or carton when the quantity matches, instead of breaking it.
• Minimum remaining shelf life: skip lots too close to expiry for a particular customer.

Allocation vs available-to-promise and common mistakes

Available-to-promise tells sales how much can still be sold. Allocation reserves particular units for orders already accepted. Every allocation reduces available-to-promise.

The most common mistake is allocating at SKU level only, without a lot or location. Pickers then choose whatever is closest, which breaks FEFO and makes recalls harder. Another is allocating from stock in quarantine or on hold because the system doesn't check status.

How NextStock handles allocation

NextStock allocates automatically or manually. Rules include FEFO, whole-LPN and pick-face first, and lines that can't be filled become backorders. Allocation works from available stock belonging to the order's client, so quarantined and held stock never reaches a pick list. See order picking.