Brilliant minds come along everyday, but few of those minds accomplish that of Joseph Orlicky. Without him, we would have never had MRP, MRP2 or even the modern ERP. When Mr. Orlicky developed the netting algorithm and established the foundational concepts and principles of Material Requirements Planning (MRP), every company relied on different variations of statistical analysis and various reorder point methods. These same companies also carried massive amounts of buffer inventory and safety stock. Joseph Orlicky was born on December 31, 1922 and died tragically in December 1986. He lived primarily in Stamford, Connecticut as this was a short distance from IBM's local offices. These offices would be where Mr. Orlicky would change the word of manufacturing. Joseph Orlicky was a deep thinker, innovator and a hard working individual. His principles about manufacturing, supply chains and inventory management however were much different and they were meant for greatness.
In 1964 Orlicky was working as an engineer at IBM. It was here that he would begin to develop the netting algorithm that would be the core of his MRP development. Oddly enough, at the time he was also very interested in the pull systems that the Toyota Production System had just begun developing. As you may already know, TPS would later transform and become the basis of lean manufacturing as we know it today. One interesting thing to note is that although many lean practitioners despise MRP and its push system methods, the methodologies were developed around the same time and with the intent to better control and manage inventory. It’s been reported that Black and Decker was the first company to use the fledgling concepts in production in the late 1960s and early 1970s. Orlicky wrote many books. His first book was published in 1969 by McGraw and Hill. It was titled, “The Successful Computer System: Its Planning, Development, and Management in a Business Enterprise.” Six years later he would publish his second book entitled, “Material Requirements Planning: The New Way of Life in Production and Inventory Management.” It was also published by McGraw Hill. This book highlighted the manufacturing industry and Orlicky’s principles. The first edition of “Material Requirements Planning: The New Way of Life in Production and Inventory Management” sold more than 150,000 prints and later became the standard and goto manual for developing Material Requirements Planning systems. In just a few short years, this book would help more than 10,000 companies implement MRP by 1981. This was a real accomplishment that can still be felt today. In fact, in the world of manufacturing, it is very difficult to find a business that does not have some form of MRP or ERP in its organization. For many years after Mr. In Orlicky's publication of “Material Requirements Planning: The New Way of Life in Production and Inventory Management” almost all MRP systems that companies used were homegrown systems or based on IBM’s database programs. These programs were then called Bill of Material Processor (BOMP) or Database Organization and Maintenance (DBOMP). IBM would later develop these systems into PICS, COPICS and MAPICS, programs that were made to be run on IBM’s computers and manage production and manufacturing of inventory. MRP systems would later evolve into MRP II and today’s ERP systems. Orlicky’s Netting algorithm used in early systems was the foundation of MRP and he was the pioneer. With pull systems and kanban driving the world of lean, one basic idea that Orlicky shared in his book: “Material Requirements Planning: The New Way of Life in Production and Inventory Management” still exists today. And that is, that “a company should never try to forecast what it can calculate.” Even with the revisions, the basic principles and algorithms that Orlicky had established are at the core of Material Requirements Planning. Challenge:
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