Dynamics 365 Commerce provides retailers with the ability to define multiple selling channels. These channels can be in the form of:

  • Brick and mortar stores
  • Online/digital stores
  • Call centers

Because sales transactions are created in the selling channels, the physical products that the customer is purchasing must be fulfilled and delivered to the customer. Commerce uses the basic concept of a warehouse entity to track and manage the physical inventory at each fulfillment location. Fulfillment warehouses could be in the form of a distribution center or a physical brick and mortar store location.

Distribution center warehouse

Distribution center warehouses are typically used to fulfill online/digital or call center orders. However, distribution center warehouses can also be used to fulfill customer orders that are created in a store, if necessary. Often, distribution centers are used as storage and transfer hubs for holding and redistributing inventory to individual store locations, as needed.

Store warehouse

Store warehouses are configured as part of the store channel setup in Commerce. For brick and mortar stores, each store should be configured with its own unique store warehouse because this approach is the best way to ensure that users can clearly understand how much physical inventory is available for a given item at that store location. Store warehouse physical inventory is used to fulfill cash and carry (carryout) transactions and pickup orders that are created at the point of sale (POS). In addition, the store’s inventory might be used to fulfill ship-to-home orders that are created in store, digital, or call center channels.

To meet customers' needs, Commerce provides store employees with various capabilities to ensure that they can view their store warehouse's on-hand inventory for a given item and view inventory levels in other distribution centers or nearby store warehouse locations.

Store employees can also request restocks for low or out-of-stock inventory through the creation of transfer order requests. Alternatively, the retailer can keep their corporate merchandising team accurately informed of their actual physical inventory by using stock counts. Store employees can also initiate outbound transfer orders to ship back overstock or damaged items to a distribution center or perhaps ship overstock to another store location that needs it.

Users of the Dynamics 365 Commerce Headquarters (HQ) application can initiate replenishment of inventory to store warehouses based on incoming purchase orders. Additionally, they can redistribute inventory that is already on hand from other stores or warehouses to store locations that are most in need of the products.

HQ users can get a centralized view of inventory across all their store and distribution center warehouse locations to help them make better inventory purchase and transfer decisions.

Review function in POS inventory operations

The Commerce point of sale (POS) offers a set of operations to help with inventory management in-store (such as receiving inbound purchase order, shipping outbound transfer order, and more). A typical inventory operation starts at the point of sale and ends at Commerce headquarters (HQ). To avoid potential failure, make sure that all required inputs for the operation are properly specified in POS prior to processing.

Users can pre-check the operation request for incorrect or missing data by using a Review function in the Inbound Inventory and Outbound Inventory operations in POS. Users can choose whether to perform validation manually or automatically after submitting a request. The Review function's scope includes receiving or shipping quantity issues, storage dimension settings, serial number registration and validation, and data that is out of sync between Commerce HQ and POS.