The MRP evolution took us down the road of computer sophistication. It was to be the panacea for solving all manufacturing problems. Little did we know that when we finally arrived at the final phase---ERP/MRP---we would still be facing daily parts shortages, shop floor chaos and end-of-the-month scrambling. What happened to all those "salesmen" promises?"

When it comes to detail scheduling, marginal data input integrity and inside-of-lead-time orders cause MRP systems to create far too many rescheduling actions that causes purchasing and production to lose control of day-to-day activities. This schedule instability is human driven and not a system design problem. (So stop listening to salesmen, while bank clerks may perform their duties flawlessly, stressed-out purchasing and production planners, processing inside-of-lead-time orders, will never achieve perfection.)

The MRP evolution took us down the road of computer sophistication. It was to be the panacea for solving all manufacturing problems. Little did we know that when we finally arrived at the final phase---ERP/MRP---we would still be facing daily parts shortages, shop floor chaos and end-of-the-month scrambling. What happened to all those "salesmen" promises?"

When it comes to detail scheduling, marginal data input integrity and inside-of-lead-time orders cause MRP systems to create far too many rescheduling actions that causes purchasing and production to lose control of day-to-day activities. This schedule instability is human driven and not a system design problem. (So stop listening to salesmen, while bank clerks may perform their duties flawlessly, stressed-out purchasing and production planners, processing inside-of-lead-time orders, will never achieve perfection.)

An effective method for evaluating how well a company is doing in managing their MRP input data is to ask questions as to how accurate are their bills of materials, how accurate is their purchase order and shop order status, how accurate are their inventory records, etc.

If the answers you get are vague, like...good, OK, not too bad... with no historical percent-age data, then you know that this is a company that needs help in stepping up to the problems of poor information integrity.

If a company tracks MRP input data and does a simple calculation of statistical probability of MRP accuracy: Master schedule  99%, BOM = 98%. Shop Order Status = 90%, P.O. Status = 92%, Inventory = 92%  it will find that its MRP scheduling accuracy is 74%. In this case, if buyers and planners followed the MRP scheduling take actions, the order launch error would be 26%. How does your calculation compare?

For a measure of MRP shortcomings, one needs only to spend some time in a manufactur-ing facility... especially during the last weeks of the final financial quarter. In a typical company, you'll find that converting the quarterly financial forecast into reality still requires internal/external expediting, last minute on-the-run product changes and even a little smoke and mirrors  Results are overtime, scrap, rework and warranty claims (all non-value-added costs) that negatively impact a company's bottom line performance. 

In addition, marginal quality and late shipments deliver less than acceptable customer satisfaction. Companies that have spent thousands of dollars in pursuing MRP/ERP are devastated when they experience a business decline due to  noncompetitive pricing caused by uncontrolled non-value-added costs. Is there a solution? Certainly, I call it Kaizen Based Operational Excellence.