Page 407 - Orlicky's Material Requirements Planning

386 PART 4 Looking Backward and Forward

THE MRP CONFLICT

Figure 22-1 is a conflict diagram depicting many companies’ current dilemma around
MRP. The failure to resolve this dilemma consistently and satisfactorily results in poor
organizational and supply-chain performance, conflicting modes of operation between
planning and manufacturing, and countless numbers of workarounds.
This diagram is read from left to right. Today, few people in manufacturing would
disagree with an objective to be “agile.” What is agility? The twelfth edition of the APICS
Dictionary defines agility as:

The ability to successfully manufacture and market a broad range of low-cost, high-
quality products and services with short lead times and varying volumes that provide
enhanced value to customers through customization. Agility merges the four distinc-
tive competencies of cost, quality, dependability, and flexibility.
A problem with this definition is not whether it is a desirable state to achieve; the
problem is that it is too difficult to achieve given no shortage of challenging circumstances
relative to the manufacturing environment. One of those challenges is the conflict defined
earlier. In many manufacturers, the inability to resolve this conflict means that agility is
completely unrealistic, and the company attempts to find a compromise position.
There are two critical needs coming into contention behind the compromises. From
a manufacturing perspective, a company must have a realistic way to respond, pace, and
produce to actual demand. This way must include both capacity and materials, as dis-
cussed previously. Within increasingly shorter horizons that are inherently more variable
and volatile, MRP tools simply do not create the correct demand signals, nor do they
facilitate materials availability. Additionally, many pull-based or demand-driven sched-
uling techniques (e.g., lean and drum-buffer-rope) are effectively blocked by this lack of
material synchronization. MRP systems appear to be overly complex and lack clear visi-
bility for the quick and effective decision making that agility requires. In most cases,

FIGURE 22-1 Mode of
Requirement 1 Operation 1
The MRP conflict.
Produce to
actual market Ignore MRP
Business pull
Objective
Conflicting
Be Agile Modes of
Operation

Have visibility to
total requirements,
especially long Utilize MRP
lead time parts
Requirement 2 Mode of
Operation 2