Page 397 - Orlicky's Material Requirements Planning

376 PART 4 Looking Backward and Forward

driver tightening all the screws around and then filing slots in nail heads to tighten those
too. Real problems went unattacked and unsolved.
Business computer hardware and software became generally available in the early
1960s, making recordkeeping and use of complex planning techniques practicable for the
myriad items found even in small manufacturers. This removed obstacles to the devel-
opment of many planning techniques that were impractical to apply manually.
Prominent among these were

1. George E. Kimball’s “base stock system,” aimed at eliminating wide variations
in upstream demand caused by independent ordering of components of assem-
bled products. This 1950’s system foreshadowed Japanese kanban “pull” tech-
niques by communicating end-product actual demands to each work center
producing components and to outside suppliers. Lack of computers to handle
the masses of data, long setups, large component-order quantities, and buffer
stocks at many process steps prevented early wide use and any reaping of the
potential benefits of this technique.
2. A forecasting technique called exponential smoothing was publi cized by Robert G.
Brown in 1959. This weighted-averaging technique found wide application in
product forecasting because of small computer data storage requirements and
flexibility in reacting to demand changes. As with many other mathematical
techniques, variations were developed extending it to unusual demand patterns
well beyond the point of diminishing returns. These techniques were developed
in the late 1950s by IBM, with its IMPACT forecasting software providing the
capability to apply order-point sophistication at all levels of stocking.
3. MRP driven by a master produc tion schedule (MPS) was first applied success-
fully in 1961 by J. A. Orlicky on J. I. Case Company farm machinery. The rigor-
ous logic and masses of data to be handled made this an ideal computer appli-
cation. The enormous potential benefits over existing ordering techniques
generated great interest worldwide.
4. Detailed capacity requirements planning (CRP) was known since Taylor and
colleagues had showed how to develop work standards. While good computer
software was available early in the 1960s, failure to develop adequate capacity
planning resulted from poor-quality, incomplete pro cessing data and work
standards in most companies. Rough-cut (infinite) capacity planning techniques
were used only for testing the validity of master production schedules. This
neglect of capacity requirements planning contributed greatly to the early fail-
ures of MRP to realize its full potential.
5. Input/output (I/O) capacity control. Tight control of work input and output
was impossible without sound capacity plans. This delayed and blunted attacks
on long cycle times and made priority planning and control much less effective.
6. Operation simulation. O. W. Wright, J. D. Harty, and George Plossl developed
at Stanley Tools in 1962 one of the first detailed computer simulations of plant