diff --git a/erpnext/selling/doctype/sales_order/sales_order.py b/erpnext/selling/doctype/sales_order/sales_order.py
index b6a979dbc61..9b14616373b 100755
--- a/erpnext/selling/doctype/sales_order/sales_order.py
+++ b/erpnext/selling/doctype/sales_order/sales_order.py
@@ -1785,7 +1785,9 @@ def create_pick_list(source_name, target_doc=None):
 
 	doc.purpose = "Delivery"
 
-	doc.set_item_locations()
+	# Only auto-assign serial numbers if not picking manually
+	if not doc.pick_manually:
+		doc.set_item_locations()
 
 	return doc
 
diff --git a/erpnext/stock/doctype/pick_list/pick_list.js b/erpnext/stock/doctype/pick_list/pick_list.js
index c72fa864960..252a5d2872f 100644
--- a/erpnext/stock/doctype/pick_list/pick_list.js
+++ b/erpnext/stock/doctype/pick_list/pick_list.js
@@ -81,6 +81,26 @@ frappe.ui.form.on("Pick List", {
 			};
 		});
 	},
+	pick_manually: (frm) => {
+		// Clear auto-assigned serial numbers and related fields when switching to manual picking
+		if (frm.doc.pick_manually && frm.doc.locations) {
+			let has_changes = false;
+			frm.doc.locations.forEach((row) => {
+				if (row.serial_no || row.batch_no || row.serial_and_batch_bundle) {
+					row.serial_no = "";
+					row.batch_no = "";
+					row.serial_and_batch_bundle = "";
+					row.picked_qty = 0;
+					has_changes = true;
+				}
+			});
+			
+			if (has_changes) {
+				frappe.show_alert(__("Cleared auto-assigned serial numbers and batch numbers for manual picking"), 3);
+				frm.refresh_field("locations");
+			}
+		}
+	},
 	set_item_locations: (frm, save) => {
 		if (!(frm.doc.locations && frm.doc.locations.length)) {
 			frappe.msgprint(__("Add items in the Item Locations table"));
@@ -273,7 +293,7 @@ frappe.ui.form.on("Pick List", {
 			max_qty_field: "qty",
 			dont_allow_new_row: true,
 			prompt_qty: frm.doc.prompt_qty,
-			serial_no_field: "not_supported", // doesn't make sense for picklist without a separate field.
+			serial_no_field: "serial_no",
 		};
 		const barcode_scanner = new erpnext.utils.BarcodeScanner(opts);
 		barcode_scanner.process_scan();
diff --git a/erpnext/stock/doctype/pick_list/pick_list.py b/erpnext/stock/doctype/pick_list/pick_list.py
index f554f4bd140..24fecce135a 100644
--- a/erpnext/stock/doctype/pick_list/pick_list.py
+++ b/erpnext/stock/doctype/pick_list/pick_list.py
@@ -572,10 +572,16 @@ class PickList(TransactionBase):
 
 			if not item.item_code:
 				frappe.throw(f"Row #{item.idx}: Item Code is Mandatory")
-			if not cint(
-				frappe.get_cached_value("Item", item.item_code, "is_stock_item")
-			) and not frappe.db.exists("Product Bundle", {"new_item_code": item.item_code, "disabled": 0}):
-				continue
+
+			# Check if item is stock item or product bundle
+			is_stock_item = cint(frappe.get_cached_value("Item", item.item_code, "is_stock_item"))
+			is_product_bundle = frappe.db.exists("Product Bundle", {"new_item_code": item.item_code, "disabled": 0})
+
+			# Include non-stock items for delivery purposes, but skip them for warehouse assignment
+			if not is_stock_item and not is_product_bundle:
+				# For non-stock items, set warehouse to None and continue processing
+				item.warehouse = None
+
 			item_code = item.item_code
 			reference = item.sales_order_item or item.material_request_item
 			key = (item_code, item.uom, item.warehouse, item.batch_no, reference)