Page 396 - Orlicky's Material Requirements Planning

CHAPTER 21 Historical Context 375

Since the early 1960s, when a few pioneered the development and installation of
computer-based MRP systems, time-phased MRP has come a long way—both as a useful
technique and as a source of new knowledge. From the original handful, the number of
MRP systems in use in American industry grew gradually to about 150 in 1971, when the
growth curve began a steep rise. By 1975, over 700 systems had been implemented, and
the 1980s saw thousands more come into use. Today, it is a rare company in Western and
Pacific Rim industrial countries that does not operate a material requirements plan. We
have deliberately avoided saying that most use them successfully. Too few do! The
important reasons are covered in this book.
In the early days, the subject of MRP was neglected in academic curricula in favor
of intellectually challenging statistical and mathematical techniques. People in industry
thought these irrelevant or obsolete. Academicians considered the study of MRP “voca-
tional” rather than “scientific.” Production and inventory management are vocational, of
course, in the sense that knowledge is applied to solving real business problems. As with
engineering or medicine, production and inventory management are oriented toward
practice but must be based on a sound body of theoretical knowledge.
In the past also, communications were poor between practitioners in industry and
those who taught production planning and inventory control. Over almost two decades,
the first edition of this book helped to improve such communications because it com-
bined both theoretical knowledge and practical experience.

EVOLUTION OF THE ART

Manufacturing planning and control theory and practice have been evolving in the
United States at an accelerating rate through the last half of the twentieth century. The
first rigorous attempts to improve manufac turing processes and workers’ productivity
were made around the beginning of this century by pioneer industrial engineer Frederick
W. Taylor. The standard-setting techniques developed by him and later applied widely
by Henry Gantt, Frank and Lilian Gilbreth, and Harrington Emerson are still the basis for
planning labor requirements and paying incentives to workers to reward them for pro-
ducing more.
Ford Harris published in 1915 the first formula to calculate an EOQ to minimize the
total of ordering-related and inventory carrying costs. In 1934, R. H. Wilson showed how
statistics could be used to plan inventory cushions to reduce the impact of forecast errors
and material shortages and to improve customer deliveries with minimum inventories.
During World War II, teams of British scientists applied mathematical tech niques
and scientific methods to complex problems involving the choosing among alternate uses
of scarce resources. For over two decades after the war, attempts were made in Europe
and America to apply tools of operations research, as it was called, mainly linear pro-
gramming and queuing theory, to industrial logistics. These produced good results in
some situations but had only limited application. Too often operations researchers resem-
bled people with a familiar tool looking for something to fix, like a person with a screw-