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30 April 2024

SAP MRP: How Material Requirements Planning Works

Aspects such as the technological revolution, the growth of e-commerce, globalization and new consumer demands have been some of the factors that have led to the efficient management of inventory and production being more critical in today's business environment than in other times. However, the efficiency demanded by today's market cannot be achieved without the support of technology. Today we will talk about one of the tools that will allow us to achieve these goals: the MRP (SAP Material Requirements Planner), focusing especially on the one found within SAP Business One.

Why is SAP MRP necessary?

Faced with customers who demand personalized products and services with increasingly shorter deadlines, and with the popularization of 24-hour delivery, companies are required to be more agile and flexible. This, coupled with increasing competition, means that companies also need to be more efficient and profitable.

With SAP MRP, present in several versions of their ERP, included in SAP Business One, companies can ensure the availability of the right materials, in the right quantity, at the right time. Thus, SAP MRP makes it possible to minimize waste and overproduction, reduce storage costs and delivery times, ultimately improving operational efficiency.

Especially for SMBs, which have tighter margins and a greater need for supply chain optimization, SAP MRP becomes essential. That is why SAP Business One, the leading ERP for SMEs, integrates MRP into its software, although in a more basic version than in the S/4HANA, but with everything necessary to meet the needs of companies of this size.

Key features of SAP MRP

With SAP MRP, companies can automate and optimize the planning of materials needed to meet both current and future demand. We will now address in more detail the benefits offered by this functionality, focusing on SAP Business One, although, as we mentioned earlier, this functionality is also present in the S/4HANA ERP. The main difference lies in the scale, complexity, and depth of integration with other functionalities due to the needs of a company based on its size. Still, the features you'll see in this post about SAP MRP are common to both versions.


Materials Planning Management

With SAP Business One MRP, we are able to automate the material planning process accurately, reducing errors, time, and resources invested. The use of artificial intelligence in SAP ERPs makes it possible to determine material needs based on data collected on aspects such as demand, suppliers, stipulated delivery times and warehouse stock levels, ensuring that materials are available at the right time. Thanks to this, we avoid both an excess of stock and a lack of materials, also reducing waste as much as possible by providing an optimized guide for the optimization of resources.

Real-Time Inventory Monitoring

SAP Business One's intuitive dashboards, thanks to its MRP, allow real-time tracking of inventory status, including not only stock levels but also other aspects such as location or movements made. In this way, we not only achieve correct planning, but also complete traceability with automatic alerts that we can customize when stock levels are not adequate.

Instant evaluation and reporting

The real-time monitoring data mentioned above is collected and analyzed by the software. SAP MRP generates detailed reports and presents the information in a simple way so that business leaders know what decisions they need to make at a glance.

Improved organization of production schedules

Material requirements planning doesn't just focus on the materials themselves, it also encompasses the production process. In this way, SAP's MRP makes it possible to schedule production taking into account all the parameters involved in it, and can even identify and correct possible bottlenecks that occur during the process. In this way, we optimize the production process to the maximum and improve the satisfaction of our customers with products that arrive on time and without errors.

Ability to simulate different planning scenarios

SAP's MRP predictive analysis, in addition to predicting what materials we will need, also offers the possibility of simulating different scenarios. In this way, we can evaluate the impact on our production with changes in aspects such as the price of raw materials, an increase or decrease in demand or a need for greater agility in delivery times in our production, to name a few examples. This way we can have greater control of our business and anticipate potential problems before they occur.

Connection with different areas

SAP Business One is a powerful end-to-end software that covers all business areas and interconnects them to ensure seamless cohesion. This cohesion includes MRP, which is integrated with areas such as finance, sales or purchasing, ensuring that the information obtained in the production area is used to make decisions in other areas and vice versa.

Do you want to implement SAP Business One MRP?

You've already seen the many benefits of SAP MRP. Now you only need a trusted technology partner like SEIDOR to integrate an ERP system like SAP Business One into your business and enjoy the material requirements planner and the rest of the modules that make up the software's end-to-end approach. We have numerous success stories implementing SAP solutions and you can be next. Contact us.


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