Location directives in Dynamics 365 Supply Chain Management (WMS) decide where to pick from and where to put to. Within each directive, action strategies define how the system chooses the “best” location once eligible locations have been found by your query. This post walks through the most commonly used strategies—what they do, when to use them, and realistic examples from the floor. Microsoft’s documentation covers the concepts well, though for some strategies the logic is not documented all that well; keep that in mind during design and testing.
What are location directive action strategies?
When a location directive line is evaluated, D365 can apply an action with a strategy (for example, Consolidate, FEFO batch reservation, Round up to full LP). The strategy guides how candidate locations are ranked/selected to fulfill the line. Administrators configure these under Warehouse management > Setup > Location directives (pick/put for different work order types like Sales, Purchase, Transfer, Replenishment, etc.).
Tip: Your work template(s) and location directives work together—work templates define the sequence of pick/put operations, while location directives decide the actual locations used. Validate both in tandem when troubleshooting.
Strategy-by-Strategy Guide (with Examples)
1)Match packing quantity
What it does: Prioritizes locations that align to the requested quantity using unit sequence/UoM conversions—reducing the need to break standard packs during picking. While Microsoft doesn’t detail the internal algorithm of this specific strategy, its behavior follows the broader picking and unit sequence modeling in WMS.
When to use it: Case/carton‑oriented picking where full packs are preferred (e.g., retail distribution).
Example: A sales order for 24 each of Item A (case = 12). The system prefers a bin with two full cases over mixed open cases, minimizing repack and scan time.
2) Consolidate (Putaway-focused)
What it does: On put work, steers inventory to locations that already contain the same item (and matching dimensions per your mixing rules) to reduce the number of partial bins. This improves space utilization and future pick ergonomics.
When to use it: Purchase receipts, production RAF putaway, or replenishment targets where you want to fill up existing like-for-like locations first.
Example: Receiving 50 units of Item B. If Location X already holds Item B and mixing rules allow it, the strategy will choose Location X to consolidate rather than opening a new location.
3) FEFO batch reservation
What it does: Enforces First‑Expired‑First‑Out during picking by prioritizing batches with the earliest expiry, honoring reservation and dimension settings. Useful for food, pharma, and chemicals.
When to use it: Any batch‑controlled item where shelf life matters.
Example: Two batches of the same SKU expire March 1 and April 15. Picks are driven first from the March 1 batch—subject to your reservation configuration and on-hand.
4) Round up to the full LP and FEFO batch
What it does: During picking, prefers full license plates (LPs) and applies FEFO to determine which batch/pallet to consume first—ideal when you want whole‑pallet efficiency without breaking FEFO discipline. (Microsoft doesn’t fully disclose the exact tie‑break ordering between FEFO and rounding, so validate in your flows.)
When to use it: Pallet picking for perishable goods where whole‑pallet moves are the norm.
Example: Need 80 units; pallets (LPs) hold 100 each. The system chooses the earliest‑expiring full pallet and rounds up to that LP for a single move.
5) Round up to full LP
What it does: On picking, prefers selecting full pallets/license plates, even if it means exceeding the requested quantity, aligning with LP‑centric and automation‑friendly operations. (Pair with Handle by license plate on the mobile app/work template behavior for streamlined scanning.)
When to use it: High‑throughput pallet operations, AS/RS or conveyorized warehouses, or when shipping full pallets is standard.
Example: Order for 90 each; one pallet contains 100. The system directs the full LP to be picked and moved as a unit.
6) License plate guided
What it does: Drives picking based on known license plates rather than generic location optimization—handy for cross‑dock, transfer, or scenarios where LPs are pre‑associated to demand.
When to use it: Cross‑docking from inbound LPs; transfer orders created “from license plates” via the mobile app; scenarios where workers scan and move whole LPs.
Example: Goods arrive on LP‑0001 at a cross‑dock location; a linked outbound demand directs the pick by LP so the worker can move the entire pallet without item‑by‑item scans.
7) Empty location with no incoming work (Putaway – focused)
What it does: On put work, selects empty locations that also don’t have inbound work pending, helping avoid congestion and work collisions.
When to use it: Busy inbound docks, or when you want cleaner task separation during staged putaway.
Example: Two empty bulk slots exist; one is already targeted by another receipt. The strategy picks the other empty slot with no incoming work.
8) Location aging FIFO
What it does: During picking, chooses locations based on how long the stock has been in that location, oldest first—without requiring batch tracking. Requires the Location status and Inventory picking aging features (now mandatory in recent versions).
When to use it: Non‑batch items where FIFO turnover is still desired.
Example: Location L1 holds stock aged 90 days; L2 holds 30 days. The system directs the pick from L1 first.
9) Location aging LIFO
What it does: Mirrors FIFO but selects the most recently stored inventory first during picking—useful for fast movers where the newest putaway is most accessible. Same feature prerequisites as FIFO.
When to use it: Campaign or promo items, where speed and nearest‑in storage matter more than aging.
Example: Newest receipts are in the front pick face; the system directs picks from these to minimize travel time.
10) Consolidate including incoming work (Putaway-focused)
What it does: Extends Consolidate on put by considering not only on‑hand but also inventory that has inbound work assigned (e.g., ASN/receipt flows), so putaway can target locations that will soon contain like stock.
When to use it: High‑velocity inbound where you want to pre‑stage/cluster like items as they arrive, avoiding later reshuffles.
Example: You’re receiving multiple POs for the same SKU across the day. Putaway can direct to a location already targeted by earlier inbound work for that SKU to maintain slotting continuity.
Quick Reference: Typical Applicability
The availability of strategies depends on the Work type (Pick vs Put) in the UI, and on feature flags/version. Always verify in your environment.
- Pick‑oriented: Match packing quantity; FEFO batch reservation; Round up to full LP; Round up to full LP and FEFO; License plate guided; Location aging FIFO; Location aging LIFO.
- Put‑oriented: Consolidate; Consolidate including incoming work; Empty location with no incoming work.
Final Word
Location directive action strategies are powerful—but they only shine when paired with the right work templates, UoM modeling, and feature flags. Test each strategy in your sandbox with realistic data, validate the results in the work details, and keep an eye on feature notes in each new release of Supply Chain Management.