Transfer order process in Dynamics 365 Finance and Operations - Functional consultant series

Managing inventory across different locations is a critical aspect of any supply chain operation. In Dynamics 365 Finance and Operations, the Transfer Order process offers a structured way to move inventory between warehouses, ensuring accuracy and efficiency. This blog explores the step-by-step process, key features, and best practices for setting up and executing transfer orders effectively.

What is a Transfer Order?

A transfer order facilitates the movement of inventory between warehouses or locations within the same company.

• Use Cases
• Replenishing stock in different warehouses.
• Optimizing inventory levels across locations.
• Supporting internal logistics and distribution.

Picking Process under Transfer order processing

What is a Picking List in Dynamics 365 Finance and Operations?

A picking list in Dynamics 365 Finance and Operations is a document or record that specifies the items and quantities to be picked from inventory for a specific transaction. It serves as a guide for warehouse personnel to locate and prepare items for shipping, production, or transfer.

Key Features of a Picking List

1) Purpose:

1. Facilitates the process of selecting items from inventory.
2. Ensures accurate and efficient order fulfillment.

2) Usage Scenarios:

1. Sales orders: Preparing items for customer shipment.
2. Transfer orders: Moving inventory between warehouses.
3. Production orders: Supplying raw materials for production.

3) Components of a Picking List:

• Item details: Product name, item number, and description.
• Quantity: Number of units to be picked.
• Location: Warehouse, aisle, bin, or shelf where the item is stored.
• Batch or serial numbers (if applicable).

How to create Transfer order in Dynamics 365 Finance and Operations

Scenario: Consider an item, "FGEXP001," that needs to be transferred from the source warehouse, "P_KRM," to the destination warehouse, "SD_DMZ." At present, there is no stock of this item in the "SD_DMZ" warehouse.

TO Process

1) Go to Inventory Management> Outbound Transfer > Transfer order

2) Click on the New button to create a new Transfer Order (TO). Specify the From warehouse as "P_KRM" and the To warehouse as "SD_DMZ." In the lines section, select the item and enter the desired demand quantity.

3) Navigate to the Ship tab and create the picking list.

4) Post the picking list.

5) Set the Ship now quantity in cases where the physical stock available in the warehouse is less than the requested quantity and negative inventory is not permitted. Alternatively, adjust the quantity if the shipment vehicle has limited capacity, making it impossible to deliver 100% of the demand in a single shipment.

6) To ship the transfer order, go to the Ship tab. Within the Ship tab, click the button labeled "Ship the transfer order".

7) Once the shipment is completed and the customer who requested the transfer receives it, navigate to the Receive tab and click the Receive button to post the receipt of the shipment.

After receiving the complete order, the status of the Transfer Order changes to Received.

Additionally, there are two more scenarios that need to be addressed.

Scenario 1: The customer initially requested 15 units of an item. You shipped the 10 units initially and the customer received 10 units. The remaining 5 units were planned for the next shipment, but the customer informed you that they no longer want the remaining 5 units. In this case, you can simply cancel the remaining quantity using the Delivery remainder option available under the Transfer order lines as shown in the figure below..

Scenario 2: The customer originally requested 15 units of an item. You shipped 10 units initially, but the customer received only 8 units, as 2 units were defective. Additionally, the customer has informed you that they no longer want the remaining 5 units that are yet to be shipped. What happens in this scenario?

The solution is to first fully receive the order and cancel the remaining quantity still to be shipped using the Delivery remainder option available under the Transfer order lines. After completing this setup, create a new transfer order to move the defective quantity (2 units in this scenario) to either the Damage warehouse or the Source warehouse.

Scenario 3: The customer originally requested 15 units of an item. You shipped 10 units initially, but the customer has yet to received. Additionally, the customer has informed you that they no longer want the shipment. What happens in this scenario?

The answer is that you need to cancel the shipment from the option below.

Go to the Transfer order history

Click on Cancel button

A confirmation dialog will show you. Select Ok.

Once you press ok, the system will automatically set stock back from the Transit warehouse to the From warehouse.

Happy Learning,

Syed Amir Ali.