stock-piled in front of the work station. This is caused by labor-based routings (rather than
machine or materials based routings) which focus attention on labor efficiency and cause materials
inefficiencies. Similarly, materials efficiency focused systems, as in the case of JIT, achieve their
efficiency by creating inefficiency in other resources. For example, in a JIT line we have a series
of workers each being fed materials, through the use of KANBANs. Unless you have an empty
Kanban, you are not allowed to work or else you would be considered as someone who is
generating waste. However, in a JIT line, it is impossible to balance the workload of all the
workers equally. Since the employees are doing different functions, some employees will always
be busier than others. The speed of the entire production process moves at the speed of the slowest
worker. Therefore, most of the employees will have some wait time in the production process,
which is the labor inefficiency that is generated by a drive for materials efficiency.
In looking at the usage differences of MRP, we find that even though MRP was not
specifically designed to have labor based routings and a labor based production order tracking
system, it almost always does. The production lead times are labor based, and the production
traveler reports labor starts, stops, and efficiencies. Because of this, through its usage rather than
through its design, MRP has become a labor efficiency oriented system, where production lead
times are used to build buffer inventories in front of workstations so that labor efficiencies can be
maximized (Berger,1987). The shop floor data collection process reports labor performance based
on what is tracked in these routings, and efficiency reporting is reported back against the standards
that have been built into these routings. Other resources, like machine hours, could be used as the
basis for these routing and also for systems like CRP and resource requirements planning, but
labor is almost always used. Labor efficiency can only be achieved at the expense of in
efficiencies in other resource areas, such as materials.
It is the Western obsession with labor efficiency that has taken MRP and focused it on labor
based lead time management. The MRP routings are scheduled based on labor lead time, and the
data collection process is focused on labor efficiency and labor performance standards. These lead
times are generally inflated to support labor based efficiencies to the point that 90-95% of the
manufacturing lead time of a product is spent in wait, hold, queue, etc. which are all areas of
staging inventory to support labor efficiencies. These inventory levels (stagings) do not support
production throughput and inventory minimization, as MRP was designed for, rather, they make
sure that there is always enough work in front of each workstation in order to keep employees
busy.
The following is a recap of the design differences between MRP and JIT:
Area MRP JIT
Product flexibility High Narrow range
Order tracking High degree None
Data accuracy High None
Computational needs Lots Minimal
Scheduling flexibility High Poor
Shop layout Flexible Restricted
The following is a recap of the usage differences between MRP and JIT:
Area MRP JIT