A longitudinal study of material planning applications in manufacturing companies

Journal article, 2006

Purpose – The paper seeks to describe the state-of-the-art, reasons for selecting various material planning methods, and modes of applying methods for initiating inventory replenishment of purchased items. It also identifies trends from 1993 to 2005. Design/methodology/approach – Empirical survey data are collected from Swedish manufacturing companies in 1993, 1999 and 2005. The MRP, re-order point, fixed interval ordering, run-out time, and Kanban methods are studied. Findings – MRP is the most commonly used method and its position has strengthened since 1993. A common way of determining parameters such as order quantities and safety stocks is to use judgment and experience. Parameters used in material planning methods are reviewed relatively infrequently. The planning frequency has increased, with daily planning now being typical. Research limitations/implications – The major limitation is that different data collection techniques were used in 1993 compared with 1999 and 2005. An important research implication is that the state-of-the-art applications differ from theoretically appropriate application modes. The trends are towards less appropriate modes among the most widespread applications. Practical implications – The frequency of reviewing planning variables is relatively low in industry, and should in most situations be increased. The paper implies that more user-friendly software applications need to be developed and implemented. It could serve as guidelines when designing and developing training and education programs and function as a benchmark. Originality/value – The paper provides a longitudinal state-of-the-art description of materials planning usage and identifies application modes with positive and negative performance impact.