Introduction to Planned Independent Requirements (PIRs)
Planned Independent Requirements (PIRs) are forecasted demands based on historical data, represented by blue bars. Customer Requirements are actual sales orders or demand, represented by green bars. These two demand types are reconciled in MRP using either backward consumption or forward consumption.
Backward Consumption Mode
In backward consumption mode, the system looks backward from the customer requirement date to find the nearest PIR. The backward consumption process helps match actual customer demand with earlier forecasted demand, adjusting production needs accordingly.
Visual Representation:
Time
──────────────────────────────────────→
Planned Independent Requirements ┃ ┃ ┃ ┃ ┃
Customer Requirements ┃⬤⬤⬤⬤⬤⬤⬤⬤ ⬤⬤⬤⬤
Backward Consumption ⬏←———←———————————←————⬐In the above example, the green bar (customer requirement) looks backward in time and finds earlier blue bars (PIRs) to fulfill the demand.
Benefits:
- Reduces unnecessary production by adjusting for real-time demand.
- Useful for industries with variable demand, where forecasts may not always align with actual needs.
Forward Consumption Mode
In forward consumption mode, the system looks forward from the customer requirement date to find the nearest PIR. This approach is beneficial when actual demand outpaces earlier forecasts, allowing upcoming planned stock to cover current customer orders.
Visual Representation:
Time
──────────────────────────────────────→
Planned Independent Requirements ┃ ┃ ┃ ┃ ┃
Customer Requirements ⬤⬤⬤⬤⬤⬤ ⬤⬤⬤⬤
Forward Consumption ⬌——→——————→————————→In this example, the green bar (customer requirement) looks forward and consumes the nearest future blue bar (PIR) to meet current demand.
Benefits:
- Prevents shortages by using forecasted stock for immediate needs.
- Ideal for environments where demand can exceed forecasted quantities.
Summary of Backward and Forward Consumption Modes
| Consumption Mode | Consumption Direction | Use Case |
|---|---|---|
| Backward | Looks to previous PIRs | When forecast demand needs to be adjusted to meet real-time demand |
| Forward | Looks to future PIRs | When current demand exceeds forecast, prioritizing future stock for immediate use |
This flexibility in adjusting PIRs based on actual customer demand helps maintain optimal stock levels, reduce excess inventory, and align production more closely with real-world requirements.