Processing of Receipts
Just like with processing of shipments, there are four ways to process receipts of inventory in Microsoft Dynamics NAV. Choosing the most suitable method is important in order to get the software to support the business as efficient as possible.
Below is a description of each of the four methods together with some of the pros and cons. If you have read the previous blog post describing processing of shipments then you will notice that there are lots of similarities between the options on the receiving and shipping side, in fact a lot of the functionality just ‘mirrors’ each other.
On the illustration below the ‘Receive’ in red indicates from what page the receipt is posted and the items goes into inventory.
Note: Note that ‘Order’ refers to all types of orders that can be received; purchase orders, sales return orders and transfer orders. The configuration for how to process receipts are made on the location card with the two fields require receive and require put-away. This was different locations can be configured differently, which is very useful.
Option 1: Receiving from Order
The simplest way to receive inventory in Dynamics NAV is to receive it directly on the orders. You do this by populating the quantity to receive field and select post. Just like with shipping, the biggest downside of this is that the person doing the receiving is working directly on the orders and could accidentally change the orders and needs access to modifying them. Some of this can be reduced by role tailoring the page to make it simpler and contain less information/functionality. A purchase order could for example look like below for a receiving profile.
Finding the correct order to receive can easily be done using the order number (if the vendor is nice enough to put your order number on the packing slip), or by using the vendors order number (if the purchaser has been good enough to enter it on the order 🙂 ). Another alternative is to create a menu with the order lines (a way to do this is described here; Add Order Lines to Navigation Pane), the receiver can then also use the item numbers or the cross reference numbers to find the correct order to receive against.
Posting the order line(s) as received is simply done by entering the quantity in the quantity to receive field on the line and selecting post from the header of the order. You probably only want to receive it and not receive and invoice, in standard Dynamics NAV the option defaults to receive and invoice, it is very common to change this so it defaults to just receive (and through permissions you define what the receiver will be able to post).
If you select post and print you get a posted receipt document printed that could act as a traveler that goes with the product to the stock location or as a receipt that goes to the accounts payable department (although I am a bit against having a procedure like that when users can look up in Dynamics NAV what has been received or not, but it is common to do this for some reason).
If you are using bins then you can only receive inventory from an order line into one bin (this since the bin codes are on the order lines and you can’t split a line like you can do on an inventory put-away for, described later).
The biggest advantage of receiving inventory directly on orders is that you can also receive things that are purchased through g/l accounts. If you for example create purchase orders for things you expense (like labels, gloves, packing material, etc.) using g/l accounts then those can be received as well when receiving directly on purchase orders. Neither inventory put-aways or warehouse receipts will receive g/l accounts.
Option 2: Receiving from Inventory Put-away
The second option is to use inventory put-aways to receive inventory. The inventory put-away provides a simple user interface for receiving inventory against all types of orders (purchase orders, sales return orders and transfer orders). The main advantage with this is that the user that is doing the receiving does not have to work on the orders themselves which is both a simpler and safer way of doing it.
The inventory put-aways can be created in advanced (from the orders or through the create inventory pick/put-away batch job) or at the time of receiving the inventory by simply creating a new inventory put-away and entering or selecting the order to receive in the header. I typically recommend to have a procedure where the inventory put-aways are created at the time of receiving, I think it is a lot less confusing for the person doing the receiving. To do this you simply select the source document and source no. in the header of the inventory put-away and the lines will populate with the outstanding orders lines.
There is a one to one relationship between an inventory put-away and an order, you can’t have order lines from multiple order on the same inventory put-away and you can’t create multiple inventory put-aways for the same order.
If the location is setup to use bins, then the inventory put-away can be used to receive inventory from a single order line into multiple bins using the split line function (just by entering a qty. to handle and selecting the function), which I think is a nice feature.
Just like with inventory picks, if the inventory that is handled is lot or serial number tracked you have that information directly on the lines, there is no need to go to an item tracking page for this. The real downside here though is that there is no way to assign lot numbers, the functionality that you have on the item tracking lines page is simply not there (which makes it useless in my mind if you handle lot tracked inventory and you want to assign your own lot number at receiving). A modification that will enable it can of course be created.
The inventory put-away is then posted using the post function in the header. This receives whatever quantities you entered in the qty. to handle fields on the lines.
In my mind, inventory put-aways are not very common to use, the downside with not being able to assign lot or serial numbers is part of the reason.
Option 3: Receiving from Warehouse Receipt
The third option is to use warehouse receipts. A warehouse receipt also provides a separate and simpler user interface compared to working directly on the orders (just like an inventory put-away). Unlike an inventory put-away, a warehouse receipt can have lines from multiple orders which is useful if a receiver is receiving inventory from multiple orders at the same time and want to process them all at once.
Warehouse receipts can theoretically be created in advanced, but this never works in real life since the list of warehouse receipts does not contain any useful information for finding the right warehouse receipt to process once the inventory is physically received. Because of this it is highly recommended that you only created the warehouse receipt at the time of receiving the inventory and not before that, I have seen many people struggle with this and I actual wrote a blog post about that a while ago; How to Work with Warehouse Receipts (one of my very first blog posts actually, feels like a long time ago 🙂 ).
While you can have multiple orders on the same warehouse receipt, there will always be a one to one relationship between a warehouse receipt line and an order line. There is no way of splitting a line into two like you can on an inventory put-away (for receiving it into multiple bins for example) and a single order line will never be on more than one warehouse receipt line. If you want to receive a single line into several bins then the typical work around is to post partial receipts multiple times with the different bin codes.
The serial and lot numbers are on warehouse receipts handled through the standard item tracking lines page, and you therefore have all the functionality related to assigning lot/serial numbers etc.. available, which is a big advantage compared to the inventory put-aways.
The warehouse receipt is then posted using the post functions in the header.
Using warehouse receipts for receiving inventory is quite common, in my experience it is the most common approach among the four options.
Option 4: Receiving from Warehouse Receipt and using Warehouse Put-aways
The forth option is almost a combination of option 2 and 3. The warehouse receipt is created like in option 3 and after it’s been posted as received a warehouse put-away is used to move the inventory to their appropriate bins. This method is applicable if you want a two-step process where step one is to receive the inventory into a receiving area and step two is to move it from the receiving area to where it should be stocked or used. This could be useful if you for example have dedicated receiving and stocking personal, if you repackage the inventory and/or do quality checks before it is put-away, etc..
This option works both with and without the ‘directed put-away and pick’ functionality (also sometimes referred to as advanced warehousing or WMS).
You can have the warehouse put-away being created automatically when the warehouse receipt is posted or you can use the put-away worksheet to create the warehouse put-aways based on what is in the receiving area. You define this on the location card through the Use Put-away Worksheet field (unchecked and the warehouse put-away will be created automatically).
If you use the put-away worksheet you actively have to generate the put-aways, the advantage of this is that you can create put-aways across multiple receipts and you can control a bit more what inventory is put-away when (things that has passed quality control, are repackaged, etc..).
My experience is that most companies that choose to work with warehouse put-aways wants them to be created (and printed) automatically when the receipt is posted (and not use the put-away worksheet).
Dynamics NAV also has the option to use certain logic defined through put-away templates in order to suggest the bins where the inventory is going to be placed (this logic only works for locations setup as ‘directed put-away and pick’). You can have a standard/default put-away template defined on the location card and you can have specific put-away templates defined on individual item cards. In the put-away template you simply specify the most desirable way to find a bin as the first line, then the second most desirable way as the second line, etc..
In the below example we say that Dynamics NAV should first look for bins that are fixed with the same item and unit of measure in them where the quantity is less than then minimum quantity. If it does not find such a bin it should continue to look for fixed bins with the same item and unit of measure, etc..
It looks a bit complicated, but it is actually quite powerful and works very well. The beauty is (like with everything else in NAV) that it can easily be extended. I have done things like adding different stocking units as part of the logic in the past and it was quite simple to do (if you for example have some items that are stocked on pallets and other items that are stocked in smaller bins and you want Dynamics NAV to include that logic in its search for appropriate bins).
If you use ‘directed put-away and pick’ you also have something called cross-docking, this feature basically allows you to put inventory aside that is due to be shipped within a certain period during the receiving process. The idea with this is that you then save the steps of putting the inventory away just to pick it shortly thereafter.
Just like on the shipping side, my recommendation is be careful to not choose an option for processing receipts that is mode advanced that necessary. I have seen many cases where the receiving process became unnecessarily complicated because the wrong option being used. I hope the above provides some directions in choosing a method. 🙂