SAP Busines One MRP Defined
Material Requirements Planning or MRP is an important business tool to help organizations plan manufacturing, purchasing, and delivery activities in order to maintain optimal inventory levels. If you purchase too few quantities of an item you used in your manufacturing prcoess you risk not being able to supply products on tie or meet contracts. If you purchase too many quantities of an item it wastes money by typing up cash in excess stock, or risk that it may never be used at all.
SAP Business One built-in MRP will let you determine what items are required, how many, and when by generating you a recommended production schedule and a recommended purchasing schedule.
- Saves money by not tying up cash in extra stock that isn’t needed
- To reduce procurement costs, order intervals can be set up to consolidate purchases of like items
- Minimum order quantities and order multiples allow companies to take advantage of quantity and order discounts
- If an answer is needed about the ability to fill a big order, you don’t have to wait your warehouse staff to tell you what’s on hand
- Inventory levels can be reduced because you know how much of all the items you need are on hand
- Calculates minimum inventory level
- Tracks the dates at which an item must be available at the factory
- Bill of materials
- Calculates inventory and demand
- Generates suggested purchase orders
- Generates suggested production orders
- Forecasts quantities needed
- Helps avoid inflating inventory
- Financial accounting happens automatically because items, inventory, and production are linked to master data record
- Factors warehouses
- Replaces informal production scheduling with structured process that better utilizes information
- Provides just the right balance between automation and hands-on control
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