The Effect of Just‐in‐Time with Customers on Organizational Design and Performance

Abstract

Faced with environmental volatility and increased competition, firms are turning to supply chain management and associated time‐based initiatives to develop sustainable competitive advantages. This research examines just‐in‐time (JIT) as one such logistics strategy. While prior research has focused on internal and upstream JIT (i.e., production and purchasing), the present research examines the extent to which exchange with downstream customers is just‐in‐time oriented. The results of the research show that JIT with customers is associated with organizational designs that are more decentralized, integrated, and formalized and with better performance in terms of less finished goods inventory and higher overall financial performance. The analysis controls for firm size, production technology, and tenure of the senior logistics executive and shows that the effects of JIT with customers on organizational structure and performance are, with a limited number of exceptions, relatively robust.

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