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Kanban vs. MRP: What are the differences?
Examining Kanban vs. MRP involves evaluating the two concepts’ similarities and some crucial differences as well. Learn more about the two approaches.
Inventory management is a complex manufacturing process, and certain approaches can help companies carry it out more successfully. Two such examples are Kanban and materials requirements planning (MRP), but the strategies differ in some key ways.
Understanding the differences between Kanban vs. MRP can help supply chain managers identify which is right for their organization. Each approach has its own strengths and weaknesses.
Let’s take a deeper look at the two concepts and the differences between them.
What are the differences between MRP and Kanban?
Materials requirements planning (MRP) aims to help employees measure, order and manage the elements that their company will require to manufacture a product.
Kanban aims to cut down on waste by having users signal if more materials are needed.
Here are some of the key differences between Kanban vs. MRP:
- MRP is push-based, while Kanban is pull-based. MRP uses demand forecasts to determine inventory needs, while Kanban has employees put in a request for a part, or create a product, only if demand exists.
- MRP involves determining components and materials availability ahead of time, so potential shortages or delays are flagged before they happen. Companies using the Kanban approach only respond to demand when it happens, so an increase in orders could lead to problems because of a lack of materials.
- MRP is typically better suited for more complicated, large-scale manufacturing processes, while Kanban systems are better for manufacturing environments that are lean and Agile.
- MRP is more resistant to change, while Kanban is more flexible.
What is MRP?
MRP is an approach for determining the amount of materials that a company will require to create an item. MRP is often carried out using MRP software.
MRP draws on data from tools such as a bill of materials and the master production schedule and helps users ensure that their company has ordered the correct amount of materials to create the items ordered by customers.
MRP can help companies improve their production schedules and reduce the amount of time between a customer ordering a product and its arrival. MRP can also help companies cut down on expenses because it helps reduce the ordering of extra materials.
What is Kanban?
Kanban involves employees signaling that certain components are needed because of customer demand.
Inventory isn’t ordered until it’s needed, which helps avoid overstocking inventory. Like MRP, Kanban can help companies save money because it can help organizations avoid excessive ordering of components.
eKanban, or electronic Kanban, enables companies to use technology to pursue the Kanban approach. Previously, employees using the Kanban approach used items like a card to signal demand.
If one employee uses a card to signal the need for a part and another employee doesn’t see the card, production could be delayed. eKanban aims to avoid these problems by automatically sending messages about replenishment needs.
Jacob Roundy is a freelance writer and editor specializing in a variety of technology topics, including data centers and sustainability.
