Page 263 - Orlicky's Material Requirements Planning

242 PART 3 Managing with the MRP System

the automated forecasting procedures could be integrated into a program of MPS cre-
ation, including preparation of the schedule of factory requirements, netting, product lot
sizing, and so on. The logic of the procedures can be clearly defined, and all the required
data are available.
This notion must be repudiated. All the required data are, as a matter of fact, not
available. Information on a multitude of extraneous factors, current company policy, and
seasoned managerial judgment—all of them bearing on the contents of an MPS—cannot
be captured by a computer system. This is why management should be involved in the
creation and maintenance of the MPS every step of the way.
The MPS represents the overall plan of production to which all subsequent detailed
planning is geared. Inventory management action, procurement action, and manufactur-
ing action—all these are directly or indirectly dictated by the contents of the MPS.
Developing and maintaining the best possible MPS is the premise on which depends the
success of the manufacturing logistics system. This, it would seem, will always be too
important to entrust to a computer program.
The MPS represents the main point of management entry into the overall system. It
is through this schedule that management provides (or can provide) direction, initiates
changes in production, exercises control over inventory investment, and regulates man-
ufacturing and procurement activities. It was pointed out earlier that given properly
implemented and properly used systems for planning and execution, the MPS is virtual-
ly the sole determinant of what will happen in areas of capacity, production, and cus-
tomer delivery service. Inevitable consequences flow from an MPS because it, in effect,
contains within itself the scenarios that will be acted out later. Management has the
opportunity and responsibility to manage all this through the MPS.
Coupled with a modern MRP system, the MPS constitutes a new tool for the solu-
tion of many problems that traditionally have had to go unattended to in a manufactur-
ing operation. To take advantage of this tool, it is important to understand the relation-
ship between factors of production, especially of open orders, and the MPS and the desir-
ability of maintaining a correspondence between this schedule and the realities of the
manufacturing floor. The key to this is willingness on the part of management to change
the MPS.
This calls for a departure from the traditional view of the MPS as representing a goal
not subject to change and one that, if somewhat overambitious, acts to spur the factory to
greater efforts. In the modern view, an MPS should represent a feasible goal subject to
continuous review and adjustment. The MPS no longer must be considered a sacrosanct
document; on the contrary, it should be treated as a flexible, living plan, adaptive to actu-
al developments. Even in the presence of an MRP system, inventory, priority, and capac-
ity planning will be invalidated in the face of an inflexible MPS.
This is a new situation, brought about as a consequence of applying the principles
and techniques of time-phased MRP. It calls for a new way of looking at things in a man-
ufacturing business environment. Management has been given a new, powerful tool, and
it should step up to its responsibility for using it well. Management is responsible for