Picking List Reservation for Production Orders

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Posted on by Fernando Villamán U.

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Hello Experts! I am working on adjusting the picking reservation for production orders.

Our client does not use advanced warehouse management and the reservation for production orders is set to Start.

Since the reservation happens when the Production Order is started, all the quantities in the BOM are reserved when starting the order. What our client wants to achieve is to automatically reserve only what is included in the picking list.

If I set the reservation for the production Order to manual, is there a way to automatically create the reservation upon adding items to the picking list journal?

Thanks!

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Dynamics 365 Supply Chain Management

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Zain Mehmood 4,187 Most Valuable Professional on at

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Hi,
If the reservation setting on the production order is Manual, D365 will not auto-reserve inventory when you add lines to a picking list journal. If you try to post it without prior reservation, the system will throw an error like:

"Quantity cannot be picked because there is no inventory transaction with status 'On order' or 'Reserved physical'."

You’ll need to manually reserve the BOM lines first before posting the picking list.

Also to understand from a business perspective, what's the reason for requiring reservation to happen only at the picking list stage instead of at production start? Understanding that might help suggest a cleaner or more controlled approach.

Warm Regards,

Zain

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André Arnaud de Cal... 300,904 Super User 2025 Season 2 on at

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Hi Fernando,

Can you elaborate on the process? At what time and by what trigger do you create the picking list?

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Fernando Villamán U. 164 on at

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Thanks André and Zain.

This is a simplified description of the process

- We have a stock of 100 eaches of item RM

- Reservation happens when Production Order is started. (current setting)

- Client creates Production Order 1 for 100 eaches of Item FG1, that requires 100 eaches of RM

- Client creates Production Order 2 for 100 eaches of Item FG2. that also requires 100 eaches of RM

- Client starts Production Order 2 and RM is fully reserved

- Client creates picking list for 25 eaches of item RM for Production Order 2.

- Client starts Production Order 1 and reservation cannot be created because when production order 2 was started it reserved all the stock of item RM.

Considerations

- BOM can contain more than 50 items, so they cannot be manually removing the reservation of items in the BOM

- They always do partial picking of the order, because they process small batches.

- They dont know the eexact quantity that they are going to produce per day, so they dont create the Production Orders per the exact quantity to be produced.

My idea would be to set the reservation to manual, and then figure out a way to automatically reserve only the units that were on the picking list. Is it possible to achieve this without a customization?

Thank you so much! Have a great week

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Zain Mehmood 4,187 Most Valuable Professional on at

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Hi Fernando,

Thanks for the clarification — that makes a lot of sense now.

Based on your process, I think the root issue is starting the full quantity of the production order up front, which leads to the system reserving the entire BOM quantity, even if you’re only going to produce a portion of it.

We can try by starting the production order with a partial quantity (e.g. 25 instead of 100), the system might only reserve materials needed for that partial quantity — maybe there is no need to set reservation to Manual or customize.

So, if your team is used to starting the entire order and just picking part of it, that’s where the full reservation happens. Instead, the cleaner approach can be to start only what’s going to be processed that day.

This way, reservation can stay automatic but limited to actual production needs and no materials get blocked unnecessarily.

Let us know if that workout.

Warm Regards,

Zain

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Fernando Villamán U. 164 on at

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Thanks Zain. I tried that and the system still reserves everything.

For example, the production order is for 520 Eaches, and I started 260

If I look into the BOM, 4 eaches are required

Then if I inspect the transactions I can see that the quantities for the full BOM were reserved

Is there any missing configuration, that enables that partial reservation that you mention?

Thanks!

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Zain Mehmood 4,187 Most Valuable Professional on at

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Hey @Fernando Villamán U.,

Just a quick update, we were initially under the impression that starting a production order with a partial quantity would result in partial reservation of BOM materials. However, after reviewing and testing, that’s not how it works in standard D365.

Even if you start the order with a lower quantity, the system still reserves the full BOM quantity for the entire order.

This limitation is already raised on the Ideas portal — feel free to upvote it here: Microsoft Idea

Here are a couple of options that you could do now,

Use Manual reservation and reserve only what’s needed via the picking list

Or implement a custom solution that auto-reserves based on the start quantity

Hopefully, this gets addressed in a future release — it's a valid requirement for partial production scenarios.

Thanks,

Zain

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Fernando Villamán U. 164 on at

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Thanks Zain for the answers and all the efforts testing this.

One last question, when you mention to create the reservation at the picking list, you mean manually by line, right?

Have a great day!

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Zain Mehmood 4,187 Most Valuable Professional on at

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Hi @Fernando Villamán U.,

Yes, or you can do it on the BOM page and clicking on the reservation button against every BOM line.

Thanks,
Zain

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