Page 273 - Orlicky's Material Requirements Planning

252 PART 3 Managing with the MRP System

er levels, the MPS may have to be changed. This can and should be done so as to reflect
the reality of assembly X (and consequently, higher-level items of which it may be a com-
ponent) having to be completed at some later date.
Once the MPS is again in harmony with the realities of production, the MRP system
will explode it, recompute the respective requirements, and call for a rescheduling of
orders B and C based on their new dates of need. Note that the MRP system in this case
will automatically identify all open orders affected by the scrapping of the order for item
A, will update their priorities, and will determine exactly by how many periods each indi-
vidual order should be rescheduled. This is an outstanding capability of an MRP system,
the full implications of which may not be evident immediately. The example in Figure 13-
1 is extremely simple. In a real case, hundreds of orders (among thousands outstanding in
the shop) may be involved. While the inventory planner realizes that the scrapping of the
order will delay assembly of the parent item, he or she does not necessarily know
■ Which parent item
■ How many component orders are affected
■ The identity of affected orders
■ Exactly how each of these orders should be rescheduled
Unless the planner has a tool—an MRP system—to establish these facts quickly and
accurately, he or she will not even try to solve the problem. The complexity of the prob-
lem is compounded by the fact that the scrapped item may have multiple parents, some
of which may not figure in the current production plan at all; by the fact that several
orders (in different stages of completion) for the same item may be open; and by the fact
that lot sizing plus common usage obscure what rescheduling action, if any, should be
taken for a given order.
This is a formidable problem that seems to defy solution, particularly when one con-
siders that such minor catastrophes as scrapping an order, equipment breakdown, inabil-
ity of a vendor to deliver, and so on occur all the time. Such events, when preventing
completion of a component order, have an identical effect on priority integrity. An MRP
system can solve this type of problem quickly, automatically, and with complete accura-
cy. Without an MRP system, it is impractical even to attempt to solve the problem, and
there is no hope of maintaining the integrity of order priorities. Order priorities and oper-
ation priorities constitute a classic, chronic problem in the manufacturing industry. This
problem has proven intractable, and it has defied solution by even the most sophisticat-
ed techniques until the advent of the computer and time-phased MRP.

Severity of the Priority Problem
To recap the subject of dependent priorities and to bring it into focus, a classification of
2
priority problems by type of manufacturing business, as suggested by Oliver Wight, will

2 O. W. Wight. Oliver Wight Newsletter No. 10, September 1971.