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The just-in-time philosophy: A literature review SNA Quen e DAMODAR Y. GOLHAR? and CAROL LEE STAMM The just-in-time (JIT) literature is reviewed to identify 211 refereed articles. To it examine the significance of JIT implementation, global productivity comparison ; } atticles are summarized. The JIT, MRP and OPT comparisons research is ‘7 examined. Classification of the JIT-practices-articles according to the topic areas is masca®/ presented. Critical variables, discussed in the JIT implementation in manufacturing articles, are classified according to the four basic tenets of the JIT philosophy. Eleven critical variables are identified for the elimination of waste tenet. For employee involvement in decision-making, supplier Participation and total quality control tenets, five, ten, and eight critical variables, respectively, are listed. To ensure a comprehensive review of the JIT literature, an extensive bibliography and some reviews of books on the JIT philosophy are provided. Future research directions are discussed. 1. Introduction An extensive literature search was conducted to identify over 860 just-in-time (JIT) articles published in professional journals since 1970. With the exception of the Harvard Business Review, articles published in non-refereed journals were then eliminated from further investigation. This screening process led to the identification of 211 research papers for further analysis. It should also be noted that case studies were not considered unless the cases were included as examples in already selected studies. A topic-specific classification of the JIT articles is provided in the bibliography. The bibliography also contains a list of books on the JIT philosophy. Articles and books cited in the manuscript are preceded by an asterisk (*). The first article on the JIT implementation in manufacturing appeared in the 1970s (Sugimori et al. 1977). Since then, hundreds of JIT papers have been published in professional journals. This body of literature describes the JIT philosophy and its implementation in manufacturing. It contains conceptual and empirical studies, simulation and mathematical models, as well as case studies. Two general review articles have attempted to integrate the reported research in this field (Im 1989, Sohal et al. 1989). However, these reviews cite only a limited number of refereed journal publications and do not provide a framework for classifying the JIT literature. The reviews also fail to link critical variables with the basic tenets of the JIT philosophy (i.e. elimination of waste, employee involvement in decision-making, supplier participation and total quality control). Two topic-specific reviews have been published on cellular manufacturing (Huang and Houck 1985) and worker cross-training (Treleven 1989). Because of their narrow topical focus, these review articles do not integrate the developments in these fields with overall JIT implementation. Thus, there is a need for a comprehensive review that integrates developments in the JIT field. The major aims of the present study are to: (1) classify articles according to the JIT topic areas (that include implementation in manufacturing, kanban, purchasing, and human resource management); (2) identify the critical variables associated with the tenets of the JIT philosophy; and (3) provide direction for further research. In addition, the role of JIT philosophy in global productivity is examined. Also, JIT, material requirements planning (MRP), and optimized production technology (OPT) as inventory systems are compared. First, we explore the role of the JIT philosophy in global productivity comparisons. Particularly, the role of culture in successful JIT implementation is examined. Second, articles that treat JIT as an inventory model and compare its performance in relation to MRP, and OPT are reviewed. Then, we classify the JIT practices literature into broader categories that include implementation in manufacturing, kanban, human resource management, purchasing and quality. Articles in the JIT implementation category are further analysed to identify critical variables associated with the basic tenets of the JIT philosophy. Development of these variables over time is also examined. 2. Global productivity comparison Three articles (Wheelwright 1981, Abernathy et al. 1981, Sakurai and Huang 1984) attribute the success of Japanese manufacturing firms to the willingness of managers to pay close attention to detail. For example, the production related issues (workers, quality control and product assurance, and production planning and materials control) are treated as strategic factors by Japanese managers, while managers in Western countries consider these issues as operational factors. According to these researchers, the strategic approach has caused Japanese management to take a long- term view of business and this has been instrumental in fostering the evaluation of the JIT philosophy. Productivity advantages of Japanese industries suggest that JIT implementation leads to profitability. Cusumano (1988) gives an historic account of developments in the Japanese automotive industry and examines the impact of JIT implementation on solidifying productivity gains. According to Suzaki (1985), 70% of the productivity improvements in the Japanese automotive industry can be attributed to operational improvements and managerial systems. During an American Produc- tion and Inventory Control Society (APICS) study mission of Japanese manufacturing industries, Burnham (1985) observed that in order to be competitive, industries must focus on workforce involvement in decision-making and management commitment to viewing production related issues as strategic instead of operational. Many researchers argue that culture has been critical to the successful JIT implementation by Japanese firms (Johnson and Ouchi 1974, Cooper 1984, Manoochehri 1985, Musselwhite 1987, Gettel-Riehl and Kleiner 1987). These authors classify Japan’s cultural issues into two broad categories: worker related and management related. Japanese workers are loyal, flexible, well educated, co-operative and willing to work long hours. Key elements of the Japanese management approach are: life-time employment, consensus and bottom-up approach to decision-making, respect for workers, seniority-based pay scale, salaried employees, and a paternalistic approach toward workers. This distinction between worker and managerial cultural issues is helpful because Japanese management approaches have been imported successfully by other cultures. For example, Japanese companies with subsidiaries in the USA are providing the same working environment as in Japan and getting US workers involved in implementing the JIT philosophy (Johnson and Ouchi 1974), Also, other US companies have reported success on this dimension (Wheelwright 1981, Sakurai and Huang 1984, Suzaki 1985, and Cusumano 1988). These studies further suggest that the Japanese management approach may be far more important than worker-related cultural issues in successfully implementing the JIT philosophy. Thus, for a successful JIT implementation in the West, a strategic view of the production- related issues and employee-oriented Japanese management approach seem critical. 3. JIT/MRP/OPT comparison Comparisons between JIT, MRP and OPT as inventory control systems have been presented in the literature (for detailed discussion of these systems, see Aggarwal and Aggarwal (1985)). Grunwald et al. (1989) argue that JIT, MRP and OPT are mutually exclusive inventory control systems. In a repetitive manufacturing environment with moderate product variety, kanban (an inventory control system in JIT) is found to be effective in drastically reducing inventory and simplifying planning and control. On the other hand, in a job-shop environment with large product variety, MRP improves customer service and moderately reduces inventory. However, in a complex produc- tion environment, OPT is preferred to MRP or JIT (Schonberger 1983, Grunwald et al. 1989). However, these arguments are refuted by Plenert and Best (1986) who claim that both kanban and OPT are more productive than MRP. These studies suggest that the selection of an ideal inventory control system is situation specific. According to the simulation and mathematical studies on inventory system comparisons, the manufacturing environment is most crucial in reducing inventory. In particular, levelled production, reduced set-up time and lot sizes are most effective in reducing inventory and improving customer-service levels (Krajewski et al. 1987, Lambrecht and Decaluwe 1988, Luss 1989, Lee 1989). With kanban, the JIT philosophy focuses on simplifying the production process and finding ways to reduce set-up times and lot sizes. When compared to MRP and OPT, , kanban provides an appropriate manufacturing environment for effectively controlling inventory. Another critical factor in successful implementation of an inventory system is human involvement. Since workers are responsible for making the kanban system work, researchers find it advantageous because it is relatively simple and easy to implement (Rice and Yoshikawa 1982, Aggarwal 1985, Aggarwal and Aggarwal 1985). MRP, on the other hand, has more human involvement problems because employees are more excluded from decision-making and fail to see how their work contributes to reduction in inventory. OPT requires managers to make procedural and work method changes prior to its implementation. These changes increase employee involvement. As a result, OPT has fewer employee problems in controlling inventory than MRP. The articles cited above focus on contrasting kanban, MRP and OPT. However, some studies argue that kanban and MRP systems are complementary (Gelders and Van Wassenhove 1985, Loebel 1986, Discenza and McFadden 1988, Walbank 1988, Karmarkar 1989. According to these researchers, the strength of MRP is in long-term planning and scheduling, while kanban is better at daily operations, controlling production by reducing inventory, and providing visible controls. Thus, integration of MRP and kanban would allow a manufacturer to improve productivity and customer- service level. 4. JIT practices In our opinion, success of the JIT philosophy depends on the implementation of four basic tenets: [a] elimination of waste; [b] employee involvement in decision-making; [c] supplier participation, and [d] total quality control. Fora detailed discussion of some of the tenets and the associated variables, see Hannah 1987), Schonberger (1986), Sugimori et al. (1977) and Warne (1986). Of the 211 articles examined in this review, 180 are about the JIT practices. The four JIT tenets were used as a framework for classifying the 180 JIT-practices articles. These articles are classified based on topic focus (see Table 1). Note that in Table 1 the articles listed under the implementation in manufacturing category deal with two or more tenets of the JIT philosophy. Kanban, cellular manufacturing and accounting topics belong to the climination-of-waste tenet. The remaining three tenets, namely, employee involvement in decision-making, supplier participation and total quality control are represented by human resource management, purchasing and quality topics, respectively. The articles in each category are then classified based on the type of study: conceptual, empirical, simulation or mathematical models, identified in the bibliography as , and Aq kydesZonqig oy) ur payesipur si pone jo odd, z s 1 81 9 remdaou0 Ayyend Buiseyoing juowaseueu Bununosoy = Bujounuew uequey (gaua} ouo Apnys e0unosad ae[NY}eZD uey} a0) jo adh uewny Surmpoejnuew ul [o2yU09 uonedpnied Sulyew-uoisisap aysem uonejuawajdwy Ayyenb Joyddng ur jo uoneurunyy TeIOL WUSUAATOAUT sekojdwy in Table 2. For each of these articles, the critical variables discussed therein are identified in the bibliography by the basic JIT tenet and the variable number. For example, consider an article with an index [B (1,2)]. Index [B] refers to the employee participation in decision-making tenet. The critical variables 1 and 2 discussed in this article are cross-training of workers and group decision-making, respectively. This indexing procedure allows the reader to identify articles in the bibliography that discuss specific variables. In order to examine the evolution of these variables over time, the articles have been sorted by publication date (1975-1980, 1981-1985 and 1986- 1990). 1975-80 1981-85 1986-90 Total [A] Elimination of waste 1. Kanban 2 13 22 37 2. Reduction in waste 1 7 26 34 3. Reduced set-up times 0 9 21 30 4. Stable production 1 9 16 26 5. U-cells 0 7 18 25 6. Reduced lot size 0 5 17 22 7. Group technology 0 7 10 17 8. Reduced lead-time 0 5 12 17 9. Automation 0 3 5 8 10. One piece flow production 1 3 4 8 11. Right tools at right place 0 2 2 4 [B] Employee participation in decision-making 1, Cross-training 1 8 7 26 2. Group decision-making 0 6 14 20 3. Problem solving network 1 4 3 8 4. Employee suggestions 1 2 3 6 5. Life-long employment 1 2 2 5 [C] Supplier participation 1. Frequent and reliable deliveries 0 3 18 21 2. Quality parts 0 3 15 18 3. Small lot size 0 3 u 14 4. Supplier network 9 3 8 ul 5. Communication with suppliers 0 0 7 7 6. Reduced lead-time 0 1 4 5 7. Proximity to the customer 0 0 5 5 8. Single sourcing 0 0 4 4 9, Long-term contract 0 0 4 4 10. Supplier training 0 1 3 4 [P] Total quality control 1. Continuous quality improvement 0 6 23 29 2. Employee inspecting own work 0 6 3 19 3. Stop the line 1 5 7 13 4. Preventive maintenance 0 5 8 13 5, Fool proofing (autonomation) 0 3 6 9 6. Visible controls 0 4 4 8 7. Variance reduction 0 1 3 4 8. Statistical process control 0 1 3 4 *Tenet-specific critical variables included in the study are listed in the bibliography in a square bracket [ ] Table 2. Classification of JIT tenet-specific critical variables for 46 articles.* Based on the number of articles published on the JIT implementation, it can be seen that rapid growth has occurred in JIT research since 1981 (see Table 2). Further analysis identified 11 variables associated with the elimination-of-waste tenet. Kanban is the most often mentioned variable (37 times). On the other hand, Tight tools at the right place piece is the least cited variable. Of the five variables identified for the employee participation in decision-making tenet, cross-training of workers and group decision-making tenet, cross-training of workers and group decision-making are the most frequently mentioned variables. Life-long employment and employee suggestions are mentioned less frequently. For the supplier participation tenet, frequent and reliable deliveries of quality parts are cited more often. Surprisingly, single sourcing, long-term contract for suppliers and supplier training are the least often mentioned variables. For the total-quality-control tenet, continuous quality improvement and employees inspecting their own work, are the most frequently discussed variables. On the other hand, variance reduction and statistical process control variables are cited explicitly the least number of times. It should be noted that while frequency of citation provides some indication of the relative importance of a given variable, this technique may under-represent emerging variables and cannot identify additional variables that may be critical. Empirical studies on JIT implementation in manufacturing have been done more recently. These studies typically used a small sample size, are industry specific or collected data from the JIT companies in a particular geographic location. Nonethe- less, they examine the effectiveness of the JIT implementation. A major focus of these studies has been on the benefits and the problems of JIT implementation (Celley et al. 1986, Crawford et al. 1988, Im and Lee 1989, Golhar et al. 1990). The cited benefits include reduced inventory, increased productivity and higher quality of goods. However, JIT implementation involves additional costs to provide new equipment and the employee training programmes (Finch 1986). Although benefits and costs have been discussed separately in the literature, no empirical studies have been undertaken to examine the cost effectiveness of the JIT implementation. Simulation studies on the JIT implementation have been reported since 1983. To measure the efficiency of an assembly line for a given production strategy, most of these studies considered variations in processing time, demand and machine down-time (Huang et al. 1983, Lee and Seah 1988, Villeda et al. 1988, Sarker and Harris 1988, Sarker 1989). Mathematical models have also been developed to examine diverse issues in JIT manufacturing such as plant location, scheduling and mixed model assembly line problems (Das and Heragu 1988, Miltenburg and Sinnamon 1989, Miltenburg 1989). The focus of the simulation and mathematical models has been on production in the JIT environment. However, inter-dependency between purchasing, quality and production remains unexplored. Further simulation research is needed to integrate these manufacturing issues in order to understand their inter-relationships and contributions to the overall productivity improvement. 4.2. Kanban Kanban is an inventory control system that is used in the JIT manufacturing environment. Conceptual articles in this category describe one-card and two-card kanban systems and discuss their advantages and limitations (for details see Esparrago (1988), Schonberger (1983) and other references under the subtitle ‘Kanban’ in the bibliography). Simulation studies of kanban systems typically consider a manufactur- ing environment with uncertain demand, variable processing time, and random machine breakdowns (see, for example, Gupta and Gupta 1989, Changchit and Kung 1988). The objective of these studies is to find the number of kanbans for each work- station that will reduce inventory. The effect of different assignment rules on the number of kanban cards has also been explored using simulation (Lee 1987, Gravel and Price 1988). Mathematical models, on the other hand, study the economic benefits of set-up reduction to find the optimal lot size for deterministic demand (see, for example, Porteus 1985, South 1986, Funk 1989, Philipoom et al. 1990). For stochastic demand and a limited number of workstations, mathematical models have been developed to find the optimal number of kanbans at each workstation (see, for example, Rees et al. 1987, So and Pinault 1988). The number of articles published on kanban is a reflection of interest in kanban as an effective tool in controlling inventory in a JIT environment. 4,3. Cellular manufacturing Although there is a rich body of literature on group technology (see the review article by Huang and Houck (1985) and the references listed therein), only five articles examine the role of cellular manufacturing in the JIT environment (see, for example, Wemmerlov and Hyer 1987, Zelenovic and Tesic 1988). The objective of this research is to identify common parts and design U-cells to manufacture them with increased efficiency. Further studies are needed to examine U-cell lay-outs, scheduling of different parts, work-content for each employee, and an appropriate training level for employees assigned to U-cell. 4.4. Accounting Only recently (since 1988) have articles been published that critique the appropri- ateness of traditional accounting practices in the JIT environment (see, for example, Tatikonda 1988, Mills 1988, Harris 1990). They suggest the use of alternate accounting methods, such as process costing, instead of the currently used product costing method. Not surprisingly, given the recent interest in this field, all the cited articles are conceptual. Different types of studies (empirical, simulation or, mathematical) should be undertaken to identify suitable accounting practices in the J IT environment. In our opinion, this is a rich area for researchers to investigate. 4.5. Human resource management Two early conceptual articles discuss the Japanese approach to human resource management (Drucker 1971, Fazakerley 1976). Drucker (1971) stresses the role of employee contributions in improving productivity and advocates an active human resource development strategy. Fazakerley (1976), however, is critical of the demands imposed by the JIT philosophy on employees. The majority of the articles in this category emphasize that developing a problem-solving network, a cross-trained workforce, and group decision-making are critical for successful JIT implementation (see, for example, Johnson and Ouchi 1974, Sanfield 1984, Hopkins 1989). To date, only one empirical study and a simulation study have been reported in the literature to examine in-company communications, staff benefits and job security (Treleven 1987, Oliver and Wilkinson 1989). Further studies are needed to explore human resource management issues in the JIT environment. These issues include employee cross- training, worker participation in decision-making and self-inspection of produced parts. 4.6. Purchasing The JIT purchasing issues are discussed by Gupta (1990) and Schonberger and Gilbert (1983), among others. They identify the supplier-related issues to include frequent and reliable deliveries of quality parts in small lots. In return, to strengthen a supplier relationship, a JIT buyer is expected to award a fair and a long-term contract, and to provide training for and communicate effectively with suppliers. The supplier relationship in the JIT environment has also been examined extensively (Bartholomew 1984, Manoochehri 1984, Burt 1989, Fieten 1989). Some of the problems identified in the conceptual articles are lack of support from suppliers, product quality and lack of communication (Ansari and Modarress 1986, Balsmeier 1988). Recommended solutions to these problems are supplier training, long-term contract to suppliers, supplier certification and plant audit programmes. Besides the conceptual articles, several empirical studies on JIT purchasing have been published (see, for example, O’Neal 1989, Chapman and Carter 1990). Increased communication between the supplier and the JIT buyer firms and frequent deliveries of quality parts in small lots are identified as critical variables for JIT purchasing. However, small sample size has been a problem with these studies. Transportation logistics issues that relate to JIT purchasing are reported by Lieb and Miller (1988), Bagchi et al. (1987), Perry (1988) and Ansari and Heckel (1987). Simulation studies (Bookbinder and Locke 1986, Bagchi 1988) examine the feasibility of a distribution centre in the JIT purchasing environ- ment. Reported mathematical models consider a variety of issues such as the economic advantages of cooperation between a buyer and a supplier (Banerjee 1986, optimal order size and the number of deliveries (Gupta and Bagchi 1987, Ramasesh 1990). 4.7. Quality Ina JIT environment, improved quality of goods reduces lot size (Juran 1978). It is observed that when traditional inspection plans are used ina JIT environment, reduced lot size increases inspection efforts (Krupp 1985). Mathematical models are developed to investigate appropriate sampling plans for such situations (Baker 1987, Chung 1987). The significance of process control as a technique for monitoring quality is also examined (Krupp 1987, Modarress and Ansari 1987). Given the critical role of quality in successful JIT implementation, it is interesting to note that only six articles have thus far been reported on quality to the JIT environment. 5. Book reviews Early articles describing the JIT philosophy appeared in different professional journals. But the most useful material for practitioners appeared in texts. These texts integrated the JIT material and provided readily available references on the JIT Philosophy. Using real-life examples, the books explain the tenets of the JIT philosophy. Most of the books describe steps for successful implementation of the JIT philosophy. In order to provide a comprehensive review of the JIT literature, we provide a list of JIT books in the bibliography and review three prominent texts. Monden (1983) wrote an early text on the JIT philosophy to provide a theoretical framework that explains the JIT philosophy and its implementation. The examples cited in the text are from the Toyota Motor Company. He considers cost reduction as the primary goal of the JIT philosophy. To achieve this goal he proposed the following three subgoals: (1) quality control that includes kanban, smooth production flow, reduced set-up and production lead-time, U-cells, and standardized operations; (2) quality assurance considers a 100% self-inspection, statistical quality control, establishing quality circles, eliminating outside inspection, fool-proofing and autonomation; and (3) respect for humanity involves giving workers valuable jobs, training and development of multifunctional workforce, open communication, seeking employee suggestions for continuous improvements, and allowing production workers to stop the line. Monden also highlights problems faced by small suppliers to a JIT firm. Toyota’s approach, to minimize the impact of these problems and get full co-operation from the small suppliers, is discussed. However, the suppliers’ role in successful JIT implement- ation is not emphasized. Furthermore, workforce reduction techniques discussed inthe book may be misinterpreted as lay-offs by non-Japanese managers. In summary, Monden’s text is a well written source for managers and engineers interested in understanding and implementing the JIT philosophy. The theoretical framework provided should be of considerable interest to researchers. In his book World Class Manufacturing (WCM), Schonberger (1986) presents theory, concepts and implementation of WCM. According to him, the following four basic principles are necessary for the successful implementation of WCM: (1) total quality control; (2) JIT production; (3) total preventive maintenance; and (4) employee involvement. He emphasizes supplier development and employee involvement in the successful implementation of WCM. Numerous examples are cited from various North American industries that have implemented the WCM concepts. The book provides a list of the JIT firms. Firms wanting to be competitive in the world market might benefit from implementing the WCM concepts suggested by Schonberger. Suzaki’s (1987) book is a practical text on the implementation of the JT philosophy. He gives numerous examples of shop-floor JIT implementations in various industries. The following topics are covered in the text: (1) elimination of waste; (2) set-up time reduction; (3) smooth production flow; (4) employee participation in decision-making; (5) total quality control; (6) total preventive maintenance, (7) kanban; and (8) suppliers. Although, no theoretical framework is provided to enhance understanding of the JIT philosophy, the book is well written and easy to follow. Suzaki’s book is a useful source for both workers and managers responsible for implementing the JIT philosophy. 6. Future research directions Introduction of the JIT philosophy in the West is a relatively recent phenomenon. It is only in the last decade that most of the research articles on this philosophy have started to appear in professional journals. Although several research papers discuss JIT implementation in manufacturing, most conceptual studies consider only a few variables associated with the basic tenets of the JIT philosophy. Lack of standard terminology for the critical variables coupled with a narrow focus of the reported Tesearch limits the generalizability of the findings. The usefulness of empirical studies on the JIT implementation is also limited because of their small sample size. Thus, national studies, across different industries and with large sample size are needed. As discussed earlier, further research on the JIT topic areas, particularly, quality, cellular manufacturing and accounting, is in order. To understand the inter-relationships between manufacturing functional areas in the JIT environment, integrative models must be developed and tested. As pointed out earlier, cost effectiveness of the JIT implementation is another area that needs further scrutiny. Given the vastness of the JIT philosophy, it is impossible to envision all possible future research directions. However, in our opinion, the two most critical research areas in JIT implementation are small manufacturing firms and the service sector. Only a few articles deal with the JIT implementation in small manufacturing firms (Soufield 1984, Finch 1986, Finch and Cox 1986, Manoochehri 1988, Newman 1988, Golhar et al. 1990, Inman and Mehra 1990). Small firms play a dominant role in the manufacturing sector. For example, 97% of the US manufacturing firms are small and they account for 40% of the gross national product (Inman and Mehra 1990). Hence, competitiveness can only be achieved when every operation in the manufacturing pipeline (including small manufacturers) becomes efficient. In order to be globally competitive, the number of small manufacturers implementing the JIT philosophy will increase. It is, therefore, important that future research explores the success and problems of JIT implementation in small manufacturing firms. Also notably missing are articles on the JIT implementation in the service sector. Only one article has examined the applicability of the JIT techniques in administration (Billesbach and Schniederjans 1989). Because of its documented growth and the need to make the service sector more productive, further investigation of application of the JIT principles in this sector is needed. Acknowledgments Drs John Rizzo, Snehamay Banerjee and Marilyn La Plante’s efforts in reviewing the original manuscript are greatly appreciated. Bibliography Review articles *Huane, P. Y., and Houck, B. L. W., 1985, Cellular manufacturing: an overview and bibliography. Production and Inventory Management, 26, 83-93. *IM, J. 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