Page 259 - Orlicky's Material Requirements Planning

238 PART 3 Managing with the MRP System

Changing the Schedule for Marketing Reasons

The changes in the MPS discussed thus far have been related to problems of production.
Changes also will be made, however, for reasons of marketing. It is common for a mar-
keting manager to request and for management to authorize changes in the MPS so as to
accommodate a customer or to make a sale. Such changes usually call for increasing the
quantity or advancing the timing of an end-item lot. From the point of view of the com-
pany, these are desirable changes, but if they are made arbitrarily, the MPS again may
become unrealistic, with all the adverse consequences discussed earlier.
Each schedule change of this type, whether merely intended or put into effect, rep-
resents the desire for flexibility, that is, freedom in changing previous decisions. The
flexibility is constrained, however, by the realities of commitment. Another way of
expressing this is to say that the consequences (cost) of a previous decision constitute
the practical limits of changing that decision. The limits of flexibility contract with pas-
sage of time, making it less and less practical to effect changes as the end item nears its
scheduled completion date. The reality of commitment acts as a funnel with ever-nar-
rowing walls that, as times goes on, leave less and less room for deviation from the
original plan.
If lead time is, say, four months, there is a world of difference in impact and cost of
changing something in the MPS that is four months away from completion as opposed to
something that is three months away from completion. In the former case, the conse-
quences of the previous decision (having placed the original end-item lot into the respec-
tive MPS bucket) are negligible because tangible commitments have not yet been made.
In the latter case, only one month later, costs have already been incurred in the process-
ing of requisitions and orders, as well as in purchasing and manufacturing activities. In
addition, the action already taken entails a certain amount of committed-for investment
for materials that it may not be possible to cancel.
This is related to the concept of firm and tentative portions of the MPS mentioned
earlier in this chapter. End-item quantities that appear in the firm segment of the sched-
ule represent products in various stages of commitment and corresponding degrees of
amenability to change. The tentative portion of the schedule represents merely a plan for
the execution of which money has not yet been expended or invested as far as materials
are concerned. The firm portion of an MPS is of the same length at any point in time; that
is to say, it moves along the time scale with passage of time, progressively covering what
previously had been the tentative area.
In order to avoid making marketing-motivated changes that would render the MPS
unrealistic, the MRP system may be used to make a so-called trial fit. This means that the
contemplated change is made in the schedule and exploded in a simulation mode. An
MRP system has the inherent capability to act as a simulator, in that it will accept any ver-
sion of an MPS and, by processing it, will indicate the specific consequences—material
availability, order action, and lead-time availability.
Special programming (or a modification of the regular program) normally would be
used for this purpose, but an MRP system always can be used (less efficiently) as a simula-