Page 23 - Orlicky's Material Requirements Planning

4 PART 1 Perspective

Orlicky’s preceding statement about literature still rings true today. Generally, acad-
emia continues to research and write about what is already written rather than develop-
ing new insights and thought leadership. The practitioners who use technology and tech-
niques remain in the best position to properly and practically define the tool and tech-
niques that actually produce sustainable positive results. However, very few will take the
time to write those techniques into a book.
After the first edition of this book was written, the use of MRP in industry literally
exploded. If you are interested in a detailed history, refer to Appendices A and D. Consider
the following statement from the second paragraph of the Preface of the first edition:

As this book goes into print, there are some 700 manufacturing companies or
plants that have implemented, or are committed to implementing, MRP sys-
tems. Material requirements planning has become a new way of life in pro-
duction and inventory management, displacing older methods in general and
statistical inventory control in particular. I, for one, have no doubt whatever
that it will be the way of life in the future.

MRP did become the way of life in production and inventory management. This
planning approach is still the standard across the globe for determining what to buy and
make, how much to buy and make, and when to buy and make it. The number of MRP
implementations today worldwide is estimated to be in the hundreds of thousands (if not
millions) of companies using it in some form. An Aberdeen Group Study showed that 79
percent of companies that bought enterprise resource planning (ERP) systems also
bought and implemented the MRP module. 2
What is important to note is that since its articulation in the first edition of this book,
the definition of MRP has not really changed. The concept has evolved as technology has
improved, as detailed in Figure 1-1. This evolution included closed-loop MRP, manufac-
turing resource planning (MRP II), advanced planning and scheduling systems (APS),
and finally enterprise resource planning (ERP). An in-depth explanation of this evolution
is chronicled in Chapter 21, as well as in Appendix D.
Throughout this entire evolution, the core MRP calculation kernel stayed the same.
MRP fundamentally is a very big calculator using the data about what you need and
what you have in order to calculate what you need to go get—and when. This has grown
from the first ability to track inventory. At its very core, even the most sophisticated ERP
system of the day uses these basic calculations. Typically, these calculations are imple-
mented in a push system based on a forecast or plan with the assumption that all the
input data are accurate. In the most stable of environments, this assumption may be
somewhat possible, but how does the twenty-first-century global economic environment
fit with this approach?

2 Aberdeen Group ERP Study, 2006, Table 3, p. 17.