From Purchase to Delivery - Managing Entire Inventory with Odoo

Odoo helps manage inventory easily from purchase to delivery. It links Purchase, Inventory, and Sales apps. You can see stock levels in real time for better control.

Let's examine the cycle in greater detail:

Purchase Management: Procuring Goods

When your company decides that stock replenishment is necessary, the cycle starts. Two choices are offered by Odoo:

• Manual Purchase Orders (POs): When you need products, you can directly create a Purchase Order using the Purchase app.

• Automated Reordering Rules: Set lead times, minimum stock levels, and preferred vendors. When stock drops below the set level, Odoo automatically creates a Request for Quotation.

Once a PO is confirmed, the next step begins: Incoming Shipments.

Inventory Receipt: Goods Enter the Warehouse

When the suppliers ship goods, Odoo creates an Incoming Shipment (Receipt) inside the Inventory application.

• The receipt can be verified by warehouse employees.

• Batches or lot numbers can be tracked, which is useful for industries like electronics, food, and pharmaceuticals.

• Quality checks can be enforced using Quality Control Points.

After validation, products are ready for manufacturing or sales, and stock levels are updated instantly.

Stock Management: Keeping Control in Real-Time

The inventory app in Odoo records and tracks all movements of goods.

• Multiple Warehouses & Locations: Stock by physical or virtual locations.

• Putaway & Removal Strategies: Define how products are stored (FIFO, LIFO, FEFO).

• Inventory Valuation: Setup costing methods (Standard Price, FIFO, AVCO).

• Traceability: Track products by serial number or lot number.

• Internal Transfer: Products can be moved between warehouses with full tracking.

 Thus, businesses know exactly what is there, where it is located, and its financial valuation.

Putaway & Removal Strategies

These decide how products are stored and picked in the warehouse.

• FIFO (First In, First Out): Oldest stock is used first.

• LIFO (Last In, First Out): Newest stock is used first.

• FEFO (First Expired, First Out): Items with the earliest expiration are used first.

In Odoo, go to Inventory -> Configuration -> Product Categories to set this up. Benefits include better use of stock, less waste, and happy customers.

Inventory Valuation

This is how stock cost is calculated for accounting.

• Standard Price: Fixed cost per item. Simple and reliable.

• FIFO: Cost comes from oldest stock. Good for changing prices.

• AVCO (Average Cost): Uses the average price of all purchases.

Go to Configuration -> Inventory -> Settings -> Odoo Product Categories to set costing methods. This helps keep financial reports and COGS correct. Automation saves time and reduces mistakes.

Sales and Delivery

• When an order is confirmed, Odoo checks stock automatically.

• If stock is enough, it is reserved for delivery.

• If stock is low, Odoo can create a purchase or manufacturing order.

• After delivery, Odoo updates stock and reports automatically.

Accounting Integration: Closing the Loop

Every movement in Odoo can be linked with accounting:

• Vendor Bills are generated from Purchase Orders.

• When goods are delivered, the Cost of Goods Sold (COGS) is automatically determined.

• Invoices are generated from Sales Orders.

This gives inventory control a comprehensive financial overview.

Reporting and Forecasting

The reporting features in Odoo provide thoughtful information:

• Current Stock vs. Anticipated Amount

• Analysis of Lead Time (reliability of suppliers)

• Reports on Reorders

• Reports on valuations for accounting compliance

• Companies can minimise stockouts and lower holding costs by making data-driven decisions.

Example Flow: A Real-World Scenario

1. The low stock of "Laptops" is detected by the reordering rule.

2. For the selected supplier, Odoo automatically generates an RFQ.

3. The PO is confirmed ->Incoming shipment is created.

4. Warehouse validates receipts, and laptops move into stock.

5. A customer places an order for 5 laptops ->Delivery order is generated.

6. Warehouse staff pick, pack, and ship ->Stock updated in real-time.

7. Sales invoice generated and linked to delivery.

8. Accounting automatically records purchase, delivery, and sales entries.

Why Odoo for End-to-End Inventory?

• One integrated platform (not requiring separate tools).

• Location-wise stock visibility in real-time.

• Automation reduces human errors and frees up time for more important tasks.

• Flexible and scalable—perfect for both small businesses and large enterprises.

Step-by-Step Setup in Odoo

Step 1: Install the Required Apps

Go to Apps ->Install:

1. Purchase

2. Inventory

3. Sales

4. Accounting (optional)

Step 2: Configure Warehouse

Inventory ->Configuration ->Warehouses ->Create

1. Name: Main Warehouse

2. Address: Warehouse location

Go to Settings ->Inventory ->Multi-Step Routes

1. It will allow more option to configure in warehouses

Incoming Shipments

When receiving products from vendors, Odoo lets you manage the process in 1, 2, or 3 steps:

1. Receive and Store (1 step): Products go directly from vendor to stock. Example: Vendor delivers 100 laptops ->confirm receipt ->stock updated.

2. Receive then Store (2 steps): Products first arrive at a receiving area, then moved to stock. Example: Laptops unloaded at the dock ->later stored on shelves.

3. Receive, Quality Control, and then Store (3-step process): In this warehouse operation, upon arrival, products pass through quality checks before entering into storage. It is necessary for any company dealing with pharmaceuticals, electronics, or food, amongst others. 
   Example: Laptops arrive ->inspected for defects ->approved units go to stock.

Outgoing Shipments

Odoo supports shipping methods all through 1, 2, or 3-step processes:

1. Deliver (1 step): Stock goes directly to the customer. Example: 10 laptops shipped directly from stock.

2. Pick then Deliver (2 steps): Products are picked and moved to a dispatch area before delivery. Example: Laptops picked from shelves ->moved to dispatch ->delivered.

3. Pick, Pack, and Deliver (3-step process): Products are picked, packed, and labeled for shipping. This is ideal for big warehouses or e-commerce. Example: Laptops picked ->packed in boxes with labels ->shipped to customer.

 

Step 3: Configure the Items

1. Products ->Inventory ->Name of creation: Laptop Model X

1. Type of Product: Stockable The item

2. ₹50,000 is the sales price.

3. Price: 45,000

4. If necessary, enable tracking (lot/serial).

Step 4: Configure Vendors

Purchase ->Vendors ->Create

1. Vendor: Laptop Supplier Ltd.

Inventory ->Product ->Inventory Tab

1. Product: Laptop Model X

Step 5: Set Reordering Rules (Optional)

Inventory ->Products ->Product ->Reordering Rules Smart Button->Add a line.

1. Minimum Quantity: 5

2. Maximum Quantity: 20

When stock levels are low, Odoo automatically generates RFQs.

Step 6: Make a Purchase Order

Purchase ->Orders ->RFQ ->Create

1. Vendor: Laptop Supplier Ltd.

2. Product: Laptop Model X

Confirm order ->triggers incoming shipment in Inventory

Step 7: Receive Products

Inventory ->Operations ->Transfers ->Receipts

1. After the products are delivered, click Validate.

2. Automatic stock updates

Step 8: Create a Sales Order

Sales -> Orders -> Create

1. Customer: ABC Pvt Ltd

2. Product: Laptop Model X

Verify -> Delivery Order automatically generated

Step 9: Deliver Product

1. Inventory -> Operations -> Transfers -> Delivery Order

2. Select, package, and ship, then Verify

3. Stock levels drop, and an automated invoice is produced.

Step 10: Track Inventory & Reports

Inventory ->Reporting ->Inventory Valuation ->Track stock value

Conclusion

The software ensures that every process, from purchasing and warehouse management to inventory control and delivery, is seamlessly connected, automated, and completely transparent. By integrating these key operations, it minimizes manual intervention, reduces errors, and provides real time visibility into stock levels and movement. Odoo stands out as a powerful choice for modern inventory management systems, enabling businesses to achieve higher efficiency, better stock accuracy, faster order processing, and greater customer satisfaction.