Supercharged Supply Chains

CHAPTER 2Get the Basics Right: Eliminate the Churn

A constant and common complaint about planning systems is that the information is not accurate, not realistic, and the planning system is overly nervous (it sends so many exception messages that planners cannot work with them all). That is ironic since the first Material Requirement Planning (MRP) system was built on the very simple and sound logic of exploding dependent demand down through the bill of material into material requirements. Dr. Joseph Orlicky was the guru of the original system implemented in 1961 at the J. I. Case Company. Oliver Wight made it famous by simplifying the explanation of the process so Leadership and Middle Management could understand its power, how it works, and how it should be used. For instance, Ollie would say that the basic logic of MRP is simple: “Tell me what you want, what you have, and I will tell you what to get.” The actual calculation is simple, perfectly accurate, and the outcome will not change no matter how many times you run the computer through recalculations of the plan. Planning in this manner is formal and top down, as depicted by Figure 2.1, Business Excellence Planning.

FIGURE 2.1 Business Excellence Planning

But change the “what you want” or “what you have” and the system will recalculate what you need to get. If the data in the system is not accurate, you will get an ...