Manufacturers are getting more flexibility in the 2021 wave 1 release of Microsoft D365 with the ability to override the default reservation principle for production materials. As part of D365 Supply Chain Management, this new functionality adds more control to how and when raw materials are reserved in the warehouse for a production order. In addition to impacting the reservation, this feature gives enhanced control of warehouse pick work generation for each raw material used in production.
The previous versions of D365 and AX had a single parameter in the production control parameters that set the production reservation principle. This parameter was either set to Estimation, Scheduling, Release, Start, or Manual.
For many organizations, setting the production reservation to occur at Release is a great option. Release signifies that the order is released to the floor, and this often coincides with being ready to reserve for (and execute) picking work. If a reservation is generated too early, you may create conflicts for materials designated for an order expected to run earlier in the schedule, so release aligns reservations with the processing of an order.
For some organizations, reserving earlier in the production process makes more sense. For example, if you have a make-to-order product designated for a specific customer, you may want to ensure reservations for materials occur when a promise date is made. This helps ensure the materials are available and not given to another order.
Setting the reservation to Manual is ideal in situations where you don’t want to reserve inventory or create warehouse directed picking work. If your inventory is in tanks, silos, or vats then often the picking is done via conveyors or pumps and the determination of where to pull from is a manual decision and not system directed. Creating a reservation against the inventory and using warehouse processes to pick is an added step that does not align with the physical process. With bulk inventory it is often preferable to monitor the amount consumed from a tank or silo and register actual consumption at the end of a production run.
Previous versions of D365 and AX restricted you from differentiating between principles automatically. You were limited to the production control parameter or overriding the parameter at the time of production order creation. In both cases the principle selected applied to all raw materials on a production BOM or formula.
In the latest release, you can now setup different item model groups that use a different reservation principle and apply those to items based on how we want them to reserve in the warehouse.
In the example below, an item using the Standard item model group would be reserved when a production order is released, and if we were using warehouse management processes, pick work could also be created. The Bulk item model group could then be applied to items that we didn’t wish to reserve automatically during the production process.
More D365 Supply Chain Resources
Supply chain and logistics professionals are getting a significant boost in inventory visibility as part of Microsoft Dynamics 365 2021 release wave 1. Learn more about: