Guidelines for Sales Order Reservations in Manufacturers using Microsoft Dynamics 365 for Finance and Operations or AX 2012 R3

Sales order processing involves a wide spectrum of considerations and many variations in business practices, and sales orders comprise a key element in the S&OP (Sales & Operations Planning) game plans used by master planning calculations to coordinate supply chain activities in manufacturing firms. A critical consideration involves sales order reservations, and they serve multiple purposes.

At a minimum, reservations are an essential prerequisite for sales order picking - and the reservation logic and picking approaches differ between the basic and advanced approaches to warehouse management. They are also essential when using the marking functionality to link the sales order and supply order, such as special orders or production orders for make-to-order products.

The reservation policy assigned to a sales order line can serve other purposes, too. For example, the Automatic policy supports the use of immediate reservations as the basis for delivery promises during order entry (typically in scenarios for stocked products) and the identification of shortages. However, many scenarios can benefit from deferred reservations that reflect a Manual reservation policy. Hence, the assignment of sales order reservations should align with an item's S&OP game plans, the basis for delivery promises, and the warehouse practices for sales order picking.

This article begins a four-part series that provides some guidelines for using sales order reservations in manufacturing firms. This first article addresses the fundamental issue of reservation timing and provides a comparison between the use of immediate versus deferred reservations for sales orders. Subsequent articles cover the significance of the Item Sales Reservation policy, and the use of sales order reservations in common S&OP scenarios and in scenarios involving batch-controlled products. Each article builds on the previous content within ...