The new AX 2012 R3 Warehouse Management functionality includes improved flexibility in the inventory reservation process. There were challenges in the past around the system trying to reserve items at too granular of a level, resulting in the system being too restrictive for use in many scenarios. With the introduction of AX 2012 R3, there have been significant changes that make the use of reservation hierarchies more attractive with out-of-the-box AX. All examples used in this blog post are derived from Microsoft Dynamics AX 2012 R3 Contoso demo data.
You can find reservation hierarchies in the new Warehouse Management module. See: Warehouse Management -> Setup -> Inventory -> Reservation hierarchy
When goods are sold, inventory must be reserved to fill the orders. This reservation process will follow the rules of your reservation hierarchy. It must, at minimum, reserve inventory on 3 variables: Site, Warehouse, and Inventory Status. Site and Warehouse tells the user where the inventory is, and inventory status ensures that nothing which should be blocked from reservation (such as damaged goods) can be reserved. Other possible attributes that can be reserved against include License Plate, Batch Number, and Serial Number.
The location of the inventory being reserved is deliberately omitted from this list. This allows the person doing reservations to disregard where in the warehouse an item is and allow the warehouse team to determine from where inventory should be pulled during picking. This also allows the warehouse team to complete inventory moves and replenishment without being thwarted by inventory reservations that keep them from completing work against inventory in a specific location.
The way this works is that in your reservation hierarchy the system will reserve items in the order you have specified until it reaches the Location attribute. All attributes above Location will be marked for reservation, and all attributes below and including Location will not. In the example below, your sales team is prevented from selling more inventory than you have in your warehouse (or ordered, depending on your use of inventory statuses and blocking), and not allow them to dictate from what Location, License plate, or Batch number is chosen for picking.
If the person inputting the sales order into AX should have the ability to dictate the batch number, then the Reservation hierarchy should look like this:
Please note that these Reservation hierarchies work in concert with the rest of the new Warehouse Management module in Microsoft Dynamics AX 2012 R3. Warehouses using this functionality must have the advanced warehousing functionality enabled along with a number of other configurations in order to work properly. Stay tuned for future blog posts on AX 2012 R3 WMS systems and other functionality.
Understand the benefits of Supply Chain Management Software for your organization by breaking down the key features and taking an in-depth look
Learn accounts receivables automation benefits and best practices from readiness through to implementation. Introduction As businesses grow and scale, managing accounts receivables
Learn how automation for 3PL companies helps them to overcome many of the issues facing the 3PL industry today. Introduction In recent
Discover how Avantiico helps you improve business processes, provide customers with a seamless experience and transform the way you do business.