The encyclopedia · Engineering & Operations · Operational decision · 1990–1993
A small brass distributor modernized with four OR methods at once
Merit Brass, a small plumbing distributor, combined forecasting, MRP, cells and inventory models to cut cost and raise service.
The Merit Brass Company
the move
The Merit Brass Company, a brass-fitting distributor, set out in mid-1990 to improve customer service as cheaply as possible, since service was the deciding variable in its industry; its people-intensive systems had simply been outgrown.
It built one integrated management system on four OR methodologies: statistical forecasting, cellular manufacturing, manufacturing and purchasing resource planning (MRP), and finished-goods inventory management.
The four components were implemented together at a modest cost and in record time, and their effects were both synergistic and dramatic, materially improving customer service while cutting costs.
why it works
- Forecasting, production planning and inventory are interdependent levers.
- A single method leaves the other constraints unmanaged.
- One integrated system lets each model feed and tighten the next.
- Measured: dramatic service gains and lower costs at a modest cost.
what transfers
When a firm's constraints are interdependent, apply the related OR methods as one system rather than one at a time, since each feeds the next; together they beat the sum of the parts.
what came after
The modernization became a documented management-science case, a Franz Edelman Award finalist, and a proof that operations research is not only for large firms — a small distributor could deploy a full planning stack cheaply and fast.
references
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