H2: Overview
Microsoft's 2026 Wave 1 update introduces a dedicated Stockkeeping Unit (SKU) tab on the Location Card in Microsoft Dynamics 365 Business Central. This tab contains two critical fields that fundamentally change how the Planning Engine and master data governance work, without requiring you to create thousands of individual SKU records.
This guide is intended for Business Central consultants, ERP leads, supply chain planners, warehouse managers, and Microsoft Dynamics 365 Business Central professionals who want to understand these fields in full depth—what they do, who should configure them, when to use them, and what happens if they are not set correctly.
Where to Find the SKU Tab
Navigation Path
Warehouse → Setup → Locations → Open a Location Card → SKU Tab
This tab is new in Business Central 2026 Wave 1 and was not available in previous versions.
Field 1 – Missing SKU Planning Policy
What is it?
This field instructs the Business Central Planning Engine (MRP/MPS) on how to handle items at a location when no explicit SKU Card exists for the Item-Location combination.
The Three Options Explained
| Option |
Behaviour |
When to Use |
|
Minimal
|
Uses legacy logic and checks Components at Location in Manufacturing Setup. Order modifiers from Item Card are frequently ignored. |
Legacy implementations only. Not recommended for new projects. |
| Item Card |
Creates a temporary virtual SKU during planning and respects all Item Card order modifiers like MOQ, order multiples, and safety stock. |
Recommended for most warehouses and retail locations. |
| Don't Plan |
Completely excludes the Item-Location combination from planning runs. |
Display, Quarantine, Virtual and Showroom locations. |
Why Does It Matter?
Before this feature existed, Business Central's planning engine had a major limitation whenever an Item-Location combination did not have an SKU.
As a result:
Minimum Order Quantities (MOQ) configured on the Item Card were ignored.
- Order Multiples were skipped.
- Safety Stock values were not considered.
- Purchase suggestions matched exact demand instead of business rules.
- Organizations had to create thousands of SKU records simply to enforce Item Card planning logic.
With the Item Card option, Business Central creates a virtual SKU during planning.
This means:
- No permanent SKU record is stored.
- All Item Card planning rules are honored.
- Master data remains lean.
- Planning recommendations become significantly more accurate.
Real-World Use Cases
Use Case 1 – Retail Chain (200 Stores)
Without Setting
A retail chain has Minimum Order Quantity = 10 on the Item Card but no SKU records per store.
Demand = 1 Unit
Business Central recommends purchasing:
1 Unit
MOQ is ignored.
With Item Card
Business Central creates a virtual SKU during planning.
Demand = 1 Unit
Suggested Purchase = 10 Units
No permanent SKU records are created.
Use Case 2 – Manufacturing with Satellite Warehouses
A manufacturer operates:
One Production Plant
Five Regional Warehouses
All warehouses should inherit planning rules from the Item Card.
Using Item Card eliminates the need to maintain five SKU records per item.
Only locations requiring different vendors or replenishment methods need dedicated SKU records.
Use Case 3 – Quarantine Location
Inventory stored in a QUARANTINE location should never trigger replenishment.
Selecting Don't Plan ensures that:
Demand is ignored.
Inventory is excluded from planning.
No replenishment suggestions are generated.
Field 2 – SKU Creation Policy
What is it?
SKU Creation Policy is a master data governance feature.
It determines whether SKU records can be created manually or through batch jobs at a specific location.
Think of it as a permission gate for SKU creation.
Available Options
| SETTING |
IMPACT |
WHO CONFIGURES IT |
RECOMMENDED FOR |
| Allowed |
Manual and Batch SKU creation permitted |
Warehouse Managers, SCM Planners |
Physical Warehouses |
| Blocked |
Manual and Batch SKU creation prohibited |
ERP Leads, Data Stewards, Administrators |
Virtual, In-Transit, Quarantine, Display Locations |
Why Does It Matter?
Business Central includes a Create Stockkeeping Unit batch job.
Without governance controls, this batch job creates SKU records for every location.
This can result in:
- Thousands of unnecessary SKU records
- Reduced planning performance
- Poor lookup experience
- Increased maintenance effort
- Incorrect planning behavior
Blocking SKU creation at non-planning locations keeps the SKU table clean and efficient.
Real-World Use Cases
Use Case 1 – In-Transit Location
Goods move through a TRANSIT location.
This location should never contain planning data.
Selecting Blocked ensures the batch job skips this location entirely.
Use Case 2 – Initial Data Migration
During ERP implementation or year-end migration, consultants often generate SKU records using batch jobs.
Without blocking virtual locations, unnecessary SKUs are created for:
- SHOWROOM
- SAMPLES
- DAMAGE
- QUARANTINE
Configuring Blocked before migration prevents this issue.
Use Case 3 – Multi-Site Enterprise
A manufacturing company manages:
- 5 Warehouses
- 4 Transit Locations
- 2 Virtual Locations
- 1 Quarantine Location
Applying Blocked to non-warehouse locations keeps planning data clean and improves usability.
Combined Impact: Master Data Efficiency
| Scenario |
Without Both Fields |
With Both Fields |
| Retail Chain |
Thousands of SKU records or inaccurate planning |
Virtual SKUs only. MOQ respected everywhere. |
| In-Transit Locations |
SKU table filled with unnecessary records |
Batch jobs automatically skip locations |
| Quarantine Locations |
Purchase suggestions generated incorrectly |
No planning and no SKU creation |
| Manufacturing Warehouses |
SKU required for every Item-Location |
Virtual SKU created only during planning |
Who Should Configure These Fields?
| Role |
Missing SKU Planning Policy |
SKU Creation Policy |
| ERP Lead / Data Steward |
Define implementation standards |
Block virtual locations |
| SCM Consultant |
Recommend Item Card for standard warehouses |
Identify exception SKU requirements |
| Warehouse Manager |
Configure planning based on warehouse purpose |
Allow physical warehouse SKU creation |
| System Administrator |
Validate post-upgrade configuration |
Verify blocked locations before batch jobs |
Professional Consultant Tip
Senior SCM Consultant Recommendation
When implementing Microsoft Dynamics 365 Business Central for manufacturing or retail organizations, configure Missing SKU Planning Policy as Item Card for all standard satellite warehouses.
Benefits include:
- Reduced master data maintenance
- Improved planning accuracy
- Cleaner Item Availability by Lot pages
- Elimination of unnecessary SKU records
- Better long-term ERP governance
Additionally, always configure SKU Creation Policy as Blocked for:
- In-Transit Locations
- Virtual Locations
- Quarantine Locations
- Display Locations
This should be completed before running any batch jobs, particularly during ERP go-live and data migration.
Quick Configuration Reference
| Location Type |
Missing SKU Policy |
SKU Creation Policy |
| Main Warehouse |
Item Card |
Allowed |
| Production Site |
Item Card |
Allowed |
| Regional Warehouse |
Item Card |
Allowed |
| In-Transit Location |
Don't Plan |
Blocked |
| Virtual Location |
Don't Plan |
Blocked |
| Quarantine Location |
Don't Plan |
Blocked |
| Showroom |
Don't Plan |
Blocked |
| Exception Warehouse |
Item Card |
Allowed |
Conclusion
The introduction of the SKU Tab in Microsoft Dynamics 365 Business Central 2026 Wave 1 significantly enhances inventory planning and master data governance.
By correctly configuring Missing SKU Planning Policy and SKU Creation Policy, organizations can:
- Improve planning accuracy
- Reduce unnecessary SKU maintenance
- Eliminate master data clutter
- Enhance MRP and MPS performance
- Simplify warehouse management
- Support scalable ERP implementations
Two fields. Configured once. Massive impact on planning quality and master data health.
Frequently Asked Questions (FAQs)
1. What is the new SKU Tab in Microsoft Dynamics 365 Business Central 2026 Wave 1?
The SKU Tab is a new feature added to the Location Card that allows administrators to configure Missing SKU Planning Policy and SKU Creation Policy, improving planning accuracy and master data governance.
2. What does Missing SKU Planning Policy do?
It determines how the Business Central planning engine behaves when an Item-Location combination does not have a dedicated SKU record.
3. Which Missing SKU Planning Policy option is recommended?
For most implementations, Item Card is recommended because it creates virtual SKUs during planning while respecting Item Card planning parameters such as MOQ, Safety Stock, and Order Multiples.
4. What is SKU Creation Policy?
SKU Creation Policy controls whether SKU records can be created manually or through batch jobs for a specific location.
5. Why should virtual and transit locations be blocked?
Blocking SKU creation prevents unnecessary SKU records, reduces database clutter, improves planning performance, and simplifies system maintenance.
6. Does the Item Card option create permanent SKU records?
No. It creates temporary virtual SKUs only during planning runs. No permanent records are stored.
7. Who should configure these settings?
Typically, ERP Leads, SCM Consultants, Warehouse Managers, and System Administrators configure these settings based on organizational planning and governance requirements.
8. How does this feature improve Business Central planning?
It enables accurate replenishment suggestions, minimizes master data maintenance, eliminates unnecessary SKU records, and ensures consistent planning behavior across multiple warehouse locations.