Page 121 - Orlicky's Material Requirements Planning

100 PART 2 Concepts

FIGURE 6-2
Independent Master External
Sources of MRP Demand Production Orders for
system inputs.
Forecasts Schedule Components

Inventory Product-
MRP
Record System Structure
File File

Outputs

The MPS expresses the overall plan of production. It is stated in terms of end items,
which may be either (shippable) products or highest-level assemblies from which these
products are eventually built in various configurations according to a final assembly
schedule. The span of time the MPS covers, termed the planning hori zon, is related to the
cumulative procurement and manufacturing lead time for components of the products in
question. The planning horizon normally equals or exceeds this cumulative lead time.
The MPS serves as the main input to an MRP sys tem in the sense that the essential
purpose of this system is to translate the schedule into individual component require-
ments, and other inputs merely supply reference data that are required to achieve this
end. In concept, the MPS defines the entire manufacturing program of a plant and there-
fore contains not only the products the plant will pro duce but also orders for components
that originate from sources external to the plant, as well as forecasts for items subject to
independent demand. In practice, however, such orders and forecasts are normally not
incor porated into the MPS document but are fed directly to the MRP system as separate
inputs.
Externally originating orders for components include service-part orders, interplant
orders, original equipment manufacturer (OEM) orders by other manufacturers who use
these components in their products, and any other special-purpose orders not related to
the regular production plan. Com ponents may be ordered for purposes of experimenta-
tion, destructive test ing, promotion, equipment maintenance, and so on. The MRP sys-
tem treats orders of this category as additions to the gross requirements for the respective
component items. Beyond this, regular MRP treatment applies.
Forecasts of independent demand for component items subject to this type of
demand can be made outside the MRP system, or the system can be programmed to per-
form this function by means of applying some statistical forecasting technique. The fore-
cast quantities are treated as item gross requirements by the MRP system. Items subject
only to independent demand (such as service parts no longer used in regular production)