Locations vs Zones vs Bins in Business Central: Understand Warehouse Structure Easily

Intro:

When implementing warehouse management in Microsoft Dynamics 365 Business Central, understanding the building blocks of your warehouse—Location, Zone, and Bin is critical. These three terms aren’t just technical jargon; they directly impact inventory accuracy, picking efficiency, and data-driven decision-making. In this guide, we’ll use a real-world scenario to simplify these concepts and help you structure your warehouse for maximum performance.

Use Case:

Meet FastMove Supplies Inc.

Imagine FastMove Supplies Inc., a mid-sized distributor of industrial tools. They operate from a single warehouse located in Houston, Texas. As the company grew, they started facing frequent stock mismatches, delayed order fulfillment, and inefficient stock movements.

The operations manager decided to implement Business Central’s Warehouse Management module and came across the concepts of Location, Zone, and Bin. Here’s how these components transformed their warehouse.

Warehouse: Houston Distribution Center (Location)

├── Zone A: Receiving

│   └── Bin A01, A02 (for inbound goods)

├── Zone B: Storage

│   ├── Bin B01 (Heavy tools)

│   └── Bin B02 (Light tools)

└── Zone C: Shipping

└── Bin C01, C02 (Outbound staging)

Understanding the Differences

1. Location

• Definition: A Location represents the physical warehouse or storage site.
• Example: “Houston Distribution Center” is one Location.
• Why it matters: It determines where transactions occur—sales, purchases, and transfers.

2. Zone

• Definition: A Zone is a logical grouping within a Location for better control.
• Example: FastMove set up Receiving, Storage, and Shipping zones.
• Why it matters: It helps organize workflows like receiving, picking, and packing.

3. Bin

• Definition: A Bin is the smallest storage unit—like a shelf or pallet space.
• Example: Bin B01 stores heavy-duty hammers, while C01 is for packed shipments.
• Why it matters: Accurate bin-level tracking ensures fast and correct item picks.

Best Practices

• Define Locations based on physical warehouses or fulfillment centers.
• Create Zones reflecting warehouse operations: Receiving, Storage, Returns, etc.
• Designate Bins based on size, weight class, or item type to speed up picking.
• Use meaningful codes (e.g., STG-01 for Storage Bin 01) to minimize confusion.
• Keep bins flexible but avoid overlapping SKUs unless necessary.

Pro Tips:

Always align your Zones with your workflow. If you pack and stage separately, define those as individual zones. It’ll streamline your pick-to-ship process.

• Warehouse Setup in Business Central – Microsoft Learn
• Inventory Put-Away Made Simple in Business Central – 5-Minute Guide (Your Site)
• Wave and Batch Picking Strategies – Business Central Quick Guide
• If you’re planning for implementation, support or upgrades in Microsoft Dynamics 365 business central or NAV, check out our Business Central consulting services for tailored implementation and support.

💡What you have learned in this post:

By now, you understand how location, zone, and bin work together to form a structured warehouse in Business Central. With our FastMove Supplies Inc. example, you’ve learned:

• What’s the difference between a Location and a Zone in Business Central?
• How are bins used in warehouse management?
• Why do you need zones if you already have bins?
• What is the hierarchy of warehouse structure in Business Central?