Warehouse Management quickie

I’ve just got a call for help from a partner, about their customer who has decided to move from basic inventory management to full-scale warehouse management system. The question was how to post the opening balances for existing inventory quantities in flat locations to warehouse-managed ones.

I thought this might deserve a quick blog post, you can never know when someone else would want to do the same thing.

There are basically two ways how you can achieve this:

  1. Transfer Orders: you go and create a transfer order which transfers all inventory from old (non warehouse managed) locations to new (warehouse managed) ones. You post the shipment from old location, then create and post the warehouse receipt for the new location.
  2. Journals: you post the negative adjustment of closing inventory balance in old locations using Item Journal, then post the positive adjustment of opening inventory balance in new locations using Whse. Item Journal.

There are advantages and drawbacks of both approaches.

With Transfer Orders you’ll have more Item Ledger Entries and Value Entries (and G/L Entries, of course) than you would want to, because there is an In-Transit location involved. However, you keep the value link, which means that any cost adjustments on original entries will propagate all the way through (to receipt entries to start with, and any consecutive entries for any outbound transactions in the future).

With Journals, you get less entries, which means easier tracking. However you lose the value link, which means that any cost adjustments on original entries won’t propagate further, and you will have to revaluate all the opening balances manually to reflect the change in value.

In any case, I am not a Warehouse Management expert, and I believe there may be other ways, or better ways, or other pro’s and con’s of these two approaches. I would personally always opt for the first choice – Transfer Orders.

If you have a better idea, or a cleaner solution, please share it with all of us here.

8 thoughts on “Warehouse Management quickie”

  1. Hi,
    you can use Item Reclass.Journal (Warehouse -> Inventory) – you will get only 2 inventory entries (as in option 2) of type Transfer – so also costs will get updated (as in option 1).

  2. Jana: Your solution would work only if the location didn’t use the Directed Put-away and Pick. But as soon as you configure the location to use the Directed Put-away and Pick, you can’t use the reclassification journal anymore, and you must rely on Whse. Item Journal (or transfer orders).

  3. A “cleaner solution” would probably be to utilize Vai’s warehouse management services or at least attend their expo they are having on September 10th.

  4. Warehouse Management: I hope you don’t mind me taking the links away from your comment. I believe your comment doesn’t really help solve the problem in this case, it simply advertises a competitive solution. Yet, it was obviously posted manually by a human, and my policy is not to delete any comments made manually, so I unmarked it as spam, where the system originally (and probably correclty) put it.

  5. Thanks vjeko,

    Same way could u explain about the how to enter the opening stock in Navision.

    Why I am asking about this one is my inventory stock will contain Invoiced qty , Un invoiced qty , open purchase orders with partially received , open sales orders with partially shipped.

    1. Austin: I’ve just completed delivering course 8873A – there is some theory on how to import opening balances in NAV. I wouldn’t recommend posting any half-managed documents. If you can, close the documents before migrating; if you can’t close the part that you can, then create new documents for the unhandled part. Definitely never try to migrate anything that hasn’t been fully posted or processed.
      The best practice is to post opening balances, and migrate posted and open documents.

  6. HI

    what i am not able to understand what you said .

    what is this document 8873A , is it Trade & inventory document – 5.0

Let me know what you think

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