JV B/C E5: The Inventory Mega-Episode

A quick chat about Fail Mountain, and then diving into a long tour of Inventory Basics with #msdyn365bc.  We talk about Availability, Ledger Entries, Location Setup, and Warehousing.  So much!

0:00:00-0:00:55 Pre-Intro Talk
0:00:55-0:01:28 Intro Music
0:01:28-0:05:27 Fail Mountain
0:05:27-1:05:31 Inventory in Business Central
1:05:31-1:07:15 Outro

Transcript

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Jeremy Vyska: 0:00

Good morning, everybody, and Good Day to everyone else who is listening to this different times, we are going to have a little bit of a different format this episode, I got a lot of questions from people, which by the way, you can hit me up on Twitter, LinkedIn, any number of places to ask, Can you cover this topic for me, please? I have gotten lots and lots of questions about items and inventory stuff. And honestly, we need the full hour to go over a lot of those different areas. So that's what we're going to be doing today. Have a little bit of a quick thing I want to talk to and then we're just going to dive into a lot of stuff that consultants implementers project managers, developers, you should all know this if you're doing inventory stuff. So let's get started. Forgot to do that a little overly fancy swooshing noise there. Alrighty, well. So, one quick thing, because I like to talk to a topic. That's important to me in the beginning parts of things before we get into business centrally sort of things. It was a thread that I posted last year that some folks have already seen, I'm sure but hey, new audience. And it's a concept that came up in, someone was struggling with the fact that they were having a really hard time working with the system, they felt like everything that they were learning, they felt very one step forward, two steps back, and that it was very difficult for them to feel like they were making any progress. And that happens a lot to folks in the startup community to that, you know, if you're running your own shop, there feels like there's always some thing, there's always more things to do that are setting you further back from your objectives. Trust me, I feel this is my third company as an interesting side note. And the best way that I ended up thinking about it was something that I had to help my son learn when he was much, much smaller, he would get very frustrated, because he was a bright little kid. And lots of things when you're a smart little kid. You go to try it, you might stumble once or twice, but then you got it, and you're done. And so learning is easy. Learning new stuff. It's easy. Oh, wow. Until it isn't. Not everyone can do everything like second or third drive. That's not life. Some things take some serious effort. And the way that I explained it to him, because as you have probably noticed, I'm a pretty big metaphor and simile sort of person is anytime that you're trying to do something new, and you've made a thing made an attempt whatever have you. It feels like a failure. And it just kind of sits there in your brain. Particularly if you're a spectrum person, IT failures sit really obviously in the brain. And it's just gonna sit there. And you might try again, and another failure sits there and they feel like they're start stacking up. Well, the thing about that is that eventually, that means that you can climb those little buggers, you're going to be able to reach higher and higher because you're stepping on all the things that you know, don't work. So we ended up calling this idea for because, you know, my kid was very little at the time, we ended up calling this fail mountain, you know that you got to climb fail mountain. And, you know, sometimes it's about having enough things that you've tried, that didn't work to pile them up and reach to a higher level. And sometimes the mountains just, you know, a real big challenge to hike up and it's already there. You just don't know what the skills you need to climb up the next part. You have to make the path to get further along and each time you have to give up go home and go back down to the bottom of mountain think About a little bit. So that happens a lot. It sometimes feels pretty awful. But learning what doesn't work is a very important skill. It's It's the foundation stone of progress, really. So anyways, I'm hopeful that while a very short little topic, it was one that I've talked to in the past, and I thought it would be fun to go through again, I really did want to save a huge chunk time to talk to inventory topics in Business Central, because it's a doozy of a topic. Well, there are going to be things that we're probably not going to get to today, there, there are things that this is an area of which there's a lot of configuration that changes the whole process. There's a lot of customization that needs to happen. And there's a lot of underlying assumptions in Business Central on how you should work with inventory, that if you're not familiar with those assumptions, the whole system seems really strange and foreign. So let's spend some time talking to that. I am absolutely going to talk through things. So for people who are listening through in podcast form, rather than in YouTube and streaming and whatnot, hopefully, I'll be doing a good job of describing everything we're going through. So let's pop open a business central system to have kind of the starting point. So one of the first things that I find people stumble on very quickly, is understanding the big scary question of what in my system for an item is available? You know, is there a feel like can I pull from Power BI to Power BI? Can I pull to power apps, particularly mentioning those because it's a lot of people who work outside of business central that struggle? This one? How many are available? Well, every BC developer in the room has already gone Oh, boy, yeah. There is no single field in your system that will say this is how many are available. Because this is a fairly powerful system, it means that there are so many configuration options, and business considerations that drive What does available mean. So with that in mind, you have to figure out first to your customer, what does available mean? And that can get really complicated very quickly. And we'll we'll kind of explore the why of it. Where you get started. When you're looking at Kronos, for the first time, where you get started on what's available are a set of flow fields in the item card on the Inventory section, the fast time column inventory, you'll see right out of the gate, that there are three fields that give you a hint to your availability. One is the inventory field. And you'll see that these are drilled down capable they are flow fields. This means that they are dynamically updated based on information underneath the item card from some other table. For those of you not familiar with flow fields, the inventory field in our Kronos environment here for one of the guests chairs says that there's 95 available. Well, here's the thing, in which location. Business Central supports lots of different locations. And those locations could be on other sides of the planet. Some of those locations could be vendor managed inventory, how can you say, Oh, sure, we've got five available? Well, you might have five available, but it might be that, you know, of this 95 on the item card. 90 of those are currently in a country that has a quarantine going on and you can't ship those Nivea out of that country. You don't really have 95 available you have five, how do you know that? When you from the item cart you don't. And then additionally, there are some other fields that are shown right out of the gate as well called quantity on purchase order and quantity on sales order. Well, those are going to reflect what your incoming and outgoing inventory are. And that's a good thing to have visibility into. Sure. But if you had 1000 on your quantity on purchase orders, when are they due to arrive? Do you consider them to be available in your business process because they're due to over If at some point, maybe they're not, you know, maybe it's a promised order that someone's manufacturing that will be delivered in two months, but it could bleed over into four. So how do you consider those available when you talk to a customer? Some customers are perfectly fine with being backordered. And they'll get it when they get it. It's important to them, they just need to know when their customers in better ship tomorrow, you have to think about what does that mean? And then it gets even crazier. In the inventory fast tab, you can click show more. And suddenly, you don't just have quantity on purchase order and quantity and sales order quantity on job orders, you have quantity on assembly order and quantity on assembly component. And you go Oh, geez, what what does that mean? Quantity on assembly order means that it's something that is going to result as an output from some sort of assembly or manufacturing process. So you as an end, you as a business organization are planning to make these. So this is going to be a net positive to your inventory. But quantity and assembly component means that it's going to be consumed by some sort of assembly or manufacturing process. And that is a net negative. But again, you know what location. So that gets real fun, real quick. It there, there is no single component level where you can say, I know precisely what's available. And you get a hint of some of the complexity behind this. When you dig into it. This is too many menu steps in the action bar in releated. There's an availability section. And then under availability, you can see item availability by and check out all the different breakdown levels that they give us here, you have item availability by event, which means that it's going to show you sequentially, all of the different events that are known in the system, potential chips, potential receives potential assemblies, all those sorts of things, it's going to show that list of those events and give you a sense of how your item forecast is going to go. There is item availability by period. So you can say Okay, show me week by week, what am I going to have? There is item availability by variant, which we'll talk to in a couple of minutes, because that's a whole nother level. Same for item availability by unit of measure, because sometimes Unit of Measures are really important. And you can see that there's also item availability by location, lot and Bill of Material level. Well, I mean, that gives you a sense of how complicated the availability is the the base product has over seven different ways, right from the start to potentially look at the question of what's available. And if we go into each one of these screens, we get some interesting insights into the level of detail that comes behind it. Looking at item availability, availability, by periods, we can see we can view it by different periods, we can view it by day, week, month, year accounting period. But on the lines for this, we see all those different periods. And we see that there are requirements for scenes, planned order receipts, projected available balance, and these are all drill downs. So there's more and more info behind all the scenes. So availability is a doozy of a question. And that that is something that I think trips up people new to Business Central in a big way. So that leads us to some other fun questions. First, let's zoom out for one second, and come back to items as a concept. For starters, in Business Central items, these days have a type, which I think is a really interesting idea. These used to be broken out in two different parts of the system and have been consolidated to the item card under the type hierarchy. Used to me item was just inventory. Once upon a time, you could only have an inventory item. I made sense. It was an item that you kept it in stock. There you go. They over time have added support for what is referred to as a service type item, which is sort of fascinating. The idea behind this being that you could functionally train your users to work with it just like An item but there are some differences and variations on how much you would potentially track inventory around it. And what's how that's going to be available to use on other parts of the system, like you would never know there, we're not going to chase down that rabbit hole. But service and non inventory items functionally work fairly differently. But they allow users of the system to work with the same pricing, the same discount groups, all those sorts of functional pieces can be tied to the service and non inventory items, non inventory being things like, well, you know, we want to carry this as something someone can order. But we're never going to stock this, we will only use this for drop shipments and things like that. That rule used to be filled by a separate system, and may still be in there, I haven't looked before the stream called non stock items, which was once upon a time a nice little way of doing things. So without delving into the rabbit holes of type, there's also a core concept that is a little bit new for some non VC folks, that items always have a unit of measure code. Whether that be in this case, for example, they use PCs, as pieces, aka each, you can potentially have different things in different units of measure, but for the perspective of your inventory, and how you would count these things and how you might value these things. What do you consider the baseline? For example, if you're a company that has spools of wire that have 5000 meters of wire on the spool? Do you potentially just buy and ship the whole spool? You never ever unwind it ever? Okay, well, then you might track those in pieces. But if you're the kind of company that buys big spools and then consumes or sells in those individual meters, then a base unit of measure you might want to use is meter. But not only can you have a base unit of measure, you can have separately on the let's see. Yep, on the prices. And I believe it's replenishment fast hubs, you can have a sales unit of measure. And you can have a purchase unit of measure. Well, what do all those different things mean? How do they relate to each other. If we look at the item Unit of Measures, which I always get myself a little lost as to which menus, the action bar with the item card, I do hope they clean it up, because I find it's very, very challenging. For those of you not following on visually, we have in the action bar process item, prices and discounts request approval. And then we have the deeper menus of action and related. Well under this item menu, we have comments, attachments, attributes, and adjust inventory, perfectly reasonable things that we might want to get to frequently. But under the Actions menu, we also have a folder called item. And under that it has variants and identifiers. I don't know why those are actions. If we go under the related menu, we have another folder called item. So when you try to teach users where to find this stuff, or you're just not in here every day, that Whew, that's a mess to navigate these menus I, I really hope they clean it up. Because I don't understand why variance and identifiers is under Actions, you're not taking an action. Those are related setup items. But anyways, under a related item folder, you'll see there is a unit of measure table. What this does is it allows you to see first of all that your current basing your measure for an item, what is it and that will always be quantity per unit of measure one. So anytime you're dealing with this unit of measure, that is the measure that you're working with. So in our wire example meters would be quantity per unit measure one in our spool of wire example, we could then set up another item unit of measure for this called spool or you know, unit or whatever makes sense for your organization. And the quantity per unit of measure on that would be 5000. Then when your users are going into a purchase order and you've got it set up to buy in those spools, if they buy three spools, when you receive that in, it's going to do the math for you automatically. And say cool, you got 15,000 meters, tada. And that's it. You don't have to do any of that conversion work. Your users don't have to do that commercial work. That is super helpful. You'll notice here on the screen, we've got the items unit of measure, we can specify the code, the quantity per unit measure. And this is where you put in some of the different specification values that you might need elsewhere for like shipping documents with height, width, length cubed, and weight. This is where that information lives, I get the question a lot of I need to enter in the weight of my items. So I can put them on a picking document or a shipping document. This is where that comes from. Because after all, if you sell a meter of wire, that's going to have a very different weight than if you sell a spool of wire. So makes sense? All right. So that's one of the other fun challenges. And then I think that covers one of the core concepts. As an aside, I am not going to try to cover in this hour, the different costing methods, because who who bets that probably could be an hour in its own right. So with the explainer on items, and unit of measure, just a quick aside, before we go to the next part. Sometimes you have versions of items that come in different varieties, say for example, colors or sizes, it is fairly common to set up what's called variant codes on that. So for example, the KRONOS chair that we're looking at is noted as 1936 dash s Berlin guest chair yellow, well, we might have six different colors of this guest chair, but there are the otherwise functionally identical. What some companies will do is they will want to say, Look, I need to know how many guest chairs I have, regardless of color. And I would like to be able to drill into and seeing the differences of which items I have. And that is managed via a system called variance under our action item variants, which I'm not a big fan of that we do it this way, you'll note that we just get a list here, that is code and description, you can set up different variant codes. And for the most part, there's not a lot of differentiation. But what it does is it gives us the ability to tag. When we're looking at inventory transactions involving this item, which variant am I dealing with. So that was why we had the ability to look at the we have the ability to look at the availability by variant. So if we had you know, six different colors of this guest chair, we've got 100 in stock, well, we might drill into the variants to go out we have you know, 13 red, we have 16, blue, blah, blah, blah, whatever makes sense. So that can affect some of those availability calculations as well. If you've got variants involved, you have 95 in stock, but of which color. So it can get pretty complicated pretty quick. So let's talk a little bit about some of the underlying tables behind the item card and what's going on transactionally with it in system. In the related menu. Under the history, we have entries, just like customer has Customer Ledger Entries, and vendor has vendor ledger entries item has ledger entries. But when you pop that list open for the first time, you may have a bit of a panic moment as you go, what in the heck. Here under history entries. We have ledger entries, physical inventory, ledger entries, reservation entries, value entries, item tracking injuries, warehouse entries, and we got a couple of odd balls in here of application worksheet and for some ungodly reason, export item data, which to me is an action not related. So I hope at some point that we can do pull requests against the base app because well why would I want to clean up these menus, just like a half a day of let's move these to be logical, please. Anyways, I assure you that it is still better than it once was. I had a I had an interesting experiment back when 2009 dropped where we were attempting at that point in time to start the process of writing being your first 20 hours of Business Central. The first version of that I was actually going to right back in the nav 2009 era. And we were going through all of the roll centers looking at all the different action bar items And there were duplicates, there were misspellings. There are places where, if you clicked on something in that menu, it wouldn't even go to the right object. It was a mess. So I promise that it is infinitely better than it was 2009 was not a gold standard version, I'm afraid for you usability. So if you're out there today, using nav 22,009, or customer has come to us saying they want help with their nav 2009 system, I am very sorry to hear that. Please move to Business Central. Anyways, so the ledger entries is as useful as it sounds, it's your straightforward what has changed of stock in my system, you know, when stuff comes into, or leaves my inventory for this item, what is the impact of that what kind of transaction is etc. The physical inventory ledger entries, if you use the physical inventory system, whether you do full physical inventory or a cycle counts, they segregate these physical inventory ledger entries just so that way you have a better visibility into it. I think it's a good thing. That's fine. Reservation entries, that is a whole I would say half day session not even a full hour that's had so half day. There's mechanisms in the system by which you can say, for this given customer's order for this given vendors order, I want to have this inventory promised to this transaction, it comes up a great deal with lots and serial numbers, which is a way I feel like I could teach a week long class and some of these topics. So we're not going to dive into that. Value entries is an interesting table. And it's worth talking to in a moment. It has to do with the financial transactions related to the value of the inventory that is in your system. We're going to talk about that in a sec related to ledger entries. Item tracking entries is part of the lot tracking or serial tracking mechanisms. Because there are some implications so that we might might be able to squeak in 10 minutes to chat about that and an overview. And then warehouse entries talks to the fact that there is warehousing system in this product. And for example, in a warehouse based location. When you move stuff between different bins, there is no effect overall, because it's still within the same location, there is no effect on the overall availability or the financial value of that stock. So those entries need to be kept. But they don't necessarily need to clutter up your availability info table, the ledger entries, the item ledger entries. So warehouse entries is a whole separate table. And that can throw people off a little bit here, application worksheet that is related to costings, we're not going to dive into that. So let's look at the item ledger entries table. The item ledger entries table looks an awful lot like many other ledger entries. If you've ever drill down into Customer Balances or vendor balances, it will look pretty familiar because it's got a posting date, it has an entry type, which lets you know what kind of transaction it has a document type to let you know which kind of document did this transaction. So for example, in our list of things, we have a few different sales shipments that are entry type of sales. We have some purchase receipts that are type of purchase. And as you can imagine, as we scroll off to the side, we see that the sales transactions they show negative quantity impact and the purchase receipts when we received those items in have a positive quantity impact. And that drives what basically what's behind the item. Card inventory field is a sum of not the quantity, but this remaining Quantity column. For those who are following an audio we have quantity invoiced quantity, remaining quantity. And we've got some sales amount and cost amount and an open Boolean flag off to the right and all of those are pretty relevant. So what's the switch on quantity, invoice quantity and remaining quantity? Well, for starters, every one of these transactions was originally related to a sales or purchase document. You can do item journal entries that aren't related to a document type. So but the ones we are currently looking at for this item on screen, they were all related to sales or purchase not adjustments. So for the sales ones, for example, we have quantity, say minus two. And we'll notice that we have an inventory invoiced quantity minus two, that means that not only was the shipment posted, but also the invoice. So we know looking at the item ledger entry that this was a fully invoiced sales shipment. And the remaining quantity on most sales ledger entries typically will be zero because there wasn't any positive impact to your inventory. For the purchase side of things, there will be remaining quantities based on what's in your system. If we scroll down far enough, we will get to a list of purchase receipts for this, where we start seeing that, for example, in the demo data here, we had a quantity of 10. That hasn't remaining quantity of zero. That means that somewhere in the demo data here, march 2021, we bought 10 of these, and they those particular items have since left the building, so they are no longer considered open that open flag that we mentioned, a little checkbox. The reason that matters, which items did I sell is because that connects your sales costs to your purchase costs. This gets deep into the weeds of the costing, but much like when a customer makes a payment and you can apply the customer payment to different invoices. Inventory works in the same way of a shipment under the hood is automatically applying typically automatically is automatically selecting which inventory went out the door. So when I asked the question for this quantity of two that we shipped out, I want to know how much profit did we make on that item? Well, it depends, doesn't it on which inventory you bought, if the costs are going up and down per unit, you know, say for example, your crazy company who's selling graphics cards? Well, the costs on those definitely have gone a little haywire. So you know, a graphics card that's been sitting on your shelf for a year, that the value of that might be a lot lower than if it's a graphics card that you bought just last month, they might be identical for the purposes of shipping out the door, but the profitability will be very different. So those are connected things. And that is why the sales amount and cost amount fields. They are drill downs, they flow into other records. There also is an option. And let's see if it's available here and personalize. I didn't look at any of this at a time as usual. It's not my jam. I overthink it. If I do that. We'll notice too that it says sales amount actual cost amount actual. The reason those are in there is because there is functionality in the system that allows you to record the expected costs. And in your personalization of item ledger entries, you'll see there are cost amount expected and sales amount expected. If you have turned on expected costs or you're working with a customer with expected costs, what that does mean is typically in your business process flow, the actual process of receiving the goods and getting the invoice or shipping the goods and sending the invoice are far enough apart in time then it makes sense to also have some estimated value of the purchase or sales and you want to just get something recorded in your books because of inventory has moved. So there's a whole expected functionality around that. Again, deep dive topic on costing. So if we look at the sales amount, actual and cost amount actual let's come into one of our last purchases that we have received. If we click on the cost amount actual drill down, you'll note it'll drop you to the value entries table In our case, in the current Stata, that just brings us to a single value entry showing a purchase. That happened on that date. And the entry type is a direct cost. And if we scroll off to the right, it will show our sales amount actual our cost amount, expected our cost amount actual. And I also show some info about the cost posted to the GL. It will tell you lots more things about like, you know, what was the item ledger entry quantity? What was the cost per unit? It will tell you a little bit more about what posting groups than it used to go to the GL, all that fun stuff. The reason for this? What if the market went crazy, and this chair was suddenly now worth? You know, instead of 97 per unit, this chair in the market space was worth 500. The people discovered it, it's now amazeballs. And we need to figure out how to make sure our inventory value reflects that. Well, we don't have to adjust the stock out. And we don't just post a single adjustment to the inventory account of the GL. No, no, what we do is we do a revaluation where we can say these, these 13 items posted in March, we can adjust that to say instead of 1200, it's actually 12,000, or whatever have you. And that revaluation process will create new entries in this table. And all of these costs are then summed up into the item ledger entry, in effect how that works. If you're using average costing not FIFO, which again, I'm not going to dive too deep into the average costing creates a ton of entries in that info as you buy and sell against items. So a lot of churn if you do it that way. Okay, so that's, I think, enough dive into that. One of the other areas that throws people off a whole heck of a lot in a big way, coming, zooming all the way back out is that inventory in Business Central can work in a variety of different modes. And it tied to what you've configured for a location. For example, you might have a main warehouse that, you know, has, you know, hundreds of people working in it, you've got robots doing the packing of boxes, really elaborate stuff, but you might have a remote warehouse that's near to one of your customers that's got, you know, a guy. And it's one big room. And that's all you do is you just, you know, fulfill whatever that customer that one special customer, you fulfill their orders from that location, you just keep it stocked to a certain level. And you know, the operational requirements of what you do in the big giant warehouse versus that guy's warehouse. Those are very different business processes. And so whenever a customer asked me to help them with their inventory, the very first thing I do is I try to figure out what is their location configuration? What are their locations? And, you know, what are the different methodologies. An interesting side note before we dive into how different locations works, is locations aren't technically required in Business Central. For customers who have self setup, this, this scares the heck out of me that this is, you know, one of the possibilities. If you don't set up using Location Codes to begin with, it becomes much harder to add locations leader, I usually encourage all of my customers to just set up a main location and default it everywhere. Even if they have one location, they've been in business for 30 years, they don't currently have plans to expand and all that sort of stuff. Well, so what then you just set up one location and away you go. The reason for this, it's much much harder to add locations to an inventory system that doesn't have locations configured from the start. So be aware, strong recommendation from me. So what do I what do we mean by some of the different modes that we can run business central inventory and well there's a great blog post on I'm from Olaf Simran Oh, l o f Simran, which just had.com and you're on his blog, he's got this post from 2015. So you know, the screenshots are about now at the time. But this is one of the better write ups of the possible different methodologies you can use for doing shipments. And it gives you a sense of the complexities to what are the different options and the different methods that you can ship goods out of the system. And he wrote it up as four main processes. Option one is you write up a sales order, and on the sales order, you hit post, and you pick one of the options that includes ship. So there you go, very straightforward. There's no extra processes, there's no extra steps. You train your warehouse people, or logistics people or you know, your team, whoever, you train them to go to a given customer's sales order, and hit the post button after they've set the quantity to ship column on each of the lines. And that's that you're done. No, no extra complexity. That is the most straightforward and simple that works with. If you have locations, you can specify location on the customer card, which defaults to the sales header, which defaults to the sales line. And if you have multiple locations, you can fill those in separately on the sales lines. And now all will work with this option one. We'll talk in a moment about bins for sure. But if you use different bins, you have to do different sales lines. If you want to use different bins. Well, we'll get to, but just something to be aware of. In option two, however, which is a little less commonly used for Business Central, but it has some value is if you have a different logistics if you have a different team doing logistics where they potentially need to post the shipments for sales orders. But you don't want your logistics people to go to the sales order screen. There is a mechanism by which you can create what is referred to as an inventory pic. And that inventory pic is a one to one document a picking card that matches to a single sales order. It is designed around the idea that you want to not have your logistics team have permissions to look at or work with the sales order screen. It is a very simplified version of the order that allows them to work with the picking process. The advantage to the process that you you have to create a pic document. The advantage to this is that when you go to create a pic document, if the item is unavailable for some reason, then the pic will not get created. And typically organizations that would use this business process to create these inventory picks would run it as a big batch job to say okay, everything that we're supposed to be shipping today based on the shipment dates of the sales orders, I want to create my you know, 30 picks for the inventory logistics crew to fill in. They just get a simplified UI that says from this sales order, what quantity do I want to ship for each of the different lines? That's pretty good. It's not commonly used, but I still think it has value to mention. Because a lot of people who are using simpler inventory methods do find it frustrating or challenging, that they have to teach the logistics team to know which orders are available and to train them to ignore all of the rest of the sales order screen that they shouldn't be changing. You know don't change the quantity field change the quantity to ship while in the inventory pick scenario. They can't change the quantity field they have to change the quantity ship. Then you get into Options what he calls options three and four. And this is the beginning of where you use the warehousing system. Now, for those of you who don't know your business central slash NAB history, once upon a time, the product had a separate a A separate variant of essentially the system called division warehousing, it was actually a separate whole product. If you wanted to use the warehousing product, you ran a slightly different version of the software that was merged together into the base product. And feel free anyone watching this to correct me if I'm wrong, but I'm still pretty sure this is correct info, that once upon a time the warehousing engine, not only was it a separate little product, but it was a separate product because it was originally an ISV solution that got integrated into the base product. This helps understand a little bit why it sometimes feels like the warehousing system feels almost like a separate piece. So yeah, let's talk to Okay, with option three, as has off describes it. What happens with orders is when they are released, the sales orders are released, you would create a warehouse shipment based on running a batch job and it consolidates multiple orders that have the same destination. So if you have five orders for a customer, you have those five orders get consolidated onto a single warehousing document. Because the logistics team knows that the container that is on the truck is all going to the same customer. So pack five orders into that same container. Straightforward enough, when the warehousing team posts this multi sales order warehouse shipment document under the hood on their behalf, it is effectively going through each of those five orders and doing the post ship command to also create the five posted sales shipments. Okay. Let that kind of sink in for just a second there. So that is an important thing to understand that even when you do the warehouse documents, the non warehousing documents, the sales shipment, documents posted sales shipments, those are created by the warehousing system. And finally, lastly, in option for the highest kind of complexity side of things that we'll dive into today is not only does a warehouse shipment get prepared, but a set of and it can be multiple picking documents are then prepared. So in our scenario where we had a big giant warehouse where maybe there at this given location, you've actually gotten, you know, six different buildings. But it's all effectively the same location, you might have different stock in different buildings, maybe one of them is refrigerated, maybe one of them is freezer base. And you may have different teams of people who are going to pick in those different buildings. While even though it's all going into the same refrigerator or freezer truck or whatever you're doing. You need to give to your five different picking teams. Each of them gets their documents for the day. Well, the warehouse picks are what let you break up the warehouse shipment based on different criteria such as you know, different zones, different bins, different teams, whatever, it supports some pretty complex logistics. So you now have you know, maybe five different orders with a bunch of different lines all get consolidated together onto a warehouse shipment based on the destination. And then based on your business requirements of what's going to need to come together from disparate parts of your inventory, or by different people for different reasons. You have multiple pic documents, so the pics get all registered, the equivalent of posted but there's no financial location. So registered, the picks get registered, which moves all of the inventory typically to a shipping location, shipping bin within the location and then the shipment gets posted which effectively considers it going out the door. So it can be really important to understand what is the pros and cons of all of these different models. They all have different benefits and different value. So O L O fsimrn.com. He has a great series on this. And it goes into great detail of what happens behind each of these options. And nicely he did the same process for both shipments and receiving. So how can you tell when someone calls you up for the first time and they say, Hey, I've got a business central system, I need you to look at why you know why this isn't shipping? Well, the very first place I start in any new environment for me is I look at the location card, because all of those options and configuration settings about what kind of inventory management are we doing is driven by settings on the location card, and challengingly enough in the Cronus data as it stands right now, there are no locations that are configured to use the full warehousing module. It is a complex area of the system. So just be aware that that even though descriptively they call it east warehouse, main warehouse, West warehouse and a couple of logistics locations in the Cronus locations list. None of these quote unquote warehouses are using the warehousing functionality. So be aware that that's something you can't just dive into Cronus and learn. It's a challenge. How do you know on the location card because it doesn't immediately jump out the location card, if you go to the warehousing fast ham, which is also collapsed by default. This drives whether or not you utilize the warehousing module. And interestingly, you can have the process be different whether you're doing receiving or shipping. So for example, you may just go okay, we want to do order by order receiving because we don't receive very often the complexity level is much lower and receiving. But when we do the shipments, we want to do the full shipping and picking well you could do that and you can turn on ship and require ship and require pick. Or you can potentially turn on require receive and require put away put away is the equivalent of the pick where basically, you know, you can break up, we received two containers full of stuff. And now we need to put it all the way to the correct locations. There is a full scale version of this where it traces everything through the whole process. And you can have a really elaborate model around. And that is this directed put away and pick down at the bottom. And that boolean is a doozy. And most of the time it's going to be grayed out if there's existing inventory, you are not really allowed to change this. If you need to turn this on, you effectively need to make a new location and transfer your goods to a directive port away and pick location using a transfer order or inventory adjustments. As an aside, there's also a separate little thing which isn't directly related to warehouse where you can turn on been mandatory. And that also affects options one and two, even though we're not using warehousing. So just FYI. If you are going What the heck is a bin at the location level, in the simple models of things, bins are subsets of a location. A bin could be in a large warehouse you have you know building A, B and C, you could just go ahead and say look, they're over and building C, maybe that's enough granular detail for your warehouse logistics team to know exactly what that means. I have absolutely also seen far more often that in a location, they will, the customers will label each and every rack in a warehouse, and maybe even each and every single shelf in a warehouse with a bin code. And that lets the logistics person know okay, if I go into aisle, you know, let's say aisle a and I look at you know rack 20 And I look at shelf three, a Dash 20 Dash three. That makes sense to my logistics guy. He'll know exactly what to find when he gets the forklift in there and okay that that is the granular level of detail that helps. Ben is the bottom level of that. So you want to make sure that that makes sense to people. In advanced scenarios where you need to have more fine tuned control over how people use different bins, there is a middle layer between locations and bins called zones. And again, that falls into the I could spend an hour talking about bins and how those zones relate because if you expand bins fast have a bins policy fast ham, you'll see there's all sorts of crazy settings in here, I could do a day long class in just this location card and all the ancillary results of it. So because we can't turn on the warehousing modules for any of the existing Kronos locations, I can't show you as part of this stream, what it would look like to have different transactions. In the in the warehousing side of things, I would need to set up a new location and do some adjustments. And so we're not going to dive into that today. Because it gets complex. But some of the other things to be aware of that hopefully this is starting to make everything make sense. If you need to move things between different locations in the system, the appropriate keyword for that is the transfer order that allows you to do dock to do inventory moving between different locations. If you are moving things around between bins in your existing single location. The key word on that is movements. There are different types of movements, depending on what you're doing for your inventory setup. You can see here that we've got inventory movements, we've got warehouse movements, there's also movement worksheets. So it gets a little elaborate. But the idea behind this is that your recording that things are changing around. If you are needing to move things in and out of inventory, this also depends on what your location setup is. So for example, if your logistics manager, she calls you up and says, Look, we we had an issue there was you know, one of the boxes is broken, we need to zero this out, and we'll deal with it later. I think you know, it was something that our operations did, we're not going to try to do a return to the vendor or whatever have you. Well, then that would be a in a full logistics environment, you would need to do a warehouse journal, to bring the inventory out of the warehousing system. And as a second step, you then have to go to your item journal. And on the item journal, you'll see under brewery where the heck are you? Okay, in the item journal, under the Actions menu, you'll see there's something called a calculate warehouse adjustment. After you post a warehouse journal, you have to then do the related item journal, because something coming out of the warehousing ledger entries or warehouse entries, that is a quantity based change only. And the item journal does not only the quantity based change, but it also allows you to select which cost related components that is. So for example, in our crazy graphics cards were cheaper a year ago versus a month ago. If one of those got smashed by careless handling and you have to zero that off your books. Well, which which one are you zeroing off your books, the one from a year ago or the one from a month ago? The item journal lets you connect those things. So depending on the complexity of your location setup, drives a variety of the different processes that you have to handle. And that is without even getting into some of the complexities of using the variants and all that sort of thing. Let's see I'm just trying to see what else we can fit in here because there's a day's worth of content, just using this as a syllabus. There are also abilities in the warehousing module to be able to look at the quantities that are in each and every single bin. So in your item card under related and warehouse you can see bin contents to look into across all your different locations. What do we have in each bin and this allows To apply some different rules to your bins as well, if you are needing to track. Let's see here, I'm just getting a field, getting something open in front of me. I thought, all right. Okie dokie, one of the options that we're not going to go into because I don't have this set up correctly for that. One of the other options you have open to you is you can also have what are referred to as stock keeping units off of the item card for the warehousing module. So that you can potentially have different skews to be able to see what your availability is based on different locations, be able to do different traceability per locations, all that fun stuff. Another key thing to be thinking about in inventory, is that you can also have customers show up in your world that, let's see, I believe it's in inventory set up. In the inventory setup, which is your general overall inventory setup. This is a place where I come also, in any new environment quickly, you'll see a few different things that are critical to know stuff. Right off the bat, you'll see first in your general fast tab is automatic cost posting. That's an important, we can spend a long while on inventory cost, not gonna go into it. But it's something to be aware of, if you don't know what this setting is, and how that affects the financials of your client, you need to you need to read up. Because this is critical for any customer using Business Central, you need to understand this. There are definitely people who don't have this turned on and have never run the Adjust cost routines and wonder what's going on in their books. But this is one of the places I come to quickly because here is that location mandatory flag, I typically will turn this on right out of the gate before anyone sets up anything. Because if you have inventory in your system, and you decide to implement locations later, you didn't use locations to begin with turning this on means that you will never do be able to do transactions for those items that are against the blank location code. And that's a real problem. So customers that I've seen that did not have a default location right out of the gate, they ended up having to have a big giant journal where they adjusted out all of their inventory to zero out their entire inventory, then they could turn this on. And then they brought all their inventory information back into the newly created main location. So it's a real nightmare for everyone involved from a costing and accounting perspective. So I turn this on for every single one of my customers right out right to start with. Another thing to be aware of, too, is there is the setting here on the general fast tab of the inventory setup called prevent negative inventory. I'm always surprised by organizations that are ok with having this set. It speaks to their business process isn't disciplined enough. And sometimes it can't be. So you know, there are plenty of good reasons. But this being off means that if I only have five in inventory and a location and a customer orders 10. And you know, the logistics team for whatever reason goes, Oh, yeah, we've got 10 down here, they haven't maybe hit post on their receipts yet, whatever have you. Like, the system will just let them do that. And you know, it'll kind of get itself sorted out later when you post the purchase receipt to receive that inventory in but only kinda. So be aware. That's a that's an issue, I think. All right. I think we're mostly out of time with this. There are a million other settings in here that are all sorts of good things to know. There are ways to be looking at, you know, how do we do replenishment? We could do an entire section on the way that the item tracking works, because I know people get stumbled on that in a big way because it's complicated. We can do all sorts of talks about the replenishment systems or we can do a whole episode on assemblies for sure. And there's lots of information in here about you know, extended texts and how do you make Manage translations and cross references. So we could do lots. But I'm hopeful that this gives us enough information for people when they go into business Central. They're trying to understand what's in the system, what is the inventory? How do we do the different transactional stuff, I hope that gives us enough info for people to start to learn their way around things. So with all that in mind, I think that wraps us up for today, I went a little over even even trying to hurry this down into an hour, we still went a little over that there is so much in here that you can do, there are so many great ways that you can be using this part of the system. It is designed to be incredibly flexible and incredibly powerful. which means of course, it's a little bit like when you look in the front of the airplane, you look at all of the switches and toggles and buttons and you go, or in the inventory system of Business Central is definitely one of the areas of the system where there are layers and layers. There's a whole bunch of functionality in here around being able to promise dates and build demand forecasts. And it's great stuff you can make your career just on understanding this area, this system. I hope it helped developers and implementation people. This is all stuff you should know if you're working with business Central. So I hope it helped. Let me know if there are other areas of which you want me to dive into inside of inventory. But I think that's going to cover us for today. And yeah, lots more to go over. Shoot me questions. And I hope that as you go through your week this week, that this has provided some value. Take care of everybody, and see you next week.