PRODUCTION PLANNING & CONTROL, 1997, VOL. 8, NO. 4, 406~412. Implementation of just-in-time in a small company: a case study A. GUNASEKARAN and J. LYU Keywords JIT implementation, SMEs, case study, future research Abstract. This paper deals with the implementation of JIT in a small company in Taiwan that produces different kinds of automobile lamps such as rear combination lamps and front turn signal lamps. JIT systems have tremendous effects on all ‘operations of a firm, including design, accounting, finance, marketing, distribution, ete, amd thus are of interest to all levels of a firm's management. Realizing the success of JIT, large-scale manufacturing companies all over the world have implemented JIT in their production systems with the objec- tive of improving their competitiveness. Nevertheless, small and medium enterprises (SMEs) play a major role in the national economy. Hovever, JIT has not recived serious attention from SMEs. Realising the importance of improving. the performance of SMEs, a case study is presented to ‘motivate practitioners to implement JIT in their SMEs, In addition, furure research directions in the areas of imple- ‘menting JIT in SMEs are presented. ‘Authors: A. Gunasekaran, Department of Manufacturing and Engineering Systems, Brunel University, Uxbridge, Middlesex UB8 SPH, United Kingdom: J. Lyu, Department of Industrial Management Science, National Cheng Kung University, Tainan, Taiwan, R.O.C. ony ‘A. CUNASEKARAN isa senior lecturer of production operations management ‘ment of Manufacturing & Engineering Systems at Brunel University, UK. He was awarded a PhD. in industrial engineering and operations research from Indian Institute of Technology, Bombay (india). Dr Gunasekaran has been a research fellow in the faculty of management at the University of Toronto, a postdoctoral fellow at Laval University and Concordia University (Canada), and an assistant professor at the University of Madras (India) and University of Vaasa (Finland). He has published over 50 articles in journals such as Intemational Journal of Production Research, Intemational Journal of Stems Science, Intemational Journal Operations and Production Management, Production Planning & Control, Computers in Industral Engineering: An International fournal, European Journal of Operational Research, Journal of Operational Research Society, International Journal of Production Economic. Computers in. Industry: in the Depart ‘An Incerational Journal, International Journal of Quality & Reliability Management, and Intemational Journal of Compuler- Integrated Manufacturing He has presented over 30 papers in conferences and given a number of invited talks in Finland, Sweden, Denmark, UK, India, Brazil, Austria, Canada, Japan, Thailand, Singapore, US, France, Australia, New Zealand and Taiwan. He is on the editorial board of a ‘number of journals which includes the Intemational journal of Stems Science, International fournal of Quality & Reliability Management, and International Journal of Production Planning and Control He Ihas edited special istues for a number of international journals. His research interests include ‘manufacturing strategy, computer‘integrated manufacturing, agile manufacturing and business process reengineering. Kung Universi J. LW is an associate professor in the Department of Industrial Management Science at National Cheng Kung University, Taiwan. His qualifications include a bachelor’s degree in engineering science and amaster’s degree in industrial management, both from National Cheng ,, and a PhD degree in industrial and management engincering from the University of Iowa, USA. He has participated in many projects supported by the National Science Council, China Shipbuilding Co., Taivan Power Co., and private companies. He has also published several papers in international journals and written a book entitled Management Information Syste. is research interests arc in the areas of global quality management, business internet applications, and intelligent production planning and control systems. 01587287/07 $1200, © 1007 afore Francis LtImplementation of IT in a small company 407 1. Introduction Justindime (JI) stimulates new directions of planning and performing activities in manufacturing stems: its effects are significant in improving the overall performance of the whole organization. Conceptually, JIT is an approach that combines apparently conflicting objec- tives of low cost, high quality, manufacturing flexibility and delivery dependability. In short, JIT isa system that produces the required item at the time and in the ‘quantities needed. ‘Since the excellent work by Schonberger (1982) on Japanese manufacturing techniques and Monden (1983) on the Toyota production system, tremendous progress has been made on the methods and techniques, related to the applications of the JIT philosophy. A ‘number of articles have been published on the practice, JIT, however, most of them deal with largescale indus- twies. However, SMEs play a significant role ina national economy. Therefore, there is a need to help these companies to improve their competitiveness and hence to improve the national economy. Realizing the importance of SMEs and their performance, various productivity and quality improvement programmes have been implemented in the past. However, JIT has not received much attention from SMEs who fear that JIT requires new investments of capital in labour, materials, and equipments to implement JIT. However, experience shows that JIT requires change in the management of various production operations, but not necessarily investment of capital resources such as, automation, new equipment and workforce. In order to ‘motivate other SMEs, a case study conducted in a small company in Taiwan is presented. Some of the observa- tions from the case study may be useful to practitioners, for motivating their efforts in implementing JIT in SMEs. ‘The organization of this paper isas follows: Section 2 deals with the background to the research. The details, of the case study conducted at a small company in ‘Taiwan are presented in Section 3. Future research directions in the areas of implementing JIT in SMEs are discussed in Section 4. Seetion 5 concludes the paper. 2. Background to the research ‘There is no standard to implement JIT other than continuous progress towards the ultimate objective of delivery as wanted, with a smoothly synchronized con- tinuous flow (purchasing and production) keyed to final ‘demand, with perfect quality of incoming materials, goods- inprocess, and finished products, JIT is a concept that, for the most part, is not culturally based. The most notable aspect of the suggestions is that itis clearly possible to implement JIT in an automated facility that utilizes a relatively small amount of direct labour in its processing operation. Gupta (1987) conducted a feasibility study of ‘JIFpurchasing system implementation in a manufactur- ing facility. This helps the JIT implementation process considering the flexible production systems. Richmond and Blackstone (1988) reviewed the applicability of JIT concepts in the plastics industry, focusing on three aspect areas: quality management; technological requirements; and raw material purchasing practices. Crawford et al. (1988) presented JIT implementation and operating problems through a survey of industries in US. Because of the limited amount of research that hhas been conducted in the area of JIT operations, they were not able to provide closed-ended questions about implementation and operating problems. Nevertheless, JIT manufacturing demands better forecasting, much tighter control of workin-process and near perfect quality. Barker (1998) presented a case study and results are an implementation in a JIT environment in the elec- trical switchgear industry. The competitive pressures being placed on Western manufacturing organizations require new restructuring models, which take account of value-adding capability investment. Time-based man- uofacturing strategies offer a framework to develop the total input/output chain in solution of selling price. This method can be used successfully in bate ‘manufacturing companies to reduce the throughput time and conversion cost ~ the method is non-capital- intensive and involves the total company and people’s ‘commitment, Clarke and Mia (1993) investigated the adoption of JIT manufacturing and the design of appropriate ‘accounting information systems. Several factors that appear to be important in the successful tion of IT management systems in Australia include the lose geographic proximity of suppliers and customers, the existence of a highly competitive market, a broad product range, small to medium firm size, the existence of flexible manufacturing technology, large inventory holdings as a part of total assets, the use of JIT by dominant industry members, and a low degree of ver- tical integration in the firm, Industry type is also an important factor. The ideal goal of a JIT system is to have the entire production-ofbusiness cycle operate without interrup- tion and without non-valueadded time costs. JIT is much more than just another system of methods of improvement. It is a philosophy that can apply to any company, regardless of whether the company is a manufacturer, distributor, or virtually any types of