Page 134 - Orlicky's Material Requirements Planning

CHAPTER 6 The Material Requirements Planning System 113

the component-item record from storage during the requirements explosion and a reduc-
tion in data-processing efficiency.
This problem is solved by employing a low-level coding tech nique. The lowest level
at which any inventory item appears is identified through an analysis of the BOM mate-
rial file, and this information—the low-level code—is added either to the BOM or to the
item’s inven tory record. In the level-by-level requirements-computation process, the pro-
cessing of the item then is delayed until the lowest level on which it ap pears is reached.
At that point, all the possible gross requirements stemming from parent items at any of
the higher levels have been established, and the need for multiple retrievals and pro-
cessing has been forestalled. The concept of low-level coding is illustrated in Figure 6-12.
All the factors just discussed that affect and complicate the MRP process must be
taken into account by the proce dural approach used by any MRP system. These
approaches have been perfected and streamlined gradually, and they are by now largely
standardized in what is called the processing logic of an MRP system. Processing logic will
be the subject of discussion in Chapter 7.

FIGURE 6-12 Level End Item End Item End Item

Low level coding. 1 X Y Z

2

3

4 A A A A
(Low Level)