This is what happens in the video
When you run MRP planning in Business Central, the system processes items in low-level code order to make sure all dependent demand is calculated before it plans the items that depend on it.
Low-level codes are assigned automatically when you certify a bill of material, provided you have enabled the Dynamic Low-Level Code setting in Manufacturing Setup.
An item’s low-level code depends on where it sits in the BOM hierarchy, not on whether it is a production item or a purchase item. The same item can have a different low-level code depending on how it fits into the structure.
The MRP engine plans everything at the highest low-level code first and works its way down the hierarchy.
How MRP planning uses low-level code order
When you run MRP planning, the calculation is carried out in low-level code order. The point of this is to make sure all the dependent demand is calculated first, so that nothing gets planned before the demand from the levels above it is known.
You can see this in the planning worksheet. When you calculate the plan, watch the small message box that appears while planning runs. It shows which low-level code is being processed. It starts at low-level code zero, then moves to one, then two, three, and so on.
At each level you have a mixture of item types. Low-level code one might include a production item and a couple of purchase items. Low-level code two contains the next set, and so on. The engine plans per low-level code, working through the whole hierarchy from top to bottom.
Low-level code depends on the BOM hierarchy, not the item type
It is tempting to think of a purchase item as a “lower-level” item and a production item as a “higher-level” item, but that is not how it works. An item’s low-level code is determined entirely by where it fits in the bill of material hierarchy.
Take a hierarchy with production items and purchase items. Low-level code zero might hold two production items. Low-level code one might hold one production item and two purchase items. The same physical item could sit at a different level depending on the structure it appears in.
How low-level codes are assigned with Dynamic Low-Level Code
Low-level codes are calculated automatically when you certify your bill of material. This happens if you have set the Dynamic Low-Level Code checkmark in Manufacturing Setup, which you should do in almost all cases.
The only reason not to enable this setting is if you have very complex bills of material. In that situation, recalculating the low-level codes every time you certify a BOM can take a long time, and you may prefer to manage it differently.
Why planning order matters
Because dependent demand flows down through the hierarchy, you have to plan everything at the highest low-level code first and then work down. If the engine planned a component before it planned the parent items that drive demand for that component, the figures would be wrong. Running in low-level code order keeps the calculation consistent all the way through the structure.
Q&A
What order does MRP planning run in?
MRP planning runs in low-level code order, starting at low-level code zero and working down the hierarchy. This ensures all dependent demand from the levels above is calculated before the items below them are planned.
What determines an item’s low-level code?
The low-level code is determined by where the item sits in the bill of material hierarchy, not by whether it is a production item or a purchase item. The same item can have a different low-level code depending on the structure it appears in.
How are low-level codes assigned in Business Central?
Low-level codes are calculated automatically when you certify a bill of material, provided the Dynamic Low-Level Code checkmark is enabled in Manufacturing Setup.
When should you not enable Dynamic Low-Level Code?
The only reason to leave it off is when you have very complex bills of material, where recalculating low-level codes on every certification takes too long.