Please respond to both students 100 words minimum each!!!!!
With respect to the supply chain, discuss the terms JIT (Just-in-time) & MRP (Materials Requirements Planning).
How are they related to maintaining proper levels of inventory?
To be considered substantive, your reply should add significantly to the discussion by building on others’ comments, pointing out similarities or differences in your backgrounds or course expectations, etc. One or two sentence responses such as “Hi, welcome to the course!” or “I feel the same way” are not acceptable.
Maintaining proper levels of inventory is a constant formula of push and pull that can change at any point with many variables involved. An example of a variable could be increased or decreased demand, transportation changes, scarcity or availability of product and minimally the cost fluctuation. JIT or just in time ordering prevents copious amounts of inventory but depends on rapid lead time. MRP or material required planning requires careful forecasting that is built on a foundation of old data. The most desirable solution is to carry 1/5 of the inventory as forecasted MRP and the other 4/5 using JIT purchasing strategy. A company could potentially lose more money keeping inventory than losing customers for out of stock or back ordered products. Just recently in the Army we switched to the system GCSSA which seems like a knock off version of SAP. The part that gets me lost about it is It seems like the logic works well everywhere else but not for the government. Our JIT and our MRP seem to have the same mystery delivery dates. Our BOM is just a system of equipment component listings and not anything to do with constant consumable supply reorder techniques. The forecasting does not seem available in that system the same way it would in a non-government SAP program that tracks trends and live tracking of material placement through the transfer stations.
Good Evening Everyone,
Just in time (JIT) and Manufacturing Resource Planning (MRP) are both complementary concepts with each other, but are completely different from one another. JIT operates mostly on the prevention of waste through manufacturing, whereas MRP is a “Forward-Thinking” tool that is used to plan for the future production.
The JIT system is based on a pull system where the production and distribution are not based on a forecasted projection of sales, but are rather based on customer desire. This means that the company will not spend money to store resources and take up company capital for a long amount of time, but will rather purchase items to maintain minimum inventory levels. This type of adaption is usually adopted by companies, and is often referred to the “Kaizen” model.
MRP is a planning of production that is based on future sales, and to satisfy those needs MRP keeps inventory levels low, but it also purchases the necessary amount of resources needed for a product. The MRP system also tracks the billing of materials and determines the amount of products that are needed for a project. It also manages scheduling, cash flow, labor planning, inventory, and distribution plans.
The car manufacturer, Toyota, revolutionized itself when it adopted the JIT system in the 1960s. Toyota realized that they were storing too much excessive stock and were losing valuable capital. When they switched to the JIT system, Toyota was able to eliminate large amounts of wasted inventory as well as reduce storage costs.
In 2014, I use to work for a company known as Flanders Electric that would work under MRP for their repair shop side of the facility. The company would get work orders from major companies like Alcoa, Berry Plastics, and Omni Plastics. These work orders were weeks in advance so our company could order the necessary products to rebuild the motors. By using the MRP system, they could order the products, schedule the rebuilding, how much labor was needed, and the distribution plans for the motor. At the time, I was unaware that we were using the MRP system, but looking back at it, I realize that is partly what made that company function so well.
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