SAP divides its processes and activities into modules , one of which is PRM, which in Spanish means planning of material requirements.
The PRM in SAP allows to know when to buy the inventory ? At what point? How much? and even where? so it is possible to optimize many aspects of the company .
SAP is business resource planning, it is a system that helps companies in managing their processes . To make everything more orderly and easy when executing it, SAP divides its processes into modules.
The SAP PRM module comprises the development of a series of activities that are intended to develop a plan, these activities help companies to establish the necessary materials to carry out production.
Thanks to the PRM it is possible to optimize accounting , inventory, administration and customer relations by more than 100% because the PRM provides us with a series of benefits that we will mention later.
What is Material Requirement Planning (PRM)?
The PRM in SAP or also known as the planning of material requirements is a technique to determine the amount of materials necessary in order to meet the production requirements and cover its flow.
The PRM is a computer system designed to assist production managers in planning and ordering items of dependent demand.
One of the functions of the PRM in the SAP would be, for example, in a company that assembles bicycles, the items of dependent demand or necessary materials, can be aluminum, tires, chains, among others.
The PRM converts the MSP into a detailed plan to be able to make the purchase of raw materials and components. It is used mostly in manufacturing and manufacturing industries as they require to know the demand for their products and thus plan the amount of material needed.
Thanks to the PRM in SAP it is possible to answer the questions How much to buy? And when to buy the necessary materials?
How is the PRM applied?
The planning of material requirements, or the PRM in SAP has 3 basic requirements for its correct application:
- Identify the quantity of requirements, by identifying the quantity of requirements you can determine what quantity is available in an open purchase order, in the production plan, work orders and in forecasts.
- Do PRM calculations – When PRM calculations are performed , suggestions for materials that are considered critical may come up, such as delayed material and accelerated material.
- Complete orders, in this way the materials for production orders, purchase orders and other requirements to be reported are outlined .
Additionally , priorities and capacity must be taken into account when applying the PRM . Inventory management is regularly done taking into account the priority you have with customers.
There are several ways to prioritize deliveries, for example; by order of order, complication in it and others. For this, in the same way, the ability to carry out proper management must be taken into account.
The ability to plan a load correctly, a precise load, the ability to plan for adequate time to contemplate the future load.
Benefits of PRM in SAP
The main utility of the PRM in SAP is to avoid repetitive manual processes , the administrator or manager will be able to manage the necessary variables, variables such as weather, possible fortuitous cases and others.
Planning material requirements reduces set-up times, avoiding delays and inconveniences in production and covering flow.
In turn, the PRM improves customer service because it allows the services to be provided to be ready on time for delivery. In the same way, it is a benefit for the company since inventory storage often requires investment.
Once the tools and materials are available to start production, waiting times are reduced, which improves the efficiency of the plant operation
