Page 30 - Orlicky's Material Requirements Planning

C HAP TE R 2

MRP in the

Modern World

By definition, manufacturing is the conversion of low-value materials to higher-value
products. These must have value at least equal to their price in meeting customers’ needs
or desires. People, capital, materials, and other resources are employed at costs that must
be less than the selling price, taxes must be paid, and, hopefully, money will be left to
fund research and development (R&D), expand the business, and reward the owners
who provide the operating capital.
Recognition that manufacturing is a process is essential to understand ing how it
should work. A bewildering variety and great complexity of products, materials, tech-
nology, machines, and people skills obscure the underlying elegance and simplicity of the
total process. The essence of manufacturing is flow of materials from suppliers through
plants to customers and of information to all parties about what was planned, what has
happened, and what should happen next.
This is true regardless of what is made, how and when it is made, and who makes
it where. The first law of manufacturing is

All benefits will be directly related to the speed of flow of materials and
information.

Assuming a valid direction (not a trivial assumption), this is a universal law apply-
ing to every type of manufacturing. Difficulties in controlling manufacturing will
decrease and planning will become more effective as material and information flows
speed up. The best use of resources comes from eliminating problems that interrupt or
slow down these flows. The obvious principle that emerges is

Time is the most precious resource employed in the manufacturing process
and the ultimate constraint.

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