Academic journal article Journal of Purchasing & Materials Management

The Buyer-Seller Linkage in a Just-in-Time Environment

Academic journal article Journal of Purchasing & Materials Management

The Buyer-Seller Linkage in a Just-in-Time Environment

Article excerpt

The Buyer-Seller Linkage in a Just-in-Time Environment

The outstanding results achieved by Japanese manufacturers in implementing the just-in-time (JIT) production concept have prompted a number of U.S. repetitive manufacturing firms to develop and implement modified versions of the system. A unique feature of the JIT system is the new philosophy of the buyer-seller relationship inherent in the system--a closeness that is believed to be critical to its successful implementation.

The objective of this article is threeford: (1) to describe the basic elements of the JIT system; (2) to propose certain behavioral and logistical dimensions of the buyer-seller linkage which are believed to be impacted by the adoption of the system by original equipment manufacturers (OEM); and (3) to present the results of an empirical study designed to measure the present level of adoption of the JIT system in the automotive industry, and to test the extent of its impact on the proposed set of linkage variables.

THE JUST-IN-TIME PRODUCTION SYSTEM

The JIT production concept has been discussed rather extensively in the literature of operations management.(1) The objective of the system is to eliminate waste of all kinds from the production process. It requires the delivery of the specified product at the precise time and in the exact quantity needed. Variations in any of these three dimensions are considered wasteful. In theory, the product must conform to the customer's specifications every time. It must be delivered when needed: not earlier, not later. It must be delivered in the exact quantity needed: not more, not less.

Implementation normally begins with a modification of the facilities layout to achieve a group technology or cell configuration which permits reductions in inventory, coordination requirements, and paperwork--and at the same time allows individual workers to have greater control over the production process. A concurrent activity is the study of the production model changeover procedures to reduce to the absolute minimum model changeover time requirements. The objective is to maximize the changeover activities that can be done external to the processing operation and thus not interfere with the production process, while minimizing the changeover activities that must be done within the processing operations and, hence, are disruptive to the process. Further, both sets of these activities are analyzed with the intent of reducing to the absolute minimum the time required to achieve them. Shingo(2) refers to the SMED (single minute exchange of die) in the case of Toyota, with phenomenal success; time reductions of 20 to 50:1 are cited as the norm. This makes very short production runs economically feasible.

The JIT system is generally perceived as an inventory reduction program. The goal of the concept is the ultimate elimination of all inventory except that which is either in transit, or being processed, and both of these inventory pools are to be minimized. Only costs that add value to the product are acceptable. All others are considered wasteful. The implementation of a JIT program is often referred to as the "journey to just-in-time." There is no standard to meet other than continuous progress toward the ultimate objective of delivery as needed, with a smoothly synchronized continuous flow (purchasing and production) keyed to final demand, with perfect quality of incoming materials, goods-in-process, and finished products.(3)

DIMENSIONS OF THE BUYER-SELLER LINKAGE

Since the supplier to the JIT producer is outside the organization, the buyer-seller linkage must be extremely tight, both behaviorally and logistically, for the system to function properly. Success requires a modification of the traditional philosophy of buyer-seller interaction, which has at times placed emphasis on the adversarial role of the two parties rather than on the need for mutual cooperation. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.