Page 257 - Orlicky's Material Requirements Planning

236 PART 3 Managing with the MRP System

tomorrow. The MPS should reflect this reality. The behind-schedule column is best abol-
ished unless care is taken that the total of behind schedule and the first period does not
exceed capacity for one period.
Both examples represent a gross overstatement of the MPS, which is disastrous to
the shop priority system. In such cases, most orders are no doubt past due, and most jobs
in process are behind schedule and marked “Rush.” Expedite lists are long, and because
of this, there is a special expedite list within the expedite list. Work-in-process inventory
is excessive. Manufacturing costs are high. Although the company has the ability to plan
priorities (an MRP system is being assumed), the formal priority system has collapsed, if
anyone ever took it seriously in the first place. When everything has high priority, noth-
ing has high priority.
Disparities between the MPS and the realities of production will arise even when the
schedule is not overstated. This is caused by a miscellany of unplanned events that tend
to take place in the typical manufacturing operation. Delays in the progress of work
owing to the condition of tools and machinery are not uncommon. Neither is a tempo-
rary lack of adequate specific capacity. Neither is scrap, nor lack of material. There may
be quality problems. Vendors fail to deliver. Interplant shipments get lost in transit. No
system can prevent such obstacles from developing, but they can and should be adjust-
ed and compensated for.
With the aid of an MRP system, the remedy is straightforward, Whenever one of the
mentioned difficulties occurs, and when it becomes clear that some task (usually an open
order) will not, in fact, be completed as planned, the item in question is traced to the MPS
(assuming that the problem cannot be solved via pegging and firm planned order at an
intermediate parent level), the schedule is revised and subsequently reexploded to estab-
lish up-to-date requirements and priorities. Note that it does not suffice to reschedule the
order in question because of dependent priorities. The example of scrap in Chapter 13
(Figure 13-1) illustrates this problem and its solution.
Failure to realign dependent priorities is the most common reason why shop per-
sonnel consider a formal priority system unreliable and may decide to work around it. If,
for any reason, a given component item definitely will not be available at the time of
need, the real relative priority of its cocomponent is, in fact, lower than it would be oth-
erwise. The priority of these orders depends on the availability of the item in question,
and if the formal priority system disregards this, it loses credibility in the eyes of the shop
people. They always find out. If these people cannot work according to the formal prior-
ities and be satisfied that they are working on the right jobs at the right time, the priori-
ty system must be considered in a state of collapse. On-time delivery to the customer will
suffer even when the company has sufficient capacity. Customers then will go elsewhere.
Keeping the MPS in harmony with the realities of production is a classic problem of
manufacturing management. With older conventional methods, it is difficult or impossi-
ble to identify the specific end-item lot (or several lots that use a common component)
that is linked to some minor disaster on the shop floor or on the receiving dock. With
MRP, all the tools are there.