Material requirements planning (MRP) relies on dependent demand sourcing to maintain inventory, while lean manufacturing strives to eliminate inventory and produce just-in-time. MRP uses computer technology to track secondary materials, while lean focuses on eliminating waste. MRP relies on inventory to fulfill future orders, while lean produces as needed. Companies can integrate MRP and lean practices to meet all production needs.
Material requirements planning (MRP) and lean manufacturing are two different manufacturing methods. MRP often relies heavily on dependent demand sourcing to maintain inventory. Lean, on the other hand, strives to eliminate inventory and produce just-in-time. These concepts differ in how manufacturing takes place and how secondary materials are sorted. In some cases, MRP and lean are integrated to achieve their respective strategic planning and cost efficiency benefits.
MRP is an inventory management system usually supported by computer technology. The intent is to help managers track employee demand supplies, or secondary materials, used in the production process. In this sense, a company often bases its production schedule on the supply of secondary materials rather than consumer demand. Managers are then able to use MRP to determine what is needed, how much and when to produce.
Secondary materials are likely to vary between different manufacturing facilities. Such materials may include sub-assemblies, components and raw materials. In a furniture factory, for example, secondary materials might include various fabrics, wood, metal, and foam for stuffing.
MRP often works backwards from a list of finished goods required for the production plan. This list often provides requirements for secondary materials. When entering information into MRP computer software, managers are likely to use a master production schedule, bill of materials, and inventory record file.
When used correctly, the benefits of MRP can often help managers plan ahead. This means scheduling production workers and allocating time appropriately, organizing capacity needs, and keeping secondary material costs to a minimum. MRP works in contrast to lean manufacturing, which relies on the entirety of an organization to meet customer demands. While MRP depends on planning so that material needs are met, lean depends on execution so that the finished product is delivered without waste.
Toyota Corporation is largely credited with developing the idea of lean processes. However, the lineage for lean manufacturing, also often known as just-in-time manufacturing, can be traced back to Eli Whitney and Henry Ford. The concept of lean is simply eliminating waste. Many lean manufacturing proponents see materials, employee time, idle equipment, and product inventory as examples of waste, which in turn often hurts a company’s profitability. Lean, therefore, typically eliminates idle labor and inventory to deliver quality, fresh produce when demand is met.
A variety of concepts are often intertwined within the practice of lean. Employee team members, for example, are generally considered valuable parts of the entire manufacturing process. The finished products therefore no longer depend only on a manager, but on the entire organization. Quality is another integral part of lean manufacturing, which usually focuses on total cost reduction. In turn, this likely means meeting customer expectations first time and eliminating product rework and returns.
One of the biggest benefits of lean processes is the typical allowance for continuous improvement. Organizations that implement this practice often strive for greater efficiency, which can leverage employee talents and a company’s overall capability. Lean can also be customized to meet the needs of the individual company. It is usually independent of software or a definitive way of producing.
MRP and lean differ widely in how they perceive inventory. MRP, for example, often relies on product inventory to fulfill future customer orders. Lean, on the other hand, usually forces companies to produce as needed. Hence the term just-in-time, which often refers to fulfilling orders as they arrive, not as they are expected.
As a result of the inventory paradigm, MRP and lean also treat manufacturing differently. Companies implementing MRP are often reluctant to produce small batches of a finished product due to cost inefficiencies. Those using the lean concept, however, are likely to welcome small batches of orders. This is often because machine setup times are minimal and the workforce is ready to work.
Some companies manage to integrate MRP and lean practices. This combination often works well when the implementation of one or the other doesn’t meet all production needs. Managers are likely able to plan strategically before production needs are determined, while inventories and costs remain at a minimum. In this way, independent demand is likely to be based on an anticipated level of capacity.
Protect your devices with Threat Protection by NordVPN
