Reservation hierarchies are a mandatory setup requirement in Warehouse Management.
A reservation hierarchy defines different levels on which reservations can be made at the time of sales order entry, and dictate which items will be reserved based on storage dimensions (site and warehouse) and tracking dimensions (batch and serial numbers).
The Site, Warehouse, Stock status, Location, and License plate dimensions are all required levels in a reservation hierarchy. Batch number and serial number are only required in the reservation hierarchy if they are being used and included in the tracking dimension group for the item (the tracking dimension group determines whether a specific item needs to be batch or serially tracked).
For example, the below Default Reservation Hierarchy defines that the item would be reserved at the Site, Warehouse and Stock Status level on a sales order, but the location (and licence plate) will be determined by the system when the picking warehouse work is created or processed.
In short, any dimension below the location dimension in the reservation hierarchy will not be specifically reserved until the order is allocated to the warehouse and warehouse work is generated for the warehouse worker to complete on the warehouse mobile application. Any dimension above the location dimension will be specifically reserved at the order level before warehouse release.
To assign a reservation hierarchy to a released product, a storage dimension group and a tracking dimension group must first be assigned to the product. Also, the physical tracking and storage dimensions that are listed for the product in the Storage dimension groups and Tracking dimension groups fields must correspond to the dimension fields in the reservation hierarchy.
To gain a better understanding of reservation hierarchy and its functions, it can be beneficial to examine a few examples that highlight the differences. Specifically, two distinct configurations of the hierarchy will be analysed, one in which the batch dimension is positioned below the location and one above the location dimension.
In this example, the reservation hierarchy has the batch dimension set below the location dimension in the reservation hierarchy. In this scenario, the customer does not need to specify or know the specific batch numbers at the time of placing an order.
When a sales order is entered, if an attempt to reserve a specific batch is carried out by clicking the Stock button on the sales line and then clicking the Batch reservation button
An error message will be received explaining that a specific batch cannot be reserved due to the batch dimension being below the location level.
In this instance, the sales order should be reserved by using the Stock > Reservation button instead, allowing the reservation at the Site, Warehouse and Stock status level.
Flexible reservation for batch-tracked items
Although this Batch-below[location] reservation hierarchy may fit a company’s business requirements well most of the time, there may be a requirement, for example, where a customer needs the same batch that they previously ordered, and therefore need to specify the batch number when placing the sales order. By selecting the Allow reservation on demand order, the batch number can either be reserved on the sales order or the system can reserve a batch number at a later time when the picking warehouse work is created. This feature allows the best of both worlds so to speak.
- The Allow reservation on demand order check box applies only to reservation hierarchy levels that are below the location dimension. By default, all dimensions above the Location level are preselected.
- When using the Allow reservation on demand order, all dimensions above that level and up through the Location level will automatically be selected. This behaviour reflects the logic where all dimensions in the range between the batch number and location are also automatically reserved after you reserve a specific batch number on the order line.
- Batch number and License plate are the only levels in the hierarchy that are open for this flexible reservation policy. In other words, you can’t select the Allow reservation on demand order check box for the Location or Serial number level.
In this example, the reservation hierarchy has the batch dimension set above the location dimension in the reservation hierarchy. In this scenario, the customer would typically need to specify the batch number or need to know what the batch number is at the time of placing the sales order.
When the Stock > Batch reservation button is now clicked in the sales order, all the available batches are displayed. The Reserve lot button can now be clicked (or manually entering a quantity against each batch) and the specified quantity will be reserved against the sales order.
Learning with Microsoft
Further information related to reservation hierarchies can be found on Microsoft Learn within the Configure warehouse management in Dynamics 365 Supply Chain Management learning path via the URL below.