Are you still driving your 1950’s model supply chain management system?
Looks good. Runs well. Shiny. Comfortable.
Look under the hood
Under the hood of your shiny new, just-upgraded MRP system is fundamental design that originated in the 1950s.
That’s right. The fundamental logic that is behind today’s MRP systems originated in the 1950s.
For most software companies, this MRP logic was encoded into their MRP and ERP products sometime between the 1970s and the 1990s. It really hasn’t changed much since then.
In the mid-1970s, Joe Orlicky wrote the book (literally) on material requirements planning: MRP – Material Requirements Planning: The New Way of Life in Production and Inventory Management. If you read the book, you will almost certainly discover that the fundamental logic by which your MRP system works today is the same logic found in Orlicky’s 1975 book.
So, how’s that working out for you?
How’s that working out for you?
Well, again, if you’re like most companies—90 percent or more of companies—you cannot and do not rely upon your MRP system to manage your production and inventory. You may run your MRP / MRP II system, but you then take the data it produces, and extract it or abstract it into Microsoft® Excel™ workbooks, Access™ databases, or homegrown applications to get to the numbers you actually use to drive production and replenishment.
You don’t do this because you want to. You do it because you value your job—and you know if you were to follow the recommendations of your MRP system to the letter, you’d be soon looking for work elsewhere!
It’s time for a new supply chain management model
I think it’s time we all admitted that traditional MRP has run its course. It served well in the economic times and conditions for which it was design. But—in case you hadn’t noticed—the realities of today’s business environment are nothing at all like the economic times and markets of the 1950s, 60s or 70s.
We are actually late in recognizing that old tools applied to situations with new rules just are not satisfactory.
There is a new supply chain management model available for you. One that is designed for, and works well, in today’s supply chain environments. That new model is called demand driven MRP, or DDMRP, for short.
You can learn about it from Demand Driven Institute, or by reading DDMRP – Demand Driven Material Requirements Planning. Then, you can look for solutions here.
And, of course, we can help you get started with your new, up-to-date supply chain management model, too. Contact us directly, or feel free to leave your comments below. We’d be delighted to hear from you.