A general requirement in order fulfillment is to ship as many sales lines as possible on time against minimal shipment costs.
The "fulfillment policy" was introduced in the Microsoft Dynamics 365 for Finance and Operations Fall release 2017, instead of the former "fulfillment percentage" on the customer record.
Challenges in standard :
In Order Entry Optimization the backorder strategy is integrated with Microsoft Dynamics 365 for Finance and Operations Warehouse management at the moment the sales order is released to the warehouse.
Wins:
Considerations:
Backorder Strategies depends on the fullfillment policies of the Microsoft Dynamics 365 for Finance and Operations Warehouse management module.
This will enable the Backorder Strategies functionalities.
Warehouse managment > Setup > Release to warehouse > Fulfillment policies
Field | Description | Remark |
Backorder strategy |
Backorder allowed Max one backorder No backorder Deliver in full |
Backorder allowed: standard Max one backorder: backorders are not released to the warehouse until fully reserved No backorder: backorders can be deleted in an automatic batch, unless there is a reference to a purchase order, production order etc. Deliver in full: order is not released to warehouse until fully reserved |
Prevent partial delivery |
Only release and ship full sales lines? |
Default for new sales lines when this fulfillment policy is defined for the customer |
Fulfillment rate |
Value type |
None, Price (=Value), Quantity |
For Deliver in full, advice: Quantity |
Violation message |
Information, Warning, Error |
Advice: Error |
Sales and marketing > Customers > All customers > Fast tab Warehouse
Specify a fulfillment policy. If no fulfillment policy is selected, backorder allowed is used.
Sales and marketing > Customers > All customers > Ribbon tab General > Setup: Intercompany > Tab Sales order policies
Field | Description | Remark |
Backorder strategy |
Sync the backorder strategy from the existing original sales order to the existing direct delivery intercompany sales order. Note that independent of this setting, the backorder strategy is always initialized from the original sales order to the intercompany sales order (both direct delivery and non-direct delivery). |
For direct IC deliveries, if the backorder strategy is synchronized, it can only be changed on the original sales order, not on the IC sales order. For indirect IC deliveries that are specific for a original sales order, it makes sense to combine the order as much as possible according to the requirements. This minimizes the handling in the receiving warehouse where the shipment will probably be crossdocked. If needed, change the backorder strategy on the IC sales order. |
This setup can also be accessed from the IC vendor in the legal entity in which original sales orders are entered.
The backorder strategy is inherited from the customer’s fulfillment policy to the sales header, fast tab Delivery, and can be overwritten.
Fulfillment percentage is not inherited to the sales header and the fullfillment percentage on the customer's fulfillment policy remains active.
Note
The setting Prevent partial delivery is inherited from the Order fulfillment policy (or Default fulfillment policy of the customer) to the sales line, tab General, and can be overwritten on the sales line.
The user can override the fulfillment policy on the sales order. In that case, the backorder strategy on the sales order and the prevent partial delivery flag on the existing lines in this sales order will change automatically.
Intercompany direct delivery sales orders
The backorder strategy on the original sales order is always initialized equally on the intercompany sales order.
If synchronization of backorder strategy is active, the backorder strategy can only be changed from the original sales order header and is updated automatically on the intercompany sales order. The backorder strategy on the intercompany sales order is non-editable.
Intercompany non-direct delivery sales orders
The backorder strategy on the original sales order is always initialized equally on the intercompany sales order. There is no automatic synchronization after the intercompany sales order is created.
Button Calculate, Confirmed delivery dates (optionally)
After the sales order with all lines is entered, use “Calculate, Confirmed delivery dates” to align the dates of the sales order lines.
Note
Warehouse management > Release to warehouse > Automatic release of sales orders
This is the main go/no go point. If not reserved before, this process reserves on warehouse level (assuming that on the warehouse, the Reserve when orders are released by a batch job is active).
Note
This matrix shows the conditions for release to warehouse, depending on the backorder strategy on the sales order.
Backorder strategy |
Prevent partial delivery 1) on sales line level (a.k.a. Line complete) |
First release to warehouse incl. fulfillment % validation 2) |
Second release no fulfillment % validation |
Third, fourth ... release no fulfillment % validation |
Backorder allowed | No | Standard | Standard | Standard |
Backorder allowed | Yes |
Sales line full reservation 3) |
Sales line full reservation 3) | Sales line full reservation 3) |
Max one backorder | No | Standard |
Remaining sales lines full reservation 5) |
n.a. |
Max one backorder | Yes |
Sales line full reservation 3)
|
Remaining sales lines full reservation 5) |
n.a. |
Deliver in full | Yes | Full reservation 4) | n.a. | n.a. |
No backorder | No | Standard | Automatic cancellation | n.a. |
No backorder | Yes |
Sales line full reservation 3) |
Automatic cancellation |
1) Prevent partial delivery: each sales line must be delivered in full.
2) Fulfillment percentage is always checked in the first release unless customer has fulfillment 100 % but backorder strategy on sales order is not Deliver in full.
3) Sales line full reservation: No inventory transactions with Issue status On order or Ordered reserved exist on this sales line.
4) Full reservation: all sales lines reserved: No inventory transactions with Issue status On order or Ordered reserved exist on this sales order.
5) Remaining sales lines full reservation: All remaining sales lines reserved: No inventory transactions with Issue status On order or Ordered reserved exist on this sales order.
Sales and marketing > Sales orders > All sales orders > Tab Warehouse management > Button Release to warehouse
Reserve the sales order lines upon entry, and release to warehouse from the individual sales order or sales order list page.
Warehouse management > Release to warehouse > Release sales orders to warehouse
Warehouse management > Release to warehouse > Release to warehouse (deprecated)
On these forms, the user can select a new fulfillment policy that overrides the fulfillment policy from the order.
Note
Warehouse management > Outbound waves > Shipment waves > All waves
Automatic or manual. This is the second go/no go point. Items are now reserved on location level. However, if an item is not available on a pickable location, the standard checkmark “Fill enter order” can reverse the shipment if one of the shipment lines fails.
Note
Warehouse management > Packing and containerization > Pack
The backorder strategies are not checked on the packing station and when printing the packing slip. The disturbance of the process in case of a shortpick would cause more costs than the extra transport costs for an unforeseen backorder.
Exception Prevent partial delivery:
This is often a strict customer requirement. Only if Prevent partial delivery is set on the sales line, and the last container is closed, Microsoft Dynamics 365 for Finance and Operations checks that the setting on the sales line is not violated. But if so, the user decides whether to change the sales line setting or to reverse the picked line back to the warehouse location.
Thanks to the fact that Order Entry Optimization only releases order lines that comply with the prevent partial delivery setting, this situation should only occur in the event of an unexpected shortpick. The same check is executed again upon packing slip posting and printing. The reason is that the packing station is not a mandatory process step: it is possible to pick the goods, put them on a final shipping location, and post the packing slip.
Sales and marketing > Periodic tasks > Clean up > Cancel backorders
This functionality cancels remaining backorders with backorder strategy "No backorder".
Especially retail customers tend to order every time again. If the ordered items are not received, these customers re-order next time if the demand is still there.
Cancel backorders can run in batch every night, can delete the backorders for certain customers and sales orders automatically. The sales line functionality Update line, Deliver remainder, Cancel quantity is executed for all the sales order lines within the selection.
It is only after the cancel backorders batch job is run that the second release for the backorder strategy "No backorder" will be canceled. Even when the back order strategy is "No backorder," the second release is still possible if the cancel backorders batch job is not run.
Criteria:
In the dialog, the user can choose the required number of days after the originally planned shipping date. The specified until-shipping date is 1 day in the past (=yesterday) by default. It is possible to cancel until today (0 days in the past).
If backorders with future shipdates should already be cancelled, switch on "Ignore ship date".
The selection filter can not be changed by the user.
Note
Sales and marketing > Periodic tasks > Clean up > Cancel backorders for item or customer
In the undesired event that a customer is heading for a bankruptcy etc., the remaining open sales orders must be cancelled. Or if a vendor announces that supplies of a particular item will be stopped, all open order lines for this item should be cancelled. This functionality is also an automated Update line, Deliver remainder, Cancel quantity.
For safety reasons, either one customer, or one item / item variant can be selected per run.
The fulfillment policy and the connected backorder strategy are validated automatically when the sales order is released. In case the sales order depends on a marked purchase order that will be cross docked, and the backorder strategy is Deliver in full, this will cause a blocking error.
For these type of sales orders a batch job can be invoked to override the fulfillment policy on the sales order if:
the backorder strategy is Deliver in full or Max one backorder
the order has ordered reserved transactions
(optionally: the planned shipment date of the sales order is in a specific time window after the expected receipt of the purchase order).
Define a new fulfillment policy "Full + cross dock" or similar, backorder strategy = Backorder allowed.
On the fulfillment policy "Deliver in full", define the cross docking fulfillment policy, with on optional time window.
Sales and marketing > Periodic tasks > Update order fulfillment policy for cross dock orders
The sales order fulfillment policy will be updated if needed, and the sales order can be released to warehouse automatically or manually without an error.
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