Just in Time (JIT) is an innovative inventory strategy created by the Japanese corporations for the purpose of improving ROI of any business by reducing its inventory and other related costs. The Japanese called the processes associated with JIT kanban that tell production when a certain inventory needs to be delivered. JIT is about simple visual signals such as the absence of presence of certain merchandize on the shop’s shelf. JIT drastically improves the corporate efficiency, and quality.
JIT is about ordering new merchandise or stock when it reaches a low reorder level. Ordering in time, means that a corporation saves money and warehouse space. Still, if there are some major market changes in demand for the required stock, the company might not get it in time due to its absence on the market. JIT had been used for the past 30 years and one can say that its application meant success for major Japanese corporations.
Lean manufacturing means that the company reduces not only managerial levels eliminating different middle level managerial position but also streamlines the operations and production. Lean manufacturing means more efficiency to the organization as it manages to achieve the same goals and strategies by using less resources and tools at cheaper prices.
MRP (material requirements planning) is a novel software production planning and inventory control system used to contribute to a greater efficiency in the manufacturing process. MRP assures that materials and products are available at any required time for delivery to final customers. MRP just like JIT strives to lower the inventory as much as possible. It plans manufacturing activities, purchasing and scheduling activities.
Manufacturing Resource Planning (MRPII) is a special method of effective planning of all resources in a manufacturing company to improve efficiency and effectiveness. It addresses operational planning in units, financial planning and simulation of business scenarios. MRPII engages in planning of the following processes: business planning, production, planning, scheduling, MRP, decision support systems and sales planning. MRPII deals exclusively with the business plan, the corporate vision, purchase commitment report and inventory projection. As one can see MRPII is an extension of the closed loop Material Requirement Planning. MRPII is a combination of software, people, database accuracy and computing power.
Supply Chain management (SCM) is a process of effective planning, implementation and controlling of operations related to the supply chain with the purpose of improving the efficiency. SCM moves all resources, raw materials, work-in-process inventory and finished products from the point of origin (company) to the point of consumption (customer and shops). In order to achieve these goals, SCM engages in proper planning and management of all corporate activities such as sourcing, procurement , coordination and collaboration. It is for this reason it overlaps with other existing technologies and strategies such as MRP, MRPII and JIT. Just like these other approaches, SCM utilizes computing power, simulations and effective logistics.
In conclusion, one should note that JIT, MRP, MRPII and supply chain management although might appear different at first, overlap and related to each other. All these terms are meant to ensure proper production, manufacturing, and distribution of products and services. As they all strive to achieve similar goals, most of these approaches coincide and use similar tools. Whenever one speaks about proper inventory planning, one thinks of the JIT, MRP, and MRPII all of which effectively focus on how raw materials or inventory will reduce the corporate costs and demand less effort from organizations. The overall process of production features MRP, MRPII and the SCM all of which approach the effectiveness during the production stage and feature similar strategies that a corporation needs to use if it wants to produce things more efficiency. Ultimately, the distribution relies primarily on the MRPII and the supply chain management that explicitly state how distribution and the point-of-consumption should be approached and treated. Still, for non-manufacturing companies (such as shops, retailers) JIT would contribute to more efficient distribution.
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