ERP: Making it Happend

This was a breakthrough. For the first time ever in manufacturing,
there was a formal mechanism for keeping priorities valid in a constantly
changing environment. This is important, because in a manufacturing
enterprise, change is not simply a possibility or even a
probability. It’s a certainty, the only constant, the only sure thing.
The function of keeping order due dates valid and synchronized with
these changes is known as priority planning.
So, did this breakthrough regarding priorities solve all the problems?
Was this all that was needed? Hardly. The issue of priority is
only half the battle. Another factor—capacity—represents an
equally challenging problem. (See Figure 1-3.)
Techniques for helping plan capacity requirements were tied in
with Material Requirements Planning. Further, tools were developed
to support the planning of aggregate sales and production levels
(Sales & Operations Planning); the development of the specific
build schedule (master scheduling); forecasting, sales planning, and
customer-order promising (demand management); and high-level resource
analysis (Rough-Cut Capacity Planning). Systems to aid in executing
the plan were tied in: various plant scheduling techniques for
the inside factory and supplier scheduling for the outside factory —
the suppliers. These developments resulted in the second step in this
evolution: closed-loop MRP. (See Figure 1-4.)
Closed-loop MRP has a number of important characteristics:
It’s a series of functions, not merely material requirements planning.
It contains tools to address both priority and capacity, and to support
both planning and execution.
It has provisions for feedback from the execution functions back to
the planning functions. Plans can then be altered when necessary,
thereby keeping priorities valid as conditions change.