Page 268 - Orlicky's Material Requirements Planning

CHAPTER 13 More Than an Inventory Control System 247

The MRP system makes it possible for the load report to be complete, valid, and extend-
ing far enough into the future to allow capacity-adjustment action to be taken in time. To
keep the load projection up to date and valid, it must be recomputed repeatedly as the
order schedules in the MRP system change.
Outputs aiding in performance control are by-product outputs of an MRP system that
enable management to monitor the performance of inventory planners, buyers, the shop,
and vendors, as well as financial or cost performance. A net-change MRP system, through
the control-balance fields it maintains in the item inventory records, has an outstanding
ability to generate performance control reports by listing deviations from plan. Special
reports on item inactivity, inventory investment projections, and purchase-commitment
reports also belong in this category of outputs. When the inventory record contains stan-
dard cost, the quantities on hand projected by period (supplemented by planned-order
receipts) are simply costed out and summarized by item group to obtain a highly accu-
rate forecast of the inventory investment level. The same is true for open purchase
orders—provided they are recorded by valid due date—which can be converted into a
purchase-commitment report. The product-structure file, with its explosion and implo-
sion chaining (see Chapter 9), serves as a basis of product costing. The entire database,
usually also including the routing file, permits management to obtain profit and loss
statements, if desired, by individual customer order, by customer, by market, by product,
and by product family in addition to other critical business analytics.
Outputs reporting errors, incongruities, and out-of-bounds situations are called exception
reports and would cover the following:

■ Date of gross requirement input outside the planning horizon
■ Planned-order offset into a past period but placed into current period
■ Due date of open order outside planning horizon
■ Allocated on-hand quantity exceeding current quantity on hand
■ Past-due gross requirement included in the current period

In addition to exception reports, individual exception messages can be generated at
the time of inventory transaction entry listing reasons for transaction rejections. Such
messages would include the following:
■ Part number does not exist.
■ Transaction code does not exist.
■ Part number is incorrect (rejection based on self-checking digit).
■ Actual receipt exceeds quantity of scheduled receipt by X percent (test of reason-
ableness).
■ Quantity of scrap in stock exceeds (previous) quantity on hand.
■ Quantity of disbursement exceeds (previous) quantity on hand.
■ Order being released exceeds quantity of planned-order release.
These and similar exception messages are generated as a result of employing diag-
nostic routines and other system checks (discussed in Chapter 9).