Asia Pacifìc Manogemenr Review ( 2 0 日 1)6( 2 ) .

17 5 - 1 95

A barriers framework for understanding just-in-

time implementation in small manufacturing
enterprises

Niko M. prajogo ' and Robert B. Johnston "

A large number of studies demonstrate the benefits of Just-in-Time (JJT) manufacturing

io the cootex t of large manufàcturin g companics where the techniques were deve loped. 10 an
environmenl 0 1' increasingl y inlense global compelition Small Manufacluring Enterprises
(SMEs) wo uld li ke 10 have access to lhe same benefils. However, SM Es experience cerlain
limitations, as a dircct consequence of their size, which may make the pre requi日 le condilion
for certain JIT initiatives difficult to salisfy raising an important practical question as to the
app licab ility of JIT to SMEs
This paper presents a framework for discussing the barriers to impl ementation of JIT
by SMEs based upon an analysis of six m 句 o r Ji mitations they experience . Six case studies of
companies in various stages of implementation are presented and anal ysed using this frame-
wo rk. which is shown 10 be use fù l in accounting for the difficu lties they have experienccd and
lhe JIT componcnts the y have choscn to implement

Keywords : J lI sl-ln-Time; Leall Produclion; Toyota ProdllCtioll System ; Small Manllfacluring

Elllerprises; Case Sllldies

1. Intro duction
J1 T s u ccess stories in large manufacturing companies , especiall y in the
a utomotive and electronic industries , abo und with stated benefits including
reduced inventory , reduced direct la bo u r and increased productivity , which
in tum lead to reduction of total costs . In a n era of increased competition ,
especially globa l competition , small manufacturing enterprises (SMEs) need
to access the same benefits to gai n more competitive advantage especially
through reduced costs and increased fl exibi lity and quality . Therefore , it is
an lmpo付ant practical and research question as to the extent to w h ich S MEs
can a d opt the JIT system and gain access to its benefits
At o ne leve l, J1 T is a philosophy of waste re duction a nd s mooth pro-
duction wh ich shou ld have app lication to a n y situation . H owever , an e labo-
ra te syste m wh ich has many componenls has b een developed mainly in la rge
manufaclu ring e nv ironme nls 10 imp lemenl Ihi s philosophy. Many of these

. Dep l. ofl nform alion Syslem.The Uni versily ofMelbo ume. Melboume 30 10. VIC, Auslralia
.. Corres ponding aUlhor: Deparlment of In formalion System.The University of Melbourne ,
Melbourne 3010 , VIC, AuSlral 悶 ; Tel: +61 3 83449266 , Fax :+ 61393494596
E-Mail : r.j ohnslon@dis .unimelb.edu.au

175
Roberr B. Jolms{on

manufacturing environments to implement this philosophy. Many of these

components presume the existence or attainability of certain prerequisite
conditions for their feasibility. On the other hand , SMEs are not just large
enterprises scaled down: they have unique operating characteristics and face
different environmental constraints. Their lack of bargaining power with
customers and suppliers may limit their ability to implement those JIT com-
ponents which require cooperation of trading partners. Their limited bar-
ga ining power with financial institutions limits their ability to fund large-
scale refonn s. This coupled with limited resources such as manpower and
machinery may limit the ability of SMEs to implement even the totally in-
ternal JIT reform s
There are a number of papers that repo鬥 JIT success cases in small
companies. The manufacturing enterprises involved include a small repeti-
ti ve l11 anufacturing compan y [30] , job shop environments [2 , 9] and an in-
tenl1l ttent process envlronme肘， which is defined as a combination of repeti -
tive t1 0w andjob shop [15]. Two other case studies showed that JIT is even
applicable to small manufacturing firm s with highly seasonal demand [11 ],
[2 1]. The case stlldies repo 口 isol ated success stories and thus , while they
certain ly establish that JIT has some applicability to SMEs , they do not al-
low general conclusions to be drawn abollt the influence of size related fac-
tors on JIT implementation processes or prospects. A number of other au-
thors [3, 4, 17 , 20] have discussed the applicab ility of JIT to SMEs from a
conceptual point of view. The first three discuss technical aspects, whi le the
last di scusses managerial aspects of il11 plementation. Most of these authors
recogni ze that impediments to implementation come mainly from external
pa川的， and therefore SM Es must concentrate on internal J IT components in
th e early stages of implementation . However , none of th ese papers provides
a complete conceptual framework within which the problems of J1 T imple-
mentation may be discu ssed and from which guidelines may be deduced
This paper sets out to provide a framework for discussing the issue of
applicability of JIT to SMEs in a more rigorous way that has been done be-
fore. Firstly a simple 1110del ofthe limited capabilities ofSMEs is developed
This capabilities model is then used to discuss the kind of barriers SMEs will
encounter to JIT implementation. These bar

176
Robe!'( B. )01l n51011

th e descripti ve and predictive power of the analysis. These case studies were
based on semi-structured intervi ews with managem ent and plant in spections
but th e data gathered were sufficiently standardised to allow a much richer
comparative analysis of th e ex istence of size related factors and the ir influ-
ence on implementation experience than has previou sly been attempted
throu gh iso lated case studies. Fina lly some recomm endations for SMEs are
dedllced from th e anal ys is
2. Li mited capabilities of SMEs
In regard to what constitutes a small bu siness , most published defini -
ti ons use nllmber of employees (between 20-500) and sa les volume ($ 1-5
millio n) [4 , 12 , 19 , 24 , 33] while some others use number of managers ,
compan y ind ependence and market share [1 , 14 , 19 , 22 , 24] [n accor-
dance w ith Au stralian practice [1] , thi s research classifies manufacturing
companies with fewer than 100 employees as small
Compared to large compani es. SMEs have some advantages in adopt-
ing JIT becallse th ey lI suall y have fewer problems with res istance to change
[5] and are more acc ll stomed to a flexible 的 ponse to demand changes due
to the ir sma ll production lot s izes [14]. However , they also have a number of
limitati ons that potenti all y may hinder them from successfully implementing
J1 T , which are discussed be low
2. 1 Lack of bargaining power wilh c lI slomers
SMEs normally do not deal with end-consllmers directl y as they will
have difficulties in competing with large players. Instead , they are likely to
be suppliers of a few large firm s. They normally operate in a supply chain
which is dominated by large manufacturers who represent a high percentage
of sales. They often depend heavily on a few m 句 or customers and have to
follow wherever their customer leads ifthey want to stay in business [10, 14]
With such a weak position , SM Es may have difficulties in getting informa-
tion about production schedules and product des igns from their customers

2. 2Lαck ofbargaining power wilh suppliers

[n regard to vendor relation s hi 阱 ， SMEs purchase volume is usually
not large enough to give them leverage over their suppliers. They often have
to purchase in large batches with undetermined quality . Even worse , they
often cannot impose definite delivery times upon their vendors , which
causes delays in production or an excessive inventory buffer to cover delays

177
Roberl B. Johnston

2.3 Limitedfree cαsh and lack afbargaining power withjinancial institutio間

Compared to large firms , SMEs normally have lim ited free cash to fund
investment in new production concepts or technologies. Lack of bargaining
power with their creditors and debtors may further decrease the amount of
free cash available. The difficulty in getting loans from financial institutions
adds to this problem. Hence , forward planning is often constrained by cash
flow maintenance. Consequently , if SMEs get involved in innovative pro-
jects at all , they will tend to focus on projects with short-term returns and
overlook initiatives promoting long-term results
2 .4 Li mited managemenr time
These short-sighted views of managers in SMEs are caused not only
by limited 仕ee cash , but also by the multiplicity of roles of the owner-
manager [13]. This situation limits the amount of management time avail-
able to develop strategic plans. Consequently , managers are not likely to be
able to predict and control the operating environment, but tend merely to
adapt to changes as quickly as possible. This situation may eventually blind
them to opportunities to experiment with new production techniques
2.5 Limited resources
SMEs also have limited non-cash resources (machinery and people)
They do not normally have specific departments such as a training depart-
ment or an engineering departmen t. With limited management staffthere is a
small pool for potential champions of new techniques. SMEs are also less
likely to have the level of infrastructure that is normally a prerequisite of
new production techniques [27]
Small firms may be so small that a change in production cannot be
implemented without affecting the entire plan t. Running a pilot project may
not be appropriate in SMEs because it will change the whole existing opera-
tion . Thus SMEs may have to risk the whole operation in order to know
whether a certain technique is appropriate or no t. SMEs may have to under-
take a gradual process capability improvement , rather than to re-engineer the
whole production process

2.6 A Model ofthe Ii mited capabilities ofSMEs

ßased on the above analysis of various characteristics of SM 缸 ， a
model showing six m 句。 r factors , internal and external , that may create bar-
riers for SMEs to adopt the J1 T manufacturing system is presented in Figure
1. This model will be used in discussing the various forms of barriers to JfT
implementation and in analysing the case studies

178
Roberl B. Jolmslon

Lack of bargaining
power with financ;al
institutions

External
Factors ,
、
、
、、
,' Li mited \、
,' Li mîted
Free
Cash Management
'.'-':;,":"' \
' Time-
、 Internal
Li mited
、、、 Factors Machineryand
Lack of ba rgain ing 、、、 Peop l e Lack of bargaining
power with supp l i ers 、 power with customers

Figure 1 External and internal factors which limit SME capabilities in

adopting new production concepts and technologies

3. Barriers to JIT implementation in SMEs

Having understood SME limitations , we now turn to the Jl T require-
men 的 。 The philosophy of JIT is roducing the necessary items , in the nec-
essary quantities at the necessary time" [22 ], and the primary objectives of
JIT are waste elimination and smooth production . However, the implementa-
tion of this idea is general ly accomplished by the adoption of a wide range
of c1 0sely connected improvement initiatives that can be thought of a fo口n­
ing the components ofthe standard JIT system or paradigm. Various authors
[3 , 23 , 25 , 28 , 32] have proposed definitions and taxonomies of these JIT
components. Table 1 presents a synthesis ofthese sources , combined with an
analys is of size-related barriers to implementation of each of JIT. For a more
deta iled discussi 凹 ， see [26]
3. 1 Inter-dependencies among JfT components
Some Jl T components logically presuppose the implementation of
other components for their successful operation. Therefore , in discussing the
barriers SMEs face in implementing JIT we must consider not only whether
a particular JIT component may be beyond the capabilities of an SME, but
also what other components that depend on it might also be affected. Figure
2 presents a map , again compiled from various sources by the authors [26] ,
。 fthe inter-dependencies among Jl T components

179
 Rober( B. Johns(on

Table 1 11T Compo nents an d barr iers to imp lementing them in SMEs

JIT Components Detin ition SME Li milations Barriers to SMEs

ProductIOn Level- To pnrtoltd、 uce the Same Lack o
r 、fvbltahrgCauzINns Unstable de mand
lln s qliueannr ty and mm oI power customers from customc rs with-
s evtles ray1dadyraw oDuitfHacnuyltiloErSec11a1s1m-
t
Pull Systelll Materi als are draw n by Lim ited machincs to
thc users from the cstab lish celluJ ar pmleanmtienhuctnu呂rmCCEHular
o 、w n s lream、 stage as manufactu ri ng
needed
Good Housekee p. Workers a. re encou r- No 8 arri ers No barrîe rs

tnz TawbE
aooetrcpk
dhrtoesospdakuacecneeedsplItnotihdsreyem
ldrauollcwen
smal l Lot Produc- See depFeIE ndant compo- Depends onnO ntPhIeer-
ti on batches and to red uce ncnts (Fig.2) mentation of
buffer
dSuetcutipoTn Ime Re- To eJim inate external Li mited cash 10 fund cnUoenxmalbpbloleentem
onaIpScuhrcmheasse
setup times and to aIm
ndprlomvuetmedentprquccts
reducc internal sctup expertlse with short setup times
tlmes
Total Pre venti ve To avOEd m antyhebreak- Li mited resourc旭S and aInnaddteoqoulas te personnel
Maintenance down from the OlltSCt funds for training

bmTyoacmmhaa11l1l1kCct『atylhlue ng Ihe
(TPM)

T『loght the flrstotulmtpeub1y

Li mitcd fun ds Diffìculties in devel-
ClboInatlmQlu(aTlQ
ilyC)
Lpoawckerow
f buahrgsaumppmllE ers oV1pcmesgfoolproofde-
employllnmsl quallty at
source. lillc srop and Unablc to i01pose
foo lproof devices quality upon su ppli-
ers
1IT Purchasing Comprlses o t JlT Lack row f bltahrBsaulpmpnllgc Unab lc to im pose JIT
deliveries. information power with suppJiers delivery upon suppli-

TaS EMow『PnPMamHdιeUmnSd闊qaI加c州d叫
的晶10戶n州
ω一山 “ 岫 ßarrîers
ers

s
Li ne 8 alanci ng DHCeX
pIebnl ds on whuhcr
sefles ot ce ll s 10 tn c e manufactur-
same rate LITBIElyzllst achleved
Flexible Manufac- Fac il ilics and wo rk- Li mited reso urces and Li mited number 01
tU fl ng 的o r ce can be rear- funds to aacclquunll re add 卜 machines to form
ransed accord lnlnEd to tionalmach incs ce ll s 可 l a c k of cx per
clI stomer demand. It tise to simplify co o1-
ponents
TcOFolepemcexhrplanbrtolIcsoleonsEs
wYSotGr(akGnrh
odTuar)cpraednd

Small Gm 111uAp lm- 『o cnIPllOn W

Dr盯
oveemthpeloy- No 8arriers It is a norm al occur
Ipfrcosv(t5lnGel cuvl-ces to p ren ce in SMEs as
A) opcrat ions communlcatlon IS
freelyexcrciscd

180
 Robert B. Johnston

~- 一一. -一 ----- ---- - 一

,'
,'
,'
l、 JIT Pu-ct也50呵 --- "

Fi gure 2 Logical dependencies among JIT components

Note: Rectangles indicate components of the JIT paradigm with m貝J o r groupmg
enclosed by dotted lines. Arrows indicate dependencies for implementation. Smooth
production is taken to be the overall obj ective of JIT implementation

For example, should an SM E, due lack of resources , be unable to re-

duce setup times or provide reliable machines using TPM , it may have great
difficulties in implementing small-lot production. Also , if raw material qual-
ity standards cannot be imposed on suppliers due to lack of bargaining
power, it would be very difficult to run small-lot production and expect high
quality of fini shed products

General JfT implem entαtion guidelines

J1 T implementation , like any other proje叭 ， requlres proJect manage-
ment skill s to be successfull y completed. The main issues of .managerial
aspects of the implementation can be discussed under the following head-
mgs: top man agement s uppo 口 ， education and training , thorough planning

181
Roberl B. Johnslon

and pilot pr句 ecls . These will be discussed in relation to SME limited capa-
bilitie5
Top management support
Most authors put top management suppo此 and acceptance a5 the m05t
important factor in achieving long-term and complete implementation of JIT
[6 , 7, 8, 18 , 31]. However, gaini時 top management commitment may be
difficult in SMEs since they are often family owned and use conventional
management styles, while JIT requires a new way of management thinking
and new attitudes toward operation5 [17]. Managers of SMEs , who are al-
ways busy with daily chores , may not have the luxury to sit back to think
about the whole operation and the ways to improve it
Education and training
Training and education are fundamental to JIT implementation [7 ， 2月
Everyone at all levels needs to understand what it is about and what kind of
changes will take place. A small business cannot send its supervisors to Of1ι
site trainin g as this means they may have to close the factory [16]. Also , they
normally do not have a training departme肘， while limited funds make ac-
ce5s to outside consulting infeasible
Thorough p/anning
It is important that an adequate plan is generated before the implemen-
tation to avoid costly mistakes and to minimise the chance of failure [3 , 17]
This means that SME managers are forced to engage in both strategic and
operational planning ofthe implementation
P i/ ot project
It is often held that a pilot project is necessary to demonstrate to all
employees how the system works. It must be large enough 10 give an im-
pressive result , but not 50 large that it cannot be completed in a short time
Due 10 the small size of their product range , SMEs are often limited in their
ability to pilot JI T. Finch [3] asserts that 5mall companies may have 10
change their entire operation into JI T. Or, they may have to use a stage-wise
implementation [20] with each component being implemented gradually
wilh incremental rewards

182
Robert B. JOhnS lO n

4. A 8arriers framework for understanding JIT implementation in SMEs.

Based on the above conceptual analysis , this paper proposes a frame-
work for discussing barriers to JIT implementation in the SME environment
The framework consists oftwo components
(1) A map to identify limited capabilities of SMEs in relation to J1 T
requirements (Figure 1)
(2) Three types ofbarriers that may be faced due to these limited capabilities
Barriers to implementing each of JJT components (Table 1)
Barriers due to inter-dependencies among JIT components (Figure 2)
Barriers to conforming to general implementation guidelines
Thi s framework will be used in discussing the case studies presented
in the following section
5. Case studies
Six case studies of small Australian manufacturers with various de-
grees of JIT implementation are now presented to complement the previous
conceptual analysis. Each case study took the form of an extensive interview
with the operations manager or managing director taking approximately one
hour , followed by a short tour of the factory to see the JJT practice and to
determine the success level of the company in attaining JIT objectives
Questions were forrnulated into a semi-structured interview format to allow
for flexibility while also allowing for a degree of comparative analysis. The
question s mainly concerned
Environmental issues: company size measured by the number of em-
ployees and annual sales volume , product type and range , major custom-
ers and suppliers and managers' understanding of JJ T.
• Barriers to implementation: the existence of the three types of barriers of
the framework
• Various techniques used by the company to mitigate the barriers
Companies participating in the case studies and their features and JJT
achievement are presented in Table 2. The assessment is somewhat subjec-
tive , but it may help the reader understand the unique characters of each
company in relation to the barriers experienced in implementing JIT
The first four companies are suppliers of car manufacturers , who rou-
tinely provide production schedules to their suppliers. The rest produce fin-
ished goods to end-consumers , and thus they have more fluctuating demand
compared to the first fou r.

183
 Robert B. JOhnSlO 11

Tab le 2 Sum m a r y offeatu res a nd JfT practices oft h e companies

Feallucs C__A~_ D~ _C~_ D~ _E~_ F
Employccs 70 100 100 85~90 40
AnnualsaleS lumOVCI SA 10- 11 SA 10- 15 SA 9 mill ion $A 9- 10 NIA SA 8-10
million lI1 il lion lI1 ill ioll mill ion

tdDhearaolulem『gShs
11 M 句 or cuSlomers 6 0111 of 15 5-6 aut omo- < 10 11 Govemmcnt
ti ve Înduslri es and financial
", SIMlu)ll凹的
# M句 01' suppliers 20-30 (2-3 in 5-6 20 19-20 NIA 100
Japan)
Producllype E1ectric Pressed mela1 Prcssed metal r 1aslics Com pressors Vo i ce可 fax
cable wilh wi lh some wilh some Injecti on and dma
SO Ill C fiu ings asscmbly a s阻 nb l y M ou l d i n g 可酬 。"
protlU Cls
Product ríl l1 ges Hun dreds 1200 55 fini shed 450 patl S、 1 1undcr 3 7 0-8日
且 ood s with 100-1 20 of classes
400 com po- thcm on J1 T
nenl !;
JIT 1IIIIIIclllcnlation
No Partial No Ves Ycs
G
prrooduupcTtBeocnhSncolh
Eegdyu h IUal

mzg PgkFeauu『nlllebdatnnbgy
Pull tnby毯，
lms gPcurleldtnbyg
csN
Pcouohm
sehpduuutlsee e gmNPcuoarlellldv
E ttI 咕nf-oE-csPNcuoohsmehpduuutlses『ng
gkFczummllbdztIB
Op剝削lons OBUH Sys- kFaunllban

N/A Full Ful l Crosslr"inÎng Crosstraining

tGelFlO
oneMz
ox)dbIQ
HlcIoMMulslatenkt
v eaiCeopSnmytrHsotlem Fill
FlI lll Fllll Fllll Full FI I1 I FlIlI
FlIlI Pal1ial Flll1 FlI lI Final Tesl FlI ll
Tolal PrevenlÎve Main - Full l>al1 自 ， 1 Fu ll F"II ß ased on Part iat
lenance brcakdowns
5ε 1l1 p Redllction Fu ll No Full N。 Parti al l' ania1
SG1 A Full S vRel 間的。r
leU S
leuvpeel rVESOE S
leuvm
el m sor I' amal Fu ll

JIT Ptn chasm1tglfact PaMEal No Fll l1 No N。

wMeueltk1.ly
Cellu lar Manufacturing Yes Mu lli Ves No No
pw巾ch的incs pmt叩
achotsnces
PLe a刊d。trumnctance
1 day 4.SWECKE < 1 ddaayyss 10 days 5- 10 days
Buffer Slock of Fin - 1 day 2-3 1l1 0nth s 1-6 3ed3eadkyasys 1
w
2ap)propr卜 laRN teoetEah
<

ished Goods
aNNtfoeAt 2sao)Wpnpalrpbolpyr1 ,
Delivet)' 1"..0111 vc ndors 3 days lead Qnce a 1Il 0nth Every 1-3 Wcekl y
1MEEt dEaVyCsIY
Deli ve可 1 0 cllstomcrs Every day Oncc 01' twice Evcry day 61111zes per Nol 2ap)propn- Not 2ap) prop『卜
per wcck day atc ~ J ale

Notes
1) C ompany F is wo rki ng o n red ll cing lhc 1111mber 0 1" s uppli crs
2) S Încc bOlh compa nÎ es deal wil h e nd-co nsume rs. the y do nOl de li ve r male ria l 011 reg ular
bas is. and lhu s do nol w ithdraw Ill ate ri a ls reg ularl y fro l11 lhei r ve nd ors ei th cr

5. 1 Compαny profìles
Company A produ ces e lectr ica l cables with some fitt ings for the
automotive industry. They exce l in JfT o p e rati o n s , and are able to atta in a

184
Roberf B. Johns fO n

lead time of one day for most products , thus considerably reducing their
fïnished goods slO ck. While their manufactllring process is quite simple,
their success can be mainly attributed to their full commitment to JI T. Their
operations are signifïcantly influenced by the JIT concept. Cellular manufac-
turing with kanban systems is neatly arranged. SGIA is employed but rather
informally , due to extensive communication between people from different
leve ls of management
Company B core bllsiness for more than 60 years has been to pro-
duce pressed metal parts, involving some assembly, mainly for the automo-
tive industry. Since their customers ensure that they will use up to two
months forecast demand , they are currently running a large batch production
schedule. They purchase their raw materials also in large quantities but de-
liver their products on a JIT basis. On the shop floor , they utilize numerical
control machines and robot welders , which require long setup times. Ma-
chines are arranged according to their functions . Computers are used exten-
訂閱 Iy to schedule a push production system . With such a system, Company
B has implemented JIT only in its quality aspects and in prov idin g JIT de .
liver ies from stock
Company C has th e same core business as Company B with different
m 句。 r customers. In 1993 , their major customer , Toyo徊 ， chose them to be a
Jl T showcase supplier , and they have been working under the JIT system
ever since. Starting with a focus on one cell implementation , the company
has now successfull y implemented most of the JIT components in the pro-
duction area and has enjoyed various JIT benefïts
Company D produces plastics injection mouldings. Hav ing been an
almost dedicated supplier to Toyota for the past 5 years , Company D is
growing quite fast and is now dealing with more companies , including non-
automotive companies. Sub-assembly products are produced by high-tech
machin es in large batches , while fïnal assembly is run in cells according to
daily JIT call up. Despite some buffer stock on the shop fl oor, the imple-
mentation of Jl T in fïnal assembly is quite extensive
Company E is a job shop manufacturer producing a small range of
screw air compressors with different capacities. lt can be classed as a micro-
enterprise with only 6 personnel and sma ll production . Customers in this
industry sector tend to place orders only when their compressors break
down , making demand unpredictabl e and impeding forecasti

185
Robert B. }ohnston

which has been extensively used to increase pa閃s commonality in the prod-
uct range in order to increase production tlex ibility
Company F manufactures voice , fax and data encryption devices for
government agencies and financial institutions. Recently , they have started
to expo口 their products to China, and wi ll soon set up production there. The
sub-assembly of printed circuit boards is run on high-tech machine吟， which
requ 叮叮 long setup times. This , in turn , forces this company to run and store
large batches of work-in-process goods. However, the final product is assem-
bled and tested on a JIT basis when orders arrive. SGIA is extensive , with 訊>10
meetings every week to discuss a number of improvement projects. Various
reward systems encourage employees to further improve their productivity
6. Case study ana lysis
6. 1 SME Ii mitalions and JfT componenls implemenled
This section will discuss the existence of six the limitations of SME
model (Figure 1) in the case companies and the effect ofthese limitations on
barriers perceived in implementation. In each case , the limitations model is
mapped on the company capabilities and environment to analyse existing
barriers and investigate how these barriers affect the JIT components im-
plemented. The limitations existing in each company will be shown in a dia-
gram , with different shades of grey representing the relative significance of
the problems. To simplity the discussion , lack of bargaining power with
financial institutions and limited free cash will be discussed together and
both will be in the same grey shade
The major problems in Company A (Figure 3) come from both their
suppliers and customers. Customers' daily call-ups vary significantly. Fortu-
nately , Company A has been able to shorte n its manufacturing lead time ,
and thu s does not need a large amount of bu 仟'e r stock. In regard to supplier
relation sh 巾 ， Company A has no other choice but to keep at least three days
raw material for production as most local suppliers wi ll not comply with less
than three days lead time. The problems of limited management time and
lim ited resources were so lved when Company A chose to outsource some of
their work. This reduced the need for additiona l workers and released man-
agement time , allowing them to concentrate on improvements in their core
business. Limited free cash is not perceived as a big problem because the
process is low tech and Company A utilizes employee suggestions in an in-
formal way

J 86
Roberl 8 . Jolmston

; Lack of bargaining
power with financial
institutions

External
Factors
“c

m即m
Lr te-
ere

d
L m 1s
Fr

au。@
a

ρw
Ma en

內
h

可
、 Internal r 一一一
Li mited一一
\ Factors I Machinery and
\、 People
、 l

Figure 3 Map ofthe six limitations at Company A

It seems that Company B has all aspects of the internal barriers to im-
plementing JI T. However, it may be that a lack of management commitment
toward JIT implementation is the root cause: the managers do not believe
that the benefits of the implementation will exceed the costs. This lack of
commitment definitely affects the company allocation of funds , machin-
ery and workers for the implementation , resulting in inadequate resources as
shown in Figure 4

External
Factors
、'
、、;'，

,
出ckofba旬 a1nll19
po.t.er....th 別 pplie用

Figure 4 Map ofthe six limitations at Company B

187
Roberf B. Jolmslon

ln regard to external barriers , although pressures from customers for

JJT delivery are high , Company B has not responded by applying the whole
idea of Jl T. lnstead , they have adopted a make-to-stock policy with two
months buffer stock. They perceive that such a policy is much safer to cope
with l1 uctuating dail y call-ups from customers. However , this is not the only
difficulty. Currently , Company B is operating with multi-purpose machines
and some robotics equipmen t. With such machinery , it is very difficult to
implement cellular manufacturing and other JlT components in a small
business. JJT Pur巳 hasing is not required at Company B, as they run produc-
tion in large batch sizes , and thus lack of bargaining power with suppliers is
not appropriate in this case
From observation on the shop 1100r, it was clearly seen that Company
C has achieved a thorough JlT implementation (Figure 5). Fluctuating de-
mand from customers has been alleviated by their ability to shorten their
manufacturing lead time. Thus , they have only a sma ll mergency stock" to
cope with l1 uctuating demand. M句。 r problems with suppliers dealing with
quality and delivery are solved ， 的 their leverage over suppliers is height-
ened by the help of their major customer, Toyota. Even though limited free
cash hinders them from purchasing roll-on roll-off dies , they have made use
ofv ideotaping techniques and employees' ideas to reduce setup times. With
a full comm itment from management and help from their m 句。 r customer,
success in JJT implementatio I1 is very impressive

Lack 01 bargaining
POI蠅r 叫 thfi悶悶 al
In甜t叫 lonS

External
Factors
Li mit剖
Umil副 Free
ca納Management 、
Ti IT胃\

Internal Umit回
\Factors Machi隔ry and
Lack 01 bargaining \P田ple Lack 01 ba 旬 aining I

閻明 r with suppl 悶悶 、
POI晒"叫th 且必t四ner

Figure 5 Map ofthe six limitations at Company C

t 88
Robert B. Johnslon

Like other Toyota suppliers , Company D (Figure 6) suffers various

problems due to a lack of bargaining power with their major customer. They
struggle with demand variances. They must also endure design changes
made by Toyo恤 ， which can occur at any stage from the initial drawings
from Japan until the latest local version. The selling price is also set by Toy-
0個 giving Company D no choice but to improve production efficiency
Their problems with suppliers are smaller because of Toyota suppo口 m
negotiations. Also, since there are more and more companies adopting the
Jl T system , especially in the automotive indust門 ， they have little problems
in obtaining J1 T suppliers
Am句。r problem arises from the limited ava ilability of tools , however.
Some tools are quite easily damaged and require a few weeks to fix. Pur-
chasing adequate backup tools is difficult for Company D due to limited free
cash . This situation forces them to run production in large batches for com-
ponents to cover breakdown times. They nevertheless assemble to order J1 T.
As a micro company , Company E (Figure 7) cannot exert much pres-
sure on either their suppliers or customers: they cannot predict demand and
they cannot purchase in small quantities. Therefore , they have to apply an
order poin t/order quantity system for most components. However, the un-
predictable demand causes difficulty in calculating the optimum reordering
quantity. Faced with this problem , Company E tries to produce in-house as
many components as possible by applying Group Technology (GT) concept
This also alleviates their dependency upon thei r sub-contractors. Obviously,
due to their size, they have limited 仕ee cash and resources to implement
many of the JIT components , such as cellular manufacturing and preventive
mamtenance
Lack of ~argaining
power with financial ;
institutions

External
Factors
"
J 一一一
Li mited Free
Li mited
Cash Management \
Time
Internal
一心 、、 Factors
Lack of bargaining 、、
power 刷 th suppl 時間 \\
, ' '

Figure 6 The map of six barriers at Company D

189
Robert B. Johnston

External
Factors

祉 MFm
Mme

U
na

、
副司
M en

、
門
Figure 7 The map of six barriers at Company E
For Company F (Figure 8), producing high-tech products and dealing
directly with end-consumers limits their ability to predict demand. However,
the absence of local competitors and the nature of their product increases
their bargaining power and allows the to impose a longer supply lead time
Company F does not have problems with lack of bargaining power with
suppliers because they replenish raw material in large batches and only do
final assemb ly J\T. Major barriers at Company F are in internal areas. They
have Ii mited free cash with which to buy tools to shorten changeover times
Machinery is also too specialised to allow cells formation. Therefo悶 ， even
though they have been able to c1 assify their fi 口的 hed products to a few prod-
uct families by app lying GT concepts , they are unable to implement cellular
manufacturing. Consequently , referring to interdependencies among J\ T
components , they are unable to run small lot production and a kanban sys-
tem. However, they have conducted various improvements in may areas by
extensively utilising employee ideas through regular quality meetings

External
Factors
Limited \、
Management \
TÎme
Internal
\ Factors '
'
lackof bargaÎnÎng 、 \ " ,," lack of bargaini呵
power wilh suppliers \\ powerwith 叫到 omer

Figure 8 Map ofthe six limitations at Company F

190
Roberr B. .Johnston

6.2 Barriers created by dependencies among JfT components

As described earlier in Figure 2 , there are certain dependencies among
JIT components. The most apparent evidence of a dependency from the case
studies is between small lot production and reduced setup times. Companies
C, D and F are not able to produce certain pa口丸 especially for sub-assembly ,
in small lots just as needed for the next operation because of relatively long
setup times compared to production times. lnstead , they use a simple order
point I order quantity systems to manage these parts. lt is important to note
that their inability to reduce setup times is due to the complexity of the re-
quired setups , not due to company size. Company A does not require a com 幽
plex setup and therefore can run smalllot production more widely
Another dependency is that between small lot production and Total
Preventive Maintenance , as observed in the case of Company D. They can-
not afford a small lot production system for sub-assembly because they do
not have adequate infra-structure for maintenance
Other dependencies were not clearly seen in the case study. The
inability to implement a certain component may be caused by other factors ,
rather than by the absence of its prerequisite components. For example , the
inability of Company F to form cellular manufacturing is not only due to
their inability to apply production levelling due to unpredictable customer
demand , but also due to their limited machinery to form cells. The depend-
encies are likely to occur if a company tries to adopt the anilla flavoured"
JIT system , whereas in the SME environment, J1 T is usually implemented in
a highly customised form
6.3 Barriers to conforming with general implementation guidelines
Because this study used only companies with a reasonable degree of
J1 T success , evidence of barriers to conforming to general implementation
guidelines is not abundan t. A lack of top management commitment was not
evident , except in Company B case. As most of the managers , except for
Company B , seemed to have a clear understanding of JIT philosophy , it
can be said that education was not a big problem for them. ln regard to plan-
nm皂， it seems that these companies have to plan a gradual implementation
Exceptions were Companies C and D, as they had assistance from engineers
from Toyota. The only company that used a pilot project was Company C
Company D uses new model development as an opportunity to apply new
improvem

191
Robert B. Johnston

7. Conclusions
The cases highlight the diversity of experience of companies with
similar aims. Company A has successfully implemented llT even though
they do not have support from their customers , compared to Companies C
and D. [n similar bu siness areas and having similar customer types, Com-
pan y C has decided to adopt JIT , while Company B deems it to be infeasi-
ble. Such divers ity is shown in different production policies taken by these
companies - make-to-order , make-to stock and assembly-to-order - which
are quite interesting to observe in regard to different industry types and their
market places
Based on an analysis of the cases both individually and collective[y, a
number of conclusions can be drawn in regard to the applicability of the l[T
manufacturing system to SMEs and the usefulness of the limitations frame-
work presented here
7. J The applicability of the JJT manufacturing system in SMEs

AII companies in the case study have implemented JIT to some extent
and ga ined so me benefits. The case studies show that a number of JIT tech-
niques, such as cross-trainin 且， good hou sekeeping and SG [A , can be readi[y
adopted by SMEs. This indicates that l[T ideas are quite applicable to
SMEs. However , l[T must not be seen as merely a set of eady-to-use"
techniques for improvemen t. [t mu st be understood as a guiding philosophy
that helps a company to find its own ways to improvemen t. lIT components
which require the greatest degree of cooperation from outside parties present
the greatest difficulty , and a ll the case companies retain buffer stock at a
level greater than the l[T ideal
In term s of the benefits that these companies enjoy , future prospects
are even more promisi ng as more and more companies are adopting l[T
This means that there will be more companies requiring l[T delivery who
will be best supplied by llT suppliers. Also , adoption ofthe llT concept will
extend to suppliers further upstream in the supply chain , which means that
the implementation will be easier for SMEs
7.2 Evaluation ofthe barriersframework

Most of the barriers to lIT implementation faced by the case compa-

nies can be accounted for as the result a combination ofthe six limitations of
SMEs. Thus , the framework presented here has at least some ability to pre-
dict which components will be feasible g iven an analysis of the limitations
faced by the focal company. There is some evidence of the effects of de-

192
Robert B. Johnston

pendencies among JIT components. However , different approaches in im-

plementing Jl T , modification of components , and other factors have blurred
the relationships. The available evidence from the case studies is not repre-
sentative enough to prove the existence of all the dependencies depicted in
Figure 2. Problems with conforming to general implementation guidelines
were not strongly evident in the case studi 的 largely because successful
companies were chosen although the limitations model has also proven use-
ful in discussing these
One finding ofthe case study was that although size related limitations
clearly are significant，且 n umber of other environmental factors contribute to
problems of implementation , such as
• the availability of suppliers who are capable of providing JIT delivery
(Company F);
• the predictability of customer demands (Companies E and F);
• the nature ofthe products and processes (e.g. plastic injection moulding);
. the comp lexity of setups required (Company A compared to Company C);
. the history of the company operations which determines the level of dif-
ficulty of switching to other types of operation (Company B)
The list of environmental factors may increase as the number of cases
grows. Thus, it may be impossible to provide a complete model that includes
all possible factors , wh ich could be used to analyse and prescribe what a
company should do to attain the best possible practice for its condition
Nevertheless , the authors suggest that the SME limitation s framework
presented here is sufficiently predictive of JIT implementation choices that ,
when combined with a situational analysis of a given company , it would be
useful for a company embarking on JIT implementation to examine each of
these limitations. The case studies show that the barriers are not completely
insurmountable and individual companies may use such an analys is to find
their own path to Jl T with minimum risk offailure
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