Related Support Center Articles

Overview

There are two main groups of Units of Measure - Inventory Units and Purchase Units. This lesson will tackle the best practices for Inventory Units of Measure.

Inventory Units of Measure are Units that are utilized when taking Stock Counts. Think of these as the Base Unit for the Item itself. As a rule, the Inventory Unit should be the smallest unit you want to count by. This doesn't necessarily mean that you must break it down to the gram or the volume ounce, those would be some tedious counts. Instead, pick a common unit that is easy to break down while your employees are performing their counts.

Typically, pound is perfect for most weight items; the container the item comes in works best for Volume items (#10 Can; Quart etc.); and the individual piece or unit for count items.

Inventory Units in R365

The nice thing about R365 is you get three of these Inventory Units per item. Think of the first Inventory Unit as the base unit and reporting unit, as it is the unit that displays on inventory reports.

Most users enter the default purchase unit as the 2^nd Inventory Unit of Measure. On the rare occasion, a 3^rd Inventory UofM is warranted.

Let's walk through the following example of 'Lay Flat Bacon':

Purchasing UofM: Lay Flat Bacon is received in a Case of 30 pounds, with six 5 pound packs in a case
Inventory UofM: The first Inventory Unit of Measure would be 'lb'
Count UofM 2: 'Case - 30/lb'
Count UofM 3: 'Pack - 5/lb'

No matter which container size is on the shelf, it can be counted as is and R365 will do the heavy lifting to determine the end total, in terms of that first inventory Unit: 'lb'.

Unique U of Ms

During setup of items and their corresponding Units of Measure, there are going to be some outliers. You will end up with an odd bottle size or can size. In those instances, it is best to create a specific unit of measure that relates to that specific container. For instance, if your olives come in a 17 fluid ounce jar, a single Unit of Measure for 'Jar (17oz)' would be needed.

It is highly possible that you end up with 5 or 6 different 'Jar' sizes in your Units of Measure list. That's perfectly fine and actually preferable to having a single vague unit called 'Jar' that can mean 10 different things.

Setting Inventory Units based on Purchase Units

It's not uncommon for multiple vendors to supply the same product in multiple pack sizes. R365 has a solution for this by using Vendor Items (see the lesson on Vendor Items), but since those pack sizes can vary so greatly, it's best to have a common base unit they all funnel into.

For instance, if you have 'Ground Beef' which can be received from US Foods as a 'Case 30/lb' and from Sysco as a 'Case - 15/lb' and from US Foods again as a 'Case - 40/lb', it becomes difficult to manage if you don't have that common unit, like 'Lb'.

It's also more beneficial to see reports and costing by a smaller unit. Losing 17 lb of Bacon tends to set off more alarm bells than losing a half a case of that same Bacon. You feel the pain a little more.

Inventory Units of Measure are essential to correctly cost and relate items to purchasing units and Recipes. These Units drive the cost that is reported to the Accounting team on the inventory Journal Entries. Using the best practices outlined in this lesson will help you setup your Inventory Units with confidence and consistency.