Dispensing Management

Michał Wasiewicz Updated by Michał Wasiewicz

Dispensing Management is a standard functionality introduced in Dynamics 365 Supply Chain Management (starting from version 10.0.44 and enabled by default from 10.0.47) to support controlled material issuing processes, typically used in process manufacturing or environments with strict batch tracking and consumption control. You can find more details under the following link: Production dispensing - Supply Chain Management | Dynamics 365 | Microsoft Learn

The main purpose of this functionality is to separate physical material picking from actual material consumption in production. In the standard process without dispensing, materials are usually consumed automatically (based on the flushing principle) or directly during picking. Dispensing Management introduces an additional, controlled step. With Dispensing management enabled, the process works as follows:

  1. Materials are first picked and moved to a staging or dispensing location (e.g. using a picking list journal).
  2. The actual consumption is not posted immediately.
  3. Instead, materials are “dispensed” using dedicated documents such as:
    1. Dispensing Tickets – representing instructions for what should be dispensed,
    2. Dispensing Pick Journal – used to physically pick and register quantities for dispensing
  4. Only after dispensing is confirmed, the system posts the actual consumption to the production order.

Main characteristics

  1. Additional control layer - Consumption requires explicit confirmation (dispensing), which reduces the risk of incorrect usage.
  2. Batch/lot-controlled scenarios - The functionality is especially relevant where precise tracking of batch numbers or serial numbers is required.
  3. Compliance and traceability - Commonly used in regulated industries (e.g. pharma, chemicals), where the consumption of each material must be verified.
  4. Decoupling of logistics and consumption - Warehouse operations (picking) are separated from production reporting (consumption).
Dispensing Management extends the standard production consumption process by introducing a controlled intermediate step between picking and consumption, ensuring higher accuracy, traceability, and process compliance.

Extended Production Handling supports and integrates with the Dispensing Management functionality.

This means that most of the features provided by the Extended Production Handling module can be used together with Dispensing Management. In particular, it is possible to assign a mix pool to a production order for which Dispensing management should be applied. This allows combining advanced production handling scenarios with controlled material dispensing, ensuring that the production process remains consistent with the defined dispensing requirements.

However, there is one specific functionality that cannot be used when Dispensing Management is required. This limitation is directly related to the nature and purpose of the dispensing process, which enforces a controlled and mandatory intermediate step between picking and consumption. It means that any functionality that bypasses or automates consumption (such as automatic posting) is not compatible with Dispensing Management. This specifically applies to the Automatic Report as Finished feature.

Combining automatic RAF with Dispensing Management is not supported, because it would compromise the accuracy and traceability that dispensing is designed to provide.
  • If a production order contains a BOM line or a formula line that is configured for Automatic Report as Finished, it effectively excludes the use of Dispensing Management. The reason is that Dispensing Management requires a controlled and manual dispensing step before consumption is posted.
  • In the case of automatic reporting, this level of control cannot be ensured. The system posts the output and related consumption automatically, without the required manual verification of dispensed quantities.

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