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In Business Central, you choose between two approaches to inventory management depending on whether you use zones and bins. A location without zones and bins is what you normally call standard inventory. A location with zones and bins is what you call a warehouse.
The structure of zones and bins follows a hierarchy. The location is the top level and usually represents a geographical area. You divide the location into zones, such as a picking zone, a shipping zone, a receipt zone, and a back-end zone. Within each zone, you create bins where you place your items.
How you set up zones and bins depends on the location type. On a location with the Directed Put-away and Pick setting enabled, you must define bins through the zones and cannot add bins directly on the location card. On a location without Directed Put-away and Pick, you add bins directly on the location, and the zone is used only for information rather than for separating items.
The hierarchy of location, zone, and bin in Business Central
The setup works as a hierarchy. At the top sits the location, for example Warehouse 1. The location is the total area and normally covers a geographical site. From there you divide the location into zones, and within each zone you create the bins that hold your items.
A typical zone structure includes a picking zone, a shipping zone, a receipt zone, and possibly a back-end zone. Each zone can hold as many bins as you need.
Locations with Directed Put-away and Pick
On the location card you need to check whether there is a checkmark in the Directed Put-away and Pick field. This checkmark makes it a full warehouse location, and it changes how you create bins.
With Directed Put-away and Pick enabled, you cannot add bins directly on the location. Instead, you define your zones from the process tab on the location. Here you set up the different zones and assign the default bin type code for each zone.
When you click into a zone, you navigate further to the bins and define bins for that specific zone. For example, you can set up a Ship 3 bin under the shipping zone, and you can create as many bins as you need for that zone.
If you open the bins overview directly on the location card, you can see all of your bins, but you cannot edit them there. If you try to add a new bin, for example Ship 4, directly on the location, you get an error message. The reason is that the location uses Directed Put-away and Pick, so bins must be entered through the zones.
Locations without Directed Put-away and Pick
A location can be set up with all the warehouse checkmarks except Directed Put-away and Pick, while still having Bin Mandatory enabled. Warehouse 2 is an example of this type of location.
On this type of location, you add bins directly on the location card. For example, you can create a Shipment 1 bin straight on the location. Here the zone is not used to separate items. It serves only as information.
If you go into the zones on this location, you can add zones, but you cannot attach bins to those zones. If you try to create a shipment bin under a zone, you get an error message.
This is the opposite behaviour of a Directed Put-away and Pick location. The takeaway is that the structure of bins and zones depends entirely on the type of location you are setting up.
Q&A
What is the difference between standard inventory and a warehouse in Business Central?
Standard inventory is a location without zones and bins. A warehouse is a location that uses zones and bins. You choose between them based on how detailed your inventory control needs to be.
Why can I not add bins directly on my location card?
Your location has the Directed Put-away and Pick setting enabled. On this type of location you must define bins through the zones, not directly on the location. If you try to add a bin directly, you get an error message.
How do I create bins on a location that uses Directed Put-away and Pick?
Define your zones from the process tab on the location card. Click into a zone to navigate to its bins, then create the bins you need for that zone. You can add as many bins per zone as you require.
Can I add bins directly on a location without Directed Put-away and Pick?
Yes. On a location that has Bin Mandatory enabled but not Directed Put-away and Pick, you add bins directly on the location card. The zone on this location type is used only for information, not for separating items, and you cannot attach bins to zones.