Difference Between JIT and MRP (With Table)

Planning and scheduling are two important challenging processes involved in the production of any raw material. Both of these are very important which cannot be ignored in any manufacturing procedure. JIT and MRP are two different forms of material planning that work well together. These two methods are very helpful in producing low cost, high-quality products and increasing the number of customers for the manufacturer.

JIT vs MRP

The difference between JIT and MRP is that JIT is an inventory management strategy in which products are procured from suppliers only in the form they require whereas MRP is a completely computer-based technique that is used in the production process. Both are unlike but are complementary strategies that are used in material planning and control. 

JIT is a concept that is a manufacturing workflow methodology that aims to reduce flow time and cost within the production systems and delivery of materials. This methodology was first made famous in the early 1970s by Japanese industry for production. This technique is very successful in Japan and also copied by other U.S. companies, notably Hewlett-Packard.

MRP is a computerized based technique that is designed to improve production from raw material for business. It ensures the availability of material and components when needed and also improves overall customer satisfaction. The full form of MRP is material requirements planning. The name itself describes the purpose of this technique.

Comparison Between JIT and MRP

Parameter des VergleichsJITMRP
DefinitionJIT is a concept of inventory management that aims to decrease time flow, cost within the production systems and shipment of materials.MRP is computer-based inventory management that is designed for business purposes. It’s mainly to figure out the product and component needed to manufacture and also balancing supply and demand.
EntstehungThis concept was first used by the Japanese automotive industry in the early 1970s. This is also known as Toyota Production System(TPS).This concept was first developed in the mid-1940s-1950s. This strategy is designed for business purposes and is a computerised system.
Vollständiger NameThe full form of JIT is just-in-time which concludes its purpose.The full name of MRP is material requirement planning which depicts its role.
ZweckThis concept focuses on the reduction of inventory and exceeds efficiency.They give assurance of availability of material and components and is a time-phased system.
Executive ProductionIn the JIT system, Kanban is an important feature that works smoothly.Their main executive production is to schedule and purchase reports.

What is JIT?

The full form of JIT is Just-In-Time. The purpose of this concept is to reduce inventory and exceed efficiency. This concept originated in the early 1970s by Japanese industry. This system was adopted by car manufacturer Toyota in the 1970s, so this is also called Toyota Production System(TPS). Taichi Ohno is the father of JIT.

This is a method in which the workflow, material, and goods are rescheduled which appear when needed for manufacturing procedure. The main goal of JIT is to pick out the main hurdle from the manufacturing process and correct it on time. This system also prevents a company from overmuch inventory and smoothens production operation. 

In this management, the outdated or expired product does not appear. Under this system, only useful and essential products which need to be manufactured are obtained. The order level is set to a limit. When it reaches its expected limit, then new and fresh orders are formed, thus it is also a boon to inventory management too.

This system moves products to the right location at the right time before they need it. There are so many benefits of this manufacturing system, such as depletion in inventory, depletion in labour cost, increase production, decrease the loss, good product quality, reduction in time, increase in the number of shipments. 

What is MRP?

MRP stands for Material Requirements Planning. This system is a computer-based inventory management system that is created for business purposes. This approach figures out the material and items needed to manufacture a given product, also helps manufacturers to hold the inventory requirement while balancing both supply and demand.

There are four basic steps in the MRP system. The first one is the estimation of demand and the requirement of material needed. In this initial step, MRP processes the customer demand and their requirements. In the next step, MRP assigns inventory to their exact areas where it is needed. The next two steps are production (calculation of time and labour required) and monitoring (a final check for any issue). 

MRP gives assurance for the availability of sufficient material and components on time when needed. It maintains the overall customer satisfaction level. This concept arises from information technology (IT) systems that aim to improve production for business through computers and other software. 

This system was first developed between the 1940s – 1950s. They use computers to conclude the information on the bill of a specific product. Soon they updated their system by changing some features as needed. 

Main Differences Between JIT and MRP

  1. JIT and MRP are the methods for control and production on the inventory level. JIT is just-in-time whereas MRP is material requirement planning. 
  2. The origination of both concepts is different. JIT was developed by Japanese industry in the early 1970s whereas MRP is developed by an IT company between the 1940s-1950s. 
  3. Both are inventory management strategies. JIT focuses on production as a response to actual orders whereas MRP focuses on the production of consummate goods. 
  4. Both the strategies facilitate the prevention from overmuch production. Their production level is very accurate and always on time.
  5. JIT is a kind of demand-pull system in which procuring, production and distribution are demand-driven. So overall the product is available on time when needed. 
  6. MRP is also dependent on heavy demand for products. This system handles production scheduling, cash flow, labour capacity estimation, distribution, etc.

Fazit

As we say, both the techniques are related to inventory management but they are quite different from each other. Similarities and dissimilarities exist between these two concepts of inventory management. JIT is kind of a linked system whereas MRP is not a linked system. JIT increases the value of production whereas MRP provides more control. Both the strategies maintain the customer satisfaction level. MRP is a system that focuses on the future and is time-phased whereas JIT does not give any forward-thinking. So MRP is good for business purposes. This is how they work well in their areas. 

Referenzs

  1. https://www.tandfonline.com/doi/abs/10.1080/00207549108930074
  2. https://www.tandfonline.com/doi/abs/10.1080/00207540701636322
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