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Before using the Warehouse management only mode, the new feature must be enabled and a few things must be set up, such as the new source system, number sequences, and a new product. Below are the details on how to set up the environment and the first things, which will be followed by some information on the general workflow.

Enable the Warehouse management only mode feature

First, we'll enable the Warehouse management only mode feature in the feature management workspace. Doing this will make this D365 environment use the Warehouse management only mode. 

After you see the message confirming the enablement, refresh the webpage completely and the changes should now be visible across the environment.

Once the new feature is enabled, several new forms are available under the WMS module. These are grouped into Inbound shipment orders and Outbound shipment orders, respectively.

NOTE: I am still able to use normal purchase orders and sales orders as source documents and process them just like before. Some may have expected this to be blocked, but in fact, this is intentional. For example, some organizations will likely utilize outbound shipment orders in combination with sales orders. This would make sense for anyone managing consignment stock for another sales entity alongside the stock they are managing for their own entity.

Configure source systems

Source systems are a list of external systems (ERPs) that you want to integrate with your D365 Warehouse management only mode. Navigate to Warehouse management > Set up>  Warehouse management integration > Source systems.

Once you have it opened, it will be empty. So go ahead and create a new record. Make sure to call it “ERP” (source system field). This naming is necessary for the later purpose of this demo. In practice, you would name this based on your needs and the systems you are integrating with (e.g. Business Central, NetSuite, SAP, Odoo, etc.).

As part of source system creation, the necessary automated background processes are automatically created:

1. Post shipment packing slips, used to process the outbound shipment order finalization process.
2. Post shipment receipts, used to process the inbound shipment order finalization process.
3. Process shipment order message, used to process inbound and outbound shipment order messages.
4. Process source system product messages, used to process product related messages. 

Now let’s review the options that are available here. For more thorough information about each, hover over the fields in the form and you will see the help text provided. I’ll try to concise the important information here. 

General

Under the General tab, you can define which of the systems should be used for product master mapping and as the inventory owner.

1. Product master source system – identifier of the source system that maintains the product’s master data mapping integration.
2. Default inventory owner – who will be the owner of the inventory when using the warehouse processes. It can be used only in situation where there is more than ne related Warehouse inventory owner. If there is a single one, it will be used as default.

Outbound shipment orders

Outbound shipment order fulfillment policy - you can create a fulfillment policy. This policy defines the percentage of quantity or price the outbound shipment must reach before it can be released to the warehouse.

I chose to create a 100% quantity fulfillment rate requirement for my testing. This means that my warehouse will have to have enough inventory to reserve the complete order.

In this setup, the Fullfilment validation messages can be defined, which provides an option to allow deviations from the set fulfillment rate or not.

Outbound shipment processing policy – defined whether the outbound orders can have one or more related shipments created.

1. Fill entire shipment – define whether an entire shipment must be filled before processing it. Options here are:
   1. Respect settings – default settings or setup on another place will be respected
   2. Disabled – disabled regardless of settings on another place for filling the entire shipment
   3. Enabled – enabled regardless of settings on another place or filling the entire shipment
      

      Note: This parameter is introduced also on the Sales orders and Customer records. If set on the customer level, all sales orders for that customer will inherit the same value. In WOM case, all outbound shipment orders for this Source system will inherit the parameter value and it cannot be changed on the order itself.

2. Enforce shipment to order matching – when enabled, an outbound order can have only one shipment related to it 

Reservation policy at import – this defines whether the quantities from the outbound shipment order messages should be immediately reserved by the system or not. The options offered are:

1. Delay reservation – when used, WOM does not reserve any inventory requested in the OSO, i.e. a manual reservation process is required.
2. Allow partial reservation – when used, WOM will automatically reserve as much inventory as possible based on the OSO message request.
3. Require full reservation – when used, the system will not process any OSO message where the inventory requested is not fully available in WOM at the time of processing the message.
   • This option should be used when the source system is expected to have full knowledge of available inventory in WOM at all times.

Is reservation policy mandatory – define whether the specific value in the Reservation policy at import must be enforced or not.

Outbound shipment order consolidation policy – define whether the standard shipment consolidation policy should be used during release to warehouse or not. The options are therefore:

1. Use shipment consolidation policies – use when the WOM is expected to try to consolidate the OSO into optimized shipments based on the defined rules.
2. Always release shipment orders separately – use when the source system is handling any shipment consolidation or optimization and WOM is not using any further logic to optimize shipment creation (consolidation), i.e. OSO : Shipment = 1 : 1

Convert cross dock request to marking – define when the cross-dock requests are converted to inventory transaction marking.

1. Never – cross dock requests are never converted to marking. Use this option if you do not intend to use cross dock requests.
2. At release to warehouse – cross dock requests are converted to inventory marking before planned cross docking is processed during release to warehouse

Internal order number policy – specifies how an internal order number is created for an outbound shipment order when processing a message from the source system.

1. Use external order number
2. Use number sequences

Shipment packing slips posting delay – define the value to be used when calculating the journal creation date and time. I chose this to be 1 minute so that I don't have to wait too long during testing, but in reality, this would be every few hours or even once a day.

Enable manual outbound shipment order creation – defines if the OSO can be created manually in D365 for this source system. Useful to quickly mitigate the issue of potential message sending failure.

Enable warehouse inventory update logs – when enabled, OSO line transaction updates are included in the ‘warehouse inventory update log’ data.

Enable return details creation – enable creation of return details during container closing and during shipment confirmation for the source system.

• Select Yes, if return details receiving should be used. If using only blind returns, you can set this option to  
• Return id number sequence reference must be set, and the field must be enabled in the warehouse parameters (WMS parameters > General > Returns > Enable return details creation)

Inbound shipment orders

For the purposes of this demo, I’ve chosen to leave the standard values here, but there is still some exploration that could be done.

Internal order number policy – specifies how an internal order number is created for an outbound shipment order when processing a message from the source system. This offers the same options as the Outbound side.

Shipment packing slips posting delay – define the value to be used when calculating the journal creation date and time. I chose this to be 1 minute as well.

Enable manual inbound shipment order creation – defines if the ISO can be created manually in D365 for this source system. It is useful to quickly mitigate the issue of potential message sending failure from the source system.

Enable warehouse inventory update logs – when enabled, ISO line transaction updates are included in the ‘warehouse inventory update log’ data.

Enable returns process – when enabled, users are able to create inbound shipment orders for this source system, during return processing.

Return order type – the return order type from the source system, i.e. the name for return orders in your external system.

Source system items

Internal item number policy – defines how an internal item number is created for an item from the source system when processing a message from the source system

1. Use source system item number – when used, the internal item number is created by taking the item number from the source system and adding (optional) prefix or suffix to it.
2. Use number sequence – when used, the defined number sequence is used to allocate an internal item number

Product maintenance role – defines what should happen when a product is released

1. Maintain source system items – when used and product is released, source system item record will be created with the Source system item number matching the D365 item number

Inbound shipment order policies

Inbound shipment order policies are where we can set up how the inbound loads are created. I left the order type and consigner’s account number blank which means that this policy will be used for all inbound shipment orders. The options offered here are:

• Manual or ASN – complete manual control where the user must manually create an inbound load and where any changes in the inbound shipment orders must be manually reflected in the created inbound load.
• Create automatically – where a load is created automatically when an inbound order is created, but any changes in the order lines are not automatically updating the created load.
• Full synchronization – where a load is created and updated whenever any inbound order is created or updated. 

Delivery policy – the load delivery policy that is applied when confirming that the receiving of the inbound load is completed. The following options cover situations where there is a discrepancy between expected and actual received quantities.

• Adjust to received quantity – in case of discrepancy, the load line quantity gets adjusted to the received quantity.
• Must match received quantity – receiving completed confirmation will fail if received quantity mismatches load line quantity.
• Adjust and create new load for remaining quantity – The load lines' quantity gets adjusted to the received quantity. If under-receiving is detected against the load line, the remaining quantity gets added to a newly created load. This is done automatically.

Integration

Integration section defines some basic rules for message processing log and manual creation of order and product messages.

• Include message processing log in business event – defines whether to include the message processing log to the ‘Shipment order message changed status’ business event or not.
• Enable manual outbound shipment order message creation – defines whether the users can create OSO message manually for this source system
• Enable manual inbound shipment order message creation – defines whether the users can create ISO message manually for this source system
• Enable manual source system product message creation – defines whether the users can create product message manually for this source system

Configure the new number sequences

Now we must configure the new number sequences introduced with the WMS only mode by navigating to Warehouse management parameters > Number sequences.

When you first open this form, these six new number sequences will not have any number sequence defined. We must create these separately.

The easiest way to do this is to go to the Organization administration > Number sequences and press the Generate button.

This will take a while to execute, but it will create the new number sequences automatically. Just follow the short wizard after the process is done and refresh the number sequences page under the WMS parameters. Now, these should be populated, and we can continue.

Create new item model group and released product 

A new item model group is required that will not trigger any financial updates of the ERP (this is handled by the external ERP in the WMS only mode).

• Item model group
  • Inventory model – set to non-valuated.
  • Post physical inventory – turn off this option.
  • Post financial inventory – turn off this option.

Because all demo items in Contoso D365 environment have a legacy item model group assigned, we need to create a new released product and assign it to the new item model group. I created item W0001 called Radish Jam and will use it for further testing. The rest of the setup of the item is very much the same as with any other item. 

With that we conclude the initial system setup needed. In the next post, we will see some of the new forms introduced to the system and continue with the demonstration of other setup requirements. Continue to the next post in the series here.