Page 284 - Orlicky's Material Requirements Planning

CHAPTER 14 System Effectiveness: A Function of Design and Use 263

ered by the MRP system if the capacity requirements report is to contain complete load
data. If C items are controlled by order point, only open C item orders can be reflected in
the load. Because some of these orders will carry invalid due dates, the scheduling of
their operations will be incorrect, and this will affect the validity of the entire load pro-
jection. By excluding any manufactured items from the MRP system, the usefulness of
capacity requirements planning information is impaired, if not destroyed.

Replanning Frequency
The frequency of replanning is under complete user control, but it is of utmost impor-
tance to the effectiveness of system performance. As a general rule, the more dynamic or
prone to change the environment is, the more frequently the material requirements
should be replanned. In most manufacturing companies, a longer than weekly replan-
ning cycle will prove unsatisfactory, especially if the MRP system is used for purposes of
priority planning. As stated previously, the recommendation is to replan at least daily.
The frequency of planner action does not need to align with the replanning frequency.
Any MRP system that is used to replan cyclically (rather than continuously) can do
no more than “take a snapshot” of inventory status at the time of replanning and plan
order priorities accordingly. Their validity deteriorates gradually following the replan-
ning as the inventory status changes. If the “snapshots” are not taken frequently enough
to revalidate priorities, it becomes impractical to follow the priorities established by the
formal system, and the informal system must take over. As pointed out earlier, without
valid order priorities, there can be no valid load projection. With insufficiently frequent
replanning, the user cannot realize the potential of the MRP system. The subject of
replanning frequency was reviewed in some depth in Chapter 7.
Certain special capabilities can be incorporated into the basic MRP system that will
enhance its usefulness. These system features are not absolutely essential to the system’s
operation, and therefore they may not be included in a given MRP software package.
They do, however, increase the power of the MRP system significantly as a planning tool
and warrant inclusion in the system. Of the various special system features, the most
important ones are pegged requirements and the firm planned order.

Pegged Requirements
The pegging of requirements provides the capability to trace item gross requirements to
their sources. The process of MRP, as described earlier, progresses from top to bottom of
the product structure. The gross requirements for a component item, derived from its
parent items and from external sources of demand, if any, are summarized by period. The
contents of a given gross requirements bucket represent a total, the breakdown and
sources of which are obscured.
Pegging requirements means saving this information, which at one point in the
requirements planning process is known to the system, and recording it in a special file.