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The Issues & Pragmatic Applications PDF Print E-mail
Written by Cecilia Chee, Singapore   
Tuesday, 04 October 2011 16:00



The Issues

Material Requirements Planning of any generation assumes a finely tuned data system, which seldom ever happens. It also works from lead times, a falsity because both external and internal lead times are dynamic and change daily. MRP also assumes infinite capacity which is unrealistic and difficult to manage. The end result is usually an increase of inventory caused by the manufacture of wrong parts, the very thing MRP was designed to resolve.

One reason for the excess generation of inventory is that the data system and accuracy required for MRP to properly run is difficult to maintain, and the MRP review system is notorious for printing tons of unused material review reports. It also requires de-expediting to prevent overstocking, which is seldom accomplished because it is often treated with low priority.

Finally MRP, utilizing time-phased order point methodology, is a push system that assumes demands rather than reacts to a true demand. When driven by a forecast, as it is supposed to do, it reacts to the uncertainty of a forecast and produces parts that one hopes one will need.


Pragmatic Applications

Material Requirements Planning techniques have been proven to be ineffective at the micro level. However, if decoupled from the execution systems, provides a good methodology for forecasting both internal and supplier capacity requirements. We advocate "cutting the belt" between planning and execution. 

Last Updated on Wednesday, 05 October 2011 13:34
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