Page 290 - Orlicky's Material Requirements Planning

CHAPTER 14 System Effectiveness: A Function of Design and Use 269

planned-order schedule so as to align it properly with net requirements, which means
that planned orders are being rescheduled automatically, without action on the part of
the inventory planner.
If the relative priorities in the shop (and those of open purchase orders) are to be
kept valid, the planner must reschedule due dates not only for orders needed earlier than
originally planned but also for those needed later. The tendency is to concentrate on
orders that need to be completed early to prevent shortages and to delay action or ignore
the others. It is understood that following the rescheduling action by the inventory plan-
ner, which is reflected in the MRP system, the revised shop order due dates will be input
to the operations scheduling system and to the dispatching (operations sequencing) sys-
tem. The former reschedules all remaining operations of the affected shop orders in
accordance with the new order due dates; the new operation start (or finish) dates then
may serve as a basis for dispatching and are also used to recompute work load. When pri-
ority ratios (rather than operation start dates) are used for purposes of dispatching, the
new order due dates enter into the preparation of the daily dispatch list. As far as revis-
ing purchase-order due dates is concerned, the inventory planner recommends action, by
submitting the revised dates of need, to the purchasing department. Only when the lat-
ter actually acts does the MRP system reflect the rescheduling.
The planner may decide not to advance the order due date (contrary to an indica-
tion by the MRP system) when there is safety stock or when the new date would be
impossible to meet. In the latter case, the proper course of action is to peg upward in an
effort to solve the problem, possibly all the way to the MPS, which may have to be
changed.

Problems of Net Requirements Coverage

Probably the most serious problems that the inventory planner must cope with are dis-
crepancies or misalignments between net requirements and coverage, resulting from
unplanned events or increases in gross requirements. The planner has limited means at
his or her disposal when trying to rebalance the status of a given inventory item. He or
she cannot change the quantity on hand, nor can he or she change gross requirements by
direct intervention. The planner can only change orders, that is, the timing of an open
order and both the quantity and timing of a planned order, as discussed previously. Thus
to change the gross requirements for a given item, the planner must change the planned
order schedule of its parent item(s).
To be able to do so, the inventory planner depends on the two special capabilities
of the MRP system that were mentioned previously, that is, pegged requirements and
firm planned order. How the planner would use these is illustrated in Figures 14-6,
14-7, and 14-8.
Following the original status of item Y, a purchased material with five weeks’ lead
time (see Figure 14-6), gross requirements in week 31 increase from 20 to 30. As a result,
the MRP system requests an immediate order release for 35 units (see Figure 14-7). The