Cross-legal entity fulfillment with distributed order management (DOM) (preview)

This article describes how to set up and use cross-legal entity fulfillment optimization with distributed order management (DOM) in Microsoft Dynamics 365 Commerce.

Overview

Cross-legal entity fulfillment extends the DOM optimization engine to consider inventory and fulfillment locations across multiple legal entities within your organization. When DOM evaluates the best fulfillment source for a sales order, it can assign a warehouse or store belonging to a different legal entity than the one where the order originated. DOM then automatically creates the required intercompany purchase orders and sales orders to execute the cross-entity fulfillment.

Business value

Cross-legal entity fulfillment with DOM provides the following benefits:

• Improved fulfillment efficiency: Orders can be fulfilled from the best location based on cost, proximity, and inventory availability, even if that location belongs to a different legal entity.
• Reduced manual intervention: Automates cross-legal entity order flows, eliminating the need for manual coordination between entities.
• Enhanced customer experience: Enables seamless fulfillment across legal entities, ensuring customers receive what they want faster and more reliably.
• Alignment with global retail needs: Addresses strong demand from European and global retailers for cross-entity fulfillment capabilities in omnichannel scenarios.

Prerequisites

Before you configure cross-legal entity fulfillment, complete the following prerequisites:

• Enable the DOM configuration key.
• Establish intercompany trading relationships between participating legal entities.
• Release products and make them available in all participating legal entities.
• Ensure warehouses have valid addresses with latitude and longitude values, or configure Azure Maps for address resolution.

Configuration steps

Step 1: Enable the DOM configuration key

1. Go to System administration > Setup > License configuration.
2. On the Configuration keys tab, expand the Retail node.
3. Select the Distributed Order Management checkbox.
4. Select Save.

Step 2: Configure Azure Maps

1. Go to Retail and Commerce > Headquarters setup > Parameters > Commerce shared parameters.
2. In the left navigation pane, select Azure Maps.
3. Set Enable Azure Maps to Yes.
4. Enter a valid Azure Maps key.
5. Select Save.

Step 3: Configure DOM parameters

1. Go to Retail and Commerce > Distributed order management > Setup > DOM parameters.
2. On the General tab, configure the following settings:
   • Set Enable distributed order management to Yes.
   • Set Confirm Azure Maps usage for DOM to Yes.
   • Set the Fulfillment data retention period (in days) value.
   • Set the DOM logs retention period (in days) value.
   • Set the Rejection period (in days) value.
3. On the Solver tab, set the Solver type to Production Solver.
4. On the Number sequences tab, assign number sequences to the required DOM entities.

Step 4: Set up intercompany trading relationships

For each pair of legal entities that participates in cross-entity fulfillment, you must configure intercompany trading relationships.

Selling (fulfilling) legal entity

1. In the selling (fulfilling) legal entity, go to Accounts receivable > Customers > All customers.
2. Create or select the intercompany customer record that represents the ordering legal entity.
3. On the General FastTab, in the Intercompany section, set Intercompany to Yes.
4. Configure the intercompany sales order policy, such as automatic sales order creation and direct delivery settings.

Ordering (source) legal entity

1. In the ordering (source) legal entity, go to Accounts payable > Vendors > All vendors.
2. Create or select the intercompany vendor record that represents the fulfilling legal entity.
3. On the General FastTab, in the Intercompany section, set Intercompany to Yes.
4. Configure the intercompany purchase order policy, such as automatic purchase order creation.

Step 5: Configure DOM intercompany vendor mapping

The intercompany vendor mapping tells DOM which vendor to use when creating purchase orders for cross-entity fulfillment.

1. Go to Retail and Commerce > Distributed order management > Setup > DOM Intercompany vendor mapping.
2. Select New.
3. In the Source legal entity field, select the legal entity where the original sales order exists.
4. In the Target legal entity field, select the legal entity that fulfills the order.
5. In the Intercompany vendor field, select the vendor account (in the source legal entity) that represents the fulfilling legal entity.
6. Repeat for each legal entity pair.
7. Select Save.

Step 6: Configure fulfillment groups

Fulfillment groups define the locations (warehouses and stores) that DOM can consider for fulfillment. For cross-legal entity scenarios, include locations from all participating legal entities.

1. Go to Retail and Commerce > Channel setup > Fulfillment groups.
2. Select New and enter a name and description.
3. Select Add line or Add lines to add locations from multiple legal entities.
4. For each location, specify whether it can be used for Shipping, Pickup, or both.
5. Select Save.

Step 7: Configure DOM rules

1. Go to Retail and Commerce > Distributed order management > Setup > Manage rules.
2. Configure rules based on your business requirements. Common rules for cross-entity scenarios include:
   • Fulfillment location priority rule: Define priority across locations in different legal entities.
   • Maximum distance rule: Limit fulfillment to locations within a specified distance.
   • Minimum inventory rule: Reserve minimum stock at each location.
   • Partial orders rule: Allow or restrict order splitting across locations and legal entities.

For more information, see DOM rules.

Step 8: Set up DOM fulfillment profiles

The fulfillment profile is the central configuration that ties legal entities, rules, modes of delivery, and sales origins together.

1. Go to Retail and Commerce > Distributed order management > Setup > Fulfillment profiles.
2. Select New.
3. Enter a Profile name and Description.
4. Set the Auto apply result option as needed.
5. On the Legal entities FastTab, select Add and add all legal entities that participate in cross-entity fulfillment.
6. On the Rules FastTab, select Add and link the DOM rules you configured in Step 7: Configure DOM rules.
7. Optionally, assign a Fulfillment group to restrict which warehouses DOM considers.
8. On the action pane, on the Setup tab, select Modes of delivery:
   • Select New for each legal entity and mode of delivery combination.
9. On the action pane, on the Setup tab, select Sales order origins:
   • Select New for each legal entity and sales origin combination.
10. Set Enable profile to Yes.
11. Select Save.

Step 9: Configure DOM cost configuration

To enable cost-based optimization across legal entities:

1. Go to Retail and Commerce > Distributed order management > Setup > Cost configuration.
2. Define cost factors such as shipping costs, handling costs, and intercompany transfer costs.
3. Associate costs with specific locations or groups.

For more information, see DOM cost configuration.

Step 10: Set up the DOM processor batch job

1. Go to Retail and Commerce > Distributed order management > Batch processing > DOM processor job setup.
2. On the Parameters FastTab, in the Fulfillment profile field, select the profile you configured.
3. On the Run in the background FastTab, select a Batch group.
4. Enter a Task description.
5. Select Recurrence and configure the job schedule.
6. Select OK.

How cross-legal entity fulfillment works

After you complete the configuration, the cross-legal entity fulfillment process works as follows:

1. A sales order is created in the source legal entity (for example, through POS or e-commerce).
2. DOM runs and evaluates all eligible fulfillment locations across legal entities.
3. DOM identifies the optimal fulfillment location, which might be in a different legal entity.
4. If the selected location is in a different legal entity, DOM:
   • Creates an intercompany purchase order in the source legal entity.
   • Creates an intercompany sales order in the fulfilling legal entity.
5. The fulfilling legal entity processes the intercompany sales order (pick, pack, ship).
6. Upon shipment, the intercompany purchase order in the source legal entity is updated.
7. The original sales order is marked as fulfilled.

Fulfillment scenarios

Full fulfillment

The fulfilling legal entity ships the entire ordered quantity. The intercompany sales order, purchase order, and original sales order are all updated to reflect completed delivery.

Partial fulfillment

The fulfilling legal entity ships only a part of the ordered quantity. The delivery remainder is updated across the intercompany chain (intercompany sales order > purchase order > original sales order). DOM can reassign the remaining quantity in a subsequent run.

Rejection

The fulfilling location rejects the fulfillment assignment. DOM marks the line as rejected and attempts to reassign it to an alternative location in the next DOM run. Reassignment options include:

• A different warehouse in the same legal entity.
• A warehouse in a different legal entity.
• The same vendor but a different warehouse.

Cancellation

When the delivery remainder is set to zero on the intercompany sales order, the cancellation cascades through the intercompany chain. The behavior of the original sales order depends on the Accounts receivable parameters configuration.

Validation checklist

After completing the configuration, verify the setup by confirming the following validation checks:

Troubleshoot

Related features

Cross-legal entity fulfillment works alongside other cross-company capabilities in Dynamics 365 Commerce:

• Enable cross-company inventory lookup for POS: Allows store associates to view inventory across legal entities in POS before orders are placed.
• Intercompany trade setup: Provides the foundational intercompany trading configuration used by DOM.

More resources

• DOM overview
• Set up DOM
• DOM rules
• DOM cost configuration
• DOM processing
• Results of DOM runs
• Clean up DOM fulfillment plans and logs
• DOM extensibility
• DOM limitations