Material Requirements Planning (MRP) is a powerful inventory management tool that automatically balances production materials with projected sales to ensure your warehouse isn’t under or overstocked. After implementing MRP, companies stay better equipped to facilitate their production and procurement processes. This translates into a more efficient warehouse environment with optimized inventory levels that meet the needs of its customers more readily.
How to use MRP in SAP Business One
MRP functions seamlessly with SAP Business One. The way it works is that MRP assembles information about supply and demand, along with product quantities, and provides procurement managers with a series of recommendations based upon that data. MRP and SAP Business One work in tandem to keep tabs on specific inventory while tracking the minimum quantities programmed into the system. You can essentially customize the application to manage all aspects of inventory control.
The MRP Wizard function provides your procurement team with suggestions on what purchase orders to place next. It also helps form recommendations about orders that should be generated at the production site. Likewise, items that normally transfer from one location to another remain logged into the system. MRP then recommends various options to you upon reading the information gathered from SAP Business One. The two applications work together to present you and your team of buyers with an array of scenarios that project future production requirements based on item lead times.
The MRP Wizard tool can make recommendations concerning the following procurement tasks:
- Initiating production orders
- Creating purchase orders
- Inventory purchase quotations
- Product transfer requests
- And much more
Why you should implement MRP sooner than later
With today’s befuddle supply chain, issues with dangerous under-stocking and overstocking at production facilities are prevalent. MRP provides business owners with the necessary tools to eliminate needless warehouse clutter. An over-packed warehouse always leads to potential waste, both in terms of lost materials and labor resources. Once effectively implemented, MRP instills peace of mind in knowing that your business can always meet the needs of its customers without placing itself at risk for expensive stocking issues.
MRP’s wizard-based process does all the complicated calculations for you in SAP Business One. Not only does the system determine which products should be purchased, it tells you how many of the items are required to fulfill a specified production target. And MRP helps you establish those production goals via its recommendations. As you become comfortable with the efficacy of the software, you will then start to generate production and purchase orders based upon MRP’s Order Recommendation Report.
Should a situation arise in which an item must be outsourced by converting a production order to a purchase order, this is easily accomplished through SAP Business One MRP. Likewise, if you have to consolidate vendor production orders into just one order, it’s possible to streamline this process in MRP, as well. And while it is theoretically feasible to automatically generate orders in SAP Business One based upon the Order Recommendation Report, the MRP application alone does not do this for you.
Rather, the point of the software is to suggest purchase and production orders to be examined by expert purchase managers who review and modify the reports for improvement. Most small to mid-sized companies follow this process because it provides an adequate balance between machine learning and hands-on decision-making.
The key features of SAP Business One MRP
MRP Wizard – This tool helps users optimize future material demands before the app renders its purchase and manufacturing order recommendations.
Recommendations – Once SAP Business One analyzes current supply and demand, stock levels, existing established production orders, open purchase orders, sales data, projected orders, lead times, and so on, MRP provides the user with several recommendations.
MRP Results – Presented straightforwardly, you can sort through MRP results to sort and filter through information on its recommendations and exception screens.
Modeling – MRP allows for hypothetical proposals that can be run at anytime using its modeling feature.
The benefits of SAP Business One MRP
Reducing human error – SAP Business One MRP’s automated analysis replaces outmoded manual processes associated with production scheduling based upon the speculative instincts of one or two procurement managers.
Direct cost savings – SAP Business One reduces costs by analyzing minimum order quantities against order multiples whereby users can take advantage of pricing breaks offered in bulk quantity purchases, for example.
Enhanced strategic management – Instead of worrying about the finer details of inventory to ensure accuracy, your buyers can place a better focus on strategic procurement.
Maintaining low inventory levels – MRP’s accurate reporting reduces the need for unnecessary safety stock or duplicate purchase orders for the same item by multiple purchasing and warehouse managers.
Suggested SAP Business One MRP resources
SAP Business One MRP is a profoundly intelligent forecasting tool. It looks at historical data before tying that information to a source of demand. The system then arrives at multiple recommended values in ways that were previously inconceivable. You might be wondering, at this stage, how to get started with MRP to better leverage SAP Business One.
Presuming you are looking for more information about this state-of-the-art application, WiSys is a preeminent provider of software for manufacturing companies. The organization is known, across multiple industries, for solving the most complex challenges associated with SAP Business One.
Whether you are looking to take advantage of SAP Business One MRP for the first time or if you’re simply unhappy with its current results, WiSys remains equipped to resolve your inventory control and supply chain management issues.
Reach out to WiSys today at 770-955-3530 for a brief discovery call to learn more about how our team of experts can bring the best SAP Business One solutions to your distribution and manufacturing.