the Corporation," a phrase made popular by Hammer and Champy in
their book by the same title, is a new buzz word. However, it is
much more than just a buzz word or fad; it is what American
manufacturing companies are going to have to do if they are to be
World Class competitors. A major point made in the book is that
reengineering teams can stimulate their own creativity. This is done
by harnessing the disruptive power of information technology, not
by making the old processes work better. What is needed is a way to
enable organizations to break the old rules and create new processes
that provide breakthrough improvements. Unfortunately, when
installing MRP systems, most companies focus on the power of the
computer, not on using the power of the computer to enable the
new processes. This paper will address the real power of MRP II,
which is to discard "traditional" methodologies and
unsuccessful ways of doing business and embrace a new way to run
the company with breakthrough results.
fundamental error most companies make when installing MRP II is to
use it to automate the existing processes. What follows is generally
a frustrating and unrewarding experience. It has long been
recommended that companies starting an MRP II implementation should
use techniques that have been proven effective in other companies to
achieve breakthrough results. This approach is supported by Hammer
and Champy. The challenge is to get people to accept radical change.
This paper will explain some of the proven techniques and discuss
the change process required to get people to implement them.
order to understand what role reengineering plays, we need to
understand what MRP II is. The easiest way to explain MRP II is to
reference the flow diagram in Figure 1. The process starts with
business planning. This is the strategic plan of the company for the
next five years minimum. This plan is then converted into dollars
for near term planning. Once the strategic plan is in place, an
operations plan must be put in place for the next 18 months. Simply
stated this plan balances the demand (both actual and forecasted)
with the capacity of the company at a family level. It must be noted
that capacity is not just in manufacturing but in all aspects of the
company. This process is called Sales and Operations Planning. The
next step is to break down the families into end items or options.
This is the master schedule. Like Sales and Operations Planning, the
master schedule is checked for capacity using rough cut capacity
planning. Detail material planning (MRP) then breaks the entire
product into all the components using the bill of material and
netting the on hand and on order inventory. The routing file is then
accessed to develop a detail capacity plan. Once this is done,
priorities can be sent to the plant and to the suppliers. Simple
when one thinks about it, but unfortunately
not so simple when
companies try to implement MRP II because a radical change in the
way people operate is required throughout the company to support the
data's accuracy and properly manage the information. Implementing
software is simple compared to achieving the behavior change
required throughout the company.
To be Continued
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