How two configurations decide what warehouse work gets created and where it happens, and why the order they run in is the whole game.
If you run advanced warehousing in Dynamics 365 Finance & Supply Chain Management, you have hit the moment where work lands in a worker's queue and you cannot immediately explain why the system chose that location or that pick and put sequence. The instinct is to start changing settings until something sticks, which usually creates more problems than it solves. Almost all of that behavior traces back to two configurations working together: work templates and location directives.
What Each Configuration Is Responsible For
The division of labor is simpler than the WMS module's reputation suggests. A work template defines the structure of the work, meaning the steps a worker must perform, such as a pick followed by a put. A location directive supplies the locations those steps use. The template is the what. The directive is the where. Together they form a complete set of warehouse work instructions. That distinction is the most useful thing to hold onto when something goes wrong. If the wrong type of work is being created, the answer lives in your work templates. If the right work is pulling from the wrong location, the answer lives in your location directives.
Work Creation Starts With a Trigger
Work never creates itself. It starts with a trigger, and the trigger depends on the transaction. Releasing a sales or transfer order, purchase or transfer registrations, production orders reporting as finished, inventory movement, replenishment, and cycle counting all qualify. Following a single sales order keeps the flow clear. Under the Warehouse tab, the Release to warehouse button kicks off work creation. Behind the scenes the system is also checking inventory availability, reservations, and valid picking locations, but set those aside and focus on the core flow.
That core flow matters because picking is where warehouse cost concentrates. Order picking accounts for roughly 50 to 55 percent of total warehouse operating costs, and within picking, travel rather than the act of grabbing product eats more than half of the time. Configuration decisions that route work efficiently are not cosmetic. They move the single largest line in your warehouse budget.
The System Finds a Matching Work Template
Once the order is released, the system looks for an applicable work template. It starts at the lowest sequence number, evaluates the query on each template, and selects the first one that matches. Sequence is decisive here. The system stops at the first match, so a broad template sitting at a low sequence can intercept work you intended a more specific template to handle. When a match is found, the type of work is settled, such as a basic pick and put. What is still unknown is where each step happens.
Location Directives Determine Where the Work Happens
With the work type established, the system moves to the location directives. It evaluates them lowest to highest sequence, matching on directive type, site, and warehouse, and evaluating the directive's query if one exists. When it finds a match, it moves into the directive lines, which are evaluated highest to lowest sequence and narrow the logic by quantity, unit of measure, and unit restrictions. Once a line matches, the system runs that line's location directive actions in sequence. This is where the actual bin gets selected, based on location profiles, available inventory, or batch requirements.
This is also where accuracy is won or lost. Nucleus Research found that WMS deployments improve inventory accuracy by an average of 20 percent, and 46 percent of organizations see gains within the first year. That improvement is not magic. It comes from the system directing work to the right locations under controlled rules instead of relying on a worker's memory of where stock should be.
The Work Is Created, and the Pattern Repeats Everywhere
Once those steps resolve, the system has a work template defining what to do and a location directive defining where to do it. The work is created and made available for execution, and a worker picks it up on a mobile device. The sales order is just the easiest example. Purchase order put-away, production picking, replenishment, and transfer shipping all run through this same template-then-directive logic. Only the trigger changes. Once you can read the sequence, meaning trigger fires, template by lowest sequence, directive by lowest sequence, directive line by highest sequence, action picks the location, you can reason about behavior across the entire module instead of one process at a time.
That predictability is worth getting right now, because the stakes keep rising. The global warehouse management system market is projected to grow from $4.57 billion in 2025 to $10.04 billion by 2030, a 17.1 percent compound annual growth rate driven by e-commerce volume and persistent labor shortages. Operations that route work cleanly through their templates and directives are the ones that absorb that pressure without adding headcount.
Which Operations Get the Most Out of This
Distributors live and die by where pickers get sent, so tuning directives around location profiles and inventory availability keeps travel time down and throughput up. Manufacturers use separate templates and directives to keep raw materials, work in process, and finished goods flows from bleeding into one another. 3PLs and multi-warehouse operations rely on the directive's site and warehouse matching to keep each client's work routing isolated and correct. Food, beverage, and batch-controlled industries depend on location directive actions to enforce batch and FEFO rules, so the system only selects locations that satisfy shelf-life and lot criteria.
Watch the Full Walkthrough on YouTube
Reading the sequence is one thing. Seeing it run is another. Our F&SCM team recorded a short walkthrough that follows a single sales order from release all the way to created work, showing exactly where work templates and location directives hand off to each other inside D365. If you learn faster by watching the screens than by reading about them, start there.
The video is live on the Western Computer YouTube channel. Subscribe now so it lands in your feed the moment it publishes, and you will catch every F&SCM Tips & Tricks episode after it. Watch and subscribe here.
Get Your Configuration Right Before It Costs You
Advanced warehousing offers extensive flexibility, but understanding this core process is the foundation for predictable warehouse operations. Western Computer has spent nearly 40 years and more than 1,750 implementations helping distributors, manufacturers, and 3PLs get D365 Advanced Warehousing to behave the way their floor actually runs.
Ready to stop guessing at your warehouse setup? Reach out through our contact us form and our F&SCM team will walk through your work templates and location directives, find where the sequence is working against you, and right-size the design to how your warehouse runs.
