Planning and scheduling are two important, challenging processes involved in the production of any raw material. Both of these are very important and 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.
Key Takeaways
- JIT (Just-in-Time) is a manufacturing system that only produces items when needed. At the same time, MRP (Material Requirements Planning) is a manufacturing system that plans and schedules production based on the materials needed.
- JIT aims to reduce inventory and production waste, while MRP aims to ensure that the necessary materials are available for production.
- JIT relies on close collaboration between suppliers and manufacturers, while MRP relies on accurate forecasting and planning.
JIT vs MRP
JIT is a manufacturing methodology that emphasizes producing goods only when they are needed and in quantity needed, to minimize waste and maximize efficiency. Material Requirements Planning is a methodology used in production to manage and plan the flow of materials through the production process. MRP software is used to create production schedules and monitor inventory levels.
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 has also been copied by other U.S. companies, notably Hewlett-Packard.
MRP is a computerized-based technique that is designed to improve production from raw materials for business. It ensures the availability of materials 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 Table
| Parameter of Comparison | JIT | MRP |
|---|---|---|
| Definition | JIT 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. |
| Origination | This 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. |
| Full name | The 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. |
| Purpose | This 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 Production | In 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 in 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 operations.
In this management, 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 labor cost, increased production, decrease the loss, good product quality, reduction in time, and 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 and 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 the exact areas where it is needed. The next two steps are production (calculation of time and labor 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 businesses 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
- 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.
- The origination of both concepts is different. JIT was developed by the Japanese industry in the early 1970s, whereas MRP is developed by an IT company between the 1940s-1950s.
- Both are inventory management strategies. JIT focuses on production as a response to actual orders, whereas MRP focuses on the production of consummate goods.
- Both strategies facilitate the prevention of overmuch production. Their production level is very accurate and always on time.
- 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.
- MRP is also dependent on heavy demand for products. This system handles production scheduling, cash flow, labor capacity estimation, distribution, etc.
References
- https://www.tandfonline.com/doi/abs/10.1080/00207549108930074
- https://www.tandfonline.com/doi/abs/10.1080/00207540701636322
Last Updated : 31 July, 2023
I’ve put so much effort writing this blog post to provide value to you. It’ll be very helpful for me, if you consider sharing it on social media or with your friends/family. SHARING IS ♥️
Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
The comparison of JIT and MRP in terms of their origin, purpose, and executive production provides a comprehensive understanding of both systems.
The in-depth comparison table is extremely helpful in understanding the distinct functions and purposes of JIT and MRP.
I couldn’t agree more. The article effectively outlines the key differences and similarities between JIT and MRP.
The thorough comparison table makes it easy to differentiate between JIT and MRP. This article serves as an excellent reference for anyone interested in production systems.
Indeed. The content is well-structured and informative, making it beneficial for individuals involved in manufacturing processes.
I found the detailed origin and purpose of JIT and MRP quite interesting. It’s fascinating to learn about their historical significance.
The comprehensive comparison between JIT and MRP, accompanied by the detailed explanations, serves as a valuable reference for grasping the essentials of production systems.
Absolutely. The detailed explanation of JIT and MRP, along with the comparison table, offers a thorough understanding of both manufacturing systems.
The article’s elaboration of JIT and MRP highlights their significance in inventory management and production planning, making it a valuable source of information.
I completely agree. This article is a compelling guide to understanding the key principles and functionalities of JIT and MRP.
The article effectively presents the functionalities and objectives of both JIT and MRP, providing an in-depth understanding of their roles in the manufacturing process.
Indeed. The content captures the essence of JIT and MRP, shedding light on their distinctive features and contributions to the production workflow.
The article provides comprehensive insight into the JIT and MRP systems, highlighting the differences and advantages of each.
I totally agree. This article presents a clear and concise comparison between JIT and MRP.
The detailed explanations of both JIT and MRP, along with their benefits and functions, are highly informative and insightful.
I have to agree. The article covers all the essential aspects of JIT and MRP, making it a valuable resource for those in the manufacturing industry.
The comparison table efficiently highlights the critical differences and purposes of JIT and MRP, making it easy to comprehend.
JIT and MRP are essential methods for ensuring a streamlined production process. Each has its own benefits and plays a crucial role in manufacturing.
I appreciate the detailed information provided in this article. It’s a great resource for understanding the significance of JIT and MRP.
Absolutely. The article effectively outlines the key takeaways and the detailed comparison between JIT and MRP.
The article effectively navigates the complexities of JIT and MRP, delivering clear and informative content that sheds light on their respective roles in manufacturing.
Indeed. The in-depth explanations and detailed comparison of JIT and MRP provide valuable insights into the world of production and inventory management.
The detailed breakdown of JIT and MRP, along with their benefits and implications, is an excellent resource for those seeking to enhance their knowledge in production systems.
The detailed explanation of JIT and MRP, as well as the comparison table, is an invaluable resource for understanding the significance of these manufacturing systems.
Absolutely. The content presents a clear and thorough overview of JIT and MRP, showcasing their importance in the manufacturing process.