Precisely Wrong: Why Conventional Planning Systems Fail

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Precisely Wrong: Why Conventional Planning Systems Fail

Precisely Wrong: Why Conventional Planning Systems Fail


Carol Ptak and Chad Smith




At the heart of most supply chains lies a planning tool called Material Requirements Planning (MRP).  Invented in the 1950s, codified in the 1960s and commercialized in the 1970s, MRP became THE way of life for supply order generation and synchronization.  What used to take teams of people weeks to plan could be done overnight with incredible precision.  Yet planners and buyers that interact with MRP everyday know that something is very wrong.  They may not be able to explain exactly why but they know that if they did exactly what MRP told them to do, it would have disastrous consequences for their company and for their career. 

What if there was one fatal flaw in MRP that makes it completely incapable of conveying relevant information?  What if correcting this one fatal flaw allowed the promise of MRP to be attained?  Precisely Wrong: Why Conventional Planning Systems Fail will reveal this fatal flaw and trace its impact to everyday situations encountered by planners and buyers.  Additionally, an elegant solution to overcome this flaw will be discovered.  Readers will walk away with a new depth of understanding about conventional planning systems and a list of things they can begin to implement the very next day.




  • Provides an unique and simple view of the core problem underlying these systems, enabling a company to see a clear and relevant planning picture.
  • Gives companies an essential description of the most known and pervasive issue in supply chain called the “bullwhip  effect”, and how it relates to the core problem.

Carol Ptak, CFPIM, CIRM, is a partner with the Demand Driven Institute, and was most recently at Pacific Lutheran University as Visiting Professor and Distinguished Executive in Residence. Ms. Ptak is a past president of APICS, and has authored several books on MRP, enterprise resource planning (ERP), Lean, and TOC.


Chad Smith, CDDP, is a co-Founder and Partner at the Demand Driven Institute, and co-Founder and Managing Partner of Constraints Management Group (CMG), a leading implementer of demand driven operational systems for mid-range and large manufacturers and supply chains. Mr. Smith has co-authored and contributed to several books on MRP, TOC, and demand driven performance.

Part 1: The Current Planning Challenge

  •  The Objective and History of Planning
  • How Conventional Planning Works
  • Convention and the Bullwhip Effect


Part 2: A New Direction

  • The Power of Decoupling
  • Demand Driven MRP
  • Beyond DDMRP
  • The Demand Driven Adaptive Enterprise Model