Page 411 - Orlicky's Material Requirements Planning

390 PART 4 Looking Backward and Forward

5. Highly Visible and Collaborative Execution

Simply launching purchase orders (POs), manufacturing orders (MOs), and transfer
orders (TOs) from any planning system does not end the materials and order manage-
ment challenge. These POs, MOs, and TOs have to be managed effectively to synchronize
with the changes that often occur within the execution horizon. The execution horizon is
the time from which a PO, MO, or TO is opened until the time it is closed in the system
of record. Demand-driven MRP is an integrated system of execution for all part cate-
gories in order to speed the communication of relevant information and priorities
throughout an organization and supply chain (Figure 22-3).
These five components work together to dampen, if not eliminate, the unnecessary
nervousness of traditional MRP systems and the resulting bullwhip effect in complex and
challenging environments. In using this approach, planners will no longer have to try to
respond to every single message for every single part that is off by even one day. This
approach provides real information about those parts that are truly at risk of negatively
affecting the planned availability of inventory. Demand-driven MRP sorts the significant
few items that require attention from the magnificent many parts that are currently being
managed. Under the demand-driven MRP approach, fewer planners can make better
decisions more quickly. This means that companies will be better able to leverage their
working and human capital as well as the significant investments they have made in
information technology.

Authors’ Note: There is a challenge associated with writing this book. A large portion of
the solution involves high visibility. A large portion of that visibility is accomplished
through easy-to-interpret color signals. This book is printed in monochromatic format.
Printing monochromatically does not bring that visibility to life very well. The reader will
have to use some amount of imagination to get the proper sense of visibility.

FIGURE 22-3
The five components of demand-driven MRP.

Demand-Driven Material Requirements Planning

Strategic Demand- Visible and
Inventory Buffer Profiles Dynamic Driven Collaborative
and Levels Adjustments
Positioning Planning Execution

1 2 3 4 5

Modeling/Re-modeling the Environment Plan Execute