Small and midsized businesses (SMBs) need to manage their production operations as efficiently as their larger competitors, but many SMBs lack the budget or heavy manufacturing demands to justify implementing expensive software systems. That’s where SAP Business One (SAP B1) can help – it leads the way among mid-market ERP systems in the manufacturing industry with its powerful, easy-to-use manufacturing capabilities.
Here’s how SAP Business One’s real-time data and robust production planning features can help you.
Production Management Integrated into ERP
SAP Business One provides a production management module that significantly boosts the effectiveness of real-time data collection and production planning. All production functionality is fully integrated into SAP Business One’s inventory, financial, and MRP features, giving you complete visibility into your production process, from sales orders to finished goods. As a result, manufacturing planning is performed within the overall context of your business – all recommendations take into account your supply and demand sources and constraints, including current stock levels, planned production orders, sales orders, forecasted orders, and supply/production lead times.
More Data Offers Better Results
To understand the real-time data collection capabilities of SAP B1, you first need to recognize the wide variety of data housed in the production management module. New in version 9.1 is the ability to manage capacity around labor, machine, and resource availability, offering views of demand and supply of your finished goods and raw materials, taking your capacity constraints into account to develop a production schedule that optimizes output in line with your business goals. Moreover, you can input a wealth of material master data, including multi-level BOMs.
BOMs defined with multiple levels include the assemblies, sub-assemblies, and raw materials necessary to produce each finished product. Additionally, they allow you to identify line items (e.g., resources) and group them to reflect your manufacturing process flow. Because you can establish a sales BOM, assembly BOM, and production BOM, you gain flexibility in how you manufacture your products. In other words, substitutions can occur along the way to circumvent shortages of particular items or raw inputs.
Real-time Visibility into Accurate Data
SAP B1 tracks and reports on precise work-in-process (WIP). As such, you know precisely where each production run stands, and, with views into the available capacity for labor, machines, and other resources, you can adjust the production plan in real time and route around bottlenecks.
As your products roll off the production line, they gain ‘finished product’ status, and SAP B1 automatically updates your inventory – not just for finished products but all material inputs (thanks to the multi-level BOMs). You can do this for individual production orders as well as grouped production orders completed within a specific time frame.
You may choose to leverage the automatic backflush feature of SAP B1 (wherein product costing occurs only when finished goods are produced), or you can issue component items manually. Either way, you gain real-time insights with WIP and variance postings. As you initiate production orders, the system automatically updates their status to ‘released,’ enabling your staff to view partial or full completion reports of production orders or cancellations.
Conclusion
SAP Business One offers many features for SMBs to be excited about in regards to production planning via real-time insights. Whether you run a discrete, batch, process, or another type of manufacturing operation, SAP B1 supports it and helps you optimize your product mix and profitability. Contact us today for more information.
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