- The MRP process requires the selection of a planning bucket.
- The planning bucket changes based upon the application.
- When selecting a planning bucket for MRP users face a trade-off that must be considered.
Introduction to Selecting the Right Planning Bucket
The planning bucket is one of the primary control areas of the planning system. You will learn about the planning bucket and its interactions in this article.
What is the Planning Bucket?
The planning time bucket is how the timeline is divided for planning purposes.
It should not be confused with the storage bucket. The storage bucket is how the planning data is stored by the system which is a different relationship to the MRP process. Of course, the storage bucket must always be smaller than the planning bucket.
How the Planning Bucket Changes Depending Upon the Application
Some typical timings in different planning systems are listed below:
- In demand planning, it is normally a week.
- In supply planning, it is either a day or a week.
- In production planning and scheduling, it is normally the day.
Plossl’s Observations on the Timing of the MRP Process
George Plossl had an interesting observation on the planning bucket from his book Orlicky’s Material Requirement’s Planning..
“When selecting the size of the MRP time bucket, users face a trade off between the desire to have planned events pinpointed in time and the need for clear and simple ordering data. Specifying order completions by month is less than helpful to shop supervisors. They need to know what next to produce for this week or better yet today. When several hundreds or thousands of shop orders are due in October, but MRP schedules provide no relative priority information, shortage lists and expediting will replace the formal system and performance will deteriorate. Planning is not an exact science, in spite of the apparent rigor of MRP calculations. A one week time bucket is most common, except in a few businesses like food, pharmaceuticals and fine chemical manufacturing, where production times are very short. In other types of manufacturing, one week is reasonable for order releases, completions, priorities, lot sizing and load reporting.”
This indicates important trade-offs for the MRP process and the setup of the MRP system. It is important to acknowledge that these trade-offs exist and their implications on the timing settings of the MRP system.
George Plossl is correct, this is the most common planning bucket for the MRP process. However, it is interesting to hear the positives and negatives laid out by a person quite experienced in the area.
Learn about the history of MRP at this link.
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Plossel, George. Orlicky’s Material Requirement’s Planning. Second Edition. McGraw Hill. 1984. (first edition 1975)
I cover MRP in the following book.
Repairing the MRP System Book
What is the State of MRP?
MRP is in a sorry state in many companies. The author routinely goes into companies where many of the important master data parameters are simply not populated. This was not supposed to be the way it is over 40 years into the introduction of MRP systems.
Getting Serious About MRP Improvement
Improving MRP means both looking to systematic ways to manage the values that MRP needs, regardless of the MRP system used. It can also suggest evaluating what system is being used for MRP and how much it is or is not enabling MRP to be efficiently used. Most consulting companies are interested in implementing MRP systems but have shown little interest in tuning MRP systems to work to meet their potential.
The Most Common Procedure for Supply and Production Planning?
While there are many alternatives to MRP, MRP, along with its outbound sister method DRP, is still the most popular method of performing supply, production planning, and deployment planning. In the experience of the author, almost every company can benefit from an MRP “tune up.” Many of the techniques that the author uses on real projects are explained in this book.
- Chapter 1: Introduction
- Chapter 2: The Opportunities to Improve MRP
- Chapter 3: Where Supply Planning Fits Within the Supply Chain
- Chapter 4: MRP Versus MRP II
- Chapter 5: MRP Explained
- Chapter 6: Net Requirements and Pegging in MRP
- Chapter 7: Where MRP is Applicable
- Chapter 8: Specific Steps for Improving MRP
- Chapter 9: Conclusion
- Appendix A: Calculating MRP