There’s a part of MRP I Left out of my new course, SAP Business One Production and Logistics in the LinkedIn Learning Library. I didn’t include how forecasting works in MRP. In the last newsletter, We learned the basics of MRP forecasting.
So far, we have looked at a system with no sales orders. What happens when demands such as those Sales orders come into the system? How do forecasts work with them?
To Review what we did in the previous newsletter, There’s a demand in July for 10 tablets and 10 tablet sets. Looking at MRP, I see the demand for 10 tablet sets.
To add the demand, I’ll add a sales order for six LMT-02 tablet sets with a delivery date of July 15th.
I’ll re-run the MRP wizard. The numbers change. I have 16 sets in July instead of 10 like august.
Open up the demand for the sets. You’ll see the sales order is added to the forecast often to give us sixteen.
In most situations, we want sales orders to decrease the forecasted demand. That decrease is a consumption of the forecast.
There are two ways you can change consumption. I’ll look at the more understandable first, though not the easiest for users. The sales order item rows control consumption. Head back to the sales order. Using the form settings, add to the table consume forecast.
Looking at the new row Consume Forecast, you’ll find it currently set to No. Change it to Yes.
Update the sales order. Head back to MRP Wizard and re-run the scenario. July now reads 10 instead of 16.
Opening up the demand, you’ll see the six ordered tablet sets consumed from the forecasted 10, so we now forecasted 4.
The tablet is a component of the set, so open up the tablet. You’ll see two MRP requirements: four from the Tablet set forecast and six for the sales order, plus the forecasted demand for 10 tablets.
I mentioned a second method for consumption, and it is one you probably have on already. Under System Administration> General Settings > Inventory > Planning. You’ll see a check box for Consume forecast. Yours is probably checked on like this.
When checked, this setting defaults the Consume Forecast for the sales item to yes. You don’t need the column on the sales order. Unless you want to override consumption at times, hide the Consume Forecast column in sales orders. I did it to show you how this works.
Any new sales orders will consume more of the forecast. If I add another order for 4 more tablet sets, then all the forecast is satisfied. We get no forecast number in the demand for tablet sets.
Generally, leaving Consume Forecast defaulted to On is a good practice as it is more realistic for forecasting and good inventory practices. You might want it off in some inventory scenarios, for example, if you control to a maximum inventory level.
With forecasting in MRP and basic demand, you can efficiently handle your inventory to keep the flow of goods moving from vendors to customers.
BizOneness 