“MRP doesn’t work.” It’s a common complaint. But is it valid? Almost certainly.
If it was working, you wouldn’t hear the complaint. The real issue is this: is it the fault of MRP or is MRP not being used correctly? Another possibility is that it is being used correctly but the complainant just doesn’t understand what it’s trying to tell them.
We do not need to spend any time here on that last possibility. The cause and the solution are obvious: the user needs some training.
Assuming that MRP is really not working, and let’s just say that means MRP is not giving helpful and useful recommendations, then it could be that either MRP is not able to function in the environment where it is installed, or it is appropriate for the company’s situation but is not being used correctly.
MRP has been around for many years and has been successfully used in many companies, in many different business situations, with great success. To be fair, it’s also true that many companies have “failed” with MRP and many more are using it but are not particularly happy about it. I’ve also heard (many times) “MRP is for high volume consumer goods companies; we’re make to order so MRP won’t work for us.” I’ve also heard (just as many times) “MRP is for make to order; we’re a make-to-stock company so MRP won’t work for us.” Clearly, if MRP can work in both high volume, make-to-stock companies and in make-to-order companies making complex products, the concept of MRP is valid across the spectrum.
It may be that the particular MRP product is not well suited for the specific type of manufacturing in that plant. The fault lies in the system selection process and/or the implementation process. Don’t condemn all of MRP for a faulty implementation.
Similarly, a company trying to use MRP in a particular manufacturing environment may fail while another company in the same industry with basically the same processes and needs might succeed. Again, it’s the fault of the selection, implementation, (lack of) user training, failure to adapt policies and procedures to take advantage of MRP, poor discipline and bad data, and so on. There are many opportunities to sabotage MRP – or any other system, for that matter.
There are valid arguments that MRP is dated, and does not function well in today’s world of e-business, short product cycles, product proliferation, global competition, and ever more demanding customers. But there is nothing out there that can replace MRP (yet). New approaches are being developed all the time and someday there may be a better way. There are also many new extensions, adaptations, variations and improvements entering the market all the time that promise to make MRP work better in specific situations including process manufacturing, lean environments, demand-driven enterprises, and more. While they may not admit to being MRP “under the covers”, and may even vigorously deny it, almost all have MRP logic at the core of their planning function. A notable exception to this is Demand-Driven MRP (DDMRP) that embraces “MRP” in its name and clearly offers a methodology to adapt MRP to today’s dynamic and demanding environment.
If your system is not working the way it should (and the way you need it to), don’t just say “MRP doesn’t work” or “MRP doesn’t work in our kind of manufacturing”. Figure out why it isn’t working and fix the problem. You won’t find a viable substitute that doesn’t have MRP embedded in its core. And MRP can be adapted to meet just about any manufacturing situation (pick the right variant). MRP can be extended to work with lean, advanced planning, e-commerce, and teamed with many more additional capabilities to fit your company’s situation and needs.