Simplifying Materials Planning with MRP and JIT

3/1/21 12:00 AM

Planning and scheduling your raw materials for production can be a challenging process. The last thing a manufacturer wants is to run out of material and be unable to meet its customer demand. On the other hand, having too much material is costly to stock and manufacturers run the risk of those materials going bad, especially in the food or pharmaceutical industries. 

Material Requirements Planning (MRP) and Just-In-Time (JIT) processing are two different forms of materials planning and control that work well together to improve manufacturing processes. These methods are helpful for manufacturers as they can help provide low-cost, high-quality products that can meet and even exceed customer requirements.

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MRP looks at the customer demand to identify which materials are required for production and determines when they are needed. JIT is mostly used in scheduling and purchasing to ensure that products are produced only when they are needed and materials are ordered to arrive just before they are required for production. And Advanced Planning and Scheduling software that supports both MRP and JIT functionalities will help manufacturers plan their materials, reduce waste within their facility, and increase their profits.

Material Requirements Planning

Materials Requirements Planning (MRP) is the process concerned with ordering raw materials and planning their allocation to the appropriate resources based on sales forecasts and the overall master production schedule.

In the case where materials needed for certain products are produced in the facility, MRP can create work orders to ensure that enough materials will be available to meet production demands. 

Advanced Planning and Scheduling programs make MRP easy as it is able to pull the material requirements from the master schedule and then compare those needs to the on-hand inventory. Purchase orders or work orders are then generated to supply material requirements.

Overall, MRP ensures that all required materials are available at the correct resources when they are needed and allows manufacturers to handle complex processes, multi-component products, and variability within the manufacturing process.

Just-in-Time

Just-In-Time (JIT) is a manufacturing strategy that was designed to help manufacturers reduce inventory-related costs by receiving materials and producing goods only when they are needed.

Just-In-Time scheduling is used to accommodate last-minute changes to orders and prevent damage or spoilage of inventory by preventing jobs from starting too early.

This scheduling technique prevents jobs from scheduling too early to avoid keeping work-in-process items in inventory. In addition, materials are ordered so that they arrive at the production facility only when they are needed.

There are many benefits associated with Just-In-Time production, but the main goal of this method is to increase the efficiency of production while decreasing waste to ultimately lower the production costs and increase profits. On the flip side, implementing JIT methodology requires producers to be able to accurately forecast their demand to avoid running into material shortages. Balancing the two goals of avoiding material shortages and reducing inventory costs is key to JIT processing.

mrp and jit are crucial for materials planning in manufacturing

Where MRP and JIT Meet

Just-In-Time manufacturing strategies heavily rely on stable and reliable suppliers since they become a sort of remote storage facility for raw materials. Keeping inventory lean means a greater risk to production flow.

If an unexpected event, such as a storm, arises and raw materials cannot be delivered to the manufacturing plant in a timely fashion, Just-In-Time methods may not be able to respond quickly enough. Unexpected increases in demand can also present challenges if you do not have enough raw materials to supply the increase in demand. However, MRP is a helpful tool in inventory control and proactively address potential stock and materials shortages.

Both JIT and MRP attempt to limit waste and downtime during the production process to minimize waste and maximize your output. MRP is more agile when unexpected orders are received or when schedule adjustments are needed. This type of system does depend on accurate data entry, material tracking, and analysis. When utilized properly, the advantages of JIT and MRP include reduced production costs, improved capacity allocation, and a better response to rapidly changing market demand.

 

With PlanetTogether Advanced Planning and Scheduling, we’re able to make strategic decisions that improve operations. We can proactively prepare for anticipated increases or slowdowns in demand.

DICK MARX, MATERIALS MANAGER, KNAPHEIDE TRUCK EQUIPMENT

 

Simplifying Production Planning with MRP and JIT using Advanced Planning and Scheduling

An Advanced Planning and Scheduling system that supports both MRP and JIT functionalities results in the most optimal material planning process flow. PlanetTogether’s Advanced Planning and Scheduling software plans and schedules operations concurrently, which means that the resulting production schedule takes into account the available materials and resource capacity.

The additional forecasting and “What-If” scenario functionalities of PlanetTogether APS allow manufacturers to forecast future demand and create realistic contingency plans so that the firm can remain proactive rather than reactive when problematic situations develop.

Advanced Planning and Scheduling software has become a must for operations that are seeking to take their production to the next level and can easily aid with efficiency increase, inventory control, waste elimination, and cost reduction. PlanetTogether’s APS software will take your production facility to the next level and turn your shop floor into a goldmine.

 

PlanetTogether’s Advanced Planning and Scheduling (APS) Software

Advanced Planning and Scheduling Softwares have become a must for modern-day manufacturing operations as customer demand for increased product assortment, fast delivery, and downward cost pressures become prevalent. These systems help planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans. APS Systems can be quickly integrated with an ERP/MRP software to fill the gaps where these systems lack planning and scheduling flexibility, accuracy, and efficiency.

With  PlanetTogether APS you can:

  • Create optimized schedules that balance production efficiency and delivery performance
  • Maximize throughput on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to resource capacity
  • Enable scenario data-driven decision making

The implementation of an Advanced Planning and Scheduling (APS) Software will take your manufacturing operations to the next level of production efficiency by taking advantage of the operational data you already possess in your ERP system. Try a free trial or demo!


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Topics: JIT, MRP

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