Time and resource management

A Penny Saved is a Penny Earned

SAP Business One MRP

Running out of stock when you just won a new opportunity? Not able to fulfill orders for your regular customers? This is serious business killer but carrying too much stock to avoid missing out is not any better; after all who would like to decrease his cash flow and increase expenses?

When you don’t have visibility on your inventory, you will face multiple challenges that will cost you a fortune over time. “Did you know that out-of-stocks, overstocks and returns are costing retailers $1.75 trillion a year — a number that’s only moving higher” based on a study conducted by IHL Group.

Cutting expenses comes in many forms; below is a short list to show how you can cut on your expenses:

  1. Outsource: No need to pay full time salaries for employees that you will not need after a project is closed; you can hire freelance and reduce your cost. You can as well outsource your own resources when you can.
  2. Pay invoices on time: Paying invoices on time will give you credibility and in turn suppliers will reveal more discounts and easier payment terms.
  3. Use technology: Technology reduces operation costs and the backup in labor allocation. As an example, you can implement warehouse management solution along with handheld devices that will make locating your stock easier and automate your data entry thus reduce duplicates, errors and increase efficiency.
  4. Telecommute: If and when possible, allow your employees to work from home. This will reduce operating costs such as electricity, phone, internet and coffee J and ultimately will allow you to move to a smaller office space hence less rent cost.

The list can go forever as you will always find glitches to fix in your business however; in this blog my main focus will be Materials Requirements Planning (MRP) tool which is available in SAP Business one.


MRP will help you manage your inventory effectively so that raw materials are available for production and products are available for sales at any point in time without having to keep overly high stock levels.

MRP takes into consideration:

  • Current stock
  • Forecasts and Budgets
  • Minimum Stock Levels assigned per item
  • Expected supply and demand of items and raw material – derived from Purchase Orders, Production orders and Sales Orders
  • Items’ lead time and multiple orders.

MRP will consider the mentioned above and provide purchase orders and production orders recommendations for your items based on a selected time period. So you will be able to have enough stock to fulfill your current, due and forecasted orders.

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