What are Low Level Codes in ERP systems?

In ERP systems, Low-Level Codes (LLCs) are a key concept in Manufacturing Resource Planning (MRP) that help control how materials are planned and processed, especially in complex Bills of Materials (BOMs).

What Is a Low-Level Code (LLC)?

A Low-Level Code is a number assigned to each item in an ERP system that indicates the lowest (deepest) level at which that item appears in any Bill of Materials.

Lower number = higher in the product structure

Why Low-Level Codes Matter

Low-Level Codes ensure that:

  • Materials are planned in the correct sequence.
  • MRP calculations are accurate.
  • Demand is fully exploded before supply planning begins.
  • Items used in multiple BOMs are planned only once, at the correct time

Without LLCs, ERP systems could:

  • Plan components too early or too late.
  • Duplicate demand.
  • Create incorrect purchase or production orders

How Low-Level Codes Work (Simple Example)

BOM Structure

Level 0: Finished Product (A)

 └─ Level 1: Subassembly (B)

     └─ Level 2: Component (C)

ItemLowest Level AppearsLow-Level Code
ALevel 00
BLevel 11
CLevel 22

If Component C appears in another BOM at Level 3, its LLC becomes 3, the lowest level anywhere.

How ERP Systems Use Low-Level Codes in MRP

During an MRP run:

  1. ERP processes items level by level, starting at Level 0.
  2. Demand is exploded downward.
  3. Planning happens only after all parent demand is known.
  4. Each item is planned once, at its LLC

This prevents:

  • Partial planning.
  • Missed dependent demand.
  • Reprocessing the same item multiple times

Where You’ll See Low-Level Codes in ERP

Common ERP systems that use LLCs include:

  • SAP (ECC / S/4HANA) – MRP Low-Level Code.
  • Oracle E-Business Suite / Oracle Cloud SCM.
  • Microsoft Dynamics 365 Supply Chain Management.
  • Infor LN / M3.
  • NetSuite Manufacturing

Usually stored in:

  • Item master records.
  • MRP planning tables.
  • Calculated automatically when BOMs are changed.

Key Characteristics of Low-Level Codes

  • Automatically calculated by ERP.
  • Rebuilt when:
    • BOMs change
    • New items are added
  • Specific to MRP, not accounting or finance
  • Used only in manufacturing / supply chain modules

In One Sentence

Low-Level Codes tell the ERP system when to plan each item by identifying the lowest point it appears in any BOM, ensuring accurate and efficient MRP calculations.

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