Orlicky’s Material Requirements Planning MRP Review

Orlicky’s Material Requirements Planning – 3rd Edition by Chad Smith and Carol Ptak – Reviewed

Joseph Orlicky is a legend in the field of manufacturing systems, and Orlicky’s Material Requirements Planning, aka Orlicky’s MRP, first written in 1975, is a classic. It is quite simply the Bible of books on MRP, and the sales history – 175,000 copies sold – proves the claim.

Another legend was invited to write the 2nd Edition in 1994 – George Plossl, Orlicky’s friend, and contemporary of other Giants such as Oliver Wight.

And now Chad Smith and Carol Ptak have written the 3rd Edition of Orlickys Material Requirements Planning at the invitation of publisher McGraw-Hill.

If you read (or re-read) his original book, Orlicky’s brilliance resonates even more today than it did 36 years ago; because only with the passage of time does it become apparent just how clear was his vision, and how strong was his depth of understanding of issues we’re still facing today, and that are STILL poorly understood today by most managers.

Now, in another lifetime, I both designed and programmed MRP software, so I got to know Orlicky’s book rather well.

And now, I’ve been in the fortunate position of reviewing this 3rd Edition, which can be ordered now (April) at a great pre-launch price and will ship probably in the first week or two in June.

What Carol and Chad have brought to the table is a deep recognition at a cause-and-effect level of why today’s Planning systems are so badly broken and why manufacturers and supply chains are performing so poorly, and — and this is something I’ve missed in EVERY high-level ivory-tower article on Supply Chain Management — they also explain EXACTLY how to fix the problem.

And their blueprint comes from a track-record of doing exactly that.

At the heart of this is their recognition of precisely how MRP — which is embedded in every multi-million dollar ERP system, and still implemented in 70% of ERP implementations — is more important than ever in today’s realities, because of the need to constantly recalculate in the face of so many changes happening so quickly; yet at the same time it is the underlying cause of the vast majority of our broken Planning systems today because it’s assumptions, embedded into programming logic almost 60 years ago and barely changed since then, no longer match current reality.

The 3rd Edition of Orlicky’s Material Requirements Planning brings MRP into the modern industrial world; for example …

  • It deals with the effect of variation on Operations and Supply Chains, which is both crucial today and very poorly understood by managers – including those carrying the title “Supply Chain manager” or “Vice President or Director of Supply Chain operations.”
  • Although it isn’t quite so blunt as I’m phrasing it, it deals with the reality that forecasts are only ever lucky or lousy, that if you’re hoping for better forecasting you shouldn’t hold your breath, and that if you want to prosper in today’s realities you’d better learn to prosper DESPITE a lousy forecast.
  • Orlicky’s MRP addresses the conflict we see in some companies where the Lean Pull champions are demanding that MRP be turned off because it’s a “Push” based system, while those responsible for replenishing the plant point out that when lead times from overseas are 10 weeks or more the plant would die in a hurry if they waited for a “Pull.”

For me, the most valuable parts of the book are the explanation of how the powerful MRP logic machine is no longer in synch with current realities; and the entire section (8 chapters! Close to 100 pages!) where Chad and Carol introduce Demand Driven MRP, the technology that places MRP firmly into current reality.

This is by far the most extensive explanation of the Demand Driven MRP technology documented, covering each of the 5 elements of DDMRP in great detail  and also discussing Reporting and Analytics.

In my opinion, reading the ORIGINAL Orlicky’s Material Requirements Planning would be a good use of time, just to appreciate Orlicky’s brilliance; it’s a very thought-provoking read.

However, this 3rd Edition of Orlicky’s Material Requirements Planning (Orlicky’s MRP) is a must-read for practitioners, managers associated with Planning, Inventory, Purchasing, Distribution, or Supply Chain; and managers and executives needing to understand WHY their planning systems are broken, and Exactly HOW to fix them.

It’s an understatement to say I highly recommend this new edition (3rd Edition) of Orlicky’s Material Requirements Planning; in my opinion it’s a “must read” book.

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