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Implementation of JIT in the United States and its impact on organizational performance: An empirical study

Daesung Chang, University of Nebraska - Lincoln

Abstract

This study is the first broad cross sectional survey which utilizes concrete financial accounting data concerning measures of organizational performance, as reported in Standard & Poors Compustat, to examine the impact of JIT on organizational performance and determine how each JIT requirement factor influences organizational performances. Matching groups of JIT implementing firms and non-JIT firms are formed from the survey respondents, and a comparative analysis is made for the two groups. The result of study shows that JIT implementation companies have not achieved better organizational performance in terms of sales in dollars per employee, operating profit margin, and return on investment than non JIT firms, but achieved better performance in terms of finished goods inventory turnover, raw materials inventory turnover, work in process inventory turnover, quality and flexibility. Communication between production and marketing departments was identified as a critical factor for increasing inventory turnover and work in process inventory turnover, and employees' participation and bottom-up management were determined as significant factors for improving quality and flexibility. However, a negative correlation between integration of JIT and MRP and sales in dollars per employee, finished goods inventory turnover, and work in process inventory turnover was found. This implies that the stronger the integration of MRP and JIT, the worse organizational performance measures such as in dollars per employee, finished goods inventory turnover, and work in process inventory turnover will be. The result of this study implies that in a JIT environment personnel management such as bottom-up management encouraging employees' participation and organization management such as a linking network with communication between production and marketing departments are more important than JIT practices themselves.

Subject Area

Management

Recommended Citation

Chang, Daesung, "Implementation of JIT in the United States and its impact on organizational performance: An empirical study" (1992). ETD collection for University of Nebraska-Lincoln. AAI9225462.
https://digitalcommons.unl.edu/dissertations/AAI9225462

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