Manufacturing Handbook of Best Practices- An Innovation Productivity and Quality Focus1.pdf

SL3003Ch12Frame Page 261 Tuesday, November 6, 2001 6:05 PM
Manufacturing Controls
12 Integration
. “Chris” Christensen
THE BASIC PREMISE OF INVENTORY
Ever since the pharaohs built the pyramids, humans have been faced with the problem
in production management of how inventory should be used to maintain, balance, and
level load production. In the case of the pharaohs, they needed to have a big pile of big
rocks on hand to maintain a continuous production schedule. And since the time of the
pharaohs, we hadn’t made any significant inroads into the pile-of-rocks theory of
manufacturing and inventory control until 1959. That was when Joe Orlicky of IBM
developed the matched sets of parts relationship required to get the right parts to the
right job at the right time. He called it materials requirements planning (MRP).
Although we had the tool, we had only a very limited application of MRP. Although
the work required for processing information in an MRP environment is ideally suited
puter processing, the limiting factor in the early 1960s was our limited and
puter power. The repetitive work required to process the information and
do the calculations was cost prohibitive. This left us with finding the cheapest way to
balance the matched sets of parts. We found the method necessary to minimize our
manufacturing cost and called that tool inventory. Like the pharaohs, we now have our
“pile of rocks”— the cheapest way to do it. From this point on in the development of
manufacturing theory, all we have really done is add tools to plish the task of
controlling the matched sets of parts. The primary tool that we use is puter, so
we can do the calculations needed to control our operations. As we continue to increase
the level puter involvement as our tool, our processing time es cheaper
than that pile of rocks. puter power es cheaper than inventory, we
reduce inventory and add power.
This new and cheaper information proc