Page 120 - Orlicky's Material Requirements Planning

CHAPTER 6 The Material Requirements Planning System 99

process. “Pollution” of the information, originating upstream, in the inventory sys tem
permeates all downstream functions and activities. It therefore follows that within the
framework of the overall logistics system, the role of the inventory subsystem is of first
importance.
When the function labeled “Inventory Planning” in Figure 6-1 is exercised by an
MRP system, a reliable quarterback is direct ing the plays. An MRP system has the abili-
ty to generate calls for the right items in the right quantities at the right time with the
right date of need for every order. The system issues its action calls according to a
detailed, time-phased plan that it develops. It maintains this plan constantly up to date
by reevaluating and revising it in light of ongoing changes in the environ ment. It also
continuously monitors the validity of all open-order due dates relative to such changes.
With an MRP system making the calls, the execu tion systems downstream can function
effectively. Without it, they cannot.

SYSTEM INPUTS AND OUTPUTS
An MRP system, properly designed and used, can provide a number of desirable outputs
containing valid and timely informa tion. The primary outputs of an MRP system are the
following:

■ Order-release notices calling for the placement of planned orders
■ Rescheduling notices calling for changes in open-order due dates
■ Cancellation notices calling for cancellation or suspension of open orders
■ Item status analysis backup data
■ Planned orders scheduled for release in the future

Secondary or by-product outputs come in a great variety and are being generated
by the MRP system at the user’s option. These outputs, dis cussed further in Chapter 7,
include

■ Exception notices reporting errors, incongruities, and out-of-bounds situations
■ Inventory-level projections (inventory forecasts)
■ Purchase commitment reports
■ Traces to demand sources (so-called pegged requirements reports)
■ Performance reports
All MRP system outputs are produced by processing inputs (relating data) from the
following sources, illustrated in Figure 6-2:
■ The MPS
■ Orders for components originating from sources external to the plant using the
system
■ Forecasts for items subject to independent demand
■ The inventory record (item master) file
■ The bill of material (product-structure) file