Page 270 - Orlicky's Material Requirements Planning

CHAPTER 13 More Than an Inventory Control System 249

Validity and Integrity of Priorities

An MRP system keeps reevaluating all open-order due dates (for purchase and shop
orders both) automatically as a routine step in its netting process. The system “knows”
when an open order is not aligned properly with net requirements and, if programmed
to do so, can “tell” the user about it. This will be discussed in more detail and illustrated
in examples in Chapter 14 as part of the section dealing with the role of the inventory
planner.
Traditional inventory control systems, as mentioned previously, acted as “push”
systems or order-launching systems (order the right item at the right time) that had to be
supplemented by “pull,” or expediting, systems (get the right item completed at the time
of actual need). An MRP system functions as a push system and pull system rolled into
one.
What the MRP system does, in concept, is to attempt to make two dates coincide,
namely:

■ The due date
■ The date of need

The due date is defined as the date currently associated with the order. It is the date
someone put on the order, and it represents what he or she planned, or expected, to be
the date of order completion. The date of need signifies the time that the order is actually
needed. These two dates are not necessarily the same. They may coincide at one time, but
they tend to grow apart. An MRP system makes these dates coincide at the time of order
release, and it monitors them afterward whenever a change in status causes a recompu-
tation of net requirements. The MRP system detects any divergence of the due date and
the date of need and, by signaling the inventory planner, causes them to be brought back
together by rescheduling the order.
Note that when the dates diverge, the date of need may move in either direction—
forward or backward in time. The MRP system accordingly can either expedite the order
or “de-expedite” it, that is, have it rescheduled to an earlier or later date. It is obviously
important to schedule some orders out when other orders must be completed earlier than
scheduled originally.
An MRP system is able to keep priorities valid, but priority validity is mechanical
(i.e., coincidence of due date with indicated date of need), and it is not the same as pri-
ority integrity. The validity of all data generated by an MRP system is, as pointed out ear-
lier, relative to the contents of the MPS. Thus, if this schedule does not reflect what actu-
ally must and can be produced, the order priorities derived from it by the MRP system
will be valid mechanically and at the same time untruthful or unrealistic.
The credibility of a priority planning system depends on both priority validity and
priority integrity. This credibility is extremely important because the system, to function
successfully, requires cooperation and trust by factory personnel. When the formal prior-