Of the Returns logged (also: Reorder Point) is a fixed threshold in the item master. If the available stock level falls to or below this value, SAP Business One generates a purchase proposal – without an open customer order or MRP-run must be available.
Classification: Reorder Point Method
The stock level is part of the classic Re-order point procedureOrders are placed on a consumption-controlled basis as soon as a defined minimum stock level is reached. This procedure is particularly suitable for items with regular, easily predictable consumption. SAP Business One supports both procurement methods—reorder point and MRP—allowing individual selection depending on the item.
Delimitation from MRP and safety stock
minimum stock level and the Material Requirements Planning (MRP) are fundamentally different procedures. Safety stock reacts to the current stock value; MRP plans based on demand, taking into account open orders, forecasts, and bill of materials structures, and schedules proposals precisely in time. Both procedures exist side-by-side in SAP Business One – which one is used depends on the planning method stored in the item master data.
This is to be distinguished from Safety stockHe is a buffer below the reorder stock level, which is not planned for regular demand coverage. The safety stock protects against delivery delays and consumption peaks; the reorder stock level triggers the reorder. In practice:
- Returns logged Threshold that triggers the order
- Safety stock = Buffer underneath that should never be used according to plan
Master Data Maintenance (SAP Business One)
The reporting stock is in Article master stored at the warehouse location level. The relevant tab depends on the version Stock data or Planning data. The corresponding database field is OITW.MinLevel (location-specific) respectively. OITM.MinLevel (company-wide). As soon as the stock falls to or below this value, the item appears in the report Stock status as a replenishment candidate and triggers a purchase proposal – depending on the system configuration.
In addition, the following fields may be useful in the article master data:
- Re-order days (Lead Time, OITM): Number of days until delivery — is factored into the calculation of the correct reorder stock level.
- Minimum order quantity (MinOrdrQty): If the calculated requirement falls below this value, SAP Business One rounds up to the minimum quantity.
- Safety stock Minimum buffer not planned - in an MRP environment, it also triggers a proposal as soon as stock falls below it.
Calculation of the reorder point
The classic formula is:
Stock level = (Daily consumption × Reorder period in days) + Safety stock
For example: If an item is consumed at a rate of 10 units per day and the replenishment lead time is 5 days, this results in a reorder point consumption of 50 units. Adding a safety stock of 20 units, the reorder level then stands at 70 units. SAP Business One does not perform this calculation automatically – the planner must manually enter the determined value into the item master data.
Practical advice
A reorder point that is set too low leads to supply bottlenecks because the reorder is triggered too late. A value that is set too high ties up capital unnecessarily. Therefore, the reorder point should be checked regularly – at least quarterly – against actual consumption and current lead times.
Typical stumbling blocks in practice:
- Outdated replenishment times: If a supplier has been delivering faster for a year, the reorder point is too high – capital is unnecessarily tied up in inventory.
- No safety stock planned: Without buffers, a single delivery delay is enough to cause a delivery stoppage.
- Stockkeeping and MRP active simultaneously If both a reorder point and an MRP scenario are active for the same item, duplicate proposals can arise. The planning method in the item master should be set definitively.
Distinguishing related terms
- Reporting stock vs. safety stock The reorder level triggers the order; the safety stock is the buffer below it. Both are separate fields in the item master.
- Reporting Stock vs. MRP: The safety stock reacts based on stock levels; MRP plans based on requirements, using orders and forecasts.
- Stock level vs. Minimum order quantity The minimum order quantity (MinOrdrQty) determines the smallest permissible order size. It is not an inventory limit, but a quantity specification.
- Stock Level vs. Batch Size The lot size (order multiple, OrdrMulti) bundles order quantities in fixed units; the reorder level is independent of this.
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