Understanding the use of just‐in‐time purchasing in a developing country

Abstract

IntroductionAs cost becomes increasingly important in today's highly competitive international marketplace, more and more companies find themselves moving at least parts of their manufacturing operations to developing countries. This highly competitive marketplace, though, allows few of these companies to compete solely on the basis of price. To be successful, these companies must also achieve high levels of quality and be responsive to changing market needs. One approach that many companies in more developed countries have adopted to achieve these objectives is just-in-time ( JIT) purchasing. With JIT purchasing, a company requires its suppliers to make frequent, reliable deliveries of small lots of very high quality parts and encourages its suppliers to participate in the purchasing plant's continuous improvement efforts [1].The operating environment common in developing countries, though, poses significant obstacles to the use of JIT purchasing. The supplier bases in these countries are typically very weak. Most developing country suppliers cannot provide the levels of quality and delivery reliability required by multinational companies (MNCs) using traditional approaches to purchasing[2,3], let alone meet the more stringent requirements of a JIT purchasing environment. This forces many of these MNCs to turn to distant international suppliers. Studies of plants in the US by Vickery[4] and McClenahen[5], however, indicate international sourcing compromises JIT purchasing efforts due to the longer transportation times and limited face-to-face communication with supplier representatives. In developing countries, these problems are greatly aggravated by weak infrastructures which makes transportation times highly variable and communications problematic [2]. While it has been suggested that the basic simplicity of JIT principles makes them well suited for use in the manufacturing operations of plants in developing countries[6], little research has been conducted to investigate the extension of JIT principles to the purchasing function in these countries.

JIT implementation in Egyptian manufacturing firms: some empirical evidence

“…the Lawrence and Lewis (1996) study and the Wafa and Yasin (1998) study. The modifications made to these studies were determined by the researcher's own knowledge of conditions of the Egyptian industrial sector and the theoretical issues discussed previously.…”

“…Lawrence and Lewis (1996) concluded in their study of the use of JIT practices in Mexico that JIT can be used successfully in some Mexican manufacturing firms. Furthermore, they found that there are three groups of obstacles that hinder the implementation of JIT in Mexican operations:…”

“…IJOPM 25,4 Furthermore, it was discovered that only a few studies on JIT implementation in developing countries have appeared recently (Lawrence and Lewis, 1996;Gyampah and Gargeya, 2001). In view of that, the main task of the current empirical study is to investigate the critical human variables that are affecting the implementation of JIT philosophy in Egyptian manufacturing firms.…”

JIT purchasing in the Spanish auto components industry – Implementation patterns and perceived benefits

“…Fawcett and Scully (1995) provide evidence about a direct relationship between JIT purchasing implementation and cost-oriented benefits such as reduced administrative costs, inspection costs and inventory costs, as well as non-cost-oriented benefits such as design, quality, productivity and scheduling improvements. In a study of manufacturing plants in Mexico, Lawrence and Lewis (1996) noted a positive relationship between the implementation JIT purchasing practices related to logistics and supplier involvement and the results of the firm as regards aspects such as quality, customer service and productivity. Ansary and Heckel (1987) and Schonberger and Ansari (1984) explain respectively how some companies have reduced logistics costs and improved Spanish auto components industry 1047 quality by means of JIT purchasing.…”

Investigating the barriers of using just in time purchasing system for publically traded firms in Tehran stock exchange

“…To remove those obstacles, a project management approach was implemented and, as we expected, productivity and quality for the case study went up, and lead-time went down from six in less than two months. Lawrence and Lewis (1996) reported that poor supplier bases and infrastructures pose significant barriers for the implementation of just-in-time (JIT) purchasing in developing countries. They analyzed two distinct activities characteristic of JIT purchasing, which includes JIT deliveries from suppliers and supplier involvement in improvement activities in Mexican industries.…”