Journal of Operations Management 19 (2001) 81–96

The production performance benefits from JIT implementation

Rosemary R. Fullerton a,∗ , Cheryl S. McWatters b
aSchool of Accountancy, Utah State University, Logan, UT 84322-3540, USA
b Faculty of Management, McGill University, Montreal, Que., Canada H3A 1G5
Received 5 October 1999; accepted 15 June 2000

Abstract
The intense competition in the current marketplace has forced firms to reexamine their methods of doing business. The
US manufacturers have struggled with growing trade deficits and outsourced operations, while strong market competitors
have emerged, using superior manufacturing practices in the form of just-in-time (JIT) and continuous process improvement.
Although proponents cite the many benefits of JIT adoption, its implementation rate in the US has been relatively conservative.
This study uses survey responses from executives at 95 JIT-practicing firms to better understand the benefits that firms have
experienced through JIT adoption, and whether a more comprehensive implementation is worthwhile. The research results
demonstrate that implementing the quality, continuous improvement, and waste reduction practices embodied in the JIT
philosophy can enhance firm competitiveness. JIT implementation improves performance through lower inventory levels,
reduced quality costs, and greater customer responsiveness. This study indicates that JIT is a vital manufacturing strategy to
build and sustain competitive advantage. © 2001 Elsevier Science B.V. All rights reserved.
Keywords: Accounting/operations; Empirical research; Just-in-time

1. Introduction principles of continuous improvement and waste re-

duction. Some of its purported benefits include higher
The globalization and intense competitiveness of quality production, lower inventory levels, improved
the current marketplace has forced firms to reexamine throughput times, and shortened customer response
their methods of doing business. Despite an abun- times. In the US, JIT has been both praised and criti-
dance of both natural and economic resources, the cized for its effectiveness, accounting, in part, for its
US manufacturers have struggled with growing trade relatively conservative adoption rate (Bowman, 1998;
deficits and outsourced operations. With fewer avail- Clode, 1993; Milligan, 1999; White et al., 1999). This
able natural resources, strong market competitors have study has two principal objectives: first, it investigates
emerged, specifically in the Pacific Rim, using supe- the benefits received from the implementation of JIT;
rior manufacturing practices in the form of just-in-time second, it examines the dependence of these benefits
(JIT) and continuous process improvement (CPI) upon the level of commitment in adopting specific JIT
(Cammarano, 1996). JIT is a manufacturing philoso- practices.
phy that emphasizes achieving excellence through the This paper contributes to the JIT literature by pro-
viding a better understanding of why firms consider
∗ Corresponding author. Tel.: +1-435-797-2332; JIT adoption to be beneficial. Improvements resulting
fax: +1-435-797-1475. from reduced inventory levels are documented in sev-
E-mail address: [email protected] (R.R. Fullerton). eral JIT studies. However, limited empirical evidence

0272-6963/01/$ – see front matter © 2001 Elsevier Science B.V. All rights reserved.
PII: S 0 2 7 2 - 6 9 6 3 ( 0 0 ) 0 0 0 5 1 - 6
82 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96

exists concerning other benefits received from invest- 2.1. JIT objectives
ing in JIT. Most evidence consists of case studies
of individual firms or descriptive statistics of small JIT looks beyond the short run to the long-term opti-
samples (Ellis and Conlon, 1992; Kalagnanam and mization of the entire production/distribution network
Lindsay, 1998; Orth et al., 1990; Pandya and Boyd, (Jones, 1991). Successful JIT implementation should
1995; Patell, 1987). This study focuses on the survey accomplish two major objectives: improve quality and
responses from executives at 95 manufacturing firms control the timeliness of the production and delivery of
that have formally adopted JIT. The level of JIT imple- products (Davy et al., 1992; Monden, 1981; Walleigh,
mentation is measured by responses to Likert-scaled 1986). By concentrating on quality, companies should
questions and partitioned into low and high levels. experience less scrap and rework and more effective
One-way analysis of variance (ANOVA) tests are communication among departments and employees. In
performed to ascertain if there are differences in the addition, long-term commitments with fewer suppliers
perceived benefits of JIT between the low and high should result in fewer inspections. The achievement of
adopters. these results requires an even production flow of small
lot size, schedule stability, product quality, short setup
times, preventive maintenance, and efficient process
layout (Chapman and Carter, 1990; Foster and Horn-
2. JIT review gren, 1987; Hall and Jackson, 1992).

JIT is a Japanese-developed manufacturing phi- 2.2. JIT implementation benefits

losophy that represents “an aesthetic ideal, a natural
state of simplicity” in production efficiency (Zip- By 1982, only three English-authored publications
kin, 1991, p. 42). Although precisely defining JIT related to JIT were available (Schonberger, 1982a).
continues to be perplexing (Mia, 2000; White and Subsequently, growing interest in JIT has led to a pro-
Ruch, 1990), JIT production is generally referred to liferation of articles. Field studies of companies that
as a manufacturing system for achieving excellence have had success with JIT adoption comprise much
through continuous improvements in productivity of the published research. Most survey studies exam-
and elimination of waste (Crawford and Cox, 1990; ining the benefits from JIT adoption have reported
Lummus and Duclos-Wilson, 1992; Orth et al., 1990; only descriptive statistics. The sample sizes are gener-
Suzaki, 1987). A more specific definition is provided ally quite small because of the difficulty in effectively
by Calvasina et al. (1989, p. 41): identifying JIT firms and collecting survey responses.
“JIT is a system of production control that seeks The most consistent benefit from JIT adoption found
to minimize raw materials and WIP invento- in the empirical studies is a reduction in inventory lev-
ries; control (eliminate) defects; stabilize pro- els and/or an increase in inventory turns (Balakrishnan
duction; continuously simplify the production et al., 1996; Billesbach, 1991; Billesbach and Hayen,
process; and create a flexible, multi-skilled work 1994; Celley et al., 1986; Crawford and Cox, 1990;
force.” Droge and Germain, 1998; Gilbert, 1990; Huson and
According to Schonberger (1987, p. 5), JIT is the Nanda, 1995; Im and Lee, 1989; Norris et al., 1994;
“most important productivity enhancing management Ockree, 1993).
innovation since the turn of the century.” Gleckman Some survey studies examining the relationship
et al. (1994) stated that “JIT has come of age,” and is between JIT practices and firm performance, as mea-
recognized as a legitimate management philosophy. sured by productivity, lead-time, and quality, have
“The concept of JIT has completed its evolution from failed to find a significant relationship (Flynn et al.,
a manufacturing technique to a much broader phi- 1995; Sakakibara et al., 1997; Dean and Snell, 1996).
losophy of improvement” (Vokurka and Davis, 1996, However, both Kim and Takeda (1996) and Naka-
p. 58) that can help the US manufacturers regain and mura et al. (1998) reported an improvement in several
maintain a competitive advantage in the global market production performance measures subsequent to JIT
(Yasin et al., 1997). adoption. In a comparison study of JIT and non-JIT
 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96 83

Canadian electronic firms, Brox and Fader (1997) results, often creating negative assessments of JIT’s
found JIT firms to be more cost efficient. A few potential (Clode, 1993; Gilbert, 1990; Milligan, 1999).
studies have examined specifically the effects of JIT
implementation on traditional financial performance 3. Research proposition
measures, with inconsistent results (Balakrishnan
et al., 1996; Fullerton and McWatters, 1999b; Hu- JIT is not a new, “mysterious, oriental ritual, but a
son and Nanda, 1995; Inman and Mehra, 1993; Mia, way of operating with a higher priority on time than
2000; Ockree, 1993). we have ever experienced before” (White and Ruch,
Although reducing inventories may not be the pri- 1990). Blackburn (1991) contended that time compres-
mary purpose for implementing JIT, it is a natural sion in manufacturing originated with JIT. Bowman
consequence (Green et al., 1992). As opposed to the (1996, p. 39) stated that “JIT is a lead-time reduction
traditional “push” approach, JIT “pulls” inventory program, not an inventory reduction program.” Flynn
through production only as orders are demanded. et al. (1995) used a reduction in throughput time as a
With work-in-process inventories kept at a minimum, measure of JIT effectiveness. They further explained
production can respond more quickly to errors and how the basic tenets of JIT production improve cus-
changes in demand. Throughput time is reduced along tomer response times. Shorter setup times reduce the
with non-value-added (NVA) activities such as wait, time required to change machines to work on differ-
move, and inspection time, which can comprise up ent parts and also allow for smaller lot sizes. With
to 95% of product costs (Foster and Horngren, 1987; lot sizes decreased, inventory levels are lowered, pro-
Peters, 1990). duction flexibility is increased, and faster feedback on
quality is obtained. The more rapid detection of prob-
2.3. JIT implementation rates lems leads to better quality, with less scrap and rework
(Hall, 1987; Hay, 1988).
The implementation of JIT by the US firms has been JIT empowers employees by using their input in de-
in a relatively slow and ad hoc manner, despite grow- cision making and broadening their workplace skills
ing awareness of its purported benefits (Clode, 1993; (Banker et al., 1993a; Hall, 1987; Johnston, 1989;
Gilbert, 1990; Goyal and Deshmukh, 1992). One rea- Kalagnanam and Lindsay, 1998; Schonberger, 1982a).
son for a firm’s reluctance to adopt JIT is its resis- Workers must be trained to be flexible and given au-
tance to change (Golhar and Deshpande, 1993; King, thority to make day-to-day production decisions, so
1988). The implementation lag has been attributed to that they can react appropriately. Cross training of
a number of other factors, including a lack of under- workers is considered critical to the success of JIT
standing of JIT methods, an incompatible workforce (Epps, 1995; Inman and Mehra, 1993; Spencer and
and workplace environment, non-supportive suppliers Guide, 1995). Working effectively in teams is also
(Majchrzak, 1988; Snell and Dean, 1992; Wafa and important for problem solving in a JIT environment
Yasin, 1998), and an inadequate performance mea- (Banker et al., 1993b). Im and Lee (1989) declared
surement and incentive system (Fullerton and McWat- teamwork essential for JIT implementation.
ters, 1999a). Evidence also exists that JIT may not be The general consensus is that accounting practices
appropriate and has not been successful for all firms should be streamlined in a JIT environment (Banker
(Golhar and Deshpande, 1993; Inman and Brandon, et al., 1993a; Bhimani and Bromwich, 1991; Dur-
1992; Milligan, 1999). den et al., 1999; McNair et al., 1990; Sakakibara
Studies have found that each company undertaking et al., 1993; Schonberger, 1986; Swenson and Cas-
JIT implementation develops its own set of JIT prac- sidy, 1993). However, studies examining the actual
tices, as it tries to eliminate NVA activities (Lubben, changes in accounting practices with the adoption
1988; Schonberger, 1982b). “The greatest benefits to of JIT report mixed results (Fullerton, 1998; Patell,
be achieved by an organization adopting JIT may re- 1987; Sillince and Sykes, 1995).
sult from the synergistic gains of the JIT techniques Managers will be reluctant to implement JIT, if they
operating as a system” (White and Ruch, 1990). A are not convinced that JIT will enhance overall firm
piecemeal implementation approach has led to mixed performance. Therefore, a firm’s investment in JIT
84 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96

practices should be reflected in its profitability mea- proposition. The survey instrument was evaluated in
sures. Much of the extant research has suggested that a limited pretest by several business professors and
JIT leads to improved profitability, but few studies managers from five manufacturing firms for readabi-
have tested this relationship empirically. Inman and lity, completeness, and clarity. Appropriate changes
Mehra (1993) stated that their research study was the were made as per their comments and suggestions.
first to directly link JIT to bottom-line improvements. The survey questions applicable to this research are
A later empirical study by Balakrishnan et al. (1996) interval Likert scales. Factor analysis combined the
found no differences in return on assets (ROA) be- Likert-scaled questions related to JIT practices into
tween JIT and non-JIT firms until firms were grouped three independent measures for testing the research
into those with high or low customer concentrations proposition.
and different cost structures. Other empirical studies
have demonstrated a significant relationship between 4.1. Sample firms
JIT implementation and firm profitability (Fullerton
and McWatters, 1999b; Huson and Nanda, 1995; Mia, An extensive literature search was done to identify
2000). all of the US manufacturing firms known to be for-
Abundant research evidence is available attesting to mally practicing JIT. A sample size of 169 JIT firms
inventory reductions subsequent to the adoption of JIT was initially identified. For inclusion in the study, a
(i.e. Balakrishnan et al., 1996; Billesbach and Hayen, firm must have a primary two-digit SIC code within
1994; Droge and Germain, 1998; Gilbert, 1990; Hu- the manufacturing ranges of 20 and 39, have sales be-
son and Nanda, 1995; Im and Lee, 1989; Norris et al., tween US$ 2 billion and 2 million, and be included
1994). Droge and Germain (1998) extensively exam- on the COMPUSTAT database. Using these criteria,
ined the relationship between JIT and inventory levels the final sample size of “known” JIT firms was re-
and found a significant inverse correlation in every duced to 89. To select additional sample firms (ei-
organizational context between the levels of JIT im- ther JIT or non-JIT), an initial search was done on
plementation and total inventory. The individual re- Compaq Disclosure to identify the potential pool of
lationships of raw materials (RM), work in process the US manufacturing firms that met the set criteria.
(WIP), and finished goods (FG) inventories to JIT have There were 3266 records available. A random selec-
also been examined (Balakrishnan et al., 1996; Golhar tion of 600 firms was chosen. Randomly selected firms
et al., 1990; Nakamura et al., 1998; Patell, 1987). were eliminated from this sample due to duplication,
As noted, several studies have explored different inadequate COMPUSTAT information, addresses out-
aspects of what constitutes JIT and what benefits side of the US, or non-applicable manufacturing op-
should be expected from its implementation. Utilizing erations. As a result, manufacturing executives at 447
broadly-based measures, this study extends prior JIT firms were faxed or mailed the survey packet.
research by examining the benefits from the adoption Following a maximum of three contacts, 254 out
of specific and integrative JIT practices. The following of the 447 firms surveyed completed and returned the
research proposition is examined: firms that make a survey instruments, for an overall response rate of
higher level of commitment in adopting a more com- 56.8%. One of the returned surveys was unusable. Re-
prehensive array of JIT practices experience greater spondents had titles equivalent to the Vice President
benefits in (1) quality improvement; (2) time-based of Operations, the Director of Manufacturing, or the
responses; (3) employee flexibility; (4) accounting Plant Manager. They had an average of 17 years of
simplification; (5) financial performance; and (6) in- management experience, including nine years in man-
ventory reduction than firms with lower levels of agement with their current firm. The data of only the
commitment and fewer JIT practices in place. JIT sample firms add another year to both measures
of management experience. An ANOVA test shows
4. Research method the differences in the means for responding (US$ 404
million) and non-responding (US$ 380 million) firm
A subset of data obtained from a detailed, five-page sales are not statistically significant. Thus, a response
survey instrument was used to explore the research bias related to firm size is not evident.
 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96 85

Table 1
Distribution of two-digit SIC codes for sample firms
Industry JIT firms frequency JIT firms percent Sample frequency Sample percent

20 — Food 1 1.0 7 2.8

22 — Textiles 2 2.1 5 2.0
25 — Furniture and fixtures 5 5.3 6 2.4
26 — Paper and allied products 1 1.0 2 0.8
27 — Printing/publishing 1 1.0 1 0.4
28 — Chemicals and allied products 4 4.2 24 9.5
30 — Rubber products 3 3.2 5 2.0
33 — Primary metals 3 3.2 15 5.9
34 — Fabricated metals 7 7.4 14 5.5
35 — Industrial machinery 17 17.9 41 16.2
36 — Electronics 24 25.3 61 24.1
37 — Motor vehicles and accessories 6 6.3 11 4.3
38 — Instrumentation 20 21.2 55 21.7
39 — Other manufacturing 1 1.0 6 2.3
Totals 95 100.0 253 100.0

The majority of the sample firms classified them- 4.2. Measuring the degree of JIT implementation
selves as non-JIT firms (138). Twenty other respon-
dent firms that are also classified as non-JIT firms in The measurement of JIT implementation levels
this study either left this question blank, or indicated and benefits required a representative set of JIT
they were contemplating or just beginning to imple- manufacturing practices. These measures were es-
ment JIT. Ninety-five of the responding firms (37.5%) tablished from prior research (e.g. Banker et al.,
indicated on the survey that they had formally im- 1993a,b; Flynn et al., 1995; Mehra and Inman,
plemented JIT. However, the total sample size is re- 1992; Moshavi, 1990; Spencer and Guide, 1995;
duced to 91 firms for the data analyses, as four of the White and Ruch, 1990). The ten JIT elements de-
JIT firms did not respond to the questions related to scribed in the White and Ruch (1990) literature re-
post-JIT implementation. view and used in an empirical study by White et al.
The industry distributions of the self-identified JIT (1999) are presented as eleven six-point Likert-scaled
and total sample firms are presented in Table 1. The questions on the survey instrument to measure the
majority (64%) of the respondent firms are from three extent to which firms have adopted JIT: focused fac-
industries: industrial machinery (SIC-35), electronics tory, group technology, reduced setup times, total
(SIC-36), and instrumentation (SIC-38). The industry productive maintenance, multi-function employees,
distribution for the non-JIT firms is similar to the uniform workload, kanban, JIT purchasing, total
JIT firm distribution, except for chemicals and allied quality control (process and product), and quality
products (SIC-28). The industry distribution for the circles. Each of the JIT practices was measured by
total respondent firms is similar to the total sample a single question on the survey instrument. Multi-
industry distribution. Seventy percent of the firms ple measures for each JIT characteristic, as used in
sampled were from the same largest represented in- other studies (Flynn et al., 1995; Sakakibara et al.,
dustries: SIC codes of 28, 35, 36, and 38. The distri- 1993, 1997) would have been beneficial. However,
bution of non-responders by industry was also similar the benefits from an expanded questionnaire were
to the distribution of the total sample size. There determined to be less than those received from a
was a slightly higher percentage of non-responders higher response rate. A glossary defining the JIT
in motor vehicles and a slightly lower percentage of terms was attached to the survey packet to provide a
non-responders in fabricated metals, but neither of clearer understanding of the 11 JIT terms found on
these industries was significantly represented in any the survey, similar to the approach of White et al.
kind of sample partitioning. (1999) (for further explanation of the determination
86 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96

of the JIT measures, see Fullerton and McWatters, The third JIT factor identified is one of uniquely
1999a). JIT practices that describe the extent to which com-
panies have implemented JIT purchasing and kanban
4.2.1. Factors for JIT determinants (JITUNIQUE). Unlike the other JIT practices, these
Using the principal components method, JIT mea- practices are associated more specifically with JIT.
sures were subjected to an exploratory factor analysis. Thus, firms that have adopted these practices would
Three components of JIT with eigenvalues >1.0 were more likely perceive themselves as fully commit-
extracted from the analysis, representing 64% of the ted to JIT (refer to Table 2 for results of the factor
total variance in the data. All of the 11 elements analysis).
loaded >0.5 onto one of the three constructs except
for quality circles, which was eliminated from further 4.3. Construct validity and reliability analysis
testing. The first factor is a manufacturing compo-
nent that explains the extent to which companies “Factor analysis is considered one of the most
have implemented general manufacturing techniques powerful methods of construct validation, as it al-
associated with JIT, such as focused factory, group lows an examination of the overall measure” (Gupta
technology, uniform work loads, and multi-function and Somers, 1992, p. 173). The factor solutions for
employees (JITMANUF). Collectively, these tech- the defined constructs support the construct vali-
niques represent elements of a JIT manufacturing dity of the survey instrument. Convergent validity is
system, although individually these practices may be demonstrated by each factor having multiple-question
adopted by any high technology manufacturing firm. loadings in excess of 0.5 (see Bagozzi and Yi, 1988).
The second JIT factor is a quality component that In addition, discriminant validity is supported, since
examines the extent to which companies have imple- none of the questions in the factor analyses have
mented procedures for improving product and pro- loadings in excess of 0.4 on more than one factor.
cess quality (JITQLTY). Total quality management In order to further test the construct validity of the
(TQM) and JIT are associated through their common resulting constructs, the factor structures were cross
continuous improvement goals. Although TQM can validated through the use of the total sample. Similar
be adopted without implementing JIT, it is unlikely loadings in the cross-validation total sample verified
that a JIT manufacturing system can succeed without the initial underlying patterns.
incorporating the underpinning tenets of TQM. Good Firms reported on the survey instrument whether
quality management is frequently referred to as the or not they had formally implemented JIT. Gupta
cornerstone of JIT and key to its survival (Banker and Somers (1992) indicate that a large correlation
et al., 1993a; Imai, 1998; Sim and Killough, 1998; between two somewhat different measures of the
Swanson and Lankford, 1998; Young et al., 1988). same construct can be used to provide further evi-

Table 2
Factor analysis (VARIMAX rotation) factor loadings for JIT variablesa
Chronbach’s alpha Factor 1 Factor 2 Factor 3
(JITMANUF 0.831) (JITQLTY 0.946) (JITUNIQUE 0.684)
Focused factory 0.662
Group technology 0.719
Reduced setup times 0.732
Productive maintenance 0.729
Multi-function employees 0.537
Uniform work load 0.750
Product quality improvement 0.928
Process quality improvement 0.940
Kanban system 0.732
JIT purchasing 0.797
a All loadings in excess of 0.40 are shown (n = 95).
 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96 87

dence of the construct validity of the instrument. A 5. Research results and discussion
correlation matrix showed significant correlations be-
tween all of the JIT constructs used in this study and The respondents who indicated that they had for-
the JIT/non-JIT response. In addition, an ANOVA test mally adopted JIT were asked to identify the extent
was run comparing the means of the self-identified of operational change that occurred post-JIT adoption
JIT and non-JIT sample firms for the three JIT fac- in the following areas: quality, production timeliness,
tors (JITMANUF, JITQLTY, and JITUNIQUE) and employee utilization, accounting, firm profitability,
a JIT measure representing a complete set of JIT el- and inventory reduction. They were given five choices
ements (JITCOMB) that is the average of the three for the level of change: significant increase, moderate
specific JIT factors. All of these JIT constructs have increase, little or no change, moderate decrease, or
highly significant means differences between JIT and significant decrease. The number of answers given in
non-JIT firms (for further explanation, see Fullerton each category for each level of change is shown in
and McWatters, 1999a). Table 3. Approximately, 28% of the responses indi-
Cronbach’s alpha is used as the coefficient of re- cate that firms have had significant improvements in
liability for testing the internal consistency of the their operations since implementing JIT. More than
constructs validated by the factor analysis. The alpha 61% of the responses are positive, whereas only 5%
coefficients for JITMANUF and JITQLTY are 0.831 of the responses are negative with respect to changes
and 0.946, respectively; the coefficient falls to 0.684 after adopting JIT. When examining only inventory
for JITUNIQUE (the alpha coefficients are shown effects, over three-fourths of the respondents report
in Table 2). The Chronbach’s alpha of the reliability declines in total inventory.
for the combined JIT measure (JITCOMB) is 0.864.
According to Nunnally (1978), alpha coefficients of 5.1. ANOVA comparisons
0.50–0.60 are acceptable for exploratory research.
Overall, these tests support the validity of the mea- One reason suggested for the limited success from
sures representing the constructs used in this study. JIT implementation is the piece-meal approach that

Table 3
Responses to changes in production operations after JIT implementationa
Significant Moderate No Moderate Significant Percentage
increase increase change decrease decrease improved
Scrap 2 35 33 21 59.3
Rework 3 38 31 19 54.9
Inspections 2 7 37 24 21 49.5
Setup times 9 31 25 26 56.0
Queue times 2 20 37 32 75.8
Move times 3 33 28 27 60.4
Machine downtime 5 54 17 15 35.2
Lot sizes 1 7 25 28 30 63.7
Throughput time 12 18 31 30 67.0
Customer response time 2 27 35 27 68.1
Worker flexibilityb 20 37 29 5 62.6
Teamworkb 24 41 23 3 71.4
Accounting simplificationb 4 22 59 6 28.6
Firm profitabilityb 19 37 31 4 61.5
Inventory reduction
Raw materials 2 15 39 35 81.3
Work in process 3 14 29 45 81.3
Finished goods 3 29 23 36 64.8
a n = 91.
b Increases in these categories reflect improvements in operations.
88 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96

companies use in its adoption (Clode, 1993; Daniel viding a more comprehensive perspective of JIT. This
and Reitsperger, 1991; Gilbert, 1990; Goyal and Desh- measure examines more than the sum of the indivi-
mukh, 1992). To better understand which elements of dual factors, since a high adopter on one or even two
JIT affect improvements in firm operations, four JIT individual factors might be classified as a low adopter
factors are examined. Three individual factors, rep- overall. The distribution of low and high adopters is
resenting three different implementation perspectives different for each of the four JIT measures. Table 5 in-
of JIT (a manufacturing component, a quality compo- dicates that all of the categories except JITQLTY have
nent, and a unique JIT practices component), are used almost twice as many low as high adopters. JITQLTY
to assess the perceived benefits of JIT practices. In has approximately three times as many high as low
addition, the average score of the three JIT factors fa- adopters, supporting the importance of quality main-
cilitates the assessment of JIT benefits resulting from tenance in a JIT environment.
the implementation of a comprehensive array of JIT After partitioning the four JIT factors into the two
applications. high/low classification levels, an ANOVA was run
Each of the JIT factors is separated into low and high to determine if a higher level of JIT implementation
levels of implementation. Respondents were asked to contributes to greater improvements in inventory lev-
indicate to what extent their firm had implemented in- els, quality, timeliness, worker flexibility, and prof-
dividual JIT techniques per the following categories itability. Other complex, interactive interrelationships
— 1: no intention; 2: considering; 3: beginning; 4: par- that affect production improvements may exist be-
tially; 5: substantially; 6: fully. Mean responses for the yond those resulting from JIT implementation. How-
JIT factors that are ≥5 are classified as high adopters. ever, this study focuses specifically on JIT, recognizing
Mean responses for the three JIT factors that are >2 implicitly thereby the trade-off in model testing be-
and <5 are classified as low adopters. Mean responses tween generalizability and simplicity (Weick, 1976).
outside this range are not used in the analyses, because The ANOVA results demonstrate whether firms more
no judgment of the change effects from JIT adoption extensively committed to the implementation of spe-
can logically be made when responses indicate that cific JIT practices receive greater benefits from their
these measures have not yet been implemented. implementation efforts. The results for production op-
The combined JIT measure adds the three individ- erations are shown in Table 5 and for inventory reduc-
ual factors together and averages them. This result is tions in Table 4. In addition, the means for each JIT
then sectioned into high and low JIT adopters, pro- level, along with the total sample are given.

Table 4
ANOVA analysis of means for changes in inventory for low and high users of JIT practices
Inventory reductiona JITMANUFb JITQLTYb JITUNIQUEb JITCOMBc
(n = 88) (n = 90) (n = 90) (n = 91)
Raw materials Low 4.098 3.833 3.982 4.048
High 4.333 4.303 4.471 4.448
Total 4.171 4.178∗∗ 4.167∗∗∗ 4.176∗∗
Work In process Low 4.230 4.167 4.125 4.129
High 4.407 4.333 4.500 4.586
Total 4.284 4.289 4.267∗∗ 4.275∗∗
Finished goods Low 3.967 3.708 3.875 3.919
High 4.074 4.134 4.206 4.207
Total 4.000 4.022∗ 4.000 4.011
a Possible responses are:1: significant increase; 2: moderate increase; 3: no change; 4: moderate decrease; 5: significant decrease
b The elements for these JIT factors are shown on Table 2.
c JITCOMB adds together the three individual JIT factors, averages them, and partitions this answer into high and low overall adopters.
∗ p < 0.10.
∗∗ p < 0.05.
∗∗∗ p < 0.01.
 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96 89

To determine if the overall means of the decrease in the number of inspections has one of the
sample respondents are significantly different from the lowest positive response rates in this study, there are
neutral point of three (no change), a t-test was run significant differences between low and high adopters
for the production and inventory measures with the for the JITQLTY and JITCOMB factors. This result
full sample (both low and high adopters). Every provides some evidence that as a more serious com-
measure was significantly greater than the null hy- mitment is made to JIT and quality practices, man-
pothesis of no improvement to at least P < 0.000. agers gain more confidence in reducing the number of
These results reinforce the responses on Table 3 and inspections.
provide credibility to the tests of significance be-
tween the high and low JIT adopters. To check if 5.2.2. Time-based benefits
interactive effects from the combination of the three One of the most documented reasons for JIT im-
JIT variables led to different results than the additive plementation is the reduction of NVA activities that
effects for JITCOMB in Table 5 , the same ANOVA increase throughput time. The time-consuming, NVA
analyses were performed for the high/low multiplica- activities examined in this study include queue time,
tive product of the three individual JIT factors. The move time, and machine downtime. In addition, small
results were similar, with the level of significance lot sizes contribute to the reduction of these activi-
reduced somewhat for teamwork and accounting ties, and subsequently, to improved throughput times.
simplification. The findings in this study demonstrate that JIT can be
an effective, time-based manufacturing tool for firms
that implement a comprehensive set of JIT practices.
5.2. Changes in production operations Five of the six time-based measures show significantly
larger reductions in NVA activities for the high JIT
Improvements in production operations from the adopters using a complete set of JIT practices.
implementation of JIT practices are summarized in Arguably, one of the most wasteful manufacturing
Table 5. The quality benefits are measured by the activities is wait time. A reduction in queue time is
scrap, rework, and inspection variables. Improve- the benefit mentioned most frequently by the sample
ments in production timeliness are measured by respondents. Along with move time, this measure
six variables: queue times, move times, machine shows the greatest difference in time-based measures
downtime, lot sizes, throughput time, and customer between low and high investments in JIT. In addition,
response time. Employee flexibility is evaluated a significant difference in machine downtime between
by responses to improvements in worker flexibility low and high JIT adopters is indicated. However, ma-
and teamwork. Benefits related to accounting sim- chine downtime has the lowest average productivity
plification and financial performance are measured change overall, suggesting that JIT reduces machine
individually. downtime, but further improvements are possible.
Reduced lot sizes are considered integral to JIT im-
5.2.1. Quality benefits plementation. In this study, a significant difference is
The ANOVA analyses show that the level and type found in the change in lot size between those who
of JIT practices in place do affect a firm’s quality. have adopted different degrees of JITUNIQUE or
Scrap and rework have significant differences between JITCOMB.
low and high implementers for JITMANUF, JITU- The ultimate goal of reducing NVA activities is
NIQUE, and JITCOMB. These results support the to enhance competitive advantage through reduced
findings of earlier survey studies (Im and Lee, 1989; throughput time. Several studies have found that im-
Norris et al., 1994; Swenson and Cassidy, 1993). In proved throughput time was the major benefit from JIT
a perfect JIT world, inspections would not be neces- adoption (Cobb, 1992; Im and Lee, 1989; Nakamura
sary, because the quality would be so exceptional that et al., 1998; White, 1993). The results in this study
there would be no defects. Inspections during produc- show that the high adopters who have implemented a
tion indicate that less than perfect quality is expected full array of JIT practices, have significantly reduced
and tolerated (Lubben, 1988, p. 48). Even though a throughput times.
90 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96

Table 5
ANOVA analysis of means differences in production changes for low and high users of JIT practices
Production changesa JITMANUFb JITQLTYb JITUNIQUEb JITCOMBc
(low = 61, high = 27), (low = 24, high = 66), (low = 56, high = 34), (low = 62, high = 29),
n = 88 n = 90 n = 90 n = 91
Quality benefits
Scrap
Low 3.721 3.625 3.643 3.629
High 4.111 3.894 4.088 4.241
Total 3.841∗∗ 3.822 3.811∗∗ 3.824∗∗∗
Rework
Low 3.639 3.542 3.571 3.532
High 4.000 3.803 3.971 4.138
Total 3.750∗ 3.733 3.722∗∗ 3.725∗∗∗
Inspections
Low 3.557 3.250 3.464 3.403
High 3.852 3.742 3.824 4.035
Total 3.648 3.611∗∗ 3.600 3.604∗∗∗
Time-based benefits
Queue times
Low 4.049 3.917 3.911 3.903
High 4.296 4.167 4.353 4.483
Total 4.125 4.100 4.078∗∗ 4.088∗∗∗
Move times
Low 3.787 3.750 3.661 3.694
High 4.418 3.924 4.177 4.241
Total 3.898∗ 3.878 3.856∗∗∗ 3.868∗∗∗
Machine downtime
Low 3.443 3.208 3.357 3.307
High 3.556 3.546 3.588 3.793
Total 3.477 3.456∗ 3.444 3.462∗∗∗
Lot sizes
Low 3.803 3.917 3.679 3.726
High 4.111 3.864 4.177 4.172
Total 3.898 3.878 3.867∗∗ 3.868∗∗
Throughput time
Low 3.869 3.625 3.768 3.710
High 4.000 3.970 4.029 4.207
Total 3.909 3.878 3.867 3.868∗∗
Customer response time
Low 3.984 4.000 3.857 3.919
High 3.963 3.955 4.088 4.035
Total 3.977 3.967 3.811 3.956
Employee flexibility
Worker flexibilityd
Low 3.754 3.500 3.536 3.645
High 3.926 3.909 4.235 4.103
Total 3.807 3.800∗∗ 3.800∗∗∗ 3.791∗∗
Teamworkd
Low 3.869 3.750 3.768 3.790
High 4.148 4.015 4.235 4.276
Total 3.955 3.944 3.944∗∗∗ 3.945∗∗∗
 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96 91

Table 5 (Continued)
Production changesa JITMANUFb JITQLTYb JITUNIQUEb JITCOMBc
(low = 61, high = 27), (low = 24, high = 66), (low = 56, high = 34), (low = 62, high = 29),
n = 88 n = 90 n = 90 n = 91

Accounting simplificationd
Low 3.262 3.292 3.161 3.145
High 3.296 3.258 3.412 3.517
Total 3.273 3.267 3.256∗ 3.264∗∗
Firm profitabilityd
Low 3.754 3.417 3.768 3.677
High 3.889 3.909 3.794 4.000
Total 3.796 3.778∗∗ 3.778 3.780∗
a Possible responses are 1: significant increase; 2: moderate increase; 3: no change; 4: moderate decrease; 5: significant decrease.
b The elements for these JIT factors are shown on Table 2.
c JITCOMB adds together each of the three individual JIT factors, averages them, and partitions this answer into high and low overall

adopters.
d These items are reverse coded.
∗ p < 0.10 statistical significance of differences in means.
∗∗ p < 0.05.
∗∗∗ p < 0.01.

5.2.3. Employee flexibility rewards. Greater profitability is also observed for those
Human resource issues are critical to the success adopting a full complement of JIT practices. External
of JIT. This study demonstrates significant differences profitability measures were obtained from COMPUS-
between the low and high JIT adopters in teamwork TAT for the sample firms. There is a significant corre-
and worker flexibility for the majority of the JIT fac- lation to at least P < 0.01 between the respondents’
tors. These results suggest that firms making a greater perceived increases in firm profitability and higher
commitment to JIT implementation reap greater re- external measures of return on assets and return on
wards in terms of increased employee flexibility. sales.

5.2.4. Accounting simplification 5.3. Changes in inventory

Along with streamlining their production processes,
JIT firms should also streamline their accounting The effect on inventory levels has been researched
procedures (Bragg, 1996). This study presents some more than any other aspect of JIT implementation. The
evidence that high JIT adopters are doing a better results consistently demonstrate substantial reductions
job of simplifying their accounting systems. Mean in inventory levels post-JIT adoption. The firms in this
differences for JITUNIQUE and JITCOMB are sig- study also show considerable reductions in inventory
nificantly different for high and low JIT adopters. after adopting JIT (refer to Table 4). Almost half of
However, the mean for accounting simplification is the respondents indicated that they had a significant
appreciably lower than the means of all the other decrease in WIP since implementing JIT. The WIP
measures. mean of 4.6 for the high adopters of JITCOMB, easily
the highest average response, is significantly greater
5.2.5. Firm profitability than that of the low JIT adopters. RM inventory reduc-
As noted, several studies have examined produc- tions are also significantly greater for high adopters.
tion performance benefits of JIT, but there is limited However, the results indicate little difference in FG
and conflicting evidence of the direct effect of JIT inventory levels between low and high JIT adopters,
adoption on financial performance. This study indi- similar to the results of Balakrishnan et al. (1996) and
cates that firms that have invested more in quality Patell (1987). Inventory reductions appear to be easier
practices benefit from significantly higher financial to maintain for WIP than for FG.
92 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96

Table 6
ANOVA analysis of means’ differences in firm characteristics for low and high users of JIT practices
Level of JITa n Mean S.D.

Years of JIT experience Low 61 4.656 4.311

High 28 6.464
Total 89 5.225∗
JIT training hours per year per employee
Top management Low 53 14.226 19.044
High 24 8.000
Total 77 12.285
Middle management Low 55 28.582 38.255
High 26 25.192
Total 81 27.494
Line supervisors Low 54 29.093 38.949
High 25 26.000
Total 79 28.114
Non management Low 54 18.593 32.035
High 25 21.160
Total 79 19.415
Top management commitmentb Low 64 3.688 1.036
High 29 3.931
Total 93 3.763
Innovation leadershipc Low 63 3.841 0.698
High 31 4.140
Total 94 3.940∗
Organizational structured Low 63 3.037 1.008
High 31 3.151
Total 94 3.075
Repetitive production processe Low 64 0.781 0.402
High 31 0.839
Total 95 0.800
Firm size (sales) Low 61 532.058 1332.637
High 30 1345.147
Total 91 800.109∗∗∗
a JIT is the average of the three individual JIT factors.
b Scale for this survey item: Indifferent: 1. . . 2. . . 3. . . 4. . . 5: highly committed.
c Scale for this survey item: Follower: 1. . . 2. . . 3. . . 4. . . 5: leader.
d Scale for this survey item: Highly Centralized: 1. . . 2. . . 3. . . 4. . . 5: highly decentralized.
e Scale for this survey item: 1: repetitive production process; 0: job shop.
∗ p < 0.10.
∗∗∗ p < 0.01.

5.4. Differences in firm characteristics as measured by net sales, demonstrates any strong sig-
nificant difference. Respondent firms that more fully
Table 6 presents ANOVA analyses of the signifi- implement JIT are much larger than those which in-
cance in the mean differences of the JIT factors for vest fewer resources in JIT. A larger firm likely would
various characteristics of the responding firms. The re- have more resources to study the ramifications of JIT
sults show minimal variation in the characteristics of and to make the necessary changes for its adoption.
the low and high JIT adoption firms. Only firm size, The strong association between JIT implementation
 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96 93

and firm size has been confirmed in earlier studies (e.g. International competition continues to intensify as
Ahmed et al., 1991; Fullerton and McWatters, 1999a; firms strive to attain a greater share of the world mar-
Im and Lee, 1989; White et al., 1999). ketplace. These research results demonstrate that JIT
Two other measures show marginal significance in implementation improves competitive performance by
mean differences of low and high JIT adopters. As ex- lowering inventory levels and reducing quality costs
pected, the longer a firm has practiced JIT, the higher and throughput time. The evidence supports the con-
is its level of adoption. Also, firms that perceive them- cept of JIT as a comprehensive, vital manufactur-
selves to be more innovative have made a greater com- ing strategy that can build and sustain competitive
mitment to JIT practices. Although 80% of the JIT advantage.
firms indicated they use a repetitive production pro-
cess as opposed to a job shop, there is no significant
6.1. Research limitations
difference between high and low adopters.
Specific research limitations might reduce the gen-
6. Conclusions eralizability and applicability of the study findings. A
necessary assumption in the data collection is that the
respondents were sufficiently knowledgeable and an-
This study indicates that managers adopting JIT
swered the questions conscientiously and truthfully.
practices have experienced considerable benefits in
Although the 11 JIT indicators were supported by a
all of the measured areas: quality improvements,
thorough study of JIT literature, and an explanation
time-based responses, employee flexibility, account-
of their meaning was attached to the survey packet,
ing simplification, firm profitability, and inventory
these single measures for the individual JIT practices
reductions. The managers who reaped the highest
might not have captured actual company practices.
rewards were the high adopters of either a complete
Evaluation of the performance measures was based
array of JIT practices or the more unique JIT prac-
on management perceptions. This self-reporting may
tices of kanban and JIT purchasing. Fourteen of the
have created bias in the answers, due to a natural ten-
16 benefits examined for the combined JIT measure
dency of managers to respond favorably concerning
have significant mean differences between low and
the operations of their firm. Finally, the sample selec-
high JIT adopters. This result provides convincing ev-
tion process was not completely random. In order to
idence that the more comprehensive (both in breadth
obtain an adequate number of responses from firms
and depth) is the adoption of JIT, the greater are the
practicing JIT, a portion of the sample was selected
overall returns.
from specific firms identified in the literature review
Both low and high adopters are receiving similar
as “JIT firms”. This limitation might lead to response
benefits when their focus is restricted to JIT manu-
bias and make the test sample non-representative of
facturing practices and quality maintenance. The in-
other US manufacturing firms adopting JIT.
dividual practices associated with JITMANUF and
JITQLTY are more general in application, and could
be adopted by advanced, quality-oriented manufactur- 6.2. Future research directions
ing firms, whether or not they are formally practicing
JIT. Thus, differences in benefits achieved from vary- As JIT practices become more prevalent, in-depth
ing implementation levels in these areas may be lim- study of individual industries and companies would
ited. JITUNIQUE is the only individual JIT factor that result in a more refined representation of both its bene-
has high incidence of significant differences between fits and limitations. Case studies of JIT failures would
the means of high and low users, strengthening our provide information on the pitfalls of JIT and the
premise that a more comprehensive JIT implementa- necessary conditions for its success. Case studies also
tion leads to greater benefits. The JIT practices most would help to uncover the motivation to implement
likely found in firms that have more fully committed JIT. The increasing economic importance of service
to the JIT philosophy are those that are represented in industries reinforces the need for complementary re-
the JITUNIQUE factor. search of this sector to determine which JIT concepts
94 R.R. Fullerton, C.S. McWatters / Journal of Operations Management 19 (2001) 81–96

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Nonetheless, strong evidence of JITs substantial
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