The procedures of planning and scheduling are two of the most difficult and time-consuming tasks involved in the manufacture of any raw material. Both of these are very vital and must not be overlooked throughout any manufacturing method at all. JIT and MRP are two separate types of material planning that may be used in conjunction with one another. It is quite beneficial to use these two strategies while generating low-cost, high-quality items while also expanding the number of clients for the firm.
JIT Vs. MRP
It is important to understand the difference between JIT and MRP. JIT is an inventory management strategy in which products are procured from suppliers only in the form that is required by the customer, whereas MRP is a manufacturing technique that is completely computer-based and used throughout the manufacturing process. Both tactics are utilized in material planning and management, and although they are diametrically opposed, they are complementary.
JIT (just-in-time) manufacturing is a notion that refers to a manufacturing workflow approach that strives to minimize flow time and cost inside production systems as well as material delivery. The Japanese manufacturing sector made this system renowned in the early 1970s when it was used for production. This strategy has proven to be quite effective in Japan, and it has been replicated by other U.S. corporations, most notably Hewlett-Packard, as well.
MRP (manufacturing resource planning) is a computer-based approach that is intended to increase output from raw materials for businesses. It helps to assure the availability of materials and components when they are required, as well as improving overall customer satisfaction and retention. Material requirements planning (MRP) is the full name of the process. The goal of this approach is clearly stated in the technique’s name.
What exactly is JIT?
Just-in-Time (JIT) is the full version of the phrase. The goal of this strategy is to minimize inventory while simultaneously increasing efficiency. Japanese business was the first to use this notion, which dates back to the early 1970s. This technique was developed by the automobile company Toyota in the 1970s, and as a result, it is also known as the Toyota Production System (TPS). Taiichi Ohno is widely regarded as the founder of JIT.
This is a system in which the workflow, materials, and commodities are rescheduled so that they appear only when they are required for the manufacturing operation to be completed. The primary purpose of just-in-time manufacturing is to identify the most significant bottleneck in the production process and fix it as soon as possible. This technique also helps a firm avoid having an excessive amount of inventory and makes the manufacturing process more efficient.
The product that is out of date or has expired does not show in this management. Under this approach, only useful and important items that are in need of production are procured and produced. The order level has been set to a predetermined maximum. When it reaches its predicted limit, new and fresh orders are generated, making it a valuable asset in the field of inventory management as well.
This method ensures that items are delivered to the correct area at the appropriate time before they are required. In addition to the reduction in inventory and labor costs, this manufacturing method also increases output while decreasing loss. It also has high product quality while reducing time and increasing the number of shipments, to name a few advantages.
What exactly is MRP?
Material Requirements Planning (MRP) is an abbreviation for this. Developed for commercial reasons, this system is a computer-based inventory management system that utilizes computer technology. This technique not only determines the materials and things required to make a certain product, but also assists manufacturers in maintaining the necessary inventory levels while maintaining a balance between supply and demand.
The MRP system is comprised of four fundamental phases. The first step is the assessment of demand as well as the need for the necessary materials. MRP processes the demand and needs of the client at this first phase of the process. MRP then allocates inventory to the precise locations where it is required in the next phase. After that, the production (calculation of the amount of time and labor necessary) and monitoring are carried out (a final check for any issue).
MRP provides assurance that there will be enough material and components available when required at the appropriate time. It helps to keep the overall level of client satisfaction stable. This notion derives from information technology (IT) systems, which strive to increase output for businesses by using computers and other software to accomplish this goal.
It was developed for the first time during the 1940s and the 1950s. The information on the bill of a certain product is completed with the assistance of computers. They soon modified their system, adding various aspects as they saw fit. They were successful.
Difference Between JIT and MRP
- JIT and MRP are inventory management and production methodologies that are used at the inventory level. JIT stands for just-in-time delivery, while MRP stands for material requirement planning.
- The notions’ origins are distinct from one another in terms of their development. In contrast to MRP, which was established by an IT business between the 1940s and the 1950s, JIT was developed by Japanese industry in the early 1970s.
- Both of these solutions are inventory management strategies. JIT production is concerned with producing things in response to real orders, while MRP production is concerned with producing finished goods.
- Just-in-time (JIT) is a kind of demand-pull system in which demand drives the procurement, manufacturing, and distribution processes. As a result, the product is always accessible when it is required.
- MRP is also reliant on a high level of demand for the items. In addition to production scheduling and cash flow management, this system also manages labor capacity estimates and distribution.
Conclusion
As previously said, both strategies are connected to inventory management, but they are vastly different from one another in their approach. There are certain parallels and differences between these two notions of inventory management, as well as between them. MRP, on the other hand, is not a connected system in the same way that JIT is linked.
Compared to MRP, JIT enhances the value of manufacturing while providing more control. Both tactics help to keep the degree of client satisfaction at a high level. MRP is a system that is focused on the future and is time-phased, while JIT is a system that does not provide any foresight. As a result, MRP is beneficial for commercial objectives. This is how they are able to do successfully in their respective fields.