Theory of Constraints Handbook - James Cox Iii [223]
MRP II systems became more commercially available. No longer was it necessary for companies to develop these systems. Software companies catering to the needs of different industries and platforms provided a wide variety of software products off the shelf. At the same time, the APICS education and certification program provided industry with professionals capable of utilizing these systems. Still, the systems that were so advanced at the time were no guarantee of bottom line success. In the 1990s, as technology began to move to Internet architecture, ERP was the next evolution and brought all the resources of an enterprise under the control of a centralized integrated system. In the APICS Dictionary, ERP (Blackstone, 2008, 45) is defined as:
Framework for organizing, defining, and standardizing the business processes necessary to effectively plan and control an organization so the organization can use its internal knowledge to seek external advantage. (© APICS 2008, used by permission, all rights reserved.)
Companies continued to invest in technology pursuing the holy grail of integrated planning and yet significant bottom line results were not achieved. In the mid 1990s, advanced planning and scheduling (APS) systems1 leveraged the visibility of the company’s resources in ERP and promised to keep all scarce resources busy all the time. The APICS Dictionary (Blackstone, 2008, 4) defines an APS as:
Techniques that deal with analysis and planning of logistics and manufacturing during short, intermediate, and long-term time periods. APS describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities. APS often generates and evaluates multiple scenarios. Management then selects one scenario to use as the “official plan.” The five main components of APS systems are (1) demand planning, (2) production planning, (3) production scheduling, (4) distribution planning, and (5) transportation planning. (© APICS 2008, used by permission, all rights reserved.)
Once again, the implementation of these complex systems was rarely a significant bottom line success. This is not to say that the software did not implement or did not run. The reality was that the improved bottom line results promised in the business case were the exception rather than the rule.
Throughout this entire evolution, the MRP calculation kernel stayed the same. Fundamentally, MRP is a very big calculator utilizing the data about what you need and what you have to calculate about what you need to go get and when. At its very core, even the most sophisticated ERP system of the day is inherently a push system based on a forecast or plan and the assumption that all the input data are accurate. In the most stable of environments, this assumption may be somewhat possible, but how does the 21st century global economic environment fit with this approach?
Can MRP Meet Today’s Challenge?
The world that existed when MRP was developed no longer exists.