Question

from Accounting information systems:

What are the advantages and disadvantages of Manufacturing Resource planning and lean manufacturing?

Answer 1

S.No.	The advantages of using MRP	The advantages of using Lean Manufacturing
1	On time availability of the right materials required for production.	Lean principles aim to minimize all forms of waste, from sources as varied as material defects to worker ergonomics
2	Little, if any, excess inventory (our customers report that inventory reduced by 14% on average).	Many sources of waste are easy to identify and correct, such as a machine that is out of adjustment, producing a high volume of defects.
3	Timely delivery of manufactured goods to your customers	Implementing lean principles in your company requires input and participation from your production staff. They are often in the best place to see where waste and inefficiency occurs. Not only do they serve as a resource for you, employees usually respond in a positive way to sincere efforts to involve them in improvement processes.
4	Optimal use of manufacturing resources	JIT is a strategy that suggests large inventories are wasteful of company resources. Business equity tied up in inventories of raw and finished goods interferes with cash flow. Money is also saved through reduced warehousing needs.
5	Decrease in capital cost due to decreased inventory levels and optimal use of production resources.	Beyond simply reducing costs and improving efficiency, lean production techniques introduce systems and develop skills with your staff that support changes in the workplace that new sales create. Space saved on warehousing may be used to add new product lines.

S.No.	The disadvantages of using MRP	The disadvantages of using Lean Manufacturing
1	Customization Restrictions	Lean techniques can be overused. When tracking of productivity and waste starts to impact the time used for production, the solution becomes the problem. When lean principles are first applied, you can expect larger returns than later down the road.
2	Inflexible System; Not Compatible for Specific Organizations	JIT principles work best with stable system components. Delivery times for raw and finished goods are known, and the elements of production can be scheduled accordingly. Being overly aggressive with JIT scheduling leaves you vulnerable to systemic bottlenecks.
3	With MRP being demand-oriented, this very obviously can be detrimental to a company that is not necessarily dependent on demand forecast. Without smooth demand and lead-time replenishment regularity, there is not a lot of room to adjust the system - leaving you with either too little or too much of a any given material.	. Supplier delivery issues may cut off your raw materials, interrupting your production flow. Maintenance emergencies can reduce your production throughput. Any constraint not accounted for in your JIT planning potentially jeopardizes the entire system. Margin for error and system waste may be difficult to balance.