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FAQ : When is JIT appropriate and when MRP/ERP?

1) How to decide between MRP & JIT? - If a manager has a satisfactory MRP or MRPII system in place, he should look to JIT to simplify his processes as the first stage of implementation (see world class manufacturing e-book). Once he has simplified his processes, it is much easier to implement a new planning system although it is possible that the current planning system may now be sufficient. If his current MRPII processes are poor, he should follow the full ERP/MRP implementation plan although some simplification should be carried out if possible e.g. reducing the number of levels in the bill of material.

2) JIT and MRP are quite different but complementary material planning and control concepts. MRP (material requirements planning), MRPII (manufacturing resource planning) and ERP* (enterprise resource planning) are time phased, forward looking material and resource planning tools. JIT (just in time) is a philosophy based on the elimination of waste, an important component of JIT is kanbans which is a technique based on replacing material that has been used but has no forward visibility. It is possible to operate satisfactorily with MRPII only but it is not possible to use JIT only to run a manufacturing operation as you cannot operate a manufacturing facility without forward planning, however simple, to ensure that capacity and any materials that cannot be replenished with kanbans are available when required.

In summary, MRP gets you in control whilst JIT helps you to improve your processes.

*For the historical difference between MRP, MRPII and ERP see ERP survival guide.

Jargon Warning - If you are not familiar with any of the terms used above, you can look them up in the free Jargon Buster on this site or, for more details, purchase the book "Business Excellence". Business Excellence is available in e-book format in addition to the paperback and is a component of the ERP Class "A" toolkit which you can also purchase and download from this site. Click here for more details.