The set of just-in-time management strategies: An assessment of their impact on plant-level productivity and input-factor substitutability using variable cost function estimates

Many manufacturers in the automobile industry around the world have adopted the just-in-time (JIT) set of management strategies in an effort to improve productivity, efficiency and product quality. This paper provides empirical evidence that supports the idea that JIT manufacturing environments are, in fact, more productive than their non-JIT counterparts. Plant-level cross-sectional data from auto-parts manufacturing firms are used to estimate variable cost functions for a JIT group as well as for a non-JIT group of plants. Differences in cost function characteristics between the two groups are examined and discussed.     

Modelling of an automated guided vehicle system (AG VS) in a just-in-time (JIT) environment

Like other production systems, just-in-time (JIT) systems need to address the issue of material transport between workstations such as those served by automated guided vehicles (AGVs). Unlike other production systems, however, the JIT philosophy imposes strict requirements on inventory levels and supply-demand protocols which render conventional AGV delivery strategies ineffective and counter-productive. This paper describes the modelling of an AGV system (AGVS) in a JIT environment in a way that is consistent with JIT principles. The influence of a ‘JIT perspective’ is emphasized throughout the model by introducing threshold values for both input and output queues, performance measures that emphasize lower inventories in addition to transport efficiency, and a new dispatching rule that implements better inventory and transport control. The dispatching rule is shown to perform better in a JIT environment than previously developed AGV dispatching rules in both transport and logistic criteria.     

A synergistic analysis of joint JIT-TQM implementation

Both JIT and TQM have provided significant paradigm shifts in management philosophy to improve organizational effectiveness in today's competitive and ever-changing world market. Yet empirical studies correlating JIT, TQM and operational performance are still underdeveloped. Using a sample of 379 US computer and electronics companies, this study attempts to analyse the workforce practices and synergistic benefits of joint JIT-TQM implementation by comparing four groups of companies based on their implementation status of JIT and TQM.     

A contingency perspective of just-in-time purchasing: globalization,implementation, and performance

This paper uses a survey-based methodology to examine the performance impact of Just-In-Time (JIT) purchasing strategies. Over the past decade much has been written concerning JIT philosophies; however, relatively little empirical research has been conducted that evaluates the impact of JTT on performance. Similarly, little work has been performed to evaluate the role of JIT in global competitive strategies. This paper uses contingency theory's environment-strategy-performance relationship to consider vital issues—planning, organizational support, and implementation status—affecting the success of JIT purchasing strategies. The findings suggest that JIT purchasing strategies represent an appropriate response to global competition and that JIT purchasing can have a significant positive impact on performance improvement when adequate planning and support are in place.     

Zero inventory and firm performance: a management paradigm revisited

According to the ‘zero inventory’ paradigm, inventory reflects waste and should be eliminated in order for performance to rise. In this study, we investigate the effect of inventory holding on firm performance, analysing 3057 firm years of data. Interpreting performance as a function of inventory, results show that firms with the lowest inventory have the worst performance (and vice versa). When understanding inventory as a function of performance, results indicate that low-performing firms carry the least inventory, whereas high-performing firms have the highest stocks. Besides questions of causality, our results do not support a paradigm which suggests that firms should move toward zero inventory.     

A comparison of JIT and TOC buffering philosophies on system performance with unplanned machine downtime

The impact of buffering under just in time (JIT) and theory of constraints (TOC) is studied to determine whether a difference in performance exists in systems faced with unplanned machine downtime. Comparisons are based on results obtained from simulation of a five-station cell utilised in computer substrate manufacturing. Analysis of the simulation output suggests that the TOC technique, drum–buffer–rope (DBR), achieves higher levels of performance as measured by total output and lead time while reducing inventory requirements relative to the tested JIT technique, Kanban. Improved system performance stems from the strategic placement of buffers in DBR, which maximises protection of the constraint from variation rather than attempting to protect each individual station. Further, analysis suggests that DBR systems are more robust than JIT systems in that they are able to maintain higher levels of system performance across a range of inventory levels.     

Implementing just-in-time philosophy to reverse logistics systems: a review

Just-in-time (JIT) and reverse logistics are two important philosophies. Coincidentally, both are related to reducing the impact on the environment. However, they are sometimes in conflict with each other. The former focuses on moving the materials smoothly which require a stable demand and supply, but the latter is weak in terms of predicting how many returned products will be processed. Therefore, there is a need to investigate the impact of JIT to reverse logistics systems. After an extensive literature review based on a model developed for this purpose, different functions, namely reverse logistics structure, process model, product life cycle, information system model, and JIT performance, have been identified that have great impact on integrating JIT with reverse logistics. In short, a process model with JIT can have a better control on cost and efficiency of reverse logistics activities, and product life cycle management with JIT helps to design the product that consider the reverse activities in various process models. An information system can support both process model and product life cycle management for JIT reverse logistics. Details are presented in this paper.     

考虑双目标的JIT生产系统看板数量设定

针对现有JIT系统看板数量决策问题研究多以单目标为主的不足,提出了一种基于实验设计的双目标JIT生产系统看板数量设定方法。该方法同时考虑了高订单满足率和低系统平均在制品水平的双目标优化,以B公司CR油嘴JIT生产系统为例,建立了该JIT生产线的Witness仿真模型以实现数据的收集,以各看板循环回路的看板数量和看板容量进行水平设定,并进行正交实验设计及数据的直观分析处理,然后采用全因子实验的方法,基于帕累托最优的思想获得生产系统看板数量帕累托最优解,形成近似最优看板数量组合的帕累托最优前沿。生产管理人员可根据不同的生产计划和绩效目标从组合中选择合适的看板数量。最后的研究结果验证了该方法的可行性和有效性。     

A competitive progression perspective of JIT systems: evidence from early US implementations

This study investigates the holistic implementation of just-in-time (JIT) manufacturing. We contend that the most important elements of holistic JIT systems – focused factory, reduced setup times, group technology, total productive maintenance, multifunction employees, uniform workload, just-in-time purchasing, Kanban, total quality control and quality circles – should be implemented in a sequential manner for a firm to reap sustainable operational gains. The right sequence of implementation of JIT practices is derived using the theory of competitive progression and based on four JIT practice bundles – conformance quality related practices, delivery reliability related practices, volume flexibility related practices and low cost related practices. Data collected in a cross-sectional field study of US manufacturers are used to test the suggested implementation sequence of JIT practices and the impact of the JIT practice bundles on improvement in non-value added performance. The results indicate that implementations of JIT management practices should be in the order – first, conformance quality related practices; second, delivery reliability related practices; third, volume flexibility related practices and; finally low cost related practices. In addition, significant improvement in operational performance, as reflected in improvement of non-value added performance, is achieved via the cumulative capability building.     

Inventory management under financial distress: an empirical analysis

This study analyses inventory reductions as a means of short-term financing of firms under financial distress. We use quarterly panel data of U.S. manufacturing firms for the period from 1995 to 2007. We identify a sample of 198 distressed firms for which we analyse changes in relative inventory. Approximately 70% of distressed firms reduce their inventories until the end of their individual distress periods. This decrease corresponds to a mean reduction of 18.7 inventory days or 9.4%. Additional regression analyses show that differences in inventory adjustments depend on pre-distress inventory performance, firm size, and turnaround strategy. We also compile a sample of 142 firms that defaulted to analyse inventory actions of unsuccessful turnarounds. Our findings indicate that defaulting firms also reduce their inventories but that the reductions are lower than those of firms that resolve their financial distress. We conclude that distressed firms use short-term inventory adjustments to free up cash and to achieve long-term efficiency gains from inventory optimisation. Our findings suggest that inventory optimisation is an essential part of a complete and successful turnaround strategy and financially distressed firms should always consider this action as a means to prevent bankruptcy.     

Controlled production planning for Just-In-Time short-run suppliers

In the face of growing global competitiveness it is necessary for US manufacturers to manage their limited resources in quite the opposite manner of the way they have been managed in the past. Just-In-Time (JIT) is a practice which, by eliminating waste, improving quality, and increasing productivity, has helped manufacturers meet the competition. The core requirement of JIT in practice, however, is the timely delivery of quality products. This requirement has exerted significant economic pressure on short-run JIT suppliers that provide low-volume, diversified products. This paper presents a means by which JIT methods and Statistical Process Control may be applied jointly to short run production in an environment with demand uncertainties. The purpose of this study is threefold: (1) to examine the cost structure of short-run production, (2) to propose the application of controlled production planning, and (3) to discuss the effect of controlled production planning on the cost structure of JIT suppliers. This study examines the economic impact of JIT demands on the cost structure of short-run production and proposes Controlled Production Planning (CPP) for generating signals for delivery failures or overproduction plans. Establishing CPP minimizes short-term production plan fluctuations, reduces inventory based on the market situation, and reduces the total cost of production. Using a computer simulation we demonstrate that CPP is a viable method for achieving these inventory and production goals. Based on this proposal, three inventory strategies are recommended to short-run suppliers in order to minimize their operating costs under different business conditions. The first strategy uses CPP to determine an inventory cap that requires the maintenance of an average level of stock as a lower control limit to cope with short-run demand fluctuation. This strategy is applicable to a business condition with high product quality and low flexibility to respond to fluctuating demands. The second strategy is zero inventory exercised by sole suppliers offering standard products. The third strategy is a flexible production system combined with zero inventory, which is applicable to suppliers facing strong competition without the market position to absorb their production surplus.     

An empirical assessment of the influence of quality dimensions on organizational performance

While there are several conceptual models to suggest that there exists an association between quality dimensions (customer satisfaction, employee satisfaction, employee service quality) and organizational performance, no empirical study to date has verified such claims. This paper extends the literature by collecting hard data from 165 practising managers and testing their perceptions of the association among various quality dimensions and several organizational performance measures. The relationships between these quality dimensions and the nine component items that make up organizational performance were also investigated for both manufacturing and service firms. The data were grouped into four typologies to include type of firm, size, age, and presence of formal quality department. Multiple discriminant analysis was conducted to differentiate the typology of firms in a multivariate setting. Our results indicate that practising managers in manufacturing firms tend to perceive more widely a positive correlation between quality dimensions and the component items of organizational performance than managers in service firms. Also, managers from older manufacturing firms tend not to perceive a relationship between employee service quality and five component items of organizational performance such as competitiveness and market share.

The measures used for the three quality dimensions and organizational performance are shown to be valid and reliable. However, information derived from the study shows that practising managers in the service sector do not perceive some of the claims and expected benefits of quality management activities.     

Average setup cost inventory model: performance and implementation issues

Now that just-in-time (JIT) concepts have become widely accepted and programs to reduce setup costs are becoming common, production managers need guidance in order to adapt to, as well as facilitate, the implementation of JIT goals. An inventory model is presented for the situation in which setup costs are subject to learning curve effects. The performance of this model is analysed and the conditions for its implementation are discussed.     

Ex-post inventory control

Classical inventory control, using an ex-ante optimization approach and tending to recommend large stockholdings, has been criticized over recent decades. As a result, just in time (JIT) based inventory systems, which exhibit sensitivity to customer requests (rather than production plans based on demand forecasts) are increasingly recommended. In such inventory control schemes, orders are made once the demand is revealed. As a result, ex-ante classical and ex-post JIT inventory schemes can be compared and analysed through: (a) the valuation and the management of demand uncertainty and (b) the time phasing of information and its relationship to the (inventory) control policy. The purpose of this paper is to elaborate and compare such approaches and devise an approach to inventory control based on regret decision making. Examples are used to show how we may be able to value flexibility explicitly in supplies and construct robust inventory policies which can respond to predictable and unpredictable demands (such as using options in inventory control and increased reactivity through JIT controls).     

JIT vs. WIP— a trade-off analysis

This paper develops a decision rule to enable an a priori classification of a production system that should utilize a JIT- or WIP-type inventory control policy. A two-station deterministic serial production system is analysed. A parameter a— the ratio between WIP and maximum shortage—is defined, and a cost function K — f( α) is modelled. It is shown that α?—an optimum value of α—is a characteristic parameter of the system, can be evaluated a priori based on known parameters, and can serve to identify a production system as JIT type or WIP type. The concept of an OC curve of a system is introduced and it is concluded that JIT is not always favourable over WIP.

An extension of the deterministic case shows that α? can be expressed, among others, in terms of MTBF and MTTR. The paper concludes with a numerical example.     

A comparison of inventory cost reduction strategies in a JIT manufacturing system

Although many companies have found JIT manufacturing to be a very effective manufacturing strategy, few models have been developed which can help direct JIT efforts. This article discusses some of the problems with modelling JIT manufacturing, it describes some simple models of inventory costs in a JIT system and it uses these models to evaluate alternative inventory-cost reduction strategies in a printed circuit board (PCB) assembly system.     

Selection of management accounting systems in Just-In-Time and Theory of Constraints-based manufacturing

In today's competitive business environments, a firm's long-term survival rests heavily on its ability to sustain manufacturing superiority over its competitors. To provide the firm with detailed guidelines for sustaining manufacturing superiority, this paper examines the impact of different management accounting systems, manufacturing control systems and time horizon on manufacturing performance in an enterprise resource planning integrated environment. These management accounting systems include traditional costing, activity-based costing and throughput accounting. The manufacturing control systems include Just-In-Time- and Theory of Constraints-based manufacturing. Through a series of simulation experiments, it was found that activity-based costing provided higher short- and long-term profit, better customer service and lower work-in-process inventory than traditional costing and throughput accounting in situations where firms have high overhead costs and relatively low labour and material costs, while carrying ending inventories because of demand uncertainty. Traditional costing also outperformed throughput accounting by exploiting the real-time information sharing capabilities of an enterprise resource planning system. Just-In-Time manufacturing outperformed Theory of Constraints with respect to short- and long-term profitability, customer service, and work-in-process inventory because of differences in buffer inventory policies and sequencing rules. However, time horizon and its interaction with management accounting systems had no impact on the manufacturing performance. In addition, the results suggest that a management accounting system that depicts the manufacturing process tended to provide more accurate product cost information and resulted in a better system performance than the others.     

Comparing reactive Kanban systems

In an effort to achieve agile control in a just-in-time (JIT) environment, reactive JIT ordering systems have been proposed for multistage production systems with unstable changes in demand. In reactive JIT ordering systems, the time series data for the demand are monitored, and unstable changes in demand are detected using statistical control charts. Then, in these systems, the number of Kanbans and the buffer size at each stage are adjusted as a response to the detected unstable changes. Recently, an adaptive Kanban system based on inventory levels was proposed and applied to unstable demand conditions. However, its performance has not yet been analysed and compared with the other reactive system. Therefore, the first purpose of this paper is to analyse and compare the performance of the reactive Kanban systems, both the control chart-based and the inventory-based systems. In addition to comparing their performance, as the second purpose, a new inventory-based system is proposed. In the proposed system, the time series data for the demand is not monitored, but instead the inventory level of a product is monitored to detect unstable changes in demand, and the number of Kanbans is adjusted as a response to these detected unstable changes. The performance of the proposed system is investigated and compared with those of the previous systems by using simulation experiments that model unstable demand conditions.     

Logistics support for JIT implementation

It is generally believed that to maximize the full potential of ‘just-in-time’ (JIT), it must be fully integrated, system-wide. To achieve such integration, a common understanding of and appreciation for JIT is needed within various functional areas. Therefore, manufacturers and logistics executives were surveyed to determine their attitudes and understanding about JIT. The primary objective was to identify how different or similar their opinions were regarding JIT adoption and implementation. The manufacturer respondents indicated a much broader view of JIT as a management philosophy whose goal is to eliminate waste throughout an organization. In contrast, the logistics respondents were more likely to view JIT as largely an inventory reduction policy. In general, there appears to be an opportunity for logistics managers to more fully utilize aspects of JIT to achieve overall performance improvements.