Comparing JIT, MRP and TOC, and embedding TOC into MRP

Abstract

The traditional material requirements planning (MRP) system for planning and controlling production systems is being replaced more and more by just-in-time (JIT) and the theory of constraints (TOC). Because JIT and TOC share many elements with MRP and because MRP is very flexible, it is not difficult to make MRP behave like JIT or TOC. Consequently manufacturers with MRP systems need not dismantle them to implement JIT or TOC. A five-step technical procedure for embedding TOC into MRP is presented in this paper along with an illustrative example from a microelectronics plant. Next a simple production line is analysed using a Markov chain model to examine the types of improvements each approach makes and the effect of these improvements on the performance of the line. Performance measures are the mean and variance of the output, shortage, inventory level, and cycle time of the production line. Insights are developed into the reasons for the superior performance of JIT and TOC.