Core Concepts

Essential business concepts and entities in Smart Shelf inventory management.

Core Concepts

Understanding the core concepts and entities in Smart Shelf is essential for effective system usage. This section defines the fundamental business objects and their relationships within the inventory management system.

Products

Definition

Products are the foundation of your inventory system—items or services that your business sells, manages, or tracks. Each product represents a unique item in your catalog with specific attributes and characteristics.

Core Components

  • SKU (Stock Keeping Unit): Unique identifier for inventory tracking
  • Name: Product title or description
  • Description: Detailed product information
  • Category: Hierarchical classification system
  • Pricing: Cost, selling price, and margin information
  • Specifications: Technical details, dimensions, weight, etc.

Product Relationships

Product
├── Inventory (stock levels across warehouses)
├── Suppliers (who provides this product)
├── Purchase Orders (procurement history)
├── Sales Orders (sales history)
├── Variants (size, color, material options)
└── Categories (classification hierarchy)

Product Variants

Products can have multiple variants representing different configurations:

  • Size Variants: Small, Medium, Large, XL
  • Color Variants: Red, Blue, Green, Black
  • Material Variants: Cotton, Polyester, Wool
  • Configuration Variants: 16GB, 32GB, 64GB storage

Product Lifecycle

  1. Creation: Initial product setup with basic information
  2. Catalog Management: Detailed information, pricing, and categorization
  3. Inventory Integration: Stock tracking and warehouse allocation
  4. Sales Integration: Making products available for sale
  5. Performance Tracking: Analytics and optimization
  6. Retirement: End-of-life management and archival

Inventory

Definition

Inventory represents the current stock levels and location of products within your warehouse network. It provides real-time visibility into product availability and movement.

Inventory Components

  • Quantity on Hand: Physical stock currently available
  • Allocated: Stock reserved for pending orders
  • Available: Stock available for new orders (On Hand - Allocated)
  • Reserved: Stock held for specific purposes
  • In Transit: Stock moving between locations

Inventory States

Total Stock = On Hand + In Transit
Available Stock = On Hand - Allocated - Reserved
Sellable Stock = Available - Safety Stock

Stock Movement Types

  • Receipts: Incoming stock from suppliers
  • Sales: Outgoing stock to customers
  • Transfers: Movement between warehouses
  • Adjustments: Corrections and cycle count updates
  • Damages: Stock marked as damaged or unusable
  • Returns: Customer or supplier returns

Inventory Tracking

  • Real-time Updates: Instant stock level changes
  • Movement History: Complete audit trail of all transactions
  • Batch/Lot Tracking: Traceability for regulated products
  • Expiration Dates: FIFO/LIFO management for perishables

Warehouses

Definition

Warehouses are physical or logical locations where inventory is stored, managed, and distributed. They represent the spatial dimension of your inventory management system.

Warehouse Components

  • Basic Information: Name, address, contact details
  • Capacity: Storage limits and utilization tracking
  • Zones: Logical divisions within warehouses
  • Bins/Locations: Specific storage positions
  • Operating Hours: Availability and scheduling

Warehouse Types

  • Distribution Centers: Main storage and fulfillment hubs
  • Retail Locations: Store-based inventory
  • Temporary Storage: Overflow or seasonal facilities
  • Consignment Locations: Vendor-managed inventory
  • Drop-ship Locations: Virtual warehouses for direct shipping

Multi-Warehouse Operations

  • Inventory Allocation: Distributing stock across locations
  • Transfer Management: Moving inventory between warehouses
  • Demand Planning: Forecasting needs by location
  • Cost Optimization: Minimizing storage and transportation costs

Purchase Orders

Definition

Purchase Orders (POs) are formal requests to suppliers for inventory replenishment. They represent the procurement process from requisition to receipt.

Purchase Order Lifecycle

  1. Draft: Initial creation and item selection
  2. Review: Internal approval and validation
  3. Sent: Transmitted to supplier
  4. Confirmed: Supplier acceptance and scheduling
  5. Received: Partial or complete receipt of goods
  6. Closed: Final completion and accounting

PO Components

  • Supplier Information: Vendor details and contact
  • Line Items: Products, quantities, and pricing
  • Terms: Payment terms, delivery dates, conditions
  • Shipping: Delivery address and method
  • Approval: Authorization workflow and signatures

Purchase Order Types

  • Standard PO: Regular replenishment orders
  • Blanket PO: Long-term agreements with release schedules
  • Contract PO: Service agreements and recurring orders
  • Emergency PO: Urgent or expedited orders

Sales Orders

Definition

Sales Orders represent customer requests for products, managing the entire fulfillment process from order creation to delivery.

Sales Order Lifecycle

  1. Created: Customer places order
  2. Allocated: Inventory reserved for order
  3. Picked: Items gathered from warehouse
  4. Packed: Order prepared for shipping
  5. Shipped: Order dispatched to customer
  6. Delivered: Customer receives order

Sales Order Components

  • Customer Information: Billing and shipping details
  • Line Items: Products, quantities, and pricing
  • Payment: Payment method and status
  • Shipping: Carrier, method, and tracking
  • Status: Current fulfillment stage

Order Processing Rules

  • Inventory Allocation: Automatic stock reservation
  • Backorder Management: Handling out-of-stock items
  • Partial Fulfillment: Shipping available items first
  • Cancellation: Order modification and cancellation policies

Suppliers

Definition

Suppliers are companies or individuals who provide products to your business. They represent the upstream supply chain relationships.

Supplier Components

  • Contact Information: Names, addresses, phone, email
  • Business Details: Company size, certifications, capabilities
  • Terms: Payment terms, minimum orders, lead times
  • Performance: Quality ratings, delivery metrics, cost analysis
  • Products: Catalog of available items and pricing

Supplier Relationships

  • Primary Suppliers: Main sources for specific products
  • Secondary Suppliers: Backup sources for continuity
  • Preferred Suppliers: Partners with negotiated terms
  • Occasional Suppliers: Ad-hoc or specialty providers

Supplier Management

  • Performance Tracking: Delivery, quality, and cost metrics
  • Relationship Management: Communication and collaboration
  • Risk Assessment: Supply chain risk evaluation
  • Contract Management: Terms, renewals, and negotiations

Barcodes

Definition

Barcodes are machine-readable codes that provide quick and accurate product identification throughout the inventory management process.

Supported Barcode Formats

  • UPC (Universal Product Code): Standard retail barcodes
  • EAN (European Article Number): International product codes
  • Code 128: High-density alphanumeric codes
  • QR Codes: Two-dimensional codes with high capacity
  • Custom Codes: Internal SKU-based identification

Barcode Usage

  • Product Identification: Quick lookup and verification
  • Inventory Transactions: Receiving, picking, and adjustments
  • Order Processing: Accurate order fulfillment
  • Asset Tracking: Equipment and tool management

Barcode Integration

  • Camera Scanning: Mobile device camera-based reading
  • Dedicated Scanners: Professional barcode scanning devices
  • Bulk Operations: Multiple item processing
  • Error Prevention: Reducing manual entry mistakes

Business Process Integration

Procurement Process

Demand Planning → Purchase Requisition → Purchase Order → 
Supplier Fulfillment → Receiving → Inventory Update → 
Accounts Payable

Sales Process

Customer Order → Inventory Allocation → Order Fulfillment → 
Shipping → Delivery → Customer Satisfaction → 
Accounts Receivable

Inventory Management Process

Demand Forecasting → Replenishment Planning → 
Procurement → Receiving → Storage → 
Order Fulfillment → Shipping

Data Relationships

Entity Relationship Overview

Products ←→ Inventory ←→ Warehouses
    ↓           ↓
Purchase Orders  Sales Orders
    ↓           ↓
Suppliers    Customers

Key Relationships

  • Product-Inventory: One product can have inventory in multiple warehouses
  • Product-Supplier: One product can be sourced from multiple suppliers
  • Order-Product: Orders contain multiple products with quantities
  • Warehouse-Inventory: Warehouses contain inventory for multiple products
  • User-Permission: Users have role-based access to different functions

Understanding these core concepts provides the foundation for effective use of Smart Shelf. Each concept represents a critical aspect of inventory management, and their relationships enable comprehensive business process automation.