MRP output leads to confusion

As previously mentioned, a Planned order is the sum of all shortages of a certain material or component in a defined planning period. However, demand for that material or component is not just from sales orders and work orders, but also from forecasting demand and fixed production schedules or MPS.  All requirement quantities (as the demand for materials and components is also called) are combined in such a Planned order.

It is therefore impossible to identify from the Planned order exactly where the various needs originate from, and what exactly such a Planned order will cover if it is to be converted into a ‘real’ production order, or Purchase Order, to cover those needs or requirements.

If you, as a material planner or buyer, seek to know where those needs or requirements come from in more detail, and how such a Planned order could cover which requirement at what point in time with what quantity, you will have to go to an overview screen in the ERP system that provides that information. Such an overview screen is usually called Material Planning Window, where you can analyze item by item, material by material and component by component which orders, of which type, have caused the demand and which Planned order could possibly cover this at what specific moment in time.

That analysis of demand and coverage is then calculated on that screen, by the screen program for only that specific material or component making it transient information, that disappears as soon as the next component or material is called up on screen for the same analysis. This analysis and its detailed results are not stored in the database with standard MRP, so they cannot be used in subsequent analyses and other programs within the ERP system.

In Orlicky’s time, this way of working was understandable. In those days, a material planner or buyer worked with perhaps between a few dozen and a few hundred article numbers, materials and components and the whole of the material planning was easy to oversee. As previously mentioned, computer and storage capacity were limited and expensive. In addition, most of the industrial enterprises of the day worked with the idea that you could produce anything ‘on stock’. The assumption was that what you had made would be consumed or sold at some point in the future anyway. Production on stock was the norm and not surprising, Orlicky’s MRP concept supported that completely.