Managing inventory for a life sciences company involves more than knowing how much stock is available. Pharmaceutical manufacturers, CDMOs, and medical device companies also need to track lots, control material availability, manage expiration dates, and maintain reliable records.
Standard inventory settings, such as locations, reorder points, and safety stock, are still important. However, regulated manufacturing requires additional planning around how materials are received, stored, inspected, used in production, and shipped.
NetSuite can support many of these processes, but the results depend on how the system is configured and which features or integrations are used.
Here are seven areas to review when setting up NetSuite inventory management for a regulated life sciences business.
1. Start with a well-designed item master
The item master defines how each material or product is managed in NetSuite. Getting these records right from the beginning helps prevent problems with inventory tracking, costing, and reporting.
Each item should have the appropriate settings for its intended use, including:
- Unit of measure and purchasing requirements
- Lot or serial number tracking
- Shelf life and expiration date requirements
- Storage and handling information
- Relevant material classifications
For example, a pharmaceutical manufacturer may need to distinguish active pharmaceutical ingredients, excipients, packaging materials, and finished products. A medical device company may need serial number tracking for individual devices and lot tracking for selected components.
These differences affect how materials move through purchasing, receiving, production, and distribution.
Companies planning their manufacturing processes should also review how NetSuite MRP for life sciences supports material planning and inventory requirements.
Before importing inventory data, establish item creation standards and check existing records for missing or inconsistent information.
2. Configure lot and serial number tracking
Lot tracking connects groups of materials or products to their transaction history. Serial tracking identifies individual units.
Both can be important for understanding where inventory came from, how it was used, and where it went.
For lot-controlled materials, capture the supplier's lot number during receiving and maintain the relationships needed to trace materials through production. If internal production lots are also required, define how the system will connect them to the original supplier lots.
Consider a manufacturer that uses one incoming ingredient lot across several production orders. The inventory records should support tracing that ingredient to the relevant production activities and finished-product lots.
This is the foundation of forward and backward lot traceability. Forward traceability follows a material into the products that use it. Backward traceability identifies the materials and suppliers associated with a finished product.
Serial tracking serves a similar purpose for individual medical devices or other products that require unit-level identification.
The exact process depends on the manufacturing workflow and configured NetSuite functionality. Test both directions of traceability before go-live, using realistic examples from receiving through production and distribution.
3. Align locations, bins, and inventory statuses
Inventory records should reflect how materials are stored and controlled in the warehouse.
A regulated manufacturer may need separate arrangements for materials awaiting inspection, released stock, rejected materials, and temperature-controlled storage. NetSuite locations, bins, and inventory statuses should be configured to support these operational distinctions.
For example, a newly received ingredient may need to remain in quarantine until the quality team completes its review. The system's inventory availability rules should reflect that restriction so the material is not selected for normal production prematurely.
Rejected inventory needs similar controls to prevent it from being used or shipped through routine transactions.
These controls should work alongside documented procedures that define who can change a material's status, who approves its release, and how exceptions are recorded.
Where quality workflows need additional functionality, review Archer Insights' Quality Management System offering and determine how it fits with the company's NetSuite configuration.
4. Connect receiving with inspection and release
Receiving is where the inventory record begins. Missing information at this stage can create gaps that affect every later transaction.
Depending on the material and business process, receiving may need to capture:
- Supplier and supplier lot number
- Quantity and unit of measure
- Manufacture and expiration dates, where applicable
- Certificate of Analysis (CoA) or related documentation
- Inspection requirements and material status
- Storage location and bin assignment
The process should also define what happens when documentation is incomplete or inspection has not been completed.
For materials requiring incoming inspection, configure the appropriate hold or quarantine process. Define who can approve release and where the decision is recorded.
For example, if an ingredient arrives without the required CoA, the receiving process should direct the material into the appropriate review workflow rather than treating it as ready for production.
NetSuite can support the associated inventory transactions and records. Quality inspections, document management, and release approvals may require additional configuration, an integrated quality system, or other functionality.
The goal is to maintain a clear connection between supplier documentation, inventory status, and subsequent use of the material.
5. Configure and test FEFO picking
First-expired, first-out (FEFO) picking prioritizes inventory with the earliest expiration date. It helps organizations manage shelf life and reduce the risk of overlooking stock that expires sooner.
A useful FEFO process depends on three things: accurate expiration dates, suitable inventory and bin configuration, and picking rules that support the required sequence.
Imagine a warehouse holding two lots of the same ingredient. One expires in three months, while the other expires in nine months. When both are eligible for use, the picking process should prioritize the earlier-expiring lot if FEFO is the required rule.
Test this using inventory with different expiration dates stored in separate bins. Check which lot the system recommends, whether users can select another lot, and how exceptions are handled.
Also test expired stock, partially available lots, and inventory on hold.
The important distinction is between a picking preference and an enforced control. Confirm what the configured system actually does before describing FEFO as mandatory.
6. Establish a consistent cycle count process
Cycle counting helps maintain accurate inventory records throughout the year. For regulated businesses, it also provides evidence of count activity, discrepancies, investigations, and adjustments.
Start by defining which items should be counted and how frequently. Inventory value, transaction volume, material criticality, and internal control requirements can help determine the schedule.
The process should establish who performs each count, how variances are investigated, and who can approve inventory adjustments.
For example, a discrepancy involving an expensive ingredient may require more than correcting the quantity. The team may need to review receiving transactions, production consumption, transfers, or transaction timing to understand the cause.
Where supported by the configured functionality, manage count activity and associated records in NetSuite. If any steps happen in a separate system or on paper, define how the results and approvals become part of the official inventory record.
Clear responsibilities and documented follow-up help operations and finance teams maintain confidence in inventory balances.
7. Make inventory reporting useful for operations and finance
Inventory reports should answer practical questions without requiring teams to repeatedly export data and combine spreadsheets.
Depending on the company's requirements and reporting setup, useful views may include:
- Lot traceability in both directions
- Inventory aging and expiration dates
- Quantities by location, bin, and inventory status
- Cycle count history and variance trends
- Inventory valuation by item and location
- Visibility into quarantined, rejected, or restricted stock
Each team needs a slightly different view. Warehouse managers need to know which stock is available to pick. Quality teams need visibility into material disposition and supporting records. Finance teams need reliable quantities and valuation information for reconciliation.
Some reports may be available through standard NetSuite reporting, while others may require saved searches, SuiteAnalytics, integrations, or additional configuration.
Define the reporting requirements early and test them against actual transactions. This helps ensure that the information management receives is consistent with the underlying inventory records.
Prepare your inventory configuration before go-live
A successful NetSuite inventory implementation starts with the way materials move through the business.
Document the process from supplier receipt through inspection, storage, production, and distribution. Identify which items need lot or serial tracking, how inventory status affects availability, and which approvals and records are required.
Then test the complete process using realistic scenarios. Include routine transactions, exceptions, and traceability exercises that connect incoming materials to finished products.
For regulated processes, determine the appropriate validation activities and documentation based on the system's intended use and the company's quality procedures.
NetSuite can support important inventory management and traceability processes, but the outcome depends on the configuration, selected functionality, integrations, and procedures surrounding it.
FAQs
Can NetSuite support lot traceability for life sciences companies?
Yes. NetSuite supports lot tracking and inventory transaction history. The ability to trace materials from receipt through production and distribution depends on the selected functionality, configuration, transaction practices, and connected systems. Test both forward and backward traceability against actual business processes.
Does NetSuite automatically enforce FEFO?
FEFO behavior depends on the available functionality and how inventory and picking rules are configured. Confirm whether the system recommends the earliest-expiring stock or restricts alternative selections, then test the process using representative inventory scenarios.
How should pharmaceutical manufacturers manage quarantined inventory in NetSuite?
The inventory setup should reflect the material's status and control its availability for relevant transactions. The process should also define inspection requirements, release approvals, exception handling, and supporting records. Test the configured controls before go-live.
Can NetSuite replace a quality management system?
NetSuite can support inventory, purchasing, manufacturing, and financial processes, but it should not automatically be treated as a replacement for a dedicated quality management system. Define which system owns each quality record and workflow, including any required integrations.
What should be tested before a regulated inventory system goes live?
Testing should cover receiving, lot and serial assignment, inventory status changes, quarantine and release, production consumption, FEFO picking where applicable, cycle counts, adjustments, and end-to-end traceability. The scope and evidence should reflect the system's intended use and the organization's quality procedures.