Allocation and Cross-Docking Concepts

This document describes what allocation, pre allocation and cross docking are and when they are used.


The following changes are done in M3:

The primary use of allocation is to release orders for picking, packing and delivery to the customer as fast as possible and conduct prioritization in shortage situations.

Automatic allocation

Automatic allocation can be divided into two parts:

Automatic allocation can be used together with or without:

For more details, refer to Automatic Allocation.

Batch allocation

The purpose of batch allocation is to allocate stock according to priorities, or a fair share distributed among equal priorities when there is a stock shortage.

Example: At the end of the month you want to ship goods, but there is a stock shortage for some items. The existing stock for these items must be shipped to the most important customers. The batch allocation function enables you to de allocate the items from existing orders and to reallocate them for prioritized customers according to user defined rules.

Fair Share, allocation priority rules and allocation priority with fair share

Current allocations are reallocated and distributed across demand order lines ac-cording to user defined rules. This is most likely to happen due to a shortage problem. Redistribution can be done in one of the following ways:

Allocation rules for a group of lines (Joint delivery rules)

Joint delivery rules check for allocation over a group of lines that are defined by an implied joint delivery code instead of a joint delivery code (joint delivery code=delivery together of several different order lines within a customer order). For example, these groups of lines may contain the same style and color.

Joint delivery rules can be used with automatic allocation or with batch allocation.

With this function, you can perform a check to see if a group of lines pass or fail for dispatch according to the joint delivery rules. These rules are user defined and do not necessarily have to be for 100% allocation. Instead, each line is for instance 60% allocated, or, in total, 80% of the group is allocated.

Manual allocation

Manual allocation can be used for certain products or for products that normally are automatically allocated, but occasionally need to be manually allocated.


A pre-allocation is defined as being all or part of an acquisition order line (PO, DO and MO) that is promised to a demand order line (CO, RO, material MO and DO).

Pre-allocation can be done at any time providing that a demand order is released and that an acquisition order is firm planned (proposal with status 20) or released.

A pre-allocation becomes an allocation at the time when stock is reported as received.

Soft allocation

Soft allocation is frequently used when there are many lots and it does not matter which one is picked. It can be performed with or without a check against allocable balance on warehouse level. Issued balance identities are specified manually when reporting picking lists.

It can be used:


The cross-docking function in M3 identifies when stock being received is required for issue within a short time period. It then directs stock to the appropriate cross docking location instead of to the ordinary location. What activates cross-docking is demand in combination with a stock shortage.

Cross-docking results in an allocation to the demand order that caused cross-docking.

Demands can be internal or external orders, or acquisition orders. Internal orders include material manufacturing orders, distribution orders, move orders and requisition orders. External orders are customer orders. Acquisition orders can be manufacturing orders, purchase orders, distribution orders (receiving warehouse) and requisition orders (order category 40).

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