Choosing the Right Warehouse Setup in Business Central
By Kaspar Kasper, Founder & Senior Solution Architect· 3 min read
Warehouse management in Business Central is not one feature you switch on. It is a set of options on each Location Card that together decide how goods move in and out: who receives them, where they are stored, how picks are created and when inventory is posted. Choosing the right level per location is one of the most consequential decisions in a distribution or manufacturing implementation, and one of the hardest to reverse once inventory is on hand.
The settings that matter
On the location card, the Warehouse FastTab holds the switches that define the setup:
- Bin Mandatory: every item quantity must sit in a specific bin.
- Require Receive and Require Shipment: inbound and outbound documents go through separate warehouse receipts and shipments.
- Require Put-away and Require Pick: physical put-away and picking are tracked as their own activities.
- Directed Put-away and Pick: Business Central suggests bins using zones, bin types and rankings.
Combinations of these give four practical levels.
Level 1: No warehouse handling
With none of the switches on, users post receipts and shipments directly from purchase and sales orders. This is right for small stockrooms, drop-ship operations and locations where one person handles everything. Inventory is tracked by location, not by bin.
Level 2: Basic, order-by-order
Turning on Require Put-away and/or Require Pick without receipts and shipments gives you inventory put-aways and inventory picks. Each is created from a single source document, and registering it also posts the receipt or shipment. Adding Bin Mandatory tracks where each item sits.
This suits warehouses where the same person picks and ships each order, with modest volumes and no need to consolidate several orders into one pick.
Level 3: Advanced, receipts and shipments
With Require Receive and Require Shipment on (usually together with put-away and pick), the flow separates into steps:
- A warehouse receipt is created for one or more purchase orders and posted when goods arrive.
- A put-away is generated and registered when goods are moved to bins.
- On the outbound side, warehouse shipments are created from one or more orders, picks are generated, often through the pick worksheet, and registered.
- Posting the shipment then posts the sales order shipment.
This is the level most distributors need: receiving and shipping can be done by different people, picks can be combined across orders, and you can see what is received but not yet put away.
Level 4: Directed put-away and pick
Directed Put-away and Pick adds zones, bin types, bin rankings, warehouse classes and bin capacity. Business Central then proposes where to put items and where to pick them from, supports bin replenishment from bulk to pick faces, and enforces movement through documents. It requires warehouse employees to be set up for the location.
It is powerful and the right answer for high-volume or multi-zone warehouses, but it is also the most demanding to set up, train and support. It is not a level to choose simply because it sounds complete.
How to choose
| If your location... | Start with |
|---|---|
| Is a small stockroom or ships mostly direct from suppliers | No warehouse handling |
| Has one person picking and shipping each order, and needs to know where stock sits | Basic picks and put-aways, with bins |
| Separates receiving, stocking and shipping teams, or batches picks across orders | Receipts, shipments, put-aways and picks |
| Has many zones, replenishment between bulk and pick bins, or capacity constraints | Directed put-away and pick |
Each location can be different. A main distribution center may use advanced handling while a branch or a consignment location stays simple.
Things to decide early
- Scanning. Standard Business Central handles warehouse documents well, but most warehouses at level 3 or 4 add a mobile scanning solution. Choose it during design, because it shapes how documents are created and registered.
- Production. If the location feeds or receives from production orders, decide how consumption and output are handled in the warehouse, not just on the production order.
- Item tracking. Lot and serial numbers add steps to every activity. Test them with real volumes before go-live.
- Changing levels later. Business Central restricts changes to several of these settings once the location has open documents or inventory. Moving a live location to a higher level is a project of its own, with a cutover plan.
Our recommendation
Start at the lowest level that supports how the warehouse actually works today, with a clear path to the next level. Most go-live problems in warehousing come from configuring for the warehouse a company hopes to have in three years rather than the one it runs on Monday morning.
We design warehouse setups for distribution and warehousing clients regularly, including scanning add-ons. If you are planning a warehouse go-live, talk to an architect.
