Just-in-Time, MRP, and Lean Supply Chains

Abstract

This chapter discusses very topical issues of just-in-time (JIT), materials requirement planning (MRP), and lean concepts in supply chains. Concepts of “pull-based” systems and “push-based” systems are explained. Conditions required for JIT (zero-inventory) system are explained. These are highly reliable/dependable source of supply located nearby, single vendor base, very frequent supplies in small quantities, direct supply from source to point of consumption, and 100 % supplies on time. Lean philosophy aims at reducing inventories in the entire supply chain without increasing the risk of shortages. The second major topic covered in this chapter is MRP, followed by a push-type materials planning system and computer software for discrete products with dependent (lumpy) demand. Limitations of MRP and its subsequent improvements through MRP II (manufacturing resources planning) are also briefly given.