what is a transfer order in D365 F&O/SCM. Explain in depth and use case scenario with example of lifestyles.
In Dynamics 365 Finance & Operations (D365 F&O)/Supply Chain Management (SCM), a Transfer Order is used to move inventory between different locations or warehouses within the same legal entity. It enables businesses to manage stock movements between plants, warehouses, or distribution centers while tracking the inventory's status during the transfer. Unlike purchase or sales orders, no external vendor or customer is involved; it's strictly internal.
In-depth Explanation:
1. Creation of Transfer Order: A transfer order is created when there is a need to transfer inventory from one warehouse to another. This process involves specifying the item, source warehouse, and destination warehouse, along with the quantity to be transferred.
2. Shipment Process: The inventory is then physically picked and shipped from the source warehouse. This step ensures that stock is deducted from the source warehouse's available inventory.
3. In-transit Status: During transit, the inventory is no longer available for use at either location. The system reflects this in-transit status, ensuring accurate stock management across locations.
4. Receiving Process: Once the goods arrive at the destination warehouse, they are received and added to the destination's available stock.
5. Accounting and Tracking: Throughout the process, D365 F&O records the inventory's journey, allowing for transparency and accountability.
Use Case for Lifestyles:
Imagine that Lifestyles has two warehouses, one in Bengaluru and another in Delhi. If the Bengaluru warehouse is running low on certain raw materials, and the Delhi warehouse has excess stock, a transfer order can be created in D365 F&O to transfer these materials from Delhi to Bengaluru. The transfer order tracks the entire movement—from picking the stock in Delhi, shipping it, and then receiving it in Bengaluru—ensuring that both locations have an accurate reflection of their inventories.
This helps Lifestyles maintain smooth production without interruptions caused by inventory shortages or
delays in procurement.
Path :
Path for transfer order : https://lsdev0251da9102f61dad47devaos.axcloud.dynamics.com/?cmp=es80&mi=InventJournalTableTransfer
Inventory management > Journal entries > Items > Transfer
Transfer Journal:
- The Transfer Journal is used for simple inventory transfers between different locations or warehouses within the same company. It directly adjusts the stock levels without the need for complex shipping or receiving processes.
- Typically used when you don't need to track in-transit inventory, and the transfer is considered instant.
Movement Journal:
- The Movement Journal is used to adjust the inventory within a single warehouse or location. It is commonly applied for movements that don't involve different warehouses, such as reclassifying stock from one bin to another within the same warehouse.
- It can also be used to correct stock levels or manage inventory discrepancies.
Key Differences:
- Transfer Journal involves moving stock between two different locations (warehouses or sites).
- Movement Journal involves reclassifying or adjusting stock within the same warehouse or location.