SAP Business One – Production

The SAP Business One Production Module allows for the creation and control of your production processes. From the management of Bill of Materials (BOMS) through to Receipts and Issues to Production Orders SAP Business One has the ability of keeping control and calculating the costs of Production.

Material Requirements Planning MRP

SAP Business One offers a simple yet powerful planning function to help you schedule and manage items that will be produced or purchased using a variety of criteria. SAP Business One replaces informal, ad hoc, error-prone production scheduling with a more structured process using better information from bills of material, inventory data, inputs from scheduled production and purchase orders, and demand inputs from actual and forecasted orders.

The software offers the following material requirements planning (MRP) functionality.

  • Forecasts – You can predict demand based on historical purchases, received orders, and other forecasting metrics in the MRP wizard. Forecast calculations help you anticipate demand for your product and adjust material planning accordingly.
  • MRP wizard – Arrange for and optimize future material requirements; manage and execute purchasing and manufacturing recommendations and exceptions. By considering both minimum order quantities and order multiples, you can take advantage of purchase price breaks or standard production lot sizes and thereby reduce costs. The wizard generates a recommendation report that offers advice to either make or purchase items. Numerous drill-down options let you view the net requirement calculations and the actual documents driving the gross requirements.
  • Order recommendation report – Automatically create production orders and purchase orders based on information in a recommendation report. If an item needs to be outsourced, you can readily convert a production order to a purchase order. You can also consolidate purchase orders to the same supplier into one order, further streamlining the purchasing process.

Bill of Materials (BOMs)

Define and control all of the components, child items and raw materials required to assemble or produce a finished product. Add in virtual items such as labour costs and running costs to complete the recipe. The BOM can be included in the MRP and to create standard Production Orders

You can have different Bill of Material Types


  • Production Bill of Materials (BOM) represents a finished product (parent) comprising different inventory component (child components).
  • Sales BOM and Assembly BOM represent a finished product assembled at the sales stage. The finished product is composed of its component items only when the parent product is actually sold. The component items are stored and tracked individually in the warehouse
  • Template BOM is a bundle of items, where the parent product is the first item on the list. It does not act as a BOM once it is added to the sales document, but rather as a list of items brought together at the same time. You can update the quantity of those items, swap items, or delete them in the BOM or the sales order. The components appear below the parent as a list of items in a sales document. Use the Template BOM when you require flexibility in selecting components for a product.

Production Orders Production

Orders control the entire production process from initial Planning, through Release, Issue of Stock to production, Receipt of finished Goods from Production and then the final closure. The finished product cost is calculated according to the item management method of Standard, Moving Average or FIFO.

SAP Business One supports the following types of production orders:

  • Standard - used for regular production. Components are copied from the item BOM.
  • Special - used to produce items or perform activities on the shop floor that are not based on the Standard BOM.
  • Disassembly - Used to dismantle a parent item of the regular product back into its child items based on the BOM.

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