A warehouse is a place that can store items. All items accounted for by the system must be placed in a warehouse. Because many parameters and policies are set up for each warehouse, you can control and differentiate the warehouse operations by defining several warehouses.
Warehouses are usually a geographic location, or they serve a certain function, such as a spare parts warehouse or a finished goods warehouse. When you have several warehouses, the total on-hand inventory can be split up. All item transactions can be attached to a warehouse that then follows the transactions throughout the system.
When you are indicating a warehouse for a transaction, specify the site where you can place or pick an item geographically. This means that you use separate warehouses for distinct geographic locations.
In some cases, you can have virtual warehouses. This means that the warehouse might not be a separate physical building, but might be a logical separation or part of a building. This strategy can be used to meet complex business requirements.
To create a new warehouse, go to Inventory management > Setup > Inventory breakdown > Warehouses.
A warehouse should not be used as a financial inventory dimension. Instead, you should create separate sites.
When you create a warehouse, specify a warehouse type, as follows:
- Default - A main warehouse.
- Quarantine - Attach warehouses of the Quarantine type to regular warehouses of the Default type. When you purchase items that are quarantine-controlled to a warehouse, they are automatically put in the warehouse of the Quarantine type that is attached to the receiving warehouse. When you end the quarantine, the items are then transferred to the specified receipt warehouse.
- Transit - Use for transfer orders and the delivery date control function. Transit warehouses are the system-technical intermediary warehouses between the From and To warehouses, or warehouse and delivery location with the delivery date control functionality.
A warehouse could be organized into locations to keep stocked items in their proper locations. Usually in a simple warehouse, a warehouse location has a format of aisle-rack-shelf-bin.
The following figure illustrates a sample of a grocery store warehouse layout.
You can specify transport times for the selected warehouse by selecting the Transport button. Transport times are used in the delivery date calculation when you use the delivery date control with transfer orders.
If you do not specify a warehouse on the product, you can specify the warehouse from which the products are to be sold or purchased on the sales and purchase order header and on the individual lines.
The warehouse that is specified in the header applies to all lines, unless otherwise individually specified, either on the product or manually on an order line.
A warehouse is divided into inventory aisles. Inventory aisles are used to group locations. 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 warehouse or area within the warehouse.
The aisle number is a strictly numeric identification of the aisle in the warehouse. The aisle number is used by the system when it is generating sorting codes. You can assign unique IDs to the inventory aisle by using the Warehouse and Aisle fields.
By default, inventory aisles are sorted in ascending order. By selecting the Descending field, you can reverse the picking route for the relevant aisle. This changes the order from the highest value to the lowest value.
The term location refers to the place that items are stored and drawn from. Location is the most specific indication of where the items are stored in the warehouse. For each location, the place where the item is inserted can also be specified. By default, they are the same. Items are usually inserted and drawn from the same side of a location, but not always.
For example, items that are stored in live storage racks are inserted from one aisle and drawn from another. The main input is given by a location name, which is usually determined by its coordinates: warehouse, aisle, rack, shelf, and bin. This name or ID can be entered manually or generated from the location coordinates—for example, 1-2-3-4 for aisle 1, rack 2, shelf 3, bin 4—on the Inventory locations page.
A location has the following characteristics:
- Size (height, width, depth, and thereby volume)
- Warehouse, aisle, rack, shelf, and bin position
- Location type (bulk location, picking location, inbound dock, outbound dock, production input location, inspection location, or kanban supermarket)
- Check text can be used in online systems to verify that the operator has selected the correct location for a specific item. This check text can be created manually or by default.
Use of location is optional. If locations are used, items will be stored at locations, and the system can determine pick routes, counting operations, and so on, based on locations.
Items are usually inserted and drawn from the same side of a location, but not always. For example, items can be stored in a special type of rack, also known as a “flow rack.” This is where the items are inserted from one aisle and drawn from another.
Together with the warehouse, these four coordinates identify exactly where an item should be, or is, in the warehouse: Warehouse - Aisle - Rack - Shelf - Bin.
The following are examples of location types:
- Bulk location - The area in the warehouse where received items are stored until the warehouse worker transports the items to the picking locations. Bulk locations are used to replenish picking locations as their stock is reduced and they are also used for picking.
- Picking location - Where items are stored until they are picked for shipment. They are kept here to ensure easy access for picking. The picking location is used for picking small quantities of an item. An item can only have one picking location in each warehouse.
- Inbound dock - Location in the warehouse where items are received and possibly checked (this is the default if it is not specified elsewhere).
- Outbound dock - Location in the warehouse where shipment occurs (this is the default if it is not specified elsewhere).
- Production output location - Location where the finished items from the shop floor arrive.
- Inspection location - Location where the inspections occur.
- Kanban supermarket - Location where the inventory is controlled and processed for work-in-progress (WIP) products in a Lean manufacturing environment.
You can categorize location placement in two ways:
- Input areas - Locations 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. You can specify the input area for a location on the General tab of the Inventory locations page. For example, items that require cold storage would be in one input area, whereas items that can be stored in the general warehouse storage area would be in another.
- Picking areas - Assigned throughout a warehouse to group items that should be picked at one time or by the same person. You can specify the picking area for a location on the General tab of the Inventory locations page. For example, items that require a forklift for picking and transport would be in one picking area, whereas items that a warehouse worker can pick individually from a floor level with a hand truck would be in another.
Watch this video to see how to create locations for a warehouse:
After the warehouse is set up with aisles, locations, and store zones, you can assign products to the warehouse. Each product can have multiple warehouse items defined. By default, the system creates a blank warehouse item when the product is saved. The product dimensions on this blank warehouse item cannot be modified. However, other settings can be updated.
Product information management > Products > Released products > Manage inventory tab, Warehouse group > Warehouse items.
For each warehouse item that you create, you can also select different options for the following:
- Counting group - Determines the frequency of cycle counting.
- Default receipt location - Defines the location that is used by default when the item is received.
- Default issue location - Defines the location that is used by default when the item is delivered.
- Picking location - Defines the default location that the item is picked from.
The Default receipt location, Default issue location, and Picking locations fields are available only when the storage dimension group that is assigned to the item has the Location dimension activated. These fields are also not available for the default blank warehouse item that is created by the system.
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