Page 57 - Orlicky's Material Requirements Planning

38 PART 1 Perspective

Conflict 1: Planning Versus Execution

As discussed earlier, MRP is, by definition, a planning tool. MRP launches orders based
on a combination of data pertaining to demand, on-hand, open-supply, BOM, and lead-
time parameters. It assumes that a system of execution is in place to manage to the plan.
MRP detractors cite the frequent poor quality of the plan as a reason that makes effective
execution impossible and even counterintuitive. Worse, those detractors say that if orga-
nizations did in fact execute to the plan, it would be disastrous and result in shortages
and service-related problems.
Thus, if the planning system cannot provide a realistic, feasible plan that delivers
materials as the market needs them, many lean advocates would recommend that we
abandon planning altogether. In their mind, planning often becomes relegated to some
initial assumptions about the rate of demand pull, takt time, decoupling BOMs, and rout-
ings at most discrete part numbers and steps, respectively, and allowing resources
(including suppliers) to “read and react” in order to fulfill materials requirements. In
effect, there really is no planning after the initial setup, only execution.

Conflict 2: Complexity Versus Simplicity
MRP advocates desire a solution that identifies and manages the inherent dependencies
in manufacturing situations. In order to do this, MRP can be a highly complex system to
operate. As mentioned in relation to conflict 1, the perceived need for predictability drives
companies into massive complexity. Most people in manufacturing companies don’t
even fully understand what the planning system is or does. Furthermore, “fixing” the
system seems to be a never-ending, intricate, and expensive journey. Einstein once said,
“Any intelligent fool can make things bigger and more complex. It takes a touch of
genius—and a lot of courage—to move in the opposite direction.”
Einstein also said something else relevant to this conflict. He said, “Everything
should be made as simple as possible, but not simpler.” Lean advocates are seeking sim-
plicity in a solution. The tactics tend to be manual and visible. There is nothing wrong
with simple solutions—to a point. When things get oversimplified, however, the end
result often can be as poor as the complex side of things. Oversimplification is defined as
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“to simplify to the point of causing misrepresentation, misconception, or error” By fail-
ing to depict and account for critical dependencies and/or relationships with regard to
supply, demand, on-hand inventory, and product structure, lean can oversimplify many
environments. The more complex and variable these environments, the more likely it is
that lean is an oversimplified approach.
MRP’s complexity, combined with its critical inherent shortcomings and lean’s total
oversimplification, often has the same effect—chronic and frequent shortages and at the
same time excessive inventory positions. The solution must provide both a level of

11 www.thefreedictionary.com.