Page 287 - Orlicky's Material Requirements Planning

266 PART 3 Managing with the MRP System

■ Monitoring inventory for inactivity or obsolescence and recommending disposition
■ Investigating and correcting errors in inventory records
■ Initiating physical inventory counts
■ Analyzing discrepancies or misalignments between item requirements and cover-
age and taking appropriate corrective action
■ Requesting changes in the MPS
Most of these are routine and require no further elaboration, but a few of the inven-
tory planner’s duties warrant a more detailed review. Transactions continually modify
inventory status, which, in turn, provides the clues to inventory action. The principal
types of action are related to orders, that is, the releasing of planned orders and the
changing of the quantity and/or timing of open orders. The inventory planner is con-
strained by the fact that it may be difficult or costly to change the quantity of an open pur-
chase order and usually impossible (other than by splitting the lot) to change the quanti-
ty of an open shop order. His or her field of order-related action is, in practice, generally
limited to:
■ Releasing the order in the right quantity at the right time
■ Rescheduling the due date of an open order if and as required to make it coincide
with the date of actual need

In both these functions, the inventory planner is fully supported by the MRP sys-
tem, which determines both the quantity and timing of planned-order releases and which
also constantly monitors the validity of all open-order due dates. The following examples
illustrate how the MRP system determines when to generate the two basic outputs or
messages: “Release the order” and “Reschedule the order.”

Releasing a Planned Order
A planned order is mature (for release) when the planned release quantity appears in the
current-period bucket. This happens either as a result of offsetting for lead time in the
course of the requirements explosion or by passage of time, which gradually brings a
planned-order release toward the first or current period. The current-period bucket in the
planned-order release schedule is known as the action bucket. The (MRP) computer pro-
gram tests the contents of this bucket, and when it exceeds zero, the system generates a
message (report) to the inventory planner that the order is due for release. Figure 14-3
shows such a condition.
The planner, who reviews the request and takes the actual action, normally has the
privilege of overriding the system in terms of changing the quantity of the order at this
point. For example, a shortage of raw material may not allow the order to be released in
the full quantity planned by the MRP system, and the planner may decide to reduce the
order quantity rather than delay the order release.
Conversely, the planner may wish to increase the order quantity for some reason.
He or she should not do this without assuring himself or herself that the action will not