An MRP System for

Houston's Park Plaza

Hospilal9
Park Plaza Hospital is a privately
owned 374.bed facility with a surgical
suite of nine operating rooms. The:se
operating rooms are reserved at least
a week in advance by physicians with.

surgcry privileges at the 11Qspital.Thus, 3. A limited numbcr of highlechnol- filled as 0 specific physician pel form-
at any ti~e, the schedule of planned ogy instruments-file limitation is ing a specific procedure. This defini-
operations for the next seven days is clue to their high -:osls (for exam- lion is neces~ary, (15 has been ex-
known with some cerlainty. Anything ple, a CA1:'scCln,h(.CJrl.lungIna. plained, because the physicians have
beyond that horizon is far less certain. chine, etc.). (liff~rl)lll prcferr!llces. Thus, if vIe have
After an operalion has been entered k physicialls, each performing n pro-
on the surgical schedule, il must be In addition, the 51ock required lor ce.h'les, vIe cor, ideillify as many as
confirmed on two olher occasions: 72 any operati()n dr!p~llr's on th~ r'f1' lic- ,. j' n :-'~rar(]le products.
hours before and 48 hours before the ular rrOI:CdUfC und Itllysiciall..-e~lch W\I~le(lS ill Ihe (:onv~Illional MPS
operalion. This scheduling process al- having his or II~r r)rCfCrerIC~ {IS 10 ,III:! 111('en'! ilel!l.. arf! f.ltly~iCf.ll producls,
lows the assignmellt of slaff Irlursing, in51111ments anrl rlisl"}()S' 11)1.,'llpplif'~ hc!e III~ ~rld ilems reple$enl prore-
orderlies, etc.) and the preparation of ne",Je..! hr a !Jiv.~n f)II",..Jllle. (I'.lr~s I Jellorlned I)y (I ~fJrycific physi-
the necessary supplies arId equipment Supplies orlJ il'o;'rllrnl)nl~ me rll(I'.'JI' (ill/I, and eu(:h ("nd ilem has () quon-
for the specific procedure. The patient from invelllory ar:corJil'~} "I I) lily of only one. l-Jov/evur, ill bolh
is generally a~mi"ed to the hospital Pllysi(.:ian's Prelerence .'Jheetlllf1t lIi"ls cf.l~es, 11.t' end ilem relnairls Ihe lorgel
about 12 hours before Ihe operation. these requirements hy rroc"!rlul e (I/IJ of Ille mal"-liallluw and Ihe output of
Most surgery is performed during by physiciarl. Tllf! g()al'ol the MRP III~ proces5.
normal working hours (7 A.M. to system for r(lrk PI(IZU i~ to (~rl,IIre ll,~ sl'r~Jicolle(,uilemel1f5 file-the
5 P.M.), Monday through Friday and thai th~se reyuirec.! :;urplie5 arrive 01 (Inolo!! oflhe BOM--f:ontuins the mo-
some Saturdays. The operations thflm- Ihe proper place (Ihe ~orrect opel at. f"riol$'uno sllpfliie5 needef:i for ,he
selves average about 45 mi'lules. ing room) 01 the flrol)(~1 lime, (:or- various fJrOcetiures (or IcvelO end
Obviously, however, different opera- reclly assigned by surrJi(:(JIIJ/Ol:edure ite/n:;). In Ihe Iro,:lilionf.ll MRP system,
tions take differenl amourlls or time; and physi~ian, unJ 11101(If-'pr()I>ridll:! the BOtv\ file defio!'Js the firlol product
there is no sellime for any procedure, and accurate in',~n'(,'}' la'l~ls ('If! in 'f'rm~ of il$ (.omr()n~nI5; in the sur-
and they differ from case to case and maintained. oi<:,,1 :;"ilf? 5u~h I;onlponcnls are Ihe
physician to phY5ician. This lack of 16 demorlsllote tile (lrrlicmioll 01 SlJr'p!if!; requirf!d for () p<1/licular sur-
predictability is further complicated by requiremenls planning 10 tile SUI9ic,~11 giCI:.J plocetlurc in ac<:ordonce with
evidence that physicians perceive that suite, a nomenclolllre thot relatl:!s 1(.) ph).~i/:i(1/1 preference. l11us, Ille ilem$
they work more quickly Iharl they actu- the hospital envir(,l1Il1~nt is re(ll1il crt I")n Ihe PI'ysi<:ian's f'refercnl;c Sheet
ally do. Table 17.5 shows the nom'"!nclrlll'r6 III I? (Iefilled U5 le',el-1 (.:ompollcnls
As a result, the surgical schedule and compares il 10 the lermil1olr'9Y ,Ilalnll.!$1 b~ really fQr u~e (slerilized if
for any given operaling room on any ernployed in m()rlufcJ(~'lJrir'~J (Irplico- °1)pIQfJri(lle) ili Ihe I)ror:eclure.
given day (and hence, for Ihe seven- lions. We next J(~fin~ ~!ml, SYSt\1ITl L')':lcnJing ,his c:oncep' fulll,er, all
day planning horizon) is not entirely component irl Ihe ((')IIt!:!xl (If Ih(~ o'lrtli il~I!'S Ihnl rcquil(, sler ilization are con-
fixed. The schedule includes such in- col suite and describe !he If,lf! 01 !:!liK-h :;iJcr~J 1(.vel.2 sulJussclnblies will.
formation as: dote, operating room in tll~ system. k'<J(/ timE's equal 10 Illcir required ster-
number, scheduled lime, f)atient 1 he first c(Jnl,"}{'n~nl "llh,~ ~)'sl'!nl is ili,:utimJ tilnc! (v,'hich ranges f,om five
name, patient room nurnber, opera- Ille seven.rj(ly-hori7orl s'l/girrJI :;~IICll millul'?5 10 16 hours) and recycling.
tion, physician, estimated time, and ulC!, tile anul(.~g of 011 Mrs. In tlli5 1\III..001I:Ih thi:-. 1!leanS Ihal inventory.
planned anesthesia. case, however, each proJuct is de- rcl;ords must bl? k'~pl on Iwo \evel$,
Supplies for any operation fit into
three general categories:
Table 1705 MRP Appli(:alion Terminology
Disposable items thai can be used ( Manufacturing 0

only once. Health Core

Reusable instruments that are recy-
cled arid used again; i.e., they are MasterproductiOtl schedule Surgical schedule
cleaned, sterilized, and placed l3ill of materials Surgical requirements file
back into inventory (for example, InvenIory ~. ,. ':;" ,. ,'c",
'~ Inventory item file
pickups, clamps, etc.l. :' :---;'~
GOB Planning and Scheduling

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such a scheme provides an effective 1 requirements file to generate gross re- surgeries for a specific day and their
method for handling items that must ~ quirements for all necessary materials anticipated needed times for eol:h op-
be sterilized. Sterilization units can be 1 and supplies. Note that a specific erating room. It includes such data as
viewed as machine centers with lim- ~ identified product (a particular physi-
ited capacity. Outputs of the system ~ cion performing a specific procedure) .Operation number.
are a projected load for sterilization ~ is traceable to a single Physician's .Scheduled date and time.
and a !ichedule for -release of steril. ~ Preference Sheet. The gross require-
.Operating room number.
ized it~ms to projected inventory. ~ ments thus generated are ne"ed
.Patient room number.
The procedure for systems opera- 1 against the projected on-hand inven-
tion is shown in Figure 17.12. The ~ tory for all items required. A sample .Patient name.
system operation begins with an in- 1 record for a reusable component is .Procedure!s).
quiry to the surgical schedule. If ca- 1 shown in Table 17.6. .Anesthesia.
pacity is available in the surgical ~ The klJY database elements of the
.Physician name.
schedule, the procedure is to update ~ system are the Surgical Schedule File,
the schedule by inserting the surgery f Inventory Item File, and Surgical
rhe Inventory Item File is a time-
in the appropriate spot. The schedule ~ Requiremenis File. The Surgical
phased inventory record of surgical
is then exploded through the surgical f Schedule File should contain all posted
supplies and instruments required by
Olle or more procedures. Particular
carEt must be taken in this file to distin-
Figure 17.12System Logic
guish between disposable and
reusable items. bata in this file Irlclude

~ .Unique item number.

~ .Description of the item.
1 .level.
~ .Gross requirements.
~ .Quanlity on hand (current, allo-
~ cated, projected available).
j .Scheduled receipts.
1 .Planned order releases.
j .Standard inventory ordering data
j (lot size, order point, lead time, ven.
~ dor information).

~ .Recycling time (if applicablel.

The Surgical Requirements fIle is

the functional equivalent of a single-
item BOM for a particular pro(;e-
dure. * This file identifies quantities of
each item needed for each procedure
as well as the specific size and/or
brand of the item. The file is divided
into two parts: common items and
preference items. The common items
are those materials used by' 011physi-
cians when perf~rming the procedure;
the preference items reflect physician
differences in surgical material re-
quirements. CaU~ctively, these items
,..'.."...'..."""."""'."""""""""'.""
 Material Requirements Planning
687

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Table 17.6 Item Record for Reusable Part VI
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f~;'Net!e.quire;ment,~
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establish the ;nventory requirements cated in one contiguous area under the Table 17.7 Surgical Requirements for
for each procedure in this manner: chief surgical nurse's control. In this a Bronchoscopy
area, an inventory of the more than ~-- ~

.Level.O element number (procedure 2/000 items used in the various surgi- Common items
identifier). cal procedures is mainfained. Inventory
Bronchoscopy set, rigid
.Lower-level element numbers of com- balances are updated by on on-line Suction tubing
mon items. transaction-driven, botch-processing
Telescope, right angle
.Lower-level element number5 of systern that provides a complefe inven-
Telescope, Forward oblique
preference items (for each physician tory status report for all items each Glass slides
associated with level-O element week. In addition, a query-driven sys-
Fixative
number). tem provides access to the current level
Specimen trap
of inventory on hand for each item.
Table cover
Table 17.7 illustrates the surgical re- The entire system is designed to be
Towels
quirements file for a bronchoscopy. opera led by nursing personnel. Its suc-
Preference items
Observe that the upper portion lists cess and acceplance stem from two Dr. *****
the inventory items used by all physi- factors:
Flexible bronchoscope
cians; the lower portion lists Ihe addi- Gloves, size 6 1/2 brown
tional inventory items requested by J 0 Reliability of operation. It gener- Dr. *****
specific physicians. ates reliable schedules and en- Gloves, size 7 1/2
In ihe environment for which the sures adequate supplies. The re- Local set
system was developed, the chief nurse duction of problems in this area
of the surgical suite functions as the ha5 led to gleater physician satis-
m~dical analog to the materials man- faction and a more harmonious rc-
ager. He or she is in charge of all sur- lations~\ip with r,ursing personnel. how job-shop techniques can be em-
gical-scheduling and erjuipment-steril- 20 Simplicit)'o of of.,eration It3 outputs ployed in a nonmonufacturing envi-
izalion activities and is responsible for include a daily schedule of surgi- ronment where there are resource and
inventory management of all required cal procedures, (] list of items to be time conslraints but r101a physical fi
medical supplies for the surgical dlawn from Ihe storeroom, a list of nol product. It gives hospital odminis-
suite-'Oli tools, instrumenls, and items to be purcllosed, and a steril-
equipment (not medicalions) req'Jired izatiorl schedule.
for all procedures. -The dolo "'corded in Ih" file os",m" fhut all
The storeroom, sterilization facilities, The application of rfJquirements plun- items hov'1 b'1"n pr"~)"'ed k'r surg"'y. T1,erelore,
rhe dislincfion between c;olflpl;lnenf levels is not
and operating roolns themselves are 10- Iling 10 the surgical suite Jemonslrates
imporlarlt

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688 Planning and Scheduling

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trators a better vehicle to understand
and control the investment in malerial
and supplies in this rapidly increasing
cost area. Furlhermore the use of
MRP-based technology' ensures Ihat
malerials are available when needed,
protects againsllhe overcapitalization
of inventory, and aids in formulating
and adjusling reordering policies.
1 Questions for Discussion
i the analog to the materials manager
i 1. In a surgical context, v(hat is Ihe
1 counterparl of a "producl" in a tradi-
~ li~nal manufacluring environmenl?
~ Briefly explain how Ihis term is deFined
1 2. In a surgical context, what is the
j analog of Ihe BOM, and how is il
j defined?
3. What person in the surgical suite is
in a traditional manufacturing environ-
ment? Briefly describe this person's
duties.
4. What are the primary f(]ctors that
determine the success and acceptance
of MRP in the surgical suite?

Ileij Terms
...Material requirements planning (MRP) is a technique Materia] requirements planning (MRP)
used to plan fot and control manufacturing invento-
Bul:ket
ries. The key inputs are the master production sched- Time phasing
ule (MPS). inventory records, and bills of materials.
Regeneration approach
The outputs are schedules for obtaining raw materi-
als and purchased parts and a detailed schedule for Net-change approach
C:apacityrequirements planning (CRP)
manufal~turing and inventory control. The three
Manufacturing resource planning (MRP II)
principal applications of MRP are for planning and
controllillg inventory. detailed capacity plannillg,
and shop-floor priority plallning-
...The demalld for materials and manufactured com- ReviewQuestions
ponents is detennined by the commitments for fin-
I. Wlmt is the role of MRP in the production,'planning
ished goods reflected in the master production
and scheduling process?
s(:hedule. By "backing-up" from the time tllat fin-
2. Wlmt are the major flmclions of an MRP Rystem?
ished goods are requil-ed llSillg the lead times fllr pro-
3. Dislinguish between independent and dependent
duction or purchasing cOlnponents and assemblies,
demand.
unnecessary il1ventories can be reduce(l. 4. How can the use of MRP redul~e unnecessary illven-
...MRP requires a ~ompllterized information system
tory holding?
and software to perform the calculations. This re- 5. What are the components of an MRP information
quires accurate inventory records alld a realistic system?
MPS. I~lIIployee edllcatioll and training are essential 6. Wllat is tIle flmction of the bill of materials ill an
for succe~sful implemenlati(ln. MRP system?
...MRP II is;) tool for mantlgillg, predictillg, and con- 7. l:xplaill how net-component requirements are
trollillg a compallY's resqllr(:es alld operating il1vest- call~lIlated.
mClllS. It illcorporates tlte functions of pllrcltasing. 8. f:xplaillthe coJlcept of tilne phasing.
capacity planning, and master scltedulillg as well as 9. Dislinguish between the regeneration approach and
inventory and productiorl planning. MRP II Call help the Jlet-change approach ill MRP.
a compallY to achieve incr(~,lsedcooperation among 10. Wllat is capacity requirements planning? How does
nlnctional units by focnsing them on common strate- it illterface with MRP?
gic goal". II. Of what value is MJ{P ill areas of a firm other than
...AltilOuglt fvlRPis similar to Jfr and synchronous productioll?
manufal:turing ill that it seeks to reduce invt~Jltory in- 12. Discuss the importance of accuracy and realism in
vestmel1t and improve productivity ~IndcustOlller implementing MRP.
13. How can ilie MRP concept be applied in a service
service. many differences exist, as summarized in
Table 17.4. organization?
14. What is manufactllrillg resource planlling1 How
does it difrer from MRP?