Page 274 - Orlicky's Material Requirements Planning

CHAPTER 13 More Than an Inventory Control System 253

be reviewed briefly. For purposes of this review, manufacturing companies are divided
into four categories as follows:
1. Companies producing a one-piece product made to order
2. Companies producing a one-piece product made to stock
3. Companies producing an assembled product made to order
4. Companies producing an assembled product made to stock
In the first type of manufacturing business (e.g., a foundry, a crankshaft manufac-
turer, etc.), the order-priority problem is the simplest. The customer places an order and
requests a delivery date, and when this date is confirmed, it represents the priority of the
order. Unless the customer changes the order due date, the priority remains fixed.
Relative priorities of all open orders derive from their respective due dates.
In the second type of manufacturing business (e.g., a nuts and bolts manufacturer),
the order-priority problem is a little more complex. To keep these priorities honest, open-
order due dates would have to be related to the availability of stock for each of the items
in question. In this environment, priorities are vertically dependent on the customer
demand that causes stock depletion.
In the third type of manufacturing business (e.g., a special machinery manufactur-
er), the priority problem is quite complex because the orders for components of the
assembled product have horizontally dependent priorities. The availability of all the
components is prerequisite to completion of each parent subassembly and of the end
product.
The priority problem is most severe in the fourth type of manufacturing business
(e.g., a manufacturer of a line of power saws with a single factory warehouse) because
here the order priorities are both vertically and horizontally dependent. The real priority
of a shop order is a function of the available supply of the parent product as well as of
the availability of co-components required for the assembly of a parent item.
The preceding classification scheme is somewhat oversimplified because many
types of manufacturing businesses do not fit neatly into a single one of the four cate-
gories. Nevertheless, it is useful for purposes of analysis and exposition. From the exam-
ples, it can be seen that the more severe the priority problem, the more benefits an MRP
system will be able to provide.

Priority Control

An MRP system functions (or can function) as a priority planning system par excellence.
Where it so functions, however, it must be supplemented by a priority control system in
the factory. The MRP system keeps order priorities up to date by planning and replan-
ning order due dates, but it obviously cannot cause those due dates to actually be met.
The priority control system provides the procedural machinery to enforce adherence to
plan, and it takes the form of what is variously known as the dispatching system, job-assign-
ment system, shop floor control system, and so on.