Reservation Hierarchies & License Plates — When They Matter and Why
Reservation hierarchies in D365 WMS are the ordered list of inventory dimensions (Site, Warehouse, Inventory Status, Location, License Plate, etc.) that determine how and when stock is reserved.
By default, Microsoft shows a hierarchy of Site > Warehouse > Status > Location > License Plate.
Any dimension above Location is fixed at order entry (a “strict” pick requirement), while those below Location are left for the warehouse to determine at pick time. For example, if Batch is above Location, the sales order locks in a specific batch (enabling FEFO, same-batch picks, etc.). If Batch is below Location, the system or worker can choose the batch during picking, and you should not specify Batch on the order line or WMS won’t create work. In fact, by default sales orders only reserve at the warehouse/status level and do not block specific locations, batches or license plates unless those dimensions are moved above Location.
Liceonse plates (LPs) are treated like any other storage dimension. D365 requires Location to be above License Plate, so you cannot place LP above Location in the hierarchy. In practice this means you cannot pre-reserve a pallet (license plate) on a sales order in the standard process — LP is always chosen later, at pick time. For example, you cannot pre-reserve the license plate. The work level reservations are done at the location level (and above). The license plate is then chosen by the warehouse worker at picking.
When Hierarchies Matter:
Batch/Serial Tracking: If customers require exact batches/serials, put Batch/Serial above Location. The system will then reserve that batch on the order and force the picker to use it. If Batch is below Location (the typical “postponed” model), the batch is chosen by location directives during picking and should not be entered on the order. Without special setup, manually reserving a batch on an order when Batch is below Location would normally disable WMS picking — flexible reservation allows exceptions.
Mixed License Plates: In mixed-pallet scenarios (locations with multiple LPs or LPs with mixed SKUs), license plates complicate picking. By default no LP is fixed on the order, so location directives (e.g. FEFO by batch or LP) decide which pallet to pick.
- Wave/Container Picking: For high-volume or full-pallet picks, including LP in the workflow can speed up picking. Using D365’s “Handle by license plate” mobile menu, a picker can scan a single LP to complete the entire pallet pick.
Dimension Sequence and System Behavior:
The inventory dimension sequence (e.g. Site > Warehouse > Location > LP > Batch > Serial) affects reservation logic by defining which dimensions are above Location. Above-Location dims must be set on the order; below-Location dims are deferred. By default, sales orders are not causing reservations at storage levels like location, batch or license plate unless configured otherwise. Flexible reservation hierarchies allow overriding this to permit batch or LP reservations while keeping WMS work enabled.
Real-World Impact & Recommendations:
Pick Strategy: If your process requires strict picks (e.g. same-batch or same-serial orders), move those dimensions above Location. If customers rarely care, leave them below Location for warehouse flexibility.
License Plates: By default, leave LP below Location. If you need to lock an order to a specific pallet, enable flexible LP reservation and reserve the LP.
Mixed LP/Batch Caveats: Use location directives for FIFO or expiry rules. Be aware that LP putaway reservations won’t block sales at the warehouse level but will prevent release until complete.
Wave and Work Templates: For wave picking of full pallets, define work header breaks on LP so each pallet is picked separately. Then enable the “Handle by license plate” menu for efficient scanning.
Example: A distribution center ships full pallets on OEM orders. They enable flexible license plate reservation and, on a sales order, reserve 10 units on LP “PAL-1001”. When the order is released to WMS, work is created for location and LP already set (so no location directive is needed). The picker uses a “Handle by license plate” flow and simply scans PAL-1001 to pick the entire pallet — finishing the order quickly. This shows how reservation hierarchy design directly impacts picking efficiency.
