Page 399 - Orlicky's Material Requirements Planning

378 PART 4 Looking Backward and Forward

the time. Because of this, almost all those approaches and techniques suffered from
imperfection. They simply represented the best that could be done under the circum-
stances. They acted as a crutch and incorporated summary, shortcut, approximation
methods often based on tenuous or quite unrealistic assumptions, sometimes force fitting
concepts to reality so as to permit the use of a technique.
The breakthrough in this area lies in the simple fact that once a computer becomes
available, the use of such methods and systems is no longer obligatory. It becomes feasi-
ble to sort out, revise, or discard previously used techniques and to institute new ones
that heretofore it would have been impractical or impossible to implement. It is now a
matter of record that among manufacturing companies that pioneered inventory man-
agement computer applications in the 1960s, the most significant results were achieved
not by those who chose to improve, refine, and speed up existing procedures but by those
who undertook a fundamental overhaul of their planning and control systems. Many
things have changed, but this fact remains the same today. The result was abandonment
of techniques proven unsatisfactory and a substitution of new, radically different
approaches that the availability of computers made possible. In the area of manufactur-
ing inventory management, the most successful innovations are embodied in what has
become known as MRP systems.
When implemented, such systems not only demonstrated their operational superi-
ority but also afforded an opportunity for the student of inventory management to gain
new insights into the manufacturing inventory problem. The new, computer-aided meth-
ods of planning and controlling manufacturing inventories made the true interrelation-
ships and behavior of items constituting these inventories highly visible, thus illuminat-
ing the tenuousness of many previous assumptions and revealing the causes of inade-
quacies (always admitted) of many traditional methods. It became evident that the basic
tenet of the old inventory control theory, namely, that inventory investment can be
reduced only on pain of a lower service level (and vice versa) no longer holds true. The
successful users of the new systems reduced their inventories and improved delivery ser-
vice at the same time. A revolutionary change occurred, and a new premise was estab-
lished. Orthodox approaches and techniques became open to question, and existing
inventory control literature—indeed, an entire school of thought—was marked for re-
examination.

EVOLUTION OF MRP AND PLANNING SYSTEMS
Even in these simpler, more predictable times, MRP was really successful, as measured
by significant bottom-line results, including dramatic inventory reduction in only a small
percentage of companies that implemented the tool. The early adopters showed signifi-
cant results, but as MRP came into more widespread use, the same results were not
achieved. This significant failure rate of MRP was a major point of discussion in the
APICS meetings at the time. One big reason was that MRP was intended to do only that—
plan material. APICS professionals at the time knew that capacity was a critical consid-