AX2012 R2 CU7 - Pallet Transports [Part I - Setup]

Hi Friends,
I am starting a  blog post series on Pallet Transports in AX and will be covering it in around five posts.
In this first post I'll try to explain basics of pallet transports and setup required in AX, followed by blogs on how to setup the system for creating inbound, refill, outbound and relocation pallet transports.
I will be using AX2012 R2 CU7 during the process. The information is based on my understanding and in case you want to correct me please push your comments, they are welcome.
PS: Warehousing scenarios can vary from simple to very complex, and I will be using very simple scenarios as the main goal is to make sure we understand the way pallet transports work in AX and not how to handle the real time complex scenarios.
So let's start with some basic terms:
Pallet: A device to store, transport materials smoothly inside a warehouse. It can be of different sizes, specifications according to international shipping standards. To get a basic understanding see below an image of a simple pallet, pictures speak louder than words:

Pallet transport : It is moving a pallet from one warehouse location to another warehouse location.
Mostly pallets are transported by using forklift machines. A typical forklift machine carrying a pallet looks as shown below:

Pallet transports in AX are classified based on the location type between which they are moved:
1. Input pallet transports: Moving pallet from an Inbound dock to a buffer/picking location.
2. Refill pallet transports: Moving pallet from a buffer location to picking location.
3. Outbound pallet transport: Moving pallet from a buffer location to an outbound dock
4. Relocation pallet transport: Moving pallet from one location to another location for example from one bulk location to another bulk location.

I try to depict the various types of pallet transports in below diagram:

Now let me share some setup required in AX to use Pallets and pallet transports:

The first setup is to enable configuration key of pallets in warehouse management II, if pallets are not enabled here then you will not be able to see any pallet functionality in the system. To do this you can go to System Administration >>Setup>> License>> License configuration

Next you need to configure the item which you want to store on a pallet. As the meaning of pallet is clear now, we agree that it should be a storage dimension as it defines they way we store an item. So the storage dimension group used on the item should have "Pallets" enabled on it as shown below:

Then you need to  setup pallet types and pallet groups from Inventory and warehouse management >> Setup>>Inventory equipment [Remember if the configuration key of pallets is turned off then you will not be able to see these menu items]

Now you need to define how much qty of your item can be stored on 1 pallet and what pallet type is used to store it, you can define these fields on released product>> Manage Inventory fast tab>>Handling group as shown below

Make sure warehouse is configured with locations and item warehouse setup is defined on the item.
Once this is defined you are all set to use your item on pallets and we are all set to start exploring the pallet transports in my next blog post.