Availability is not on-hand stock
Real availability is on hand, minus committed, minus allocated, plus inbound within the promise window, across every location.
Dynamics 365 Sales · Retail & Distribution
The quote-to-cash chain
Improvements to picking and replenishment help. They cannot repair a commitment that was wrong when it was given.
Abstract
The quote-to-cash chain
Summary
A customer asks whether you have forty units. The sales desk checks a number, says yes, and the order is accepted. The warehouse discovers on Thursday that eighteen were committed to another order on Tuesday. Everyone behaved correctly; the number was wrong before anybody looked at it.
This paper argues that overselling is an architectural problem at the point of promise rather than an execution problem downstream, and examines the compounding cost that most distributors have never quantified.
Key findings
Four things this paper argues
If you read nothing else, read these. The analysis that follows sets out the evidence for each.
One overselling incident consumes the margin on several good orders
Expedited freight, partial shipment administration, a credit note, a customer call, and goodwill nobody prices.
Downstream improvement cannot repair an incorrect promise
Better picking and faster replenishment help, and they operate after the commitment has been made.
Post-acceptance interventions are the measure nobody tracks
Short shipments, substitutions, expedites and credits. The number is usually higher than expected and it moves fast once addressed.
Analysis
The argument in full
What availability actually means
On hand is the easy part and the part most systems show. Real availability is on hand, minus committed, minus allocated, plus inbound within the promise window, across every location including stock in transit.
A distributor quoting from on-hand alone will oversell whenever demand concentrates — which is to say, on exactly the lines that matter most.
The architectural requirement is that quoting reads live availability rather than a periodic copy. One inventory pool shared by every channel, rather than separate copies synchronised overnight, which diverge by definition between syncs.
- Available-to-promise including committed, allocated and in-transit quantities
- One inventory pool serving desk, web, EDI and store rather than synchronised copies
- Contract pricing applied automatically so quotes are correct as well as deliverable
- Credit position checked at quote rather than at despatch
- Substitution offered at the point of quote rather than discovered at pick
The compounding cost
A single overselling incident is not one cost. It is the expedited freight to cover the shortfall, the partial shipment and its administration, the credit note, the customer call, and the goodwill nobody puts a number on.
In thin-margin distribution one of these consumes the profit on several good orders, which makes it worth calculating your own figure before deciding this is a minor operational irritation.
The measure we recommend is the count of orders requiring an intervention after acceptance — a short shipment, a substitution, an expedite or a credit. Most distributors have never counted it. The number is usually higher than expected and it drops quickly once the promise is fixed.
Why the desk is the right place to start
Because it is where the promise is made. Improvements downstream help and they cannot repair a commitment that was wrong when it was given.
Connecting the sales desk to live availability and contract pricing changes the quality of every promise, and everything downstream inherits that improvement without further work.
It also changes the conversation with the customer. A substitution offered at the point of sale is a service; the same substitution discovered at the warehouse is a problem, and the difference is entirely one of timing.
Framework
Something you can apply without us
Every paper in this series ends with a framework you can run internally. We would rather you used it and reached your own conclusion than took ours on trust.
Framework
Fixing the promise
Five steps, starting at the point of commitment.
1
Measure
Count post-acceptance interventions. It quantifies a problem everybody knows and nobody has sized.
2
Unify
One inventory pool across every channel rather than synchronised copies.
3
Calculate
Available-to-promise including committed, allocated and inbound quantities.
4
Price
Contract pricing and credit position applied at quote, not at despatch.
5
Offer
Substitution at the point of sale, where it reads as service rather than failure.
Implications
What this means, depending on your seat
The same argument lands differently across an executive team. These are the three versions worth separating.
References
Where to check this for yourself
Microsoft's own documentation for the product behaviour described above. We would rather you verified the basis than accepted our summary of it.
01
Dynamics 365 Sales quotes and orders
02
Business Central item availability
03
Business Central warehouse management
04
Dataverse and Business Central integration
05
Dynamics 365 pricing and discount management
On these references: each entry names a Microsoft Learn article or documentation area by title, because deep links change while titles are stable. Searching the title on learn.microsoft.com will reach the current version. Where we have cited a figure or a product behaviour, it is Microsoft's statement rather than ours; where we have given a number of our own it is labelled as such in the text.
Recognise the situation?
Send us an anonymised order file and your pricing rules for one customer segment, and we will demonstrate quoting against live availability using your own product data.
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