Case study 1 Product information management and inventory management

Objectives

• Create and manage products.

• Manage inventory pricing and costing.

• Configure inventory management.

• Manage and process inventory activities.

Scenario

Company Information

USMF is a United States company that manufactures products for several different industries and has a diverse portfolio of products.

Business Challenges and Requirements

USMF recently implemented Dynamics 365 Supply Chain Management. They hired a new full-time team to manage the warehouse and inventory, the new staff doesn’t have Dynamics 365 Supply Chain management knowledge.

Your Role

You are the Dynamics 365 Supply Chain Management functional consultant that implemented the solution. You are called to help the new staff in multiple areas.

Exercise #1 Adding products to a new warehouse using basic inventory management.

Objective: Add products to a new warehouse using basic inventory management. 

You are the supply chain management functional consultant on a project team advising your customer on best way to create new warehouse to store the overflow of new products.

Your customer is managing a small warehouse that does not require the full capabilities of warehouse management systems (WMS).

you and the Solution architect are in favor of using basic inventory management to help them creating the new warehouse.

What would you do?

Set the default location capacity.

1. Access the Microsoft Dynamics 365 Supply Chain Managment website and log in with your user credentials.

2. On the Finance and Operations dashboard page, expand the left navigation pane and select the Inventory management under the Modules tab.

3. On the Inventory management page select the Setup > Inventory and warehouse management parameters.

4. Click the Locations tab.

5. In the Standard width field, enter 450.

6. In the Standard depth field, enter 250.

7. In the Standard height field, enter 200.

8. Click Save.

9. Close the page.

Define the location name format.

1. On the Finance and Operations dashboard page, expand the left navigation pane and select the Inventory management under the Modules tab. On the Inventory management page select Setup > Inventory breakdown > Warehouses.

2. Click New.

3. In the Warehouse field, type 17.

4. In the Name field, type Raw materials.

5. In the Site field, click the drop-down button to open the lookup.

6. In the list, find and select site 1.

7. Expand the Location names section. The options in this section define the default format for location names. In our example, we’ll include the aisle number, rack number and shelf number.

8. Set the Include aisle option to Yes.

9. Set the Include rack option to Yes.

10. In the Format field, for the rack, type -##

11. Set the Include shelf option to Yes.

12. In the Format field, for the shelf, type -##

13. Click Save.

Define warehouse locations

1. On the Action Pane, click Warehouse.

2. Click Location Wizard.

3. On the Welcome screen, click Next.

4. De-select the Outbound docks option

5. De-select the Bulk locations option

6. Click Next.

7. On the Create inventory aisles screen, click Next.

8. On the Edit and delete aisles screen, click Next.

9. On the Create inbound docks screen, click Next.

10. On the Edit and delete inbound docks screen, click Next.

11. On the Create picking locations screen, click Next.

12. On the Specify additional information for all your picking locations screen, note that the physical dimensions shown on this page are the ones that you set at the start of this procedure. Click Next.

13. On the Edit and delete picking locations screen, click Next.

14. Click Finish.

15. Close all pages.

Exercise #2 Creating a standard cost version that uses a specific model group.

Objective: Create a standard cost version to record certain model group products. 

The warehouse employee at USMF, need to create a standard cost version to record products that use the item model group with inventory model of Standard. The items must be grouped based on FIFO inventory model.

What would you do to help this employee?

Create cost version

1. Go to Cost management > Predetermined cost policies setup > Costing versions.

2. Click New.

3. In the Costing type field, select Standard cost.

4. In the Version field, type SeahorseST.

5. In the Name field, type Seahorse Standard Costing.

6. In the Block activation field, select No.

7. Click Save.

8. Close the page.

Create item model group

1. Go to Cost management > Inventory accounting policies setup > Item model groups.

2. Click New.

3. In the Item model group field, type STDN.

4. In the Name field, type Standard Cost.

5. In the Inventory model field, select Standard cost.

6. Expand the Inventory policies section.

7. In the Approved vendor check method field, select No check.

8. Click New.

9. In the Item model group field, type FIFO2.

10. In the Name field, type FIFO 2.

11. Click Save.

12. Close the page.

Create tracking number group

1. Go to Inventory management > Setup > Dimensions > Tracking number groups.

2. Click New.

3. In the Number group field, type ASer.

4. In the Name field, type Auto-Serial.

5. Select No in the Date field.

6. Select No in the Lot ID field.

7. Select Yes in the Number sequence No. field.

8. Select Yes in the Only for inventory transactions field.

9. Select Yes in the On physical update field.

10. Click New.

11. In the Number group field, type USer.

12. In the Name field, type Unique-Serial.

13. Select No in the Date field.

14. Select No in the Lot ID field.

15. Select Yes in the Number sequence No. field.

16. In the Number sequence code field, choose any number sequence of your choice.

17. Select Yes in the Only for inventory transactions field.

18. Select Yes in the On physical update field.

19. Set Per qty. to 1.

20. Click New.

21. In the Number group field, type Batch.

22. In the Name field, type Auto Batch.

23. Select No in the Date field.

24. Select No in the Lot ID field.

25. Select Yes in the Number sequence No. field.

26. In the Number sequence code field, choose any number sequence of your choice

27. Select Yes in the Only for inventory transactions field.

28. Select No in the On physical update field.

29. Close the page.

Exercise #3 Adding and releasing new products to a warehouse

Objective: Add new products with and without variants. 

Some new products are introduced by USMF and must be added to the new warehouse. As supply chain manager, you will have to create 2 new products:

• A V-neck T-shirt with multiple variants that has different colors and sizes. This item will be available in size Small, Medium and Large and in colors: Black and Red.

• The product type should set to: Product with no variance for the cabinets

What would you do?

Create product masters

1. Navigate to Product information management>Products>Released products.

2. Click New.

3. In the Product type field, select Item.

4. In the Product subtype field, select Product master.

5. In the Product number field, type GTLS001.

6. In the Product name field, type V Neck T-Shirt.

7. In the Search name field, type VNeckTShirt.

8. In the Retail category field, select Apparel and Footwear and select OK.

9. In the Product dimension group field, select ColorSize.

10. In the Configuration technology field, select Predefined variant.

11. In the Item model group field, select FIFO (First In-First Out).

12. In the Item group field, select Audio.

13. In the Storage dimension group field, select SiteWH.

14. In the Tracking dimension group field, select None.

15. In the Inventory unit field, select ea (Each).

16. In the Purchase unit field, select ea (Each).

17. In the Sales unit field, select ea (Each).

18. In the BOM unit field, select ea (Each).

19. In the Sales Taxation, Item sales tax group field, select ALL (All sales tax codes).

20. In the Purchase Taxation, Item sales tax group field, select ALL (All sales tax codes).

21. Click OK.

22. Close all pages.

23. Navigate to Product information management>Products>Released products.

24. Using quick filter search by item number for GTLS001.

25. Click item GTLS001 to open the product master record.

26. Click the Product dimensions button from the Product action pane.

27. Select the Sizes tab.

28. Click New in the Define sizes for a product master section.

29. In the Size field, enter Small.

30. In the Name field, enter Small.

31. In the Description field, enter Small Size.

32. Click New.

33. In the Size field, enter Medium.

34. In the Name field, enter Medium.

35. In the Description field, enter Medium Size.

36. Click New.

37. In the Size field, enter Large.

38. In the Name field, enter Large.

39. In the Description field, enter Large Size.

40. Select the Colors tab.

41. Click New in the Define sizes for a product master section.

42. In the Color field, enter Black.

43. In the Name field, enter Black.

44. In the Description field, enter Black color.

45. Click New.

46. In the Color field, enter Red.

47. In the Name field, enter Red.

48. In the Description field, enter Red color.

49. Click Save.

50. Close the form.

51. Click Released Product variants button from the Product action pane.

52. Click Variant suggestions from the Product Variant action pane.

53. Click Suggest all.

54. Click Create.

Close all pages.

Exercise #4 Using the inventory movement journal to initialize stock levels in a warehouse

Objective: Initialize stock levels in a warehouse by using movement journals. 

USMF company has some inventory opening balance for one of its products and is it necessary to add to that stock. There are no specific purchase order references for the items, so the opening balance will have to be forced into the system.

The warehouse manager, will have to use the inventory movement journal to add the opening balance and use an offset account to balance the transaction in the general ledger.

In USMF, its possible to update the on-hand inventory manually using an Inventory movement journal.

It is also possible to update on-hand inventory by importing transactions in data entities.

What would you do to guide the warehouse manager?

Initialize stock levels in the warehouse using movement journals

1. Go to Inventory management > Journal entries > Items > Movement.

2. Click New.

3. In the Name field, click the drop-down button to open the lookup.

4. Select Imov. It is a good practice to use different journal name templates for the different business purposes.

5. In the Offset account field, specify the values 140200. This is the offset account that will be the default account on the journal lines. It is possible to override the default to assign different offset accounts per line.

6. Click OK.

7. Click New in the Journal lines fast tab.

8. In the Item number field, click the drop-down button to open the lookup.

9. Select item A0001.

10. Click the Inventory dimensions tab.

11. In the Site field, click the drop-down button to open the lookup.

12. Select site 1.

13. In the Warehouse field, click the drop-down button to open the lookup.

14. Select warehouse 13.

15. In the Location field, click the drop-down button to open the lookup.

16. Select location 13.

17. In the Quantity field, enter a number.

18. Click Save.

19. Click Post.

20. Check or uncheck the Transfer all posting errors to a new journal check box. If you enable this option, any lines that fail to post will be copied to a new journal. You can use the information in the log to correct the issues and then re-post the lines.

21. Click OK.

22. Close all pages.

Exercise #5 Using the inventory transfer journal to move items to a new location in the warehouse

Objective: Move items from a plate-controlled location to a location that is not license plate controlled. 

Transfer physical inventory within the warehouse using transfer journals

1. Go to Inventory management>Journal entries>Items>Transfer.

2. Click New.

3. In the Name field, enter or select ITrf.

4. Click OK.

5. Click New in the Journal lines fast tab.

6. In the Item number field, enter or select A0001.

7. In the From site field, enter or select 2.

8. In the To site field, enter or select 2.

9. In the From warehouse field, enter or select 24.

10. In the To warehouse field, enter or select 24.

11. In the From location field, enter or select FL-001.

12. In the To location field, enter or select BULK-001.

13. In the Quantity field, enter a number.

14. Click the Inventory dimensions tab in the Line details fast tab.

15. In the License plate field, in From inventory dimensions, enter or select 24.

16. Click Save.

17. Click Post.

18. Click OK.

19. Click Inventory in the Journal lines fast tab.

20. Click Transactions to see the transfer.

21. Close all pages.

Exercise #6 Adjusting stock levels using the inventory adjustment journal

Objective: Adjust stock levels after an error by using the inventory adjustment journal. 

During the transfer journal processing a user recorded the wrong number of items moved to the new location.

You were asked to use the inventory adjustment journal to fix quantity.

You will also need to adjust the stock levels of products in the warehouse.

How would you perform this?

Adjust stock levels in the warehouse

1. Go to Inventory management > Journal entries > Items > Inventory adjustment.

2. Click New.

3. In the Name field, click the drop-down button to open the lookup.

4. In the list, click on the inventory adjustment journal name you want to use. Some other fields will be populated based on the setup of the inventory adjustment journal name you select.

5. Click OK.

6. Click New in the Journal lines fast tab.

7. In the Item number field, select D0001.

8. In the Site field, click the drop-down button to open the lookup.

9. In the list, select a site 1.

10. In the Warehouse field, click the drop-down button to open the lookup.

11. In the list, select warehouse 13. If you have selected an item with Location as a mandatory dimension, you would have to specify the location here.

12. In the Quantity field, enter a number. The cost price field specifies the cost per unit for inventory receipts. If the cost is not specified for the item number or if you wanted to change it manually, you would do this here.

13. Click Validate.

14. Click OK.

15. Note that the Journal is OK, and click Post. When you post this kind of journal, an inventory receipt or issue is posted, the inventory level and value are changed, and ledger transactions are generated.

16. Click OK.

17. Close all pages.

Exercise #7 Using the inventory counting journal to compare D365 inventory amounts to manually counted quantities

Objective: Use the inventory counting journal to compare manually counted amounts to the on hand recorded amounts in D365 supply chain and post the transaction. 

A few days after you have adjusted stock levels, the warehouse manager decide to manually count the items in that specific area of the warehouse.

The warehouse manager wants to enter the manually counted quantity and not sure what to use.

how would you help?

Use counting journals

1. Go to Inventory management > Journal entries > Item counting > Counting.

2. Click New.

3. In the Name field, click the drop-down button to open the lookup.

4. In the list, click on the inventory counting journal Icnt. Some other fields will be populated based on the setup of the inventory counting journal name that you select.

5. In the Worker field, click the drop-down button to open the lookup.

6. In the list, select the worker you want to use.

7. Click Select.

8. Click OK.

9. Click New in the Journal lines fast tab.

10. In the Item number field, click the drop-down button to open the lookup.

11. In the list, find and select A0001.

12. In the Site field, click the drop-down button to open the lookup.

13. In the list, find and select site 2.

14. In the Warehouse field, click the drop-down button to open the lookup.

15. In the list, find and select warehouse 24.

16. In the Location field, click the drop-down button to open the lookup.

17. In the list, find and select location BULK-001.

18. In the Counted field, enter a number.

19. If you enter a counted number that’s different than the number shown in the On-hand field, the Quantity field is updated to show the discrepancy.

20. Click Save.

21. Click Post. When you post an inventory counting journal, if the counted amount differs from the amount that’s reported in the On-hand field, an inventory receipt or issue is posted, the inventory level and value are changed, and ledger transactions are generated.

22. Click OK.

23. Close all pages.

Exercise #8 Creating a BOM in the BOM designer (Bonus)

Objective:  Create a BOM in the BOM designer with a title, item group, site and quantities.

The designer at USMF has received a new specification for the enclosure side of a cabinet. and she has requested your assistance. You see that an item is not set up for this specification, so you only need to create a simple BOM with component lines. Use employee 000020, Julia Funderburk, to approve the BOM.

Create a BOM titled “High Quality Speaker” and assign it to the Audio item group at site 1. Use the BOM designer to add items with warehouse 11 and the following quantities:

• 1 qty of M0008 / High End Cabinet / Black

• 2 qty of M0002 / Mid-Range Speaker Unit

• 1 qty of M0009 / Protective Corners

You will:

Create a BOM in the BOM designer.

1. Go to Product information management > Bills of materials and formulas > Bills of materials.

2. Click New.

3. In the Name field, type High Quality Speaker.

4. In the Site field, type 1.

5. In the Item group field, enter or select Audio.

6. Click Designer.

7. Click Formula lines.

8. Click Add to component BOM.

9. In the list, find and select M0008 / High End Cabinet / Black (the checkbox on the left should be checked).

10. Click OK.

11. Click Formula lines.

12. Click Add after line.

13. In the list, find and select M0009 / Protective Corners.

14. Click OK.

15. Click Formula lines.

16. Click Add before line.

17. In the list, find and select M0002 / Mid-Range Speaker Unit.

18. Click OK.

19. Close the page.

20. Refresh the page.

21. In the list of Bill of materials lines, find and select the row for M0002 / Mid-Range Speaker Unit.

22. Set Quantity to 2.0000.

23. In the Maintain action group, click Approval. Select 000020, Julia Funderburk.

24. Click OK.

25. Close all pages.