Advanced Inventory Allocation for Sales Orders in Dynamics GP

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Once in a while, we implement supply chain solutions that need more powerful allocation approaches than the standard options within Dynamics GP.  Dynamics GP allows a few options as configured within the Sales Order Setup window.  There are 3 options you can select:

1)      Line Item – as items are entered into a sales order, the inventory is allocated.  This is the default setting for sales orders.

2)      Document/Batch – items on sales orders are allocated as part of a document allocation or batch allocation.  This setting relies on the Allocation Fulfillment Options window found in the Sales Transaction Entry window or the Sales Batch Entry window.

3)      None – Allocation occurs at the time the order is invoiced based on the final document type setup on the invoice.

When a customer is not using lot numbers, serial numbers, or bin tracking in GP, then allocation is soft, meaning there are no true limitations to how the items are distributed to a specific customer.  On the other side of the coin, if you are using serial or lot tracking in GP, unless you pre-assign these lots/serial numbers (cumbersome) in the sales order entry process, these items cannot be hard allocated to a customer’s order either.  To avoid pre-assigning lots, we find that most customers wish to move lot and serial tracking to our system (WithoutWire™ Warehouse WMS) so that allocation can still be done without an attempt to pre-assign lots and serial numbers at the time of sales order entry.  Accolade Publications has a great article on allocations and backorders.

For clients who deal with very limited supply combined with high volume operations, these standard options aren’t optimal.  In these environments, you may also have high priced ticket items which can put pressure on the operations team to get it right without mistakes.  To make matters even more challenging, sales persons as well as key customers often get priority over other low volume accounts.

The challenges of allocation for these Dynamics GP customers require what-if-scenarios and fulfillment planning to optimize the fulfillment of orders to meet specific business goals.  To meet these needs, Appolis and our WithoutWire Warehouse system has developed a comprehensive approach that combines a mix of business rules and automation with management’s ability to review and analyze as quickly as possible how to execute on fulfillment needs.

First, we have created various execution buckets which we simply call groups.  These groups break down orders into logical sets that translate to how decision makers want to view their fulfillment requests (orders).  For example:

1)      Promotional or Sample orders – this is a group which can be used to filter out orders that are lower priority.

2)      Key Customers – by creating a group known as key customers, orders created in GP for these customers are automatically moved into this group to view as a set with priority.

3)      Allocated – once a set of orders are marked as “Allocated”, they are moved to a group called Allocated so that the list of allocated orders can be released as a group to be picked.

The allocation management screen shows allocated, super allocated, fill rate, and super fill rate.  Here are the definitions of these terms as defined in our system:

Fill Rate = % of qty ordered that can be allocated and fulfilled.

Allocated Qty = qty ordered that can be allocated and fulfilled.

Super Fill Rate = % of qty ordered that can be allocated and fulfilled if the order is top priority within the selected Group.

Super Allocated Qty = qty ordered that can be allocated and fulfilled if the order is top priority within the selected Group.

From this allocation screen, operations can make some decisions and create some what-if-scenarios but marking any number of orders to be moved into the allocated group.  Once these orders are moved, the screen is updated with new allocation information so further decisions can be made.  If the operator decides that too many orders were moved to allocation, then they can adjust orders back into the unallocated status and continue until an optimal solution is met.  The concept of Super Allocation provides the operator with what would happen if this order got number 1 priority for allocation.

Once orders are picked and completed, quantity shipped information is updated in Dynamics GP and allocation can occur at the point of invoice.

Allocation is a very large topic.  In a future post, I will expand this to discuss customer owned inventory and generic inventory and how to manage them effectively.  I hope this quick overview at least gives you some key concepts that will help you solve your own challenges to making sure that the right customer gets the right product at the right time.

By Travis Smith, CTO/Founder – Appolis, MN Microsoft Gold Certified ISV Partner


1 thought on “Advanced Inventory Allocation for Sales Orders in Dynamics GP”

  1. I use Sales Order of MS Dynamics GP 2015. When I am update Sales Orders by using option Sales Batch it's not update Allocated Quantity of table IV00102

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