Leveraging SAP Business One for Materials Requirements Planning (MRP)

Materials requirements planning (MRP) is a crucial part of effective inventory management, but the process is neither simple nor straightforward when businesses attempt to perform this function manually.

And as the complexity of your business offerings grows, so does the challenge of proper inventory management. This is true in any business that maintains an inventory, including manufacturers, OEMs, retailers, and suppliers and distributors.

Add to this challenge the supply chain upheaval we’re still experiencing post-COVID, and the challenges for small and medium businesses (SMBs) are significant.

SAP Business One is a powerful ERP software suite that touches nearly every corner of a business, and it includes powerful materials requirements planning capabilities.

Learn how SAP Business One can transform your materials requirements planning (MRP) efforts in this post: we’ll start with the benefits of employing software for this purpose, then give you a step-by-step guide on how to use SAP Business One for materials requirements planning (MRP).

Benefits of Materials Requirements Planning in Supply Chain

Using MRP software (or powerful wide-ranging ERP suites like SAP Business One) for materials requirements planning unlocks significant benefits for businesses, far outpacing what manual processes or unintuitive software add-ons are capable of.

Consider how these benefits could improve your inventory management operations:

How to Use SAP Business One for Materials Requirements Planning (MRP)

Using an effective MRP software solution is transformative for businesses currently running these processes manually or using ineffective bolt-on software modules. But using a powerful MRP wizard that’s built into an industry-leading ERP like SAP Business One can take you even further.

Here’s a step-by-step guide on how your business can start using Business One for materials requirements planning (MRP).

1. Routinely and Accurately Enter and Update Item Master Data

First, be diligent about accurately entering item master data into SAP Business One and then routinely checking that information and updating it when necessary. The old programming maxim “garbage in, garbage out” applies here: your SAP Business One materials requirement planning (MRP) results can only be as clean as the data they pull from.

Pro tip: staying on top of vendor terms and shipping protocols is just as important as accurate data entry, for the same reasons. Your systems depend on accurate information.

2. Flag Items as MRP Relevant in the Item Master Data

To use SAP Business One materials requirements planning (MRP) for a particular item, that item must be flagged as MRP-relevant. You’ll find this selection on the Planning Data tab in the Planning Method drop-down menu.

Selecting MRP here will tell SAP Business One to include the item in its MRP runs. The next field, Procurement Method, allows you to tell SAP Business One whether to issue a purchase or production order when the MRP Wizard is ready to order more.

Pro tip: If you don’t want the MRP Wizard to handle everything, you can manually tweak parameters like order intervals or quantities from this page.

3. Begin Building Scenarios in the MRP Wizard

With your Item Master Data correct and up to date, you’re ready to launch the SAP Business One materials requirements planning (MRP) Wizard, an insanely powerful utility that focuses the full power of SAP Business One into the MRP process.

Start by building one or more scenarios that fit the context of an item or group of items. You might create one scenario for reselling finished goods and another for acquiring raw materials or components for a product you assemble.

The scenario builder gives you all sorts of options and parameters you can use to tell SAP Business One how it should go about MRP for an item or group of items.

4. Select Items and Inventory Sources

As you continue in the scenario builder, you’ll select the items needed for the scenario and define which inventory sources to use.

Here’s where the power of SAP Business One really shines: you can choose between a consolidated company view or filter by specific warehouses. You can even toggle to include or exclude existing inventory, demand, and supply independently per warehouse! If you need to exclude a location (say, a returns warehouse) from inventory, this is where you’ll do it.

Pro tip: including and excluding warehouses can help you solve global and local inventory issues from the same system and using the same tools.

5. Define Demand and Supply Data Sources and Leverage Intelligent Sales Forecasting

Next up is choosing which data sources to include in demand and supply calculations. Many new Business One users are accustomed to manual sales forecasting, and Business One accommodates manual input here.

But don’t miss the intelligent sales forecasting tool: this extremely powerful capability layers in historical and seasonal sales data, intelligently building a clear roadmap and saving significant time. You can use intelligent sales forecasting outright or as a first step or cross-check in your own work.

Once run, you can compare the intelligent forecast with all kinds of other data and even roll it backward to see what it would have predicted in past seasons. It’s a powerful addition to your toolkit, no matter which way you elect to use it.

6. Review and Adjust Recommendations

Once the scenario has been run, all that remains is reviewing the SAP Business One materials requirements planning (MRP) Wizard’s recommendations and implementing or adjusting them as you see fit.

SAP Business One does the heavy lifting, providing you with actionable recommendations. But you keep control over the final results. You can pick and choose from the recommendations or customize them as you see fit prior to ordering.

Get the Most Out of SAP Business One Materials Requirements Planning (MRP) with Third Wave

The SAP Business One materials requirements planning (MRP) Wizard is an incredibly powerful way to consolidate and itemize materials prioritization steps, enabling your organization to better and more consistently meet customer demands. And it’s just one of many aspects that make SAP Business One a powerful ally for your growing business.

Plenty of companies can simply configure SAP Business One for your business. But you need more than a simple out-of-the-box configuration. You need a partner that goes beyond the basics, with custom tools no one else offers and a deep understanding of every aspect of the SAP Business One Suite.

Third Wave Business Systems is that partner: we go beyond the basics, delivering powerful SAP Business One implementations alongside custom tools like Bizweaver and Versago that further increase your automation and inventory management capabilities.

Reach out for a demonstration!

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