Inventory Planning using one location

If we use only one location for inventory and finish goods shipping (location A) and second location for production components (location B), then:

  • We use location A for finish goods planning
  • We use location B for material consumption, based on Production Orders
  • We use location A for production output registering

Standard inventory planning without using SKU (stock-keeping-units) enables using only one location for components for consumption. We can configure ‘Components at Location’ on Manufacturing Setup.

Inventory Planning using more locations

If we want to use more than one location for inventory planning, we have to use SKU (stock-keeping-units). SKU represents item card “upgrade” for registering planning information based on locations or variants.

SKUs do not replace item cards, but they are related to them. SKUs allow you to differentiate information about an item for a specific location (such as a warehouse or distribution center) or a specific variant (such as different shelf numbers and different replenishment information), for the same item.

We have to know, that we cannot assign BOM or Routing to SKU. We have not create SKU for each item+location+variant combination. We need to create SKU only for combination we use in planning. Even then if we have not SKU and we want to use it for planning, NAV will use information from Item card. But, the best way is to create all combination, if we want to have precise inventory planning.

It is important to note that the information on the SKU card has priority over the Item card.

In next post, I will describe SKU creation, configuring and using in planning process.