Reservations in Dynamics AX is a powerful and important function of the inventory and sales process for any company when dealing with multiple warehouses and hundreds or orders coming in and out. This is why leveraging the Dynamics AX functionality for item reservation is pivotal for companies as a control, so that they don’t run into issues related to insufficient stock, or promising inventory to customers when you don’t have the inventory to fulfill the order. Setting up item reservations in the system can be a bit complicated because the system gives users so many different options, but understanding this setup can be an extremely valuable tool to build the model that users want for item reservation.
One of the most pivotal areas of the above reservation setup is the Physical Inventory checkbox. Checking this box for a storage dimension, means that the system will check at the time of an order, whether or not the inventory is physically in that site/warehouse/location (whatever dimension is being utilized). Without the Physical Inventory checkbox active for each storage dimension that you are utilizing, the system will allow you to place orders and make reservations when you have insufficient stock in that storage dimension.
Another important setting revolving around item reservations is setting a warehouse as “Mandatory for Selling”. To change this setting for an item, go to the item page, and then the Manage Inventory tab, to Site Specific Order Settings, and set a default warehouse. From here, make sure the mandatory warehouse option is active. With this option checked, you will not be allowed to make item reservations- whether they are mandatory or automatic reservations- for any other warehouse. This is done on an item-to-item basis, so certain items can have mandatory warehouses, and other cannot.
As an example, myself and a few other consultants ran some tests to see how the system reacts to different combinations of physical inventory setup on storage dimensions. The results were as follows:
Test #1: Manual reservation of sales order line, with the Site & Warehouse inventory dimensions active and checked for physical inventory, and sufficient on-hand inventory for the sales order line in the site and warehouse.
Results: The order line was reserved
Test #2: Automatic reservation of sales order line, with the Site & Warehouse inventory dimensions active, but only the site checked for physical inventory, and insufficient inventory for the sales order line in the site and warehouse, but sufficient inventory available in a different warehouse.
Results: The order line was reserved, despite the warehouse not having sufficient inventory
Test #3: Manual reservation of sales order line, with the Site & Warehouse inventory dimensions active, but only the site checked for physical inventory, and insufficient inventory for the sales order line in the site and warehouse, but sufficient inventory available in a different warehouse.
Results: The order line was not reserved upon creation, but was reserved upon the posting of the picking list
Test #4: Manual reservation of sales order line, with the Site & Warehouse inventory dimensions active, but only the site checked for physical inventory, and insufficient inventory for the sales order line in the site and warehouse, but sufficient inventory available in a different warehouse. A different warehouse is checked as the mandatory warehouse for selling for the item.
Results: The system gives an error when trying to create the sales line, because a different warehouse is the mandatory warehouse for selling
These tests shed light on the reservation process within the system and show some of the potential pitfalls of the system if the end users are not careful. Look at tests 2 & 3 for example: Even having no inventory in the warehouse that we are using, the system allowed the reservation to go through because we did not have the physical inventory tracking active at the warehouse level. These potential pitfalls are something to watch out for, and knowledge of this parameter setup can help streamline the system and tune it the needs of each company.