License Plates and Warehouse Management in Dynamics AX 2012r3 Series 2

Originally introduced in Microsoft Dynamics AX 2012 R3 Warehouse Management System (WMS), and improved upon in subsequent releases, license plating is an effective tool for tracking inventory. License plates in Dynamics AX are a unique ID that can be barcoded and assigned to a pallet, location, forklift, etc. They are useful in warehouses where inventory needs to be tracked at a more granular level than just a location. In a dock location, for example, license plating your pallets of incoming goods allows your forklift operators to know what inventory came from which shipment, as well as what they should put away first. License plates allow you to track back items reviewed in Quality Control (QC) to a specific vendor, and offer an alternative to the higher-overhead lot tracking needed to handle First-In-First-Out (FIFO) in your warehouse. License plates are integrated with the Warehouse Mobile Device and other functionality in the Warehouse Management module.

This blog post will focus on the implications behind three decision points required to setup the use of license plates and highlights improvements to the functionality since its original release. Please note that depending on your requirements additional setup may be necessary.

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Cindy Scott

AX Senior Consultant

Note: This article was updated in 2018 with new information and improved answers!

Decision 1:

> When and where should you use License Plating in your warehouse?  Here are two scenarios:You have a warehouse where goods are manufactured or purchased. You want them license plated by pallet once they are received or become finished goods. Those goods are then put away in bulk locations, still being tracked by license plate. When your picking locations are replenished from bulk, you will take a whole pallet of inventory (a license plate) and place it at a picking location. You want to practice strict FIFO, so you continue to track inventory by License plate and have your picking team pick directly from a license plate; at this point a unit of inventory will no longer be associated with its initial license plate. Instead the Picker will have what is considered a “traveling pallet” with its own license plate (alternatively the Picker can have a license plate associated with themselves). Therefore, the quantity of the item being picked will be reduced on the original license plate and increased on the traveling license plate. The picked quantities will then be delivered to a staging area where the shipment of goods has a license plate for tracking purposes until it is shipped to a customer.

> Alternatively, it might be too much to ask your picking team to distinguish inventory by license plate. If the picking location is replenished and license plate tracked, and the system directs the Picker to take a unit from a license plate that is not easily accessible, it can significantly slow down the picking process. In this case you would want to keep your bulk locations license plate tracked to respect FIFO, but leave your picking location non-license plate tracked; the rest would be the same. The end result would be that items that move into the picking location will lose their license plate and be indistinguishable from other pallets of goods in the system. When picked for shipment, those goods would follow the same process seen in Scenario 1.

Microsoft Dynamics 365 license plates and warehouse management

These are two of many scenarios to highlight the considerations needed to determine how license plate tracking fits into your Warehouse Management process. To configure this functionality to fit your needs, go to Warehouse Management > Setup > Warehouse Setup – Location Profiles. The Location Profiles are each assigned to a Location. The option in question is called “Use license plate tracking”.

Microsoft Dynamics 365 license plates and warehouse management

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Decision 2: To what unit should inventory be grouped for license plates?

If your warehouse receives many boxes of an item that is combined onto a pallet, it makes sense for that pallet to share one license plate instead of putting one on each box of inventory. License plating boxes of goods requires a great deal of overhead in scanning for your warehouse team. Dynamics AX allows you to configure how to inventory units in a more granular level by use of Unit Sequence Groups with individual attributes. Unit Sequence Groups are then assigned to your released products. To find Unit Sequence Groups navigate to Warehouse Management > Setup > Warehouse Setup > Unit Sequence Groups. In the above screenshot the Unit Sequence Group is configured to use Pieces, Boxes, and Pallets. Pieces and Boxes are meant to be grouped onto Pallets for license plating, but Pallets are not designed to be grouped together (note the box Is not checked for license plate grouping for the Unit type Pallet (PL). A unit conversion from Pieces to Boxes to Pallets may be set up in the background.

Dynamics 365 inventory reservation screenshot

Decision 3: How does your Reservation Hierarchy affect license plating?

Dynamics AX WMS was not designed to reserve goods down to a License Plate level; instead, it is designed to reserve goods against a location which automatically dictates a license plate to pick from if appropriate. To understand how your hierarchy is currently set up, head to Warehouse Management > Setup > Inventory > Reservation Hierarchy. See our previous blog post on Reservation Hierarchies for more detail behind this functionality.

Summary of Improvements

Since the initial release in Microsoft Dynamics AX 2012 R3, license plates have received a number of improvements to their functionality.

1. License Plate Receiving:

This enables you to use license plates when inventory is provided by a vendor through use of an Advanced Shipping Notice (ASN). You can then receive the products using the pre-specified license plate as well as separate the put away work from the receive actions.

  • Prior to R3 CU10 this was only possible when receiving and put away work were combined.

2. Mixed License Plates Receiving:

As part of CU11 you are now able to receive a mixed license plate. A mixed license plate is one where multiple items are associated to a single license plate. Now, when your warehouse employee receives a mixed license plate they can do so without the use of an ASN.

All of these changes and more are incorporated into Microsoft’s newest release, Dynamics 365 for Operations.  Look for future blog posts about this functionality demonstrated in Dynamics 365 for Operations.

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