Hi Dans,
Sorry, currently only warning messages are issued. If the material is missing during the production process, it is not reported. But you can define custom alert rules that automatically send email notifications when predefined events occur. The option to send email notifications is available for all supported alert types and you can also turn them on for existing alert rules.
For more details please refer to the following documents:
Client alert notifications by email - Finance & Operations | Dynamics 365 | Microsoft Docs
You can also configure the production posting file. Production posting activities follow the production process.
- As items are consumed during production they are recorded in the production order. This process generates issue transactions to make up for the missing raw materials.
- As the materials are consumed, they are posted to both the Picking list issue account and the Picking list offset account.
For more details please refer to the following documents:
Production posting - Supply Chain Management | Dynamics 365 | Microsoft Docs
Or you can use the warehouse's replenishment function, such Replenishment with withdrawal kanbans.
The withdrawal kanban can be used to move a kanban of a single item between warehouses and production locations where the material is consumed. The withdrawal kanban supports a pull-based solution for material replenishment, where a pull signal is required in order to trigger supply for a specific demand.
The following scenario shows a pull-based replenishment system where a pull signal triggers the creation of a kanban to replenish material for a production process.

- Withdrawal kanban
- Kanban “from” location and put location for warehouse work
- Kanban “to” location and production input location
- Manufacturing process
- Warehouse work for kanban picking
- Warehouse locations for raw material
- Material warehouse
- Manufacturing warehouse
In this scenario, a manufacturing process (4) consumes material from a production input location (3) in the manufacturing warehouse (8). When a handling unit of the material (kanban) is consumed, it’s registered as empty. A replenishment signal is created for the item origin, and a new kanban (1) is created. In this case, the item origin consists of locations in the material warehouse (7). The material for the kanban is picked and put to a location (2) in the same warehouse. When the material is picked, it’s ready to be transferred from location 2 to the production input location (3) in the manufacturing warehouse (8).
For more details please refer to the following documents:
Replenishment with withdrawal kanbans - Supply Chain Management | Dynamics 365 | Microsoft Docs
Hope my answer can help you.
Regards,
Charlotte Xu