Material Requirements Planning (MRP) in SAP Business One provides the purchasing and production process with data to achieve an optimal inventory level via the corresponding processes. It is therefore about having the right quantity and quality of a required good in the right place at the right time in a cost-optimised manner.
Data basis of the MRP in SAP Business One
Material Requirements Planning (MRP) calculates the demand by first calculating the Stock for the parent items, followed by the stock levels, analysing the corresponding child items.
These data are used in the process:
The system then subtracts the demand from
- Number of items in stock
- Receipts from orders
- Production orders
- Stock transfers to the higher-level warehouse
- Incoming advance invoices
- Recurring transactions on the input side
General preparations for material requirements planning
There are some general requirements as a basis for correct material requirements planning in SAP Busines One. Most of the preparatory work concerns the material master data. In case you do not operate with fixed order points, but seasonal fluctuations or other values play a role, forecasts are used.
Preparation of the article master data
The item master data should be maintained in the system with as much detail as possible. This includes the general determination of the planning method, procurement method, order intervals, order multiples, minimum order quantity, lead times and tolerance days as well as the maintenance of the purchase price and required purchase quantities.
The forecasts in MRP with SAP Business One
A forecast is a way to predict future demand for your finished goods. Since not all customer orders are received on a fixed schedule that would allow for a constant production or purchasing plan, purchasing often has to operate with forecasts. Forecasts are based on historical sales data, current sales data and data on future sales.
In SAP Business One, you can generate a forecast manually or automatically. When one
chooses the automatic method, SAP Business One creates a forecast on the basis of
historical sales from sales orders or deliveries and outgoing invoices. One can add multiple forecasts if needed. One can then select a forecast in an MRP run.
Intelligent forecasting in SAP HANA
In SAP Business One / HANA there is an additional option to generate forecasts within the framework of material requirements planning. The so-called "intelligent forecasts" are available for this purpose. Ready-made statistical models are provided for this purpose:
- TESM (Triple Exponential Smoothing)
- LRDTSA (Linear Regression with Damped Trend and Seasonal Adjust)
The proposals generated in this way are visualised and can be further processed as such.
The Disposition Wizard in SAP Business One
The MRP wizard is the central element in material requirements planning with SAP Business One. In it, the different demand triggers and parameters are combined into an MRP proposal. In the wizard, you can set some parameters to model the results. As a result, order recommendations are generated, which can be orders from suppliers or production orders.
Data output of the results of material requirements planning
There are three options for displaying the determined data:
Daily: If you select this method, each day in the date range receives a column.
Weekly: If you choose this method, SAP Business One lists the columns by week number in the year.
Monthly: If you select this method, each month in the date range will receive