Inventory accuracy is a planning input, not a warehouse metric. Moving from roughly 85% to 98% releases the buffer stock you carry to compensate. This guide covers what that change involves operationally and why we sequence it in three phases rather than one.
If you have to build it
Location setup flags, zone and bin structure, bin types, put-away and pick templates, warehouse employee configuration, and the migration path from basic to advanced warehousing on a live location.
Why it matters
The problem this solves
Most mid-market distributors implemented Business Central to solve a finance problem, took the basic stock module, and never revisited it. Meanwhile the same licence covers directed workflows, wave planning and cycle counting.
The consequence is a warehouse running on memory and paper, an accuracy figure nobody measures, and safety stock carried everywhere downstream to compensate for a number that cannot be trusted.
Before you start
Prerequisites
Check these before beginning. Most stalled implementations stall on one of them.
Licensing
Business Central Premium for full warehouse management. Essentials carries basic locations and bins only.
Roles
Business Central administrator plus a warehouse manager who knows the physical layout and will own the bin structure.
Hardware
Handheld scanners tested with your actual Business Central client. Test transaction speed in the aisle before committing.
Data
Item unit of measure and dimension data accurate enough to drive bin capacity. This is usually the hidden work.
How it works
The concepts worth understanding first
Configuration is straightforward once these are clear. Skipping them is why most first attempts produce something that works and cannot be maintained.
Location setup flags decide everything downstream
Directed Put-away and Pick is a single checkbox that changes the entire warehouse behaviour of a location. Once enabled with inventory present, reversing it is genuinely difficult. This is why we recommend a new location for the transition rather than converting in place.
Zones and bins are a physical model, not a data structure
The bin structure should describe how the warehouse is actually walked. A logically elegant structure that does not match the physical layout produces pick routes that waste time, and the team will stop following them.
Bin types control what the system will do with a bin
Receive, Ship, Put-away, Pick, Put-away and Pick, and QC. These determine which warehouse activities can target a bin. Getting the types wrong produces workflow that stalls in ways that are hard to diagnose.
Configuration
Step by step
Settings shown are the ones that matter, not every field on the form. Values are starting points to validate against your own environment.
01
Design the bin structure with the warehouse manager, on the floor
Walk the warehouse. Number the bins in pick sequence, not in a logical scheme that looks tidy in a spreadsheet.
Establish a bin ranking so put-away favours locations that make subsequent picking efficient. This is where the throughput gain comes from.
Naming
Aisle-Rack-Level, sequenced along the actual pick path
Bin ranking
Higher rank for fast-moving forward pick locations
Bin capacity
Set by weight or cubage only if your item dimension data is reliable
Default bins
Receipt, shipment and adjustment bins defined per zone
02
Configure the location in a staged way
Enable the simpler flags first and confirm the team is comfortable, then move to directed. Attempting all flags at once in a live warehouse is the version of this project that becomes a cautionary story.
Phase 1
Require Receive and Require Shipment — document-based handling
Phase 2
Require Put-away and Require Pick — separate warehouse activities
Phase 3
Directed Put-away and Pick — full system-directed workflow
Bin Mandatory
Automatically set with directed; cannot be disabled afterwards
03
Set up put-away and pick templates
Put-away templates define where the system looks for a bin, in order. Pick follows a similar logic.
Start with a simple template and add rules once you can see how the warehouse behaves. Over-engineering this before go-live produces routing nobody understands.
Put-away template
Find Fixed Bin, then Floating Bin with capacity, then Empty Bin
Pick
Respect bin ranking and FEFO where shelf life applies
Break bulk
Enable if you pick in smaller units than you store
04
Configure warehouse employees and default locations
Every user performing warehouse activity needs a Warehouse Employee record with a default location. This is a small step that blocks everything if missed, and the error message is not obvious.
Assign one default location per employee; multiple locations require them to switch context explicitly.
05
Introduce cycle counting once the numbers are trustworthy
Phase counting last. Counting against an inaccurate baseline produces adjustments that mask whether the new workflow is working.
Configure counting periods by item velocity so fast movers are counted frequently and slow movers occasionally.
Phys. Invt. Counting Period
Set per item by velocity — weekly for A items, quarterly for C
Approach
Cycle counting replaces the annual shutdown count, not supplements it
Verify it worked
Receive a purchase order end to end and confirm the put-away directs to a sensible bin.
Pick and ship an order with multiple lines and confirm the route follows the physical layout.
Time a put-away transaction on the actual handheld in the actual aisle.
Run a cycle count and confirm the adjustment posts to the correct accounts.
Compare inventory accuracy before and after across a full month, not a week.
Best practice
What we do on every engagement of this type
Design the bin structure on the warehouse floor, not in a meeting room
Number bins in pick sequence rather than in a tidy logical scheme
Phase the location flags — receive and ship, then put-away and pick, then directed
Test scanner transaction speed in the aisle before rollout
Introduce cycle counting last, once the underlying numbers are trustworthy
Consider a new location for the transition rather than converting in place
Pitfalls
What catches most first attempts
Every one of these is avoidable, and every one of them is common enough that we check for it by default.
!Enabling directed put-away and pick on a live location with stock
It is difficult to reverse and it changes behaviour immediately. Use a new location and transfer inventory, or accept a hard cutover with a planned outage.
!Bin capacity without reliable item dimensions
Capacity checking with wrong weights or cubes produces put-away suggestions the warehouse cannot follow, and confidence in the system evaporates in a week.
!Over-engineering the put-away template
A five-rule template before go-live produces routing nobody can explain when it does something unexpected. Start simple and add rules from observed behaviour.
!Skipping the Warehouse Employee setup
Everything appears configured and nothing works. The error is unhelpful and this catches almost every first implementation.
Completion checklist
Bin structure designed on the floor and numbered in pick sequence
Location flags phased with a defined go-live for each phase
Put-away and pick templates configured simply, with room to extend
Warehouse Employee records created with default locations
Scanner transaction time measured in the aisle and accepted by the team
Cycle counting scheduled by item velocity after accuracy stabilises
Want a second pair of eyes?
We will review your current warehouse configuration against what your licence already covers, and demonstrate directed picking against your own item and bin data.