Ax2009 Enus WM 03

Chapter 3: Setting Up Warehouse Management
CHAPTER 3: SETTING UP WAREHOUSE

MANAGEMENT
Objectives
Explain the Warehouse management parameters, inventory model
groups and inventory dimension groups.
How to set up physical and logical of the inventory:
o Sites, warehouse, aisles, locations, warehouse items
o Store areas, Store zones
Introduce inventory equipment setup:
o Pallet
o Pallet types and groups
o General Concepts of Pallet locations
o Forklift
Introduction
The system must be set up before using the Warehouse management. Perform the
setup mainly from the Inventory management module. For optimal operation, the
parameters should be set up carefully. There are several forms to set up.
Descriptions of most options can be found in this lesson, but see also the Storage
Dimensions chapter.
This lesson attempts to follow the setup flow; however, it is impossible to avoid
some jumping back and forth between forms because the forms are
interconnected and interrelated.
The basic setup includes:
Setup of the item in the Items form.

Setup of the warehouse items in the Warehouse items form.
Setup of the item's inventory model group.
Setup of the item's dimension group.
Setup of the warehouse and inventory breakdown.
Setup of inventory equipment.
Setup of inventory management parameters.
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Chapter 3: Setting up Warehouse Management
Scenario
The Contoso company is in the process of implementing Warehouse
management. As a result, basic setup needs to be completed to ensure the system
works for this particular company’s business needs. For example, the company
needs to be able to store multiple food products at various temperatures. By
setting up inventory dimensions, the company will be able to track the storage of
these items at a detailed level. The company must also set up the physical
dimensions such as warehouses, inventory aisles and store areas. When
determining the layout of the warehouse, it is important that the company
carefully considers how the items should be grouped, stored and picked.
Warehouse Management Parameters

Inventory parameters set up your inventory management parameters. The
parameters are grouped on tabs according to their overall use.
Go to Inventory management > Setup > Parameters to use inventory

management parameters to:
Select between two or more different types of functionality.

Enter default information to be used by Microsoft Dynamics AX
2009 if the information has not been specified at a lower level.
Select number sequences for the module.
The tabs most relevant to Warehouse management parameters setup are:

General, Transport, Location and Inventory dimensions tabs. They are
described in further chapters of the current course.
Inventory Model Groups

The purpose of this section is to explain the definition of inventory model groups
within the relationship of Warehouse management.
You can attach several items to an inventory model group. Instead of providing
detailed information for each item, one inventory model group collects all the
information, which then attaches it to the items in question. This makes updating
easier, since you may typically manage several items according to the same setup
that only has to be updated in one place. Hence, you create inventory model
group only as needed.
In the Inventory model groups form, specify how items relate to registration
and picking procedures.
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FIGURE 3-1: INVENTORY MODEL GROUPS FORM
Inventory Model Groups - Setup

Inventory model groups contain settings that determine how items are controlled
and handled upon item receipts and issues. These settings also determine how
item consumption is calculated. A model group can be associated with many
items. This feature facilitates maintenance since many items are often controlled
with the same setup.
On the Overview tab, you can create the model group. On the Setup tab, you can
set up and maintain the model group settings. The Inventory model tab provides
help information on the selected inventory model and settings for the item cost
price managing.
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FIGURE 3-2: INVENTORY MODEL GROUPS FORM. GENERAL TAB
Field Description
Inventory model Identifying code for the inventory model group.

group
Name Descriptive name for the inventory model group.
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FIGURE 3-3: INVENTORY MODEL GROUPS FORM, SETUP TAB
Two fields on the Setup tab are relevant for the Warehouse management:
Quarantine management
Consolidated picking method
In the table below, see the short description of these check boxes.
Check box Description
Quarantine Select this check box to indicate that items attached to this
management group are under quarantine management rules and
requirements.
This option is used for items that are set aside and awaiting
approval for distribution.
If the check box is cleared, items are not under quarantine
management rules unless a quarantine order is created
manually in the Quarantine orders form.
When the item is registered, a quarantine order is generated
with the status Started.
Consolidated Select this check box to pick multiple orders and use
picking method picking areas and shipment functionality.
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Inventory model tab
On this tab, assign the inventory model to the inventory model group. The
inventory model will be used when closing and adjusting inventory (Inventory
management > Periodic > Closing and adjustment). See the description of
every individual model in the right pane of the Inventory model groups form.
When assigning the inventory model, the following options are available:
Include physical value – select this check box to include physically updated
transactions in the calculation of the average cost. Clear this check box to
consider the parameter according to the inventory valuation method at inventory
closing. The FIFO, LIFO, LIFO date inventory valuation methods will consider
the parameter during inventory close, while the Weighted avg. and Weighted
avg. date will not.
Fixed receipt price –this is inventory valuation feature .Select this check box to
adjust item receipt and issue values to the fixed receipt price in the Item form
when posted. If the receipt price is different from the fixed receipt price,
inventory is updated with the fixed receipt price and the difference is posted to
the account for fixed receipt price loss or profit items. Clear this check box to
post items at the current receipt price. Upon closing, issue transactions are value-
adjusted according to the inventory model groups that are selected in the
Inventory model groups form.
Assign Inventory Model Groups

In the Items form, click General tab to assign items to an inventory model
group.
The Inventory model group and Dimension group fields are mandatory. If you
try to save the new item without assigning them to the inventory model group
and dimension group, an error message will be displayed.
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FIGURE 3-4: ITEM FORM, GENERAL TAB
Inventory Dimension Groups

Inventory dimension groups determine which information is registered for
inventory transactions such as purchases, sales, transfers, and productions, and in
what detail items are inventoried.
Storage Dimensions
Use storage dimensions to identify and determine how items should be stored.
They allow management of the inventory on a very detailed level.
There are six types of storage dimensions in Microsoft Dynamics AX 2009.
Dimension type Definition
Site This is the geographical location of a company branch, can

either active or inactive in Microsoft Dynamics AX 2009.
Warehouse This is the storage location (for example, a site or building).
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Batch number** This is the ID for a group of related items. It is useful for
traceability.
Location* This is the detailed item storage location (for example,

aisle, rack, shelf, or bin).
Pallet ID* This is the ID for a group of items on the same pallet.
Serial number** This is the ID for each individual item, also useful when
you need traceability.
* Used only in connection with Warehouse management.
** Used only in connection with Logistics.
The amount of detail you apply when storing items depends on your company's
needs. Consider the relevance of each dimension for various items some items
have special needs.
Examples of items with special needs:
Dairy products need to be kept cool.

Pharmaceutical goods need to be easily identifiable and tracked.
Ice cream needs to be kept frozen.
When creating an item in Microsoft Dynamics AX 2009, you must specify an

inventory dimension group. In the inventory dimension group, you specify which
dimensions will or can be specified for the item.
Create and update inventory dimensions in the Inventory dimension form.
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FIGURE 3-5: DIMENSION GROUPS FORM
This table describes the fields in the Dimension groups form:
Field Description
Dimension group Set up a dimension group for a group of items that have
similar characteristics, handling traits, or the same
categorization.
Activate one or more inventory dimensions for the
inventory dimension group by selecting the Active check
box next to the dimension.
Each inventory dimension has the same setup for all items
belonging to that dimension group.
The Dimension group is a mandatory field in the Item
form. However, if only a few dimension groups are used,
include the dimension group in the item templates used
when creating new items. This way, the dimension group
does not have to be selected manually for each item being
created.
Name Descriptive name for the inventory model group.
Item dimensions An item dimension is used to identify item attributes; for
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example: model, size, or color.

The following item dimensions are available:
Configuration
Size
Color
The following rules apply to item dimensions: the
dimension must be specified when creating the item
transactions, for example, when a purchase or sales order
line is created.
The specified dimension applies only to the item
transaction. You can neither fully nor partly change the
dimension value for the related inventory transactions upon
physical issue or receipt.
Items are always reserved per dimension. In other words,
you cannot reserve items for dimension values other than
those specified on the actual item transaction.
Storage A storage dimension is used to identify where and how an

dimensions item is stored.
The following storage dimensions are available:
Site
Warehouse
Batch number
Location
Pallet ID
Serial number
Specifying mandatory storage dimensions for an inventory
group can control the level of detail used when linking
issues an alternative to using the batch number to receipts.
This is similar to marking as a reservation tool for
production.
For example, if all six dimensions are mandatory, only one
receipt posting will match an issue posting. To avoid this
high level of detail, you can set up an inventory dimension
group to allow blank dimensions, or the editing of
dimensions in order lines. Dimension handling for items is
adjusted based on the dimension setup.
To learn more about how to set up storage dimensions, see the Storage
Dimensions chapter.
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Physical Setup of the Inventory

To utilize Warehouse management, you first need to set up site, if your company
uses multisite functionality.
Sites
A site is a grouping of business resources, such as warehouses and production
facilities, which share interrelated transactions and are located at a particular
geographic location. The site entity, which is implemented in Microsoft
Dynamics AX 2009 as an inventory storage dimension, plus the enhancements to
the existing dimensions framework provide the structural foundation for the
multisite functionality.
A company may establish logistic operations at multiple sites for a variety of

reasons. These might include setting up distribution centers that serve different
geographic markets, or setting up production facilities at a particular location
because of lower overhead costs, proximity to raw materials, or convenient
transportation.
Using the Microsoft Dynamics AX 2009 multisite functionality, a customer can

configure multiple sites to reflect its unique business model and support its
operations and process flows. There are several examples of business
environments where customers could set up multiple sites:
A single production site with multiple warehouses

Multiple production sites with a shared distribution center
Multiple local production sites with a shared production site
FIGURE 3-6: SITES FORM, OVERVIEW TAB
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NOTE: To learn more about the multisite functionality, refer to the What’s New in
Microsoft Dynamics AX 2009manual, Introduction course to Microsoft Dynamics AX
2009, Master Planning in Microsoft Dynamics AX 2009 and Production I in Microsoft
Dynamics AX 2009 courses.
Once you have created a site, you can delete it as long as:
The site is not referenced from warehouses, production resources, or

other master data.
There is no open on-hand inventory that is associated with the site.
These conditions may exist if the multisite functionality is activated. If either of

these conditions exists, the program displays an error message, and you cannot
delete the site.
Hierarchy Tab
On the Hierarchy tab of the Sites form, you can view the structure of the
company based on sites and warehouses.
FIGURE 3-7: SITES FORM, HIERARCHY TAB
Procedure: Create a Site

1. Click Inventory management > Setup > Inventory
breakdown > Sites.
2. Press CTRL+N to create a new entry.
3. Enter a unique identifier and a description for the site.
4. Click the General tab. Select a time zone in the Time zone
field. If you do not specify a time zone, the time zone that is
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defined in the Company information form is used as the

default time zone.
5. Save the entry.
Warehouses
Warehouses are one of the system's inventory dimensions and are usually a
geographic location, or they serve a particular function, such as a spare parts
warehouse.
When you have several warehouses, the total on-hand inventory can be divided
up. All item transactions can be attached to a warehouse, which then follows the
transactions throughout the system.
If you have several satellite warehouses, you can set them to be refilled from the
main warehouse for which proposed transfers are generated during Master
scheduling. You can also schedule transactions for each warehouse.
If you need to delete a warehouse, first check that there is no on-hand inventory
at the warehouse. If there is on-hand inventory at the warehouse, it must be
moved to another warehouse.
For each warehouse, you can also specify the maximum time that a picking route
may take and the maximum volume of the picked items in the picking route. To
calculate the time it takes to complete a picking route, you must specify the time
it takes to go from one picking location to the next and the time it takes to pick an
item.
You can create the new warehouses and modify the existing ones in the
Warehouses form (Inventory management > Setup > Inventory breakdown >
Warehouses).
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FIGURE 3-8: WAREHOUSE FORM, OVERVIEW TAB
General Tab
In the table below, see the description of the fields on the General tab:
Field Description
Warehouse Enter the warehouse ID (Maximum ten characters).
Name Identify the name or short description of the warehouse.
Type Select “Default” for a standard warehouse or “Quarantine”

for a quarantine warehouse. A default warehouse can be
linked to a quarantine warehouse in the Quarantine
warehouse field on the General tab.
Site Select the site to associate the warehouse with. This

becomes input to the site and warehouse hierarchy. A
warehouse can only be associated with one site.
Branch number Numeric ID of the branch in the following format:

X.XXX.XXX.XXX.
Quarantine Use this field for the current warehouse. This field is not
warehouse available when the current warehouse is a quarantine one.
Transit warehouse This is used to select a location between a "from"
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warehouse and a "to" warehouse for warehouse transfers.

Items in a transit warehouse are in the process of being
transferred to a different warehouse (transfer order) and
therefore cannot be picked for other orders.
FIGURE 3-9: WAREHOUSES FORM, GENERAL TAB
Master Planning Tab
In the table below, see the description of the fields on the Master planning tab:
Field Description
Manual Select the Manual check box to process item numbers at

the current warehouse manually, once the Master schedule
has been run.
Calendar The work-days calendar. When no coverage group is

specified, the calendar chosen here is used to calculate
order date, requirement date, and preferred delivery date.
Refilling This field works together with the Main warehouse field.
Refilling the current warehouse
When a main warehouse is selected as the source for
refilling the current warehouse, the master schedule
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generates transfer orders.

When a coverage warehouse is specified instead of a main
warehouse, the master scheduling process does not support
refilling from the main warehouse. If you want to refill
from a main warehouse, you must make Warehouse active
as an inventory dimension and select the Coverage plan by
dimension check box in the Dimension groups.
FIGURE 3-10: WAREHOUSES FORM, MASTER PLANNING TAB
Warehouse Management Tab
In the table below, see the description of the fields on the Warehouse
management tab:
Field Description
Default receipt Select the default location for receiving items in the current
location warehouse.
(For example, the inbound dock.)
Default issue Select the default location from which inventory is issued
location in the current warehouse in conjunction with sales orders,
production orders, and so on.
(For example, the outbound dock.)
Empty pallet Select the location where empty pallets are stored in the
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location warehouse (i.e., when a picking pallet is empty, it will

automatically be moved to this location).
Picking route time Enter the maximum time allowed for picking per picking
route.
Picking route Enter the maximum volume that can be picked per picking
volume route.
Picking route Enter the average time required to move between picking
transit time locations on the picking route.
Use consolidated This setting is either inherited from the model group
picking method (Inventory model groups form) or can be set here.
FIGURE 3-11: WAREHOUSES FORM, WAREHOUSE MANAGEMENT TAB
Location Names Tab
In the table below, see the description of the fields on the Location names tab:
Field Description
Include aisle Select this check box to include aisle in location name.
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Include rack Select this check box to include rack in location name.
Format Format for the part of the name of the location given by the
rack. Use the # character for numbers and the
&amp character for letters.
Use the Location field to preview the format.
Include shelf Shelf is included in location name.
Include bin Bin is included in location name.
Location Use the Location field to preview the format.
FIGURE 3-12: WAREHOUSE FORM, LOCATION NAME TAB
In Warehouse management, the Inventory aisle and Location refers to the

physical location of the items in the warehouse. For example, 01-01-02 is aisle 1,
rack 1, and shelf 2.
Before creating warehouses, inventory aisles, and locations, draw up or establish

the warehouse layout, and carefully consider the options. It is important to decide
how to organize and group the items and how you store and pick them.
You may use the wizards in Microsoft Dynamics AX 2009 to create inventory
aisles and locations. The wizards facilitate the creation because they are easy to
use and let you create several locations at the same time. Before utilizing the
wizard, it is important to understand how warehouses are set up in the Warehouse
management module.
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You can copy existing locations from one warehouse to another within the
warehouses form.
Inventory Aisles
A warehouse is divided into inventory aisles. Inventory aisles are used to group
locations. Define aisles in the Inventory aisle form (Inventory management >
Setup > Inventory breakdown > Warehouses).
An aisle has an aisle ID and an aisle number, which can be the same. The aisle
ID, typically the first part of the location name, is an alphanumeric identifier for
an aisle. The letters help identify a particular warehouse or area within the
warehouse.
The aisle number is a strictly numeric identification of the aisle in the warehouse.
Do not add place-holding zeros at the beginning of the aisle number. The aisle
number is used by the system when generating sorting codes.
Assign unique IDs to the inventory aisle using the Warehouse and Aisle fields.
The Inventory aisle form can also be open by clicking Inquiries > Inventory
aisles in the Warehouses form. In the Inventory aisle form, view information on
inventory aisles for a warehouse. Also, you can view the location information on
the selected inventory aisle, or copy inventory aisle information from one
warehouse to another.
Overview Tab
Use the Overview tab to create the aisles.
FIGURE 3-13: INVENTORY AISLE FORM, OVERVIEW TAB
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Field Description
Aisle Name of inventory aisle. The name is used as a reference to

the inventory aisle, together with the warehouse.
Warehouse Identifies the warehouse where the aisle is found. The ID is

used as a reference to the aisle, together with the aisle's
name.
Aisle number Numeric field used for sorting inventory aisles when the
sorting codes for the locations are updated.
Name Provides a longer description of the inventory aisle.
Starting value Specifies the starting value for the sorting codes for the
locations in the aisle.
Descending Specifies whether the locations in the aisle should be sorted

in descending order by shelf number in connection with
picking routes.
FIGURE 3-14: INVENTORY AISLE FORM, GENERAL TAB
NOTE: For this to take effect at the locations, run the Sort codes periodic job
(Inventory management > Periodic > Locations > Sort codes) for those
locations.
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Using the Descending field, you can reverse the picking route for the relevant
aisle, making it go from the highest value downwards. The effect is shown in
Figure 3-16.
FIGURE 3-15: SORTING ROUTES
An inventory aisle has an aisle ID and an aisle number. They may or may not be
identical.
The aisle ID may consist of letters or numbers and should be easy for the user to
recognize. The aisle ID is the first part of the location name.
To copy aisles, select the copy aisle function, which allows you to copy all
locations at one aisle/rack to another aisle/rack. Both warehouse aisles must have
been defined in advance. From the Warehouses form, you can copy locations
from one warehouse to another.
Note you can neither change nor delete existing locations.
To copy aisles, click Inventory management > Setup > Inventory breakdown
> Inventory aisles > Functions > Copy aisles.
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FIGURE 3-16: COPY AISLE FORM
Field Description
Warehouse Identifies the warehouse where the aisle is found. The ID is

used as a reference to the aisle, together with the aisle's
name.
Aisle Name of inventory aisle. The name is used as a reference to

the inventory aisle, together with the warehouse.
You can copy locations from one aisle to another and copy locations from one
rack to another using the Inquiries button.
Locations
The following model is used for inventory locations:
Inventory aisles are composed of racks.

Racks are made up of shelves.
Shelves contain bins.
All of these components make up the inventory location.
Location is the most specific indication of where the items are stored in the
warehouse. It is a precisely defined physical location in the warehouse, and is
generated from the coordinates aisle, rack, shelf, and bin. The location name (the
combination) can be generated automatically or entered manually. The
coordinates are defined and activated on the Location names tab in the
Warehouses form (Inventory management > Setup > Inventory breakdown >
Warehouses).
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FIGURE 3-17: WAREHOUSES FORM, LOCATION NAMES TAB
Setting up a Location
Indicate locations on the Warehouse management tab of the Warehouses form.
By clicking Functions > Copy locations, you can copy locations from one
warehouse to another. The Inquiries button enables you to view inventory aisles
and locations of the current warehouse.
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FIGURE 3-18: WAREHOUSES FORM, WAREHOUSE MANAGEMENT TAB
You specify the default receipt and issue locations of the relevant warehouse on
the Warehouse management tab. They are used as default receipt and issues for
the inventory. You can also specify a location for storage of empty pallets. The
empty pallets are then automatically transferred to that location.
Five types of locations determine how Microsoft Dynamics AX 2009 handles the
location. This table describes the location types.
Location type Description
Bulk location A bulk location is the area in the warehouse where received
items are stored until the warehouse worker transports the
items to the picking locations.
Picking location Storage of items ready for picking. Should be used at

accessible locations.
Used for picking smaller lots. An item can only have one
picking location per unique item dimension in a warehouse.
Inbound dock Location in the warehouse where items are received and
possibly checked (Default if not specified elsewhere).
Outbound dock Location in the warehouse where shipment takes place

(Default if not specified elsewhere).
Production input Production input location is the location where the finished
items from shop floor arrive at.
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location
Location Wizard
The Location wizard helps you to set up locations in a warehouse. You can:
1. Select a warehouse.
2. Define the locations.
3. Update the warehouse settings by clicking Finish.
If you have additional warehouses to set up at a later time, start the wizard again
and repeat the procedure.
The wizard consists of a number of pages, which you are guided through until the
setup is complete.
NOTE: You can use the wizard more than once if you do not complete setup the first
time. Click View existing to check already existing base data in the respective windows.
Procedure Set up Locations in Warehouse Using Location

Wizard
This procedure shows you how to set up locations in a warehouse using the
Location wizard. This wizard is used to attach locations to each warehouse
1. To open the Location wizard, in the Warehouses form

(Inventory management > Setup > Inventory breakdown >
Warehouses), click Functions > Location Wizard.
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FIGURE 3-19: WAREHOUSES FORM

2. Read the information on the Location wizard, and click Next.
FIGURE 3-20: LOCATION WIZARD.

3. Select the warehouse you want to create locations for. Select
the locations you want to include in your warehouse. You can
select all areas for the additional setup. The Location wizard
will skip the setup of the areas were not selected. Click Next to
continue.
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FIGURE 3-21: LOCATION WIZARD

4. Create and set up the inventory aisles. Specify the number,
name format and location of the aisles to use for your inbound
and outbound docks. Click Next.
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5. Verify the information is correct. If the information is

incorrect, click the Back button to correct it. If the information
is correct, click Next to create the inbound docks.
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6. Specify the number and the naming format for the inbound
docks, and then click Next.

incorrect, click Back to correct it. If the information is correct,
click Next to create the outbound docks.
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8. Enter the number of outbound docks, the naming format for

the outbound dock, and click Next.
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click Next to create the picking locations.
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10. Specify the number of aisles, racks, and shelves for the picking
locations, and then click Next.
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11. Select the picking area, and specify the physical dimensions of
the location, and then click Next to review the picking
locations.

click Next to create the bulk locations.
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13. Specify the number of aisles, racks, and shelves in the area,
and then click Next.

14. Select the picking area and specify the physical dimensions of
the location, and then click Next to review the bulk locations.
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click Next to complete the warehouse setup.
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16. The Location wizard verifies that setup is complete for the
selected warehouse. The areas that are not set up will be
displayed. Click Finish to complete the setup.
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Warehouse Items
After the warehouse is set up with aisles, locations and store zones, it is time to
assign item to the warehouse.
In the following table, see the description of the fields on the General tab of the
Warehouses items form.
Field Description
Item number This is a unique user-defined code that is assigned when the
items are created.
It is recommended not to use special characters or spaces in
the item number.
Item numbers can be system generated by linking the item
number to a number sequences.
Configuration Identification of the item configuration.
Size Identification of the size.
Color Identification of the color.
Site Identification of the site.
Warehouse Identification of the warehouse. Warehouses are created in

the Warehouses form.
Warehouse determines which physical warehouse the item
is taken from when automatically picked or delivered or
received into in the case of negative turnover.
A gain means that items have not been fully consumed or
that a greater number of items were produced from the raw
materials than planned. It is used in connection with
production feedback.
Batch number Batch number dimension.
Location Location at a warehouse.
Pallet ID Unique identification of the pallet.
Serial number Serial number dimension.
Counting group Select a counting group. Group settings are specified in the
Counting groups form.
Counting started The selected check box indicates that an item count has
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been started. The actual count is activated from an

inventory count journal.
Counting journal Journal used for inventory counting.
FIGURE 3-35: WAREHOUSE ITEMS FORM, GENERAL TAB
On the Locations tab, set up the location for the specific item.
Note: It is important to be accurate with assigning correct Store zone and

Picking location on the Locations tab of the Warehouse items form for running
further.
In the following table, see the description of the fields on the Locations tab of
the Warehouses items form.
Field Description
Store zone The zone (area) in inventory.
Default receipt The default location that is proposed for inventory receipts
location on purchases, productions, and so on, when no other value
is specified.
Default issue The default location proposed for inventory issues on sales,
location production lines, and so on, when no other value is
specified.
Use consolidated This setting is either inherited from the model group
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picking method (Inventory model groups form) or set up here.
Picking location The location that the item is picked from.
Required When the quantity of items falls below this value, a refill
minimum should be created.
This can be set up in the Store areas form.
Max. storage The maximum storage capacity on the picking location.

capacity If the field is left blank, the storage capacity is not limited.
Logical Setup of the Inventory

Microsoft Dynamics AX 2009 uses store areas and zones to determine where to
place items upon arrival and for the automatic planning of a picking route when
the items are taken out of the warehouse again.
Store Areas
Store areas group locations by dividing the warehouse into designated sections
for inventory with similar characteristics.
There are two types of store areas:
Input area - Use for items that are stored when they are received in
inventory. Store areas are grouped into store zones; an example of an
input area system would be ABC classification.
Picking area - Use to determine picking routes. The picking lines
that make up a picking route are composed of items stored in
locations within the same picking area.
Every location is connected to one of each area.
Store areas are created in the Store areas form (Inventory management >
Setup > Inventory breakdown > Store areas).
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FIGURE 3-36: STORE AREA FORM
Field Description
Store area Unique ID of the store area.
Name The description of the store area.
Area type Indicates the type of store area involved. There are two
available area types:
Input area
Picking area
Automatic Select this check box to automatically activate a refill pallet

activation transport from the bulk location to the picking location if
items are missing on the picking location when:
A picking route is activated.
A picking route is started.
A refill pallet transport is completed.
The quantity at the picking location is less than the required
minimum specified in the Warehouse items form
(Inventory management > Item > Setup > Warehouse
items).
Mode of handling This option is available for store areas of Picking area type
only.
The mode of handling refers to the two ways of picking:
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using a handheld device and registering picked items

continuously, or else printing the picking list on paper and
updating Microsoft Dynamics AX 2009 after completion of
picking.
The setting defined in this form will be used as default in
the Picking list registration form.
FIGURE 3-37: STORE AREA FORM, GENERAL TAB
The inventory can be organized in several different ways according to item

type/group or turnover ratio. The inventory is divided into areas that have
something in common. This is done by indicating that the locations belong to a
store area. A location may belong to both an input and a picking area. The table
describes the two types of areas and their use.
Area Type Use
Input area Areas for input of items following receipt. The items are
grouped according to similar characteristics.
Items with a high turnover ratio may be placed in easily
accessible locations
Picking area Areas for picking items. The items are grouped according
to how and by whom they are picked.
The inventory is organized on the basis of the ABC analysis of the turnover ratio.
Items with a fast turnover are closest to the inbound and outbound docks. Items
that need to be kept cool are placed in a freezer.
41
Store Zones
Store zones are used for prioritizing the store areas for arriving items. The store
zones are made up of store areas. A store area may be part of several store zones.
In other words, a store zone may consist of one or more store areas.
FIGURE 3-38: STORE ZONES
Prioritizing means that if there is not enough room in area A when an item with
ABC classification A arrives, it may be placed in area B.
A store zone for a class A item may be prioritized like this:
Area A
Area B
but never area C or the freezer
A store zone for a class C item may be prioritized like this:
42
Area C
Area B
but never area A or the freezer.
Finally, a store zone for a frozen item may look like this:
Freezer
and no other store areas.
You can specify a store zone in the Store zone field of the Locations tab in the
Warehouse items form (Inventory management > Common Forms > Item
details > Setup > Warehouse items).
FIGURE 3-39: WAREHOUSE ITEMS FORM, LOCATIONS TAB
You must specify a store zone for each warehouse.
Store zones group locations in inventory. Use store zones to order and prioritize
the selection of store areas for incoming inventory. When space is needed for an
item, the warehouse is searched in the order shown on the Overview tab of the
Store zone form (Inventory management > Setup > Inventory breakdown >
Store zones).
43
FIGURE 3-40: STORE ZONE FORM, OVERVIEW TAB
On the Store areas tab of the Store zone form, you can add and remove store
areas. You can:
Add or remove store areas between the Selected and Available

panes using the arrow buttons.
Use the Up and Down buttons to arrange the order of the store areas.
44
FIGURE 3-41: STORE ZONE FORM, STORE AREAS TAB
Inventory Equipment Setup

Pallets
Wikipedia defines a pallet as a flat transport structure that supports goods in a
stable fashion while being lifted by a forklift, pallet jack, or other jacking device.
A pallet is the foundation of a unit load design, which can be as simple as placing
the goods on a pallet, and securing them with straps or stretch-wrapped plastic
film, or as exotic as a ULD minicontainer.
Therefore, pallets are a platform for loads within a warehouse: in this case, a
standardized platform or open-ended box usually made of wood that allows
mechanical handling of bulk goods during transport and storage. The Pallet form
(Inventory management > Setup > Inventory equipment > Pallets) shows
information on individual pallets.
45
FIGURE 3-42: PALLET FORM, OVERVIEW TAB
In the table below, see the description of the fields on the General tab of the
Pallet form:
Field Description
Pallet ID Unique identification of the pallet.

If you leave the field blank when creating a new pallets,
and you set up a number sequence for the Pallet ID, the
pallet will be given an ID automatically when the record is
saved.
If the length of the field set up for the number sequence is
exactly 17 and permits only numbers (no letters or the like),
Microsoft Dynamics AX 2009 assumes you are using pallet
ID’s according to the SSCC-18 standard, and it
automatically calculates and attaches a check number as
character number 18.
Pallet type Specifies the type of pallet.
Warehouse Specifies the warehouse where the pallet is located.
46
Location Specifies the location of the pallet.
Height Shows the height of the pallet, including items.

The system uses this height when searching for a location
for the pallet.
FIGURE 3-43: PALLET FORM, GENERAL TAB
On the RFID tab, you must select the server ID and the device name or printer
name in order to read and to write tags.
47
FIGURE 3-44: PALLET FORM, RFID TAB
In the Pallet form, the following buttons are available:
On-hand
Transactions
Pallet transports
Functions
Print
On-Hand
Clicking this button displays the inventory on-hand for the item divided among
inventory dimensions. On-hand inventory is generated and updated automatically
when transactions are made in inventory, whether they are:
Forecasted transactions
Physical transactions
Financial transactions
You can view the item inventory-level status by clicking On-hand in the Item
form (Inventory management > Common Forms > Item details > On-hand)
or you can view the whole list of items with on-hand inventory by opening the
On-hand form (Inventory management > Inquiries > On-hand).
The Overview tab of the On-hand form provides a general overview per
selected item. The On-hand tab provides additional information per inventory
dimension.
48
Transactions
Clicking this button displays all of the item's inventory transactions, represented
as receipt or issue transactions. The program generates transactions when sales-,
purchase-, production-, project-, and inventory journal lines are created upon
packing-slip and invoice-updating -in other words, each time lines involving an
item are manipulated. Thus, inventory transactions reflect both historical and
forecasted movements in inventory.
Sales prices do not figure in inventory transactions, but the Reference tab
displays references to both accounts payable and accounts receivable, including
sales prices. As for financial information, transactions display the cost value of
the item. They also show whether status, updates (both physical, financial, and
settlements), and transactions are used, as well as which accounts are used.
Amount fields include physical and financial cost amounts, settlement cost
amounts, and adjustments.
Pallet Transports Handling
This shows the information on where the pallet came from and where the pallet
went.
Functions
This button enables you to move pallets, create an input transport from the
inbound dock, start the item counting process, or trace the pallet through the
warehouse.
Print
This option allows you to print a pallet label or on-hand report of the pallet.
Pallet Types
You can create the pallet types used in the warehouse in the Pallet type form
(Inventory management > Setup > Inventory equipment > Pallet types). Use
the pallet types to define the physical dimensions for any type of item container.
49
FIGURE 3-45: PALLET TYPE FORM, OVERVIEW TAB
In the table below, see the description of the fields on the General tab of the
Pallet type form:
Field Description
Pallet type Unique identification of the pallet type.
Name Description of the pallet type.
Height Height of this type of pallet.
NOTE: Height of the pallet is the height without items.
Width Width of this type of pallet.
Depth Depth of this type of pallet.
Volume Calculated volume of the pallet.

The volume is calculated on the basis of the height, width,
50
and depth.
Container Select this check box if the pallet type is a container, where
items are not laid on top of but rather inside the pallet. In
this case, the pallet's height always corresponds to the
height of the pallet type. If you do not select the field, both
pallet and items are included in a calculation of the height.
FIGURE 3-46: PALLET TYPE FORM, GENERAL TAB
Specify the pallet type dimensions. The dimensions are copied to the individual
pallets when they are created. The system uses the pallet dimensions to determine
whether there is room for a certain pallet at a specific location.
In the Items form, Setup tab, Warehouse management field group specify the:
Gross height of the item.

Number of pallets, and quantity of items per layer.
Default pallet type for the item, which is used in the item arrival
journal when a pallet is created for the item.
There are two types of pallets:
Pallets - Pallets/items may be piled on the top of each other at the

location on the pallet.
Containers - Pallets/items are placed in the container. You create the
Container pallet type by selecting the Container check box on the
General tab in the Pallet type form. The items are placed inside a
container but not on the top of it, as for a pallet.
51
The type of pallet is crucial for determining whether there is room for a pallet at a
specific location.
Pallet Type Groups

You can specify a pallet type group for each location. All pallets from the
specified pallet type group can then be used at that location. Typically, pallet
types are grouped into pallet type groups on the basis- on similar physical
dimensions. Pallet type groups are then used to specify which pallet types can be
used at each location.
To create pallet type groups for the pallet types grouping, use the Pallet type
group form (Inventory management > Setup > Inventory equipment > Pallet
type groups).
FIGURE 3-47: PALLET TYPE GROUP FORM
In the Pallet type group field, type the ID of the group. In the Name field, type
the short description of the pallet type group.
On the Pallet types tab of the Pallet type group form, add or remove pallet
types to be included in the current group using the arrow buttons.
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FIGURE 3-48: PALLET TYPE GROUP, PALLET TYPES TAB
General Concepts of the Pallet Locations

A pallet's coordinates uniquely identify a location by:
Inventory location
Aisle
Rack
Shelf
Bin
The primary key is given by a location name. Usually, a pallet's coordinates

determine the location name. This name or ID can be entered manually or
generated from the location coordinates, for example, 001-002-03-4 for aisle 1,
rack 2, shelf 3, bin 4.
Items are usually inserted and drawn from the same side of a location, but not
always. For example, items stored in live storage racks are inserted from one
aisle and drawn from another. In Warehouse management, the term location is
defined as the place where items are drawn. For each location, the place where
the item is inserted should also be specified. The default would be that they are
the same.
Use the Locations form (Inventory management > Setup > Inventory
breakdown > Pallet type groups > Locations) to manage the pallet type group
locations in a warehouse.
53
Overview Tab
On the Overview tab, you can see the information on how many pallets there is
room for at the location, the number of pallets already at the location, and the
number of available pallets at the location.
FIGURE 3-49: LOCATIONS FORM, OVERVIEW TAB
In the table below, see the description of the fields on the Overview tab.
Field Description
Warehouse Identifies the warehouse where the location is situated. Use

as a reference to the location, together with the location's
name.
Location The location's name, which is used as a reference to the

location, together with the warehouse.
Usually, the name is generated automatically according to
the location's coordinator (aisle, rack, shelf, and bin) based
on the setup in the Location. To enter the name manually,
you must first select the Manual update check box on the
General tab of the Locations form.
Location type Identifies different uses of the locations. The following

types exist:
Inbound dock - use to identify locations where items
are received and registered.
Outbound dock - use to identify locations where items
54
are gathered before dispatch.

Bulk location - use to identify locations where items
are stored until they are either moved to an outbound
dock or used to fill a picking location.
Production input location use to identify locations
where the finished items from shop floor arrive.
Picking location - use to identify locations where items
have fixed picking locations.
Use for shipping quantities that are less than whole pallets.
Max. pallets Maximum number of pallets that there is room for at the
location.
Number of pallets Current number of pallets at the location.
Available pallet Number of pallet positions at the location that are neither
locations occupied nor reserved.
Location properties
A location has the following characteristics:
Size (number of pallets, height, width, and depth)

Pallet type group
Storage area
Picking area
Location type (inbound dock, outbound dock, pick location, bulk
location, production input location)
A check text can be used in online systems to verify that the operator has selected
the correct location for an item. This can be set up manually or by default.
Location Placement
Location placement can be categorized in two ways: in terms of an input or a

picking area.
General Tab
On the General tab, specify how many pallets there is room for at the location
and the pallet type group that may be used.
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FIGURE 3-50: LOCATIONS FORM, GENERAL TAB
In the table below, see the description of the fields on the Overview tab.
Field Description
Warehouse Identifies the warehouse where the location is situated. Use

as a reference to the location, together with the location's
name.
Aisle Location's aisle coordinates.

The location has the following coordinates:
Warehouse
Aisle
Rack
Shelf
Bin
Select one of the aisles that were created for the warehouse.
Rack Location's rack coordinates.

Warehouse
Aisle
Rack
Shelf
Bin
56
Shelf Location's shelf coordinates.

The location has the following coordinates
Warehouse
Aisle
Rack
Shelf
Bin
Bin Location's position coordinates.

Warehouse
Aisle
Rack
Shelf
Bin
Manual update The warehouse and the location's name uniquely identify a
location. Usually, the location name is generated
automatically by its coordinator (aisle, rack, shelf, and bin),
but you can also specify the name directly. To do this, you
must first select this check box.
By selecting the Manual update check box, you can also
change the location's name. When the check box is cleared,
the system fills in the location's name automatically.
Location The location's name, which is used as a reference to the

location, together with the warehouse.
Usually, the name is generated automatically according to
the location's coordinator (aisle, rack, shelf, and bin) based
on the setup in the Location. To enter the name manually,
you must first select the Manual update check box.
Input area Identifies the store area where the location is placed. It is
used when the system is to find a location for items in
connection with item receipt.
Picking area Identifies the picking area that the location belongs to. Only
those locations belonging to the same picking area are on
the same picking route.
Max. pallets Maximum number of pallets that there is room for at the
location.
Height Height of the location.

Specify the height that is available for the pallets. Do not
57
include the supporting structures between the shelves.
Width Width of the location.
Depth Depth of the location.
Volume The location's volume calculated on the basis of its height,

weight, and depth.
Absolute height Type the location's height above ground level, which,
together with the max. height of the forklift, ensures that
only transports that the forklift can handle are selected.
Pallet type group Determines which types of pallets can be placed at the
location.
Number of pallets Current number of pallets at the location.
Available pallet Number of pallet positions at the location that are neither
locations occupied nor reserved.
Input Areas
These are areas in the warehouse designated for item placement in the warehouse
upon receipt. Items are grouped based on similar characteristics or the order in
which they are placed in their locations. For example, items requiring cold
storage would be in one input area, while items that can be stored in the general
warehouse storage area would be in another.
Picking Areas
Picking areas are assigned throughout a warehouse to group items that should be
picked at one time or by the same person. For example, items that require a
forklift for picking and transport would be in one picking area, while items that
can be picked individually from a floor level by a person with a hand truck would
be in another.
Other Tab
On this tab, define the check texts, location type, and set up the sort order of the
location.
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FIGURE 3-51: LOCATIONS FORM, OTHER TAB

Blocking Field Group
Occasionally, it is necessary to block a location for a period of time, for example,

to allow for repairs. At times, you may only want to block the input or the output.
It is possible to block either or both of these.
Sorting Field Group
Sort codes are used to optimize handling picking lines, which detail the
information required for picking items from inventory, including the picking
order. Sort codes can be specified by the aisle and other coordinates or assigned
manually for the location.
Manual Sort Codes
Microsoft Dynamics AX 2009 uses the aisle ID to generate sort codes

automatically. Generating codes automatically means how a picking route is
planned by the system.
You can define starting values for sorting codes for individual aisles in the
Inventory Parameters form, General tab, under Locations field group by
selecting Manual Sort Codes checkbox (Inventory management > Setup >
Parameters).
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FIGURE 3-52: INVENTORY PARAMETERS FORM, GENERAL TAB
Tree Structure Tab
On the Tree structure tab of the Location form, view a graphical presentation of
the locations. Locations appear in a tree structure based on their coordinates. The
Tree structure tab can also be used to find a specific location.
Define the tree structure's setup by clicking Setup >> and selecting the settings
to be visible. Select the Summation field to view the number of locations in
underlying levels of the tree, such as the number of racks in an aisle or the
number of shelves on a rack.
You must specify the dimensions, such as height, width and depth of the location.
When a location is created, the default dimensions indicated in the Inventory
Parameters form (Inventory management > Setup > Parameters) are used.
You may change the dimensions for the location later if needed.
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FIGURE 3-53: LOCATIONS FORM, TREE STRUCTURE TAB
Forklift
Forklifts are created in a separate form. This refers to the forklifts that transport
items in and out of the warehouse using the Warehouse management. You must
know which forklifts to include in the work processes and the capacities of the
forklifts.
Register the forklifts used in the Forklift form (Inventory management > Setup
> Inventory equipment > Forklift). Set up the following forklift default
information:
Assign the current operator to a specific forklift.

Select the type of transport jobs for which the forklift is used.
Set up height restrictions (used in conjunction with absolute height
of locations).
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FIGURE 3-54: FORKLIFT FORM, OVERVIEW TAB
In the Forklift form, specify a forklift ID, an operator, and the transport tasks for
which the forklift is used, by selecting the relevant check boxes: Input, Output,
and/or Refilling transport. If, for example, the forklift is not created to perform
output tasks, output transports will not appear in the Pallet transport form for
the operator who drives the forklift.
You can specify the maximum lifting height of the forklift. The system compares
it with the height of the location. If the location is higher, the forklift will not
appear in the forklift operator's Pallet transport form.
When the forklift operator starts the transport job, he or she specifies their forklift
ID, and then the system only includes tasks and locations that can be managed by
that forklift.
The Max. height of the location is used for finding out which forklift may be
used at that location. Specify the maximum lifting height for the forklift in the
Forklift form.
If the location is higher than the forklift is able to lift, transport tasks are not
shown for forklift operators operating a forklift with a lifting height less that the
specified height.
Specify the picking locations for the item on the Location tab of the Warehouse
items form (Inventory management > Common Forms > Item details > Setup
> Warehouse items). Note that an item configuration can have only one picking
location.
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In the table below, see the description of the fields in the Forklift form:
Field Description
Forklift ID Identification of the forklift.
Operator The employee who last started a pallet transport for the
forklift. The operator can be overwritten if allowed in the
Pallet transport form.
Input transports Select this check box whether pallet transports of the Input
transport type should be shown in the overview of
available pallet transports for this forklift.
Output transports Select this check box whether pallet transports of the
Output type should be shown in the overview of the
available pallet transports for this forklift.
Refilling Select this check box whether pallet transports of the Refill
transports type should be shown in the overview of available pallet
transports for this forklift.
Max. height Type the forklift's maximum lifting height, which,

combined with the Absolute height at the location, ensures
that only transports that the forklift can handle are selected.
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Lab 3.1 - Setting Up the Warehouse Management Module

Scenario
Due to high inventory turnover, the management of the Contoso Company has
decided that the storage facilities have to be expanded. This means that they have
decided to build a new production warehouse to accommodate a further increase
in inventory turnover. They have asked you, a Microsoft Dynamics AX 2009
Warehouse Management specialist, to create two new warehouses one for
production and other for assembly items, using Microsoft Dynamics AX’s
advanced functionality and the information below: You will create the first
warehouse manually and the second one using the location wizard tool.
Challenge Yourself
Warehouse and Locations
Create a new production warehouse and name it “PROD”. The locations in the
new warehouse should be created according to the following list:
Three inventory aisles (two for production and one for picking): aisle
01-03.
Each aisle consists of three racks: rack 1-3
Each rack consists of one shelf: shelf 1
Three store areas, IPROD-1, IPROD-2, PICK-1.
Store zone “Prod Pick 22” with assigned store area “PICK -1”
Create picking location in aisle 03, rack 1-3, and shelf 1. The picking
location must belong to picking area “PICK-1”.
Create bulk locations for input area “IPROD-1” in aisle 1, rack 1-3,
shelf 1 and “IPROD-2” in aisle 2, rack 1-3, shelf 1.
Inventory Equipment
1. Create one pallet type and name it “EURO”, with the

following specifications:
Height: 0.15
Width: 0.75
Depth: 1.00
2. Create one pallet type group and name it “EURO”.
3. Create one forklift, FORKL-1, for all types of transportation,
maximum height 5 m.
64
Location Wizard
Use the location wizard to create the new assembly warehouse and name it
“ASMB”. The following locations must be created:
1. Two inventory aisles: 01-02

2. One Inbound dock: In_01
3. One Outbound dock: Out_01
4. Each picking location consist two aisles and four racks: rack 1-
4.
5. Each rack consists of three shelves: shelf 1-2. The picking
locations must belong to picking area “PICK-1”.
6. Create buffer locations in aisle 1-2, rack 1-4, shelf 4. The
buffer locations must belong to input area “IPROD-1”.
Need a Little Help?

1. Create a new warehouse “Prod” in the Warehouses form.
2. Manually create locations and inventory equipment listed in
the Challenge Yourself section for the warehouse “Prod”.
3. Using the Location Wizard, create the second warehouse
“ASMB” with the locations listed in the Challenge Yourself
section.
Step by Step
1. Go to Inventory management > Setup > Inventory
breakdown > Warehouses.
2. In the Warehouses form, press CTRL+N.
3. In the Warehouse field, type “Prod”. In the Name field, type
“Site 2, Production Warehouse”. The Type field will be filled
in automatically. The value of this field is Default. In the Site
field, select “2”.
4. Click the Location names tab, select the Include aisle,
Include rack, and Include shelf check boxes.
5. In the Rack field group, type "-###." in the Format field.
6. In the Level field group, type "-#." in the Format field. Do not
select the Include bin check box in the Position field group.
Click Save and close the Warehouses form.
breakdown > Inventory aisles.
8. To create a new inventory aisle, press CTRL + N.
Modify the fields in the Inventory aisle form as follows:
Warehouse = Prod
Aisle = Aisle 01
Aisle number = 1
Name = Prod Aisle 1
65
Press CTRL + N to create a new inventory aisle. Modify the

fields for the new record as follows:
Warehouse = Prod
Aisle = Aisle 02
Aisle number = 2
Name = Prod Aisle 2
9. Press CTRL + N to create a new inventory aisle.
Modify the fields for a new record as follows:
Warehouse = Prod
Aisle = Aisle 03
Aisle number = 3
Name = Prod Aisle 3
10. Click Save and close the Inventory aisles form.
11. To set up the storage areas for warehouse “Prod” go to
Inventory management > Setup > Inventory breakdown >
Store areas.
12. In the Store area form, create a new record. In the Store area
field, type “IPROD-1”, in the Name field type “PROD 1 store
area”. By default, the Area type field is set to “Input area”.
13. In the Store area form, create a new record.
Modify the fields as follows:
Store area = IPROD-2
Name = PROD-2
14. Create one store area of the Picking area type. In the Store
area form, create a new record.
Store area = PICK-1
Name = PICK-1
Area Type = Picking area.
15. Select the record “PROD 1 store area” and click the Location
button.
16. In the Locations form, click the General tab. In the
Identification field group, modify the fields as follows:
Warehouse = Prod
Aisle = Aisle 1
Rack = 3
Shelf = 1
17. Click Save and close the Locations form.
18. In the Store area form, select the record “PROD 2 store area”
and click the Location button.
Identification field group, modify the fields as follows:
Warehouse = Prod
66
Aisle = Aisle 2
Rack = 1-3
Shelf = 1
20. Click Save and close the Locations form.
21. In the Store area form, select the record “Pick-1 store area”
and click the Location button.
Identification field group, modify these fields as follows:
Warehouse = Prod
Aisle = Aisle 3
Rack = 1-3
Shelf = 1
23. Create new Input area “IPROD-2” which must consist of aisle
2, Rack and Shelf 1, in the same way as you have created
“IPROD-1”.
breakdown > Store zones. Create a new store zone “Prod
Pick 22”. Click Store areas tab and assign available store area
“PICK -1”. Save changes.
25. In the Location form click Ctrl+N. Create a new picking
location for aisle 3, rack 1, shelf 1. In the Pick area field select
“PICK-1”. Save changes.
26. To set up the pallet type, go to Inventory management >
Setup > Inventory equipment > Pallet types.
27. In the Pallet type form create a new record.
Modify the fields for the new line as follows:
Pallet type = EURO
Height = 0.15
Width = 0.75
Depth = 1.00
28. Save the record and close the Pallet type form.
29. To create a pallet type group for a new pallet type “EURO”, go
to Inventory management > Setup > Inventory equipment
> Pallet type groups.
30. In the Pallet type group form, press CTRL+N to create a new
pallet type group.
Pallet type group = EURO
Name = EURO
31. Click the Pallet types tab. Select “EURO” from available
pallet types. Save the record and close the Pallet type group
form.
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32. To setup up the forklift for the production warehouse, go to

Inventory management > Setup > Inventory equipment >
Forklift.
33. In the Forklift form, press CTRL+N to create a new record. In
the Forklift ID field, type “FORKL-1”.
34. In the Operator field, select “3610 John Emery”.
35. The new forklift must be able to handle all types of transports.
Therefore, select the Input transports, Output transports
and Refilling transports check boxes.
36. In the Max. height field type “5”. Save the record and close
the Forklift form.
breakdown > Locations. Click Ctrl + N. In the Warehouse
field select “Prod”, in Aisle field select “03”, rack 1-3. Under
the Physical dimensions field group in the Max. pallets field
type "999" as the maximum number of pallets with the
location type of picking location. Save the records and close
the Locations and Store areas forms. The setup of the new
production warehouse “PROD” is finished.
38. To create the new assembly warehouse, go to Inventory
management > Setup > Inventory breakdown >
Warehouses.
39. Press CTRL + N. In the Warehouse field, type “ASMB”, in
the Name field type “Site 2 -Assembly Warehouse”, the value
of the Type field will be set to Default automatically. In the
Site field, select 2.
40. Click the Location names tab, select the Include aisle,
Include rack, and Include shelf check boxes.
41. In the Rack field group, type "-###." in the Format field.
42. In the Level field group, type "-#." in the Format field. Do not
select the Include bin check box in the Position field group.
Click Save and close the Warehouses form.
43. To set up the aisles, racks, etc. use the Location wizard. In the
Warehouse form, click Function > Location wizard.
44. Click Next. The “ASMB Warehouse” is selected by default,
select the Inventory aisle, Inbound docks, Outbound docks,
Picking locations, and Bulk locations check boxes.
45. Click Next. Clear the Aisle field, in the Quantity field, type
“2”, in the Format field, type “##”for.
46. Click Next.
47. Click Next.
48. Specify the number of Inbound docks, which in this case is
one, and verify that the naming format is “In_##”. Click Next.
49. Click Next.
50. Specify the number of Outbound docks, which is one, and
verify the naming format is “Out_##”. Click Next.
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51. Click Next.

52. Set up the picking locations. Specify the number of aisles
from one to two, the number of racks from one to nine, and
select the shelves 1, 2, 3. Click Next.
53. Make sure the Picking area is “PICK-1” and the dimensions
are those of the physical dimensions of the location: Height
36.0, Width 42, Depth 48.00. Click Next.
54. Check the data presented, and then click Next.
55. Select the number of bulk locations from one to two, the
number of racks from one to four, and select the shelves 1, 2,
3, 4. Click Next. Select the input area of the bulk location
“IPROD-1”, Height “36.0”, Width “42”, Depth “48.00”. In the
Pallet type group field, select “EURO”. Click Next.
56. Review the information and click Next.
57. Review the setup and click Finish.
69
Lab 3.2 Updating Store Areas

Scenario
Ellen, the Warehouse manager of Contoso Company has checked the new
warehouse setup and she decided to combine store areas IPROD-1 and IPROD-2.
Challenge Yourself!
Use the Update store areas wizard to change input area IPROD-1 to contain
aisle 1-2/rack 1-3/shelf 2.
Need a Little Help?

From the Warehouse form, open the Update store areas wizard
to change input area IPROD-1 to contain aisle 1-2/rack 1-3/shelf 2.
Step by Step
breakdown > Warehouses. In the Warehouse form, select
the “Prod” warehouse.
2. Click Functions > Update store areas. The Update store
areas wizard will open.
3. Click Next. Make sure the warehouse is the new production
warehouse and that area type is for both the input and picking
areas. Click Next.
4. The wizard contains all the records created in Lab 3.1.
5. Press CTRL + N and create a new line (ALT + F9 deletes a
line). Select a line close to where you want to update the
information, and then add the information from the drop-down
list. Press TAB to go to the next line to update.
6. Change the line for “IPROD-1” to the following: aisles from 1
to 2, rack from 1 to 3, and shelves from 2 to 2. Click Next.
7. In the Completed form view updated information for the store
areas. If the locations were not updated, click the Back button,
and review the information. Otherwise, click the Finish button.
70
Lab 3.3 Creating a New Item

Scenario
Ellen, the Warehouse manager has approved the changes, you made in the lab
3.2. She would like to test the new warehouse using the Warehouse management
functionality, and she has asked you to do the testing. For this purpose, the
following setup should be performed for a new item called 10000 (Standard LCD
Television).
Challenge Yourself!
Item number 10000 belongs to the Television item group, Std Cost inventory
model group and N-W dimension group. It should be assigned to the EURO
pallet type group with a quantity of 32 per pallet and is located in the production
warehouse.
Need a Little Help?

1. Create a new item 10000 in the item form with appropriate
settings,
2. Assign item 10000 to the warehouse “Prod” in the Warehouse
items form.
Step by Step
1. To create a new item, go to Inventory management >
Common forms > Item details.
2. In the Items form, press CTRL + N.
3. Enter “10000” in the Item number field. In the Item name
field type “Standard LCD Television”. Select “Television” in
the Item group field. In the Item type field select “Item”.
4. Click the General tab, select “Television” in the Item group
field, in the Inventory model group field select “Std Cost”
and “N-W” in the Dimension group field.
5. Click the Setup tab, in the Warehouse management field
group, select “EURO” in the Pallet type field and type “32” in
the Pallet quantity field.
6. Click Setup>Warehouse items. Press CTRL+N to
create a new record. In the Warehouse field, select
“Prod”.
7. Click the Locations tab. In the Store zone field select
“Prod Pick”. In the Picking location field select “03-1-1”.
Click Save and close the Warehouse items and Items
forms.
71
Lab 3.4 - Set Up a Warehouse for Replenishment

Scenario
The new warehouse, Prod, needs to be set up for refilling from the Main
warehouse.
Challenge Yourself!
Go to the Warehouse form to set up “Prod” for refilling from the Main
warehouse.
Need a Little Help?

Use the Warehouse form to change the necessary settings.
Step by Step
breakdown > Warehouses. Select “Prod” in the Warehouse
field.
2. Click the Master Planning tab. In the Main warehouse field
group, select the Refilling check box.
3. In the Main warehouse field, select 21 to replenish the
production warehouse. Press CTRL + S.
72
Summary
The setup of Warehouse management is completed through the Inventory
management module. Set up the following features before you begin using
Warehouse management:
Inventory model groups

Inventory dimension groups
Physical setup (Warehouses, Inventory aisles, Locations etc.)
Inventory equipment
Inventory model groups contain settings that determine how items are controlled
and handled upon item receipts and issues. Inventory dimension groups are used
to define item and storage dimensions. Physical setup includes the creation of
warehouses, inventory aisles, store areas and store zones. The location wizard
helps you set up locations in a warehouse. Inventory equipment setup includes
creating pallets and forklifts in the system. A pallet's coordinates can uniquely
identify a location.
In order the item to be used in warehouse processes, the item is set up with
appropriate warehouse and picking location settings, which enables tracking item
in the system easily and precisely.
In the following chapter of the “Item Receipt and Storage” we will consider the
item arrival procedure and inventory storage topics.
73
Test Your Knowledge

Storage Dimensions
1. List the six types of storage dimensions available in Microsoft Dynamics AX
2009.
Setting up a Warehouse
2. When setting up Warehouse management, you first need to set up
warehouses, then inventory aisles.
( ) True
( ) False
Store Areas
3. Describe the difference between the two types of store areas: input areas and
picking areas.

4. What field is crucial for determining whether there is room for a pallet at a
specific location?
74
Pallet Locations
5. Which tab would you use in the Locations form to view a graphical
presentation of the locations?
75
Quick Interaction: Lessons Learned

Take a moment and write down three key points you have learned from this
chapter:
1.
2.
3.
76
Solutions
Test Your Knowledge
Storage Dimensions
1. List the six types of storage dimensions available in Microsoft Dynamics AX
2009.
MODEL ANSWER – Site, Warehouse, Batch number, Location, Pallet ID, Serial
number.
Setting up a Warehouse
2. When setting up Warehouse management, you first need to set up
warehouses, then inventory aisles.
( ) True
( ) False
Store Areas
3. Describe the difference between the two types of store areas: input areas and
picking areas.
MODEL ANSWER – Input areas are used for items that are stored when they are
received in inventory. Picking areas are used to determine picking routes

4. What field is crucial for determining whether there is room for a pallet at a
specific location?
MODEL ANSWER – The Pallet type field
Pallet Locations
5. Which tab would you use in the Locations form to view a graphical
presentation of the locations?
MODEL ANSWER – The Tree structure tab
77

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Chapter 3: Setting Up Warehouse Management

CHAPTER 3: SETTING UP WAREHOUSE

The basic setup includes:

Setup of the item in the Items form.

Warehouse Management Parameters

Go to Inventory management > Setup > Parameters to use inventory

Select between two or more different types of functionality.

The tabs most relevant to Warehouse management parameters setup are:

Inventory Model Groups

FIGURE 3-1: INVENTORY MODEL GROUPS FORM

Inventory Model Groups - Setup

FIGURE 3-2: INVENTORY MODEL GROUPS FORM. GENERAL TAB

Inventory model Identifying code for the inventory model group.

Name Descriptive name for the inventory model group.

FIGURE 3-3: INVENTORY MODEL GROUPS FORM, SETUP TAB

Check box Description

Inventory model tab

Assign Inventory Model Groups

FIGURE 3-4: ITEM FORM, GENERAL TAB

Inventory Dimension Groups

There are six types of storage dimensions in Microsoft Dynamics AX 2009.

Dimension type Definition

Site This is the geographical location of a company branch, can

Warehouse This is the storage location (for example, a site or building).

Location* This is the detailed item storage location (for example,

* Used only in connection with Warehouse management.

** Used only in connection with Logistics.

Examples of items with special needs:

Dairy products need to be kept cool.

When creating an item in Microsoft Dynamics AX 2009, you must specify an

Create and update inventory dimensions in the Inventory dimension form.

FIGURE 3-5: DIMENSION GROUPS FORM

This table describes the fields in the Dimension groups form:

Name Descriptive name for the inventory model group.

Item dimensions An item dimension is used to identify item attributes; for

example: model, size, or color.

Storage A storage dimension is used to identify where and how an

Physical Setup of the Inventory

A company may establish logistic operations at multiple sites for a variety of

Using the Microsoft Dynamics AX 2009 multisite functionality, a customer can

A single production site with multiple warehouses

FIGURE 3-6: SITES FORM, OVERVIEW TAB

The site is not referenced from warehouses, production resources, or

These conditions may exist if the multisite functionality is activated. If either of

FIGURE 3-7: SITES FORM, HIERARCHY TAB

Procedure: Create a Site

defined in the Company information form is used as the

FIGURE 3-8: WAREHOUSE FORM, OVERVIEW TAB

Warehouse Enter the warehouse ID (Maximum ten characters).

Name Identify the name or short description of the warehouse.

Type Select “Default” for a standard warehouse or “Quarantine”

Site Select the site to associate the warehouse with. This

Branch number Numeric ID of the branch in the following format:

Transit warehouse This is used to select a location between a "from"

warehouse and a "to" warehouse for warehouse transfers.

FIGURE 3-9: WAREHOUSES FORM, GENERAL TAB

Master Planning Tab

Manual Select the Manual check box to process item numbers at