Page 31 - Orlicky's Material Requirements Planning

12 PART 1 Perspective

Equal amounts are available to everyone, but time moves relentlessly; it cannot be
stored, extended, or recycled, and wealth can buy no more. Wasting time causes irre-
trievable loss. Simple, universal logic underlies all manufacturing and can be repre sented
by eight simple questions:

1. What is to be made?
2. How many, and when are they needed?
3. What resources are required to do this?
4. How should those resources be configured and deployed?
5. Which are already available?
6. Which others will be available in time?
7. What more will be needed, and when?
8. How will this plan enable sustainable profits for the company?
Business and marketing strategies determine the answers to the first question.
Internal company planning and control systems provide an swers to the last four. A blend
of business and marketing strategies and internal company planning, execution, and con-
trol systems provide the answers to questions 2, 3, and 4. Those questions represent the
interface between strategy and tactics.
Today, many manufacturers and supply chains face a huge dilemma related to their
operational strategy and tactics. The world is a much different place than it was when the
first edition of this book was published in 1975. To put it bluntly, the world of “push and
promote” is dead. Gone are the days when a company could use the past to predict the
future, build products to that forecast, and have any hope that the market would want
what they produced. Companies that continue in this mode will see continual erosion in
their market share and bottom-line performance until that company simply goes out of
business. Additionally, rules and tools that were developed under those conditions must
be reexamined and rebuilt for the circumstances of today.
Those circumstances define a level of complexity never seen before. Over the last
decade, the nature of the global manufacturing and supply-chain landscape has become
much more unstable. Consider the following factors contributing to this volatility:

■ Global sourcing and demand
■ Increased outsourcing
■ Shortened product life cycles
■ Shortened customer tolerance times
■ More product complexity and/or customization
■ Demands for leaner inventories
■ Increasing forecast error
■ Material shortages
■ More product variety
■ Long-lead-time parts/components
■ A hypersensitive global economic community
■ Dramatic cutbacks in personnel and other resources across the supply chain