Supply chain | Supply Chain Management, Commerce

Direct Delivery order gets created for Intercompany Vendor

(1) Share

Report

Posted on by Karan Deep Singh Bedi

The direct delivery Purchase Order get created for the Intercompany vendor and Sales order in the other legal entity gets created even though the direct delivery Boolean is switched off.

Categories:

Dynamics 365 Supply Chain Management

I have the same question (0)

All responses (6)

Answers (0)

Suggested answer

Laurens vd Tang 4,582 Super User 2026 Season 1 on at

Like (0)

Report
Copy link

Link copied!

Good day,

That’s strange. Is there an intercompany setup for the respective vendor? If so, could you try setting the 'Active' parameter to 'No' and see if that resolves the issue?

Best regards,

Laurens van der Tang

Was this reply helpful? Yes No
Karan Deep Singh Bedi 22 on at

Like (0)

Report
Copy link

Link copied!

Thank You @Laurens vd Tang for the response, But the scenario is:

1. The intercompany vendor is required for manual intercompany orders, so it cannot be deactivated, and

2. For Master planning, the intercompany vendor is required to be selected as default vendor on the Item.

The requirement is to have a sales order for a customer but it should not trigger the direct delivery order for the intercompany vendor if the direct delivery Boolean is disabled, since the inventory is still available.

The scenario is :

1. Create Purchase order in Legal Entity 1 (LE1) for a SKU with vendor as Intercompany Vendor i.e. Legal Entity 2 (LE2) - This is ok.

2. It triggers an automatic sales order in Legal Entity 2 (LE2) - This is OK.

3. It triggers and automatic purchase order for Legal Entity 3 (LE3) - This is not ok. Since the Direct delivery Boolean is not activated in the Item master in Legal Entity 2 (LE2) although default vendor is attached as the Legal Entity (LE3).

Let me know, in case more details are required,

Was this reply helpful? Yes No
Suggested answer

Zain Mehmood 4,189 Most Valuable Professional on at

Like (0)

Report
Copy link

Link copied!

Hi Karan,

I think this behavior can occur if intercompany auto-order creation is enabled in the setup between LE2 and LE3, regardless of the direct delivery flag.
To stop the unwanted PO from LE2 to LE3, try the following,

Go to Procurement and sourcing > Setup > Intercompany accounting in LE2.

Check the sales order to purchase order mapping with LE3.

Either disable auto PO creation or adjust the intercompany customer/vendor relationship so it doesn’t trigger when not needed.

The Direct delivery flag only controls direct delivery from customer orders; intercompany logic can still act if auto-processing is configured.

Hope this helps,
Zain

Was this reply helpful? Yes No
Karan Deep Singh Bedi 22 on at

Like (0)

Report
Copy link

Link copied!

Hi @Zain Mehmood,

Thank you for the prompt response.

But to clarify, I don't want to stop the auto creation of order between LE2 and LE3.

I want to stop the Purchase Order creation in LE2 from the Sales Order in LE2 since it is not a Direct Delivery. And i am not able to identify any setup to control the Purchase Order Creation in Intercompany setting or Procurement & Sourcing ->Setup. @Zain Mehmood, can you please share screenshot of the setup in case you are aware.

Was this reply helpful? Yes No
Karan Deep Singh Bedi 22 on at

Like (1)

Report
Copy link

Link copied!

Hi @Laurens vd Tang and @Zain Mehmood, It would be helpful if you have any feedback for the response.

Was this reply helpful? Yes No
Suggested answer

Danny Bilodeau 4,934 Super User 2026 Season 1 on at

Like (0)

Report
Copy link

Link copied!

Is it really a direct delivery order or does it just look like one?

From that LE3 PO, if you look at the Related Orders do you see the whole chain of orders linking it to the original SO in LE1? Is the delivery address on the LE3 Purchase Order the address for the LE1 warehouse or is it the LE2 warehouse address?

Is there enough stock in LE2 to meet the sales demand for LE1's order? You mention master planning in LE2, so if the default order type for that Item in LE2 is "Purchase", is it possible that a planned purchase order was either firmed or auto-firmed and created a PO to compensate that demand?

Was this reply helpful? Yes No