Page 154 - Orlicky's Material Requirements Planning

CHAPTER 7 Processing Logic 133

FIGURE 7-14
Period
MPS schedule Item A
interface: Lead time: 1 1 2 3 4 5
production
requirements. Gross Requirements 100 100 100
Schedule Receipts 100
On Hand 80 –100–100–200

Planned-Order Releases 100 100

100 100

FIGURE 7-15
Period
MPS interface: Item A
planned-order Lead time: 1 1 2 3 4 5
releases.
Gross Requirements
Schedule Receipts 100
On Hand 80
Planned-Order Releases 100 100 100

100 100 100

not shippable products but merely major assem blies of products, this treatment will
prove suitable only for items that are actually produced in conjunction with the final
assembly of the product rather than in advance of final assembly.
Where the MPS items are described by planning BOMs and are never actually built,
this obviously is the correct option. If the end items in the MPS are shippable products or
major assemblies of such products, this option will provide flexibility to change final
assembly operations to respond to the latest customer product needs.
Locking such execution to the planned MPS much earlier blurs the distinc tion
between planning and execution. This leads to fences in the MPS to limit near-term
replanning for differences between customer orders and master schedules. The whole
frozen-time fence approach is a fallacy. This is clear when the implications of fences are
considered. Implicitly, two naive and untrue statements apply. First, “If we haven’t
planned it, we can’t make it,” and second, “If we planned it, we must make it even if we
don’t need it now.” The only true statement is, “When enough customers’ orders arrive
to fill the front end of the MPS, stop replanning and execute.”
Another variation of this treatment of the MPS interface uses firm planned orders
(described in Chapter 9) for the quantities in question, forcing the MRP system to “pro-