The impact of just-in-time manufacturing on firm performance in the US

Mark Huson, Dhananjay Nanda

Research output: Contribution to journalArticle

141 Scopus citations

Abstract

Just-In-Time manufacturing has been subjected to numerous studies both empirical and methodological. This work attempts to measure the impact of JIT on accounting measures of performance. Most technologies and investments are justified on the basis of their impact on financial and accounting measures which are not easily quantified. Our empirical methodology, simultaneous equation estimation, allows us to isolate the partial effects of JIT on various accounting measures thus gauging the true impact of this method on firm performance. Our results show that after JIT adoption firms reduced the labor content in facilities, increased inventory turnover and enhanced earnings. There was no significant impact on prices charged by the firm. These results support the anecdotal evidence on JIT and the theoretical work done by various authors. Even though the firms studied experienced a downturn in their performance our empirical methodology could identify positive benefits resulting from JIT adoption.

Original languageEnglish (US)
Pages (from-to)297-310
Number of pages14
JournalJournal of Operations Management
Volume12
Issue number3-4
DOIs
StatePublished - Jun 1995
Externally publishedYes

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ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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