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Location directive inventory picking aging

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This article explains how to use first in, first out (FIFO) and last in, first out (LIFO) location directive strategies during picking. These strategies work in conjunction with the aging dates that are recorded for locations to track when inventory first entered the warehouse. The Location directive inventory picking aging feature uses the date on the location to determine aging. The Warehouse location status feature updates the date on the location, based on the date from the license plate.

You can use FIFO and LIFO strategies to ship both batch-tracked items and non-batch-tracked items, based on the date when the inventory entered the warehouse. This capability can be especially useful for non-batch-tracked inventory, where an expiration date isn't available to use for sorting.

When inventory is first received or created in the warehouse, the system updates the relevant license plate so that the current date is shown as the aging date. This date is then used by the location directive strategies to identify the oldest or newest inventory in the warehouse. If inventory is moved to a location that isn't tracked by license plate, the location itself is updated with aging information, and this information will then be used by the strategies.

Turn on the required features

To make this functionality available, turn on the following features in feature management, in this order:

  1. Warehouse location status (As of version 10.0.29, this feature is mandatory and can't be turned off. Learn more in Warehouse location status.)
  2. Location directive inventory picking aging (As of Supply Chain Management version 10.0.32, this feature is mandatory and can't be turned off.)

Feature requirements

To use this feature, you must set the Enable location status option set to Yes for every location profile that is used to store inventory. To set this option for a location profile, go to Warehouse management > Setup > Warehouse > Location profiles, and select the location profile. You can find the option on the General FastTab.

Feature scenarios

This section provides examples that show how to set up and use FIFO and LIFO strategies.

Tip

This section provides two scenarios, one for FIFO and one for LIFO. The procedures that are provided assume that you will do both scenarios, in order. We recommend that you do both scenarios, so that you can experience the differences between the two strategies.

Make sample data available

To work through these scenarios by using the sample records and values that are specified here, you must be on a system where the standard demo data is installed. Additionally, you must select the USMF legal entity before you begin.

You can also use these scenarios as guidance for using the feature on a production system. However, in that case, you must substitute your own values for each setting that is described here.

Set up the scenarios

The demo data requires setup and inventory adjustments to support the scenarios. Follow these steps to create the inventory data that is required to work through the FIFO and LIFO scenarios.

  1. Sign in to a system where demo data is installed, and select the USMF legal entity.

  2. Go to Warehouse management > Setup > Warehouse > Location profiles.

  3. On the Action Pane, select Edit.

  4. In the list of location profiles, select FLOOR-05.

  5. On the General FastTab, set the Enable location status option to Yes.

  6. Select Save.

  7. Go to Warehouse management > Setup > Location directives.

  8. In the list of location directives, select 63 Pick containerization.

  9. Select Edit to put the page into edit mode.

  10. On the Location directive actions FastTab, find the line where the Sequence number field is set to 1, and follow one of these steps:

    • If you're setting up a FIFO scenario, change the value of the Strategy field to Location aging FIFO.
    • If you're setting up a LIFO scenario, change the value of the Strategy field to Location aging LIFO.

  11. On the Location directive actions FastTab, select Edit query.

  12. In the query dialog box, on the Range tab, select Add to add a line, and then set the following values:

    • Table: Locations
    • Derived table: Locations
    • Field: Zone ID
    • Criteria: Floor

  13. Select OK to apply your settings and close the query dialog box.

  14. Select Save to save your changes to the location directive.

  15. On a mobile device or in the Dynamics 365 Supply Chain Management - Warehousing app on your PC, follow these steps to remove existing inventory from the warehouse location to support the scenarios:

    1. Sign in to warehouse 63 by using the appropriate user ID and password.
    2. On the main menu, select Quality.
    3. On the Quality management menu, select Scrap.
    4. On the Scrap page, select the LOC/LP field, and then enter 63_1.
    5. Select Enter or OK.
    6. Confirm the Scrap details for Adjustment out by selecting Enter or OK.

    When the license plate inventory is adjusted out, you receive a "Work Completed" message.

    These steps leave inventory in two locations in the demo data. Each location has a different aging date. Location FL-001 has an aging date of April 15, 2017, and location FL-002 has an aging date of January 29, 2017. Both locations contain item A0001.

    To view this data, go to Inventory management > Inquiries and reports > On-hand list, and then filter on warehouse 63 and item A0001. In the rows where the Location field is set to FL-001 or FL-002, select a line that has a positive Physical inventory value, and then, on the Action Pane, select Transactions. The Physical date field will show a date that corresponds to one of the previously mentioned aging dates.

Scenario 1: Set up and use FIFO location aging

The FIFO strategy finds the location that contains the oldest aging date, and it allocates picking based on that aging date.

  1. If you haven't already done so, prepare the sample data that is required for this scenario.

  2. Go to Sales and marketing > Sales order > All sales orders.

  3. Select New.

  4. In the Create sales order dialog box, set the following values:

    • On the Customer FastTab, set the Customer account field to US-001.
    • On the General FastTab, set the Warehouse field to 63.

  5. Select OK to create the sales order and close the dialog box.

  6. The new sales order is opened. It includes a new, empty row in the grid on the Sales order lines FastTab. For this order line, set the Item number field to A0001 and the Quantity field to 1.

  7. On the Inventory menu above the grid, select Reservation.

  8. On the Reservation page, select Reserve lot to reserve the ordered quantity of this item from inventory at the selected warehouse.

  9. Close the Reservation page.

  10. On the Sales order page, on the Action Pane, on the Warehouse tab, in the Actions group, select Release to warehouse. You receive informational messages. The system creates a shipment, adds it to a new load, and creates the required work.

  11. On the Sales order lines FastTab, on the Warehouse menu, select Work details to open the work that was created for this sales order. Notice that the line where the Work type value is Pick shows a Location value of FL-002. This location contains the license plate that has the oldest aging date (FIFO).

  12. Select Warehouse > Shipment details.

  13. On the General FastTab, make a note of the wave ID, so that you can use it in scenario 2.

Scenario 2: Set up and use LIFO location aging

The LIFO strategy finds the location that contains the newest aging date, and it allocates picking based on that aging date. In scenario 2, you will edit the setup for scenario 1 (FIFO), and reuse the sales order and wave that were created during that scenario.

  1. Before you start this scenario, set up and complete the full FIFO scenario as described in the previous section. In this scenario, you will reuse the wave and most of the setup that were created for that scenario.

  2. Edit the 63 Pick containerization location directive so that it uses the Location aging LIFO strategy, as described in the first part of the Set up the scenarios procedure.

    Next, you will modify the wave that was created for the sales order in scenario 1, so that is uses the Location aging LIFO strategy.

  3. Go to Warehouse management > Outbound waves > Shipment waves > All waves.

  4. Select and open the wave that contains the order that you created for the FIFO scenario.

  5. On the Action Pane, on the Work tab, select Cancel to cancel the work that you created for the FIFO scenario.

  6. On the Action Pane, on the Wave tab, in the Wave group, select Process.

  7. When the processing is completed, on the Action Pane, on the Wave tab, in the Related information group, select Work to open the work that was created for this wave.

  8. On the Work page, on the Overview tab, there should be two lines. Select the line where the Work status field is set to Open.

  9. Notice that the line where the Work type value is Pick shows a Location value of FL-001. This location contains the license plate that has the newest aging date (LIFO).

In these scenarios, you've seen how the location aging strategy directs work to the inventory location that has either the oldest inventory or the newest inventory, depending on the selected strategy.