007-0254

The relationship between JIT production and Manufacturing strategy and their impact on
JIT performance

Ayman Bahjat Abdallah¹ and Yoshiki Matsui²

Departement of Business Management Systems, International Graduate School of Social Sciences,
Yokohama National University. 79-4 Tokiwadai, Hodogaya-Ku, Yokohama 240-8501 JAPAN
E-mail: aymanabdallah@yahoo.com¹; ymatsui@ynu.ac.jp²
Phone : +81-9097952005¹ ; +81-45-339-3734²

POMS 18th annual conference

Dallas, Texas, U.S.A.
May 4 to May 7, 2007

Abstract

This study constructs multi-item scales to measure key components of JIT production and

manufacturing strategy and examines the relationship between them, and the impact of

manufacturing strategy on JIT performance for machinery, electrical & electronics and

automobile industries in Japan, USA, and Italy. JIT production scales include JIT schedule, JIT

layout, JIT delivery by suppliers, JIT link with customers, pull system, and setup time reduction.

Manufacturing strategy scales are measured in terms of achievement and leadership of functional

integration, anticipation of new technologies, communication of manufacturing strategy, formal

strategic planning, manufacturing-business strategy linkage, and proprietary equipment. The

results from regression analysis show that after controlling for the industry and country effects,

manufacturing strategy scales have positive and significant impact on JIT production. The results

also show that manufacturing strategy scales have positive and significant impact on JIT

performance.

Key words: Just-in-time production; Manufacturing Strategy; International comparison;

Empirical research
1. Introduction

In the past two decades, Japanese manufacturing practices in general and Just-In-Time

production in particular have received a great attention from western researchers and

manufacturing firms in trial to catch-up Japan in terms of quality, productivity, and low cost.

The JIT advocates the elimination of waste by simplifying production processes, reductions in

set up times, controlling material flows, and emphasizing preventive maintenance are seen as

ways by which excess inventories can be reduced or eliminated, and resources utilized more

efficiently (Kannan and Tan, 2005).

Published research papers covered a wide area of JIT. Early papers tried to identify JIT elements

and whether or not they were associated with Japanese culture and their applicability in western

manufacturing firms. Golhar and Stamm (1991) classified articles associated with JIT published

in the 1980s as follows: Global productivity comparison articles, JIT/MRP/OPT comparison

articles, articles on JIT practices, Kanban, cellular manufacturing, accounting, Human resource

management, purchasing, and quality.

Later, emphasize was given to the impact of JIT on both competitive and financial performances

of the firm. In addition to that, the relationship between JIT and other operational practices was

given a special attention. These operational practices included total quality management, total

preventive maintenance, human resource management, supply chain management, information

systems, technology and others.

Sakakibara et al. (1997) asserted that the connection between JIT and manufacturing strategy is

rarely discussed in the literature. During our review of JIT literature, we could find only two

papers that regarded manufacturing strategy as necessary infrastructure for JIT production

(Sakakibara et al. (1997); Ahmad et. al. (2003)).

In this paper we try to examine empirically the relationship between JIT and manufacturing

strategy. The data was collected from three countries-Japan, USA, and Italy to investigate this

relationship. In addition to that, the impact of manufacturing strategy on JIT performance will be

examined. The findings of this study are discussed to shed more light on manufacturing strategy

as a necessary infrastructure for successful JIT implementation.

2. Literature review

2.1. Just in time

The notion of JIT production was described by Taiichi Ohno, the godfather of Toyota production

system, as ” All we are doing at the time line from the moment the customer gives us an order to

the point when we collect the cash, and we are reducing that time line by removing the non-

value-added wastes” (Liker, 2004). One motivating reason for developing JIT and other better

production techniques was that after World War II, Japanese people had a very strong incentive

to develop good manufacturing techniques to help them rebuild the economy (Cheng, 1996).

There are seven forms of waste were identified by Toyota engineers: Waste of overproduction,

Waste of inventory, Waste of repair/defects, Waste of motion (unnecessary movement), Waste of

processing, Waste of waiting, and Waste of transport (Womack and Roos, 1990; Imai, 1997;

Taylor and Brunt, 2001; Liker, 2004).

There is no agreement on a clear definition of JIT. The complex subject is usually summarized in

a very brief statement, this result in information being omitted and causes confusion (Hallihan et

al., 1997). Voss and Robinson (1987) defined JIT as:

“JIT may be viewed as a production methodology which aims to improve overall

productivity through the elimination of waste and which leads to improved quality.

In the manufacturing/assembly process JIT provides the cost-effective production

and delivery of only the necessary quality parts, in the right quantity, at the right
time and place, while using a minimum of facilities, equipment, materials and

human resources. JIT is dependent on the balance between the stability of the user’s

scheduled requirements and the supplier’s manufacturing flexibility. It is

accompanied through the application of specific techniques which require total

employee involvement and team work”.

Many researchers have tried to identify the main elements of JIT. However, there is little

consensus among researchers regarding the relative importance of these elements in the JIT

implementation process (Ramarapu et al., 1995).However, the potential synergic benefits

are not fully realized until all elements of a JIT system are integrated (Goyal and

Deshmukh , 1992).

Research has shown several benefits obtained by implementing JIT production. According

to Hay (1988), JIT not only provide companies with great increases in quality of their

manufactured goods, but also help a company to cut response time to market by as much as

90 percent. The most cited JIT benefit is cost reduction. Other benefits included: inventory

reduction, increased quality and productivity levels, improved relationship with suppliers,

improved customer service, reduced lead time, reduced work in process and raw materials,

increased inventory turnover, downtime reduction, workspace reduction (Mehra and Inman

1992; Sohal et al., 1993; Markham and McCart 1995; Yasin and Wafa 1996; Sriparavastu

and Gupta, 1997; Imai 1997)

There are also barriers that may potentially impede successful implementation of JIT

production. The absence of senior management commitment and support was the most

frequently reported reason for JIT failure. Supplier education is an often neglected part of

JIT implementation, and companies seeking to implement JIT fully would benefit greatly

by addressing this issue (Sohal et al., 1993). One important barrier is local culture in

countries other than Japan. Many researchers insisted on Japanese culture as one of the
 main reasons for JIT success in Japan (Ramarapu et al., 1994). Other barriers include lack

of formal training/education for management and workers, and lack of cooperation with

suppliers (Salaheldin, 2005), obstacles to employee participation (Lawrence and Lewis,

1993), schedules may be more complex because changeovers are frequent (Brown and

Mitchell, 1991), and lack of accurate forecasting system (Wafa and Yasin, 1998)

Based on our literature review, we focus on the following dimensions of JIT:

1. Daily Schedule Adherence: Measures whether there is time allotted for meeting each

day’s schedule including catching up after stoppages for quality considerations or

machine breakdown.

2. Equipment layout: Measures use of manufacturing cells, elimination of forklifts and long

conveyers, and use of smaller equipment designed for flexible floor layout, all associated

with JIT.

3. JIT Delivery by Suppliers: Measures whether vendors have been integrated into

production in terms of using kanban containers, making frequent (or just-in-time)

delivery and quality certification.

4. JIT Link with Customers: Measures whether the plant has applied the JIT delivery

concept and the pull concept in the operational link with its customers.

5. Kanban: Measures whether or not the plant has implemented the physical elements of

kanban/pull system.

6. Setup Time Reduction: Setup Times/Lot Size Reduction measures whether the plant is

taking measures to reduce setup times and lower lot sizes in order to facilitate JIT.

2.2 Manufacturing Strategy

Hofer and Schendel (1978) have defined three levels of strategy: Corporate Strategy: defines

the businesses the corporation should be in. Business Strategy: defines the ways to compete
in a given business. And Functional Strategy: defines how each function contributes to the

competitive advantage of the business. Manufacturing strategy belongs to the third type-

functional strategy, and it usually answers the question: How can manufacturing contribute to

the competitive advantage of the business. Manufacturing strategy is the process companies

use to build the resources and the capabilities to create competitive advantage, and to align

their competitive priorities with the marketing function (Schroeder and Flynn, 2001). Bates et

al. (1995) defined manufacturing strategy as a design or blueprint for the manufacturing

function that frames the acquisition, development and elimination of manufacturing

capabilities far into the future.

In order to maintain their competitive position, Manufacturing managers must be able to

combine constant improvement of existing manufacturing processes with judicious

investment in new processes, utilizing both human and capital resources (Schroeder and

Flynn, 2001). In addition to that, manufacturing strategy is used to coordinate manufacturing

decision making, including selection of technologies, suppliers, production planning and

control systems, work force, and qualitative practices (Bates et al., 1995). Skinner (1969)

identified five areas that represent the pillars of manufacturing strategy: plant and equipment,

production planning and control, labor and staffing, product design, and organization and

management.

Manufacturing strategy implementation means widely communicating how to relate

decisions made within plants to business unit goals (Schroeder and Flynn, 2001). They added

that plants with high levels of manufacturing strategy implementation consistently

outperformed those that did not. Ahmad et al. (2003) suggested that plants with a well

defined manufacturing strategy are expected to be more focused than plants without a

manufacturing strategy, and thus will provide support for JIT.

Leong et al., (1990) observed that process research has been relatively neglected both

conceptually and empirically. Following Bates et al. (1995), Susan et al. (1995), sakakibara

et al. (1997), Schroeder and Flynn (2001), and Ahmad et al. (2003), we investigate

manufacturing strategy from process-based point of view. Performance measurement as well

as the pursuit of particular operational methods is out of the scope of our definition of

manufacturing strategy. Thus, we investigate manufacturing strategy based on the following

dimensions:

1. Achievement of Functional Integration: Functional integration measures whether or not

the different functional areas of the company are integrated in terms of goals, decisions

made, and knowledge of one another’s areas. Each function has a responsibility to

develop processes, procedures, systems, people and other capabilities in line with the

needs of agreed markets (Hill, 1995). He also indicated that the corporate strategy is the

outcome of functional strategies and can only be achieved by integration across the

functional boundaries.

2. Communication of Manufacturing Strategy: reflects the opinions of several categories of

plant employees’ knowledge of the plants operations strategy. Voss (1995) stated that

manufacturing strategy should be developed through a participative approach, and after

that should be freely shared with all employees in the organization. In addition to that, the

extent of understanding the manufacturing strategy by the employees is an indicator of

world class manufacturer (Susan et al., 1995).

3. Anticipation of New Technologies: Measures whether the plant is prepared in advance of

technological breakthroughs to engage in the implementation of new technologies when

such technologies become available.

4. Formal Strategic Planning: Plant management involvement in strategic planning and

frequently updated strategic plans indicate a world class orientation. According to

 McGrath and Hoole (1992), many firms have no formal manufacturing strategy. Hill

(1989) discussed that although firms within an industry may share access to the same

technology, manufacturing systems, and infrastructure elements, they are not equally

successful in linking those aspects to the criteria critical to winning orders. This will be

achieved by agreed upon strategic plan which translates the business strategy into

manufacturing terms (Leong et al., 1990).

5. Manufacturing-Business Strategy Linkage: Measures the consistency between the

manufacturing strategy and the business strategy and whether or not manufacturing

strategy supports the business strategy. Skinner (1969) stressed that manufacturing

should not merely make products and services, but should provide competitive advantage

to the business, and this will be achieved when manufacturing decisions are supportive of

the business strategy.

6. Proprietary Equipment: Measures whether or not the plant is pursuing development of in-

house equipment as a source of competitive advantage.

3.3 JIT performance

JIT performance can be measured by inventory turnover, cycle time, lead time, delivery

performance, and other measures (Flynn et al., 1995). Yasin et al. (1997) suggested fourteen

variables to measure JIT performance such as: the extent of reduction of inventory due to JIT;

the extent of reduction of rejects of finished goods due to JIT; the extent of improvement in on-

time receipts from suppliers due to JIT; the extent of lead time reduction due to JIT, and the

extent of improvement of relationship with suppliers due to JIT.

For our study, we focus on the following dimensions to measure JIT performance:

1. On time delivery performance

 2. Flexibility to change volume

3. Inventory turnover

4. Cycle time

3. Framework and research hypotheses

This research has been based on the proposed framework (Fig. 1). The framework considers the

impact of manufacturing strategy on JIT and JIT performance. As was discussed earlier, JIT,

manufacturing strategy, and JIT performance elements in the framework have been derived from

the literature. We hypothesize that there is a significant positive impact of manufacturing

strategy on JIT production. We also hypothesize that there is a significant positive impact of

manufacturing strategy on JIT performance. We discuss our hypothesized relationships in this

section.

Our data was collected from three different countries and three different industries. JIT

production was initiated by Japanese companies and for long time it was regarded as a Japanese

unique operational production philosophy. Although JIT production have been widely adopted

by may western manufacturers, we expect that the level of JIT implementation and development

still higher in Japan. In addition to that, JIT production was initiated by Toyota and many

researchers still refer to it as Toyota production system. Later, JIT was adopted by many

automobile companies in order to catch up with Toyota’s high quality and low cost cars. We

expect that the implementation of JIT production still higher in automobile industry than

electronics and machinery.

The nature of JIT production is that it requires everyone’s participation and contribution in order

to assure smooth operations. Cooperation and coordination among employees, processes, and

functions are of crucial importance for JIT success. In addition to that, Supply chain management

is the focal point in JIT environment and failure in properly managing suppliers and customers
will necessarily impede JIT production. This implies that additional responsibilities will be borne

by managers and workers. Such new responsibilities include everyone’s responsibility for quality

control and preventive maintenance, multi-functional employees, suggestions for continuous

improvements and participation in small groups for problem solving. Technology also plays an

important role in JIT environment to assure that schedules are always met and set up times are

reduced to the lowest possible. Advanced and innovative technology will also enhance the

competitiveness of the firm and new products development. Therefore, we propose that a sound

and well-developed and communicated manufacturing strategy company wide will contribute to

the level of JIT development and implementation. The effectiveness of JIT production is

expected to be higher in an organization with a well-defined manufacturing strategy (Ahmad et

al., 2003). Manufacturing strategy is expected to encompass all the issues discussed above and

will serve as a clear road-map so that everyone in the plant is expected to know that the business

strategy is built upon the manufacturing capabilities and that he or she is playing a central

strategic role in the implementation of JIT production. Manufacturing strategy here differs from

human resource management practices usually associated with JIT; it rather highlights the

strategic role of the manufacturing which is expected to lead the overall business strategy in JIT

environment.

H1a. Country and industry explain a significant portion of variation in JIT implementation level.

H1b. Manufacturing Strategy significantly contributes to JIT implementation level.

We also expect country and industry to affect the level of JIT performance. JIT manufacturing

depends on the overall strength of an organization (Sakakibara et al., 1997). They also concluded

that JIT practices have value when they are used to build infrastructure, and have no direct effect

on performance. We propose that Japanese manufacturing companies still have better

infrastructure to support JIT production, and therefore are expected to have higher JIT
performance. We also expect automobile industry to have better infrastructure for JIT and

subsequently higher JIT performance.

The way the firm manages its manufacturing strategy seems to play an important role in

manufacturing performance (Sakakibara et al., 1997). A well-developed Manufacturing strategy

is expected to affect all the elements of JIT performance. On time delivery performance is

expected to be highly affected by the degree of the integration among functions and processes,

by the existing technology and how close it meets JIT requirements in terms of reliability and

quick set ups. In addition to that formal planning and widely communicating manufacturing

strategy internally as well as along the supply chain is expected to enhance responsiveness by

suppliers in terms of time and quality as qualifying suppliers at the preparation stage of JIT is

one aspect of the strategic formal planning.

Inventory turn over is another JIT performance that is expected to be affected by manufacturing

strategy. Firms keep safety stock to cope with unpredictable problems such as late deliveries,

machines breakdowns and quality problems to assure meeting customer needs on time. A formal

and sound manufacturing strategy is expected to prevent such problems by establishing a strong

internal infrastructure for JIT as well as external infrastructure including suppliers and customers.

As a subsequent, these strategic issues are expected to decrease cycle time. Flexibility is also an

important out put of JIT production and it is expected to be highly affected by the technology,

integration, and overall planning.

H2a. Country and industry explain a significant portion of variation in JIT performance.

H2b: Manufacturing Strategy is positively related to JIT performance.

 JIT
• Daily Schedule Adherence
• Equipment layout
• JIT Delivery by Suppliers
Manufacturing Strategy • JIT Link with Customers
• Achievement of Functional Integration H1
• Kanban
• Anticipation of New Technologies • Setup Time Reduction
• Communication of Manufacturing
Strategy
• Formal Strategic Planning
• Manufacturing-Business Strategy
Linkage JIT performance
• Proprietary Equipment H2 • On time delivery performance
• Flexibility to change volume
• Inventory turnover
• Cycle time

Fig.1. Research framework

4. Methodology

4.1 Description of data

The data used for this empirical research were collected as part of an ongoing High Performance

Manufacturing (HPM) project (previously called world class manufacturing project (WCM)),

round 3 being conducted by a team of researchers in eight countries: Japan, Korea, USA,

Germany, Italy, Austria, Sweden, and Finland. The HPM database was assembled in 2003 and

2004 and consists of randomly selected world-class and traditional manufacturing companies

from three different industries: machinery, electronics and transportation. For this study, our

sample comprised of 91 manufacturing plants located in Japan, USA, and Italy representing Asia

Pacific, North America, and Europe.. Table 1 shows the distribution of the plants used in this

research classified by country and industry.

Table 1
Number of sample plants classified by country and industry
Country Industry Total
Machinery Electronics Transportation
Japan 10 12 13 35
USA 9 11 9 29
Italy 10 10 7 27
Total 29 33 29 91

The measurement instrument of this project was developed after conducting an extensive review

of relevant literature by project members. The developed scales were reviewed by a panel of 3-5

experts to assure content validity, and the scales were revised as needed. Finally, the

questionnaire was pre-tested at several manufacturing plants and with academics for pilot testing,

and was revised as needed.

The original questionnaire was translated into each county’s language by experts of operations

management from those countries and then back translated to English to ensure equivalency.

The selected manufacturing plants were contacted personally by a member of HPM in each

country. The project member asked the plant managers for their voluntary participation in the

project. About 60% of contacted managers agreed to participate and assigned one manager to be

responsible for data collection and to serve as a coordinator with the project member.

Participating plants were promised to receive a comprehensive feedback concerning their

managerial and operational practices compared to other plants. The right respondents in terms of

experience, specialty, and knowledge were agreed upon between the team member and the

assigned coordinator in each plant.

Then the questionnaire was completed by 12 direct labors who received the same questionnaire

and 14 managers who each received a different questionnaire, allowing respondents to address

their particular area of expertise. In addition to that, multiple respondents were asked to complete

each question in order to obtain greater reliability of the data and to eliminate potential

respondent bias.
The items used to measure the different practices of JIT, manufacturing strategy and JIT

performance can be found in appendixes A-C. For JIT and manufacturing strategy questions, the

respondents were asked to indicate their agreement or disagreement with the statements provided

using seven point Likert scales where 7 indicates strong agreement and 1 indicates strong

disagreement. For JIT performance measures, respondents were asked to evaluate JIT

performance relative to their competitors in the same industry, on a global basis using five point

Likert scales where 5 indicates superior to competitors and 1 indicates poor, low end of industry.

4.2. Measurement of variables

As was discussed earlier, six multi-item scales were selected to measure JIT production and six

multi-item scales to measure manufacturing strategy. To measure JIT performance, four non-

scale items were selected. Table 2 shows correlation matrix and summary of statistics of these

measures.

To ensure that JIT and manufacturing strategy scales are reliable indicators of their constructs,

factor analysis was carried out. Only items that had a factor loading of at least 0.40 and

eginevalue of at least 1 were retained (tables 3 and 4). Three JIT variables failed to meet this

cutoff loading leaving a total of 31 variables constructing the six JIT constructs.

One manufacturing strategy variable failed to meet the cutoff loading leaving a total of 26

variables constructing the six manufacturing strategy constructs. Cronbach’s coefficient α was

used to evaluate the reliability of the scales.

Five JIT scales and five manufacturing strategy scales have met the recommended standard of α

≥ 0.70 and considered to be internally consistent (Nunnally, 1967).

Table 2
Means, standard deviations, and correlations among variablesª

Mean S.D. 1 2 3 4 5 6 7 8 9 10 11 12 13
1. Daily Schedule Adherence 4.93 4.9342 1
2. Equipment layout 4.95 4.9557 0.403** 1
3. JIT Delivery by Suppliers 4.56 4.5695 0.568** 0.500** 1
4. JIT Link with Customers 4.80 4.8047 0.546** 0.371** 0.604** 1
5. Kanban 3.79 3.7998 0.401** 0.366** 0.589** 0.447** 1
6. Setup Time Reduction 4.85 4.8569 0.595** 0.336** 0.504** 0.403** 0.365** 1
7. Achievement of Functional
5.06 5.0635 0.331** 0.218* 0.267* 0.463** 0.117 0.376** 1
Integration
8. Anticipation of New
5.07 5.0784 0.332** 0.159 0.368** 0.419** 0.125 0.445** 0.549** 1
Technologies
9. Communication of Manufacturing
4.88 4.8817 0.438** 0.219* 0.296** 0.307** 0.092 0.330** 0.284** 0.403** 1
Strategy
10. Formal Strategic Planning 5.06 5.0668 0.198 0.187 0.186 0.319** 0.051 0.337** 0.480** 0.648** 0.378** 1
11 Manufacturing-Business Strategy
5.29 5.2987 0.268* 0.200 0.250* 0.437** 0.186 0.354** 0.606** 0.664** 0.251* 0.633** 1
Linkage
12 Proprietary Equipment 4.27 4.2769 0.194 0.225* 0.259* 0.282** 0.250* 0.110 0.074 0.192 0.047 0.107 0.134 1
13.JIT performance 3.63 .59293 0.374** 0.467** 0.444** 0.428** 0.230* 0.377** 0.311** 0.488** 0.229* 0.322** 0.373** 0.552** 1
ªN=91
*P ≤ 0.05
**P≤ 0.01
The reliability of the remaining two scales “JIT link with customers” and “Communication of

manufacturing strategy” has been 0.660 and 0.607 respectively. Nunnally recommends a

minimum standard of 0.60 for newly developed scales; therefore we decided to retain these two

scales.

The six JIT scales were averaged into a single overall JIT super scale. Factor analysis was

carried out for this super scale and all the factor loadings are higher than 0.40 and the eginevalue

is 3.355 with Cronbach’s coefficient α of 0.824 as shown in table 3. We also carried out a super

scale of JIT performance as shown in table 3. All factor loadings are higher than 0.40, eginevalue

of 2.148, and Cronbach’s coefficient α of 0.707.

Table 3
Factor analysis: JIT scales
Variables Descriptions Initial factor Revised factor Reliability Eigenvalue Proportion
loading loading coefficient α
Daily Schedule
Adherence
JSFTN03 0.809 0.830
JSFTN05 0.510 0.489
JSFTN06 0.813 0.813
JSFTN07 0.294 deleted
JSFTN08 0.202 deleted
JSFTR09 0.770 0.794
JSFTR10 0.770 0.787
α = 0.792 2.838 56.763%

Equipment layout
JSPLN02 0.682
JSMHN01 0.631
JSMHN05 0.431
JSMHN06 0.809
JSMHN07 0.811
JSMHN08 0.750
α = 0.769 2.923 48.720%

JIT Delivery by
Suppliers
JSVNN01 0.793
JSVNN02 0.641
JSVNN09 0.758
JSVNN10 0.623
JSVNN11 0.591
α = 0. 712 2.351 47.015%
 JIT Link with
Customers
JSVCN01 0.772 0.782
JSVCN02 0.422 deleted
JSVCN04 0.535 0.590
JSVCN05 0.569 0.568
JSVCN06 0.538 0.505
JSVCN07 0.784 0.800
α = 0. 660 2.177 43.546%

Kanban
JSVNN03 0.846
JSVNN04 0.818
JSPLN06 0.836
JSPLN07 0.831
α = 0. 853 2.774 69.3592%
Setup Time
Reduction
JSSUN01 0.699
JSSUN02 0.656
JSSUN04 0.745
JSSUN05 0.691
JSSUN07 0.744
JSSUR08 0.624
α = 0. 781 2.895 48.246%

JIT super scale

JSFT 0.793
JSMH 0.647
JSVN 0.852
JSVC 0.760
JSPL 0.704
JSUU 0.714
α = 0. 824 3.355 55.920%
JIT performance
grcpn03 0.741
grcpn06 0.693
grcpn07 0.699
grcpn08 0.793
α = 0.707 2.148 53.696%

Table 4
Factor analysis: manufacturing strategy scales
Variables Descriptions Initial factor Revised Reliability Eigenvalue Proportion
loading factor coefficient α
loading
Achievement of
Functional
Integration
SSAFN01 0.792
SSAFN02 0.823
SSAFN03 0.865
SSAFN04 0.677
α = 0. 780 2.513 62.814%
 Anticipation of New
Technologies
SSR4N04 0.743
SSR4N05 0.885
SSATN06 0.799
SSATN07 0.856
α = 0. 836 2.706 67.662%

Communication of
Manufacturing
Strategy
SSCSN01 0.840
SSCSR02 0.646
SSCSN04 0.776
α = 0. 607 1.723 57.447%

Formal Strategic
Planning
SSFPN01 0.863
SSFPN03 0.882
SSFPN04 0.780
SSFPR05 0.754
α = 0. 837 2.700 67.500%

Manufacturing-
Business Strategy
Linkage
SSR3N02 0.768
SSR3N03 0.658
SSR3N04 0.736
SSR3N05 0.800
SSMBR06 0.424
SSMBR07 0.631
α = 0. 741 2.782 46.364%
Proprietary
Equipment
SSR4N01 0.836 0.846
SSPER03 0.469 Deleted
SSPEN04 0.598 0.603
SSPEN05 0.806 0.810
SSPER06 0.624 0.618
SSPEN07 0.502 0.552
α = 0. 718 2.422 48.441%

4.3 Control variables

As was discussed earlier, our data was collected from three different countries and industries. In

order to investigate the country and industry effect in our analysis, we include two country

control variables, USA (USA compared to Japan), and Italy (Italy compared to Japan). We also

include two industry control variables, Electronic (electronic compared to automobile industry),

and Machinery (machinery compared to automobile industry).

 5. Results and discussion

Differences among countries and industries are often attractive to researchers in operations

management; therefore we start our analysis by investigating the differences in manufacturing

strategy elements among countries and industries.

Results of one-way ANOVA to investigate differences among countries are shown in table 5.

Least Significant Difference test (LSD) was used to test mean differences between each pair of

countries, however we don’t include it in the table.

F-statistic is found significant for three elements of the manufacturing strategy: Anticipation of

New Technologies, Communication of Manufacturing Strategy, and Formal Strategic Planning.

Not surprisingly that Japanese manufacturing plants have the highest levels of anticipation of

new technologies as Japanese manufacturers were always characterized by their high technology,

and it appears that they still at the leading position in this regard and significantly differ from

USA and Italy. Communication of manufacturing strategy is another distinctive competence of

Japanese plants where they significantly differ from American and Italian plants. This might be

attributed to the human resource management practices in Japan which rely heavily on employee

involvement and the unique system of life time employment. Italian plants appear to be the

lowest in communicating their manufacturing strategies. Japanese manufacturers are also leading

in formal strategic planning and significantly differ from Italian manufacturers.

For the other three elements of manufacturing strategy: Achievement of Functional Integration,

Manufacturing-Business Strategy Linkage, and Proprietary Equipment significant differences

were not found among countries.

Table 5
MS practices across countries
Practice Countries F-value p-value
JPN USA ITA
SSAF 5.11 4.93 5.08 0.52 0.59
SSAT 5.41 4.75 4.84 7.63 0.00
SSCS 5.36 4.70 4.23 35.62 0.00
SSFP 5.35 4.97 4.72 4.08 0.02
SSMB 5.35 5.08 5.41 1.55 0.21
SSPE 4.25 4.42 4.23 0.46 0.63

To investigate differences among industries, we again use one-way ANOVA as shown in table 6.

F-statistic is found significant for four elements of the manufacturing strategy: Achievement of

Functional Integration, Anticipation of New Technologies, Formal Strategic Planning, and

Manufacturing-Business Strategy Linkage. Automobile industry appears the highest to

emphasize manufacturing strategy elements while machinery the lowest. For the two other

elements: Communication of Manufacturing Strategy, and Proprietary Equipment significant

differences were not found among industries.

Table 6
MS practices across industries
Practice Industries F-value p-value
E M T
SSAF 5.0675 4.8641 5.2864 4.030 0.021
SSAT 5.0632 4.8203 5.3875 4.253 0.017
SSCS 4.8926 4.7368 5.0359 1.396 0.253
SSFP 4.9234 4.8375 5.4713 5.065 0.008
SSMB 5.3324 5.0596 5.5370 4.718 0.011
SSPE 4.1998 4.2508 4.3837 0.508 0.603

5.1. Hypothesis 1

To test this hypothesis, we used a multiple regression models using JIT super scale as a

dependent variable (table 7). In the first model, we entered country and industry control

variables: USA, Italy, Electronics, and Machinery. In the next models we entered the control

variables, manufacturing strategy elements independently, and the interaction effects

between each element of the manufacturing strategy and the control variables. In the second
model, for instance, we entered the control variables, the independent variable Achievement

of functional integration (SSAF), and the interaction effects between SSAF and the control

variables.

In the first model, we test the impact of country and industry alone on the level of JIT

implementation and development. The model reveals that country and industry significantly

contribute to the level of JIT implementation (R²adj = 0.112, P < 0.01). From this model we

found that the country in which the plant is located does not explain to the level of JIT

implementation. Although this finding might appear surprisingly as Japan is often expected

to have higher levels of JIT implementation, but western manufacturers have paid a lot of

attention on Japanese operational practices during the last two decades in a trial to catch up

Japan in terms of high quality and low cost products and many of them have implemented

JIT production in their plants.

As for the industry effect on JIT production, Electronics and Machinery have significantly

lower levels of JIT implementation than Automobile industry (P < 0.01 for both). This seems

to be logical as JIT production was initiated by Toyota Company and since then automobile

companies were regarded as the most intensive users of JIT.

Hypothesis H1a is partially accepted.

In the next models, we found that the main effect of all manufacturing strategy elements on

the explanation of the level of JIT implementation is positive and significant. Overall, the

Adjusted R squares of the models reported in table 7 are interpreted as indicating a relatively

strong relationship- for Achievement of functional integration SSAF (R²adj = 0.202, P <

0.05), for Anticipation of New Technologies SSAT (R²adj = 0.235, P < 0.01), for

Communication of Manufacturing Strategy SSCS (R²adj = 0.329, P < 0.01), for Formal

Strategic Planning SSFP (R²adj = 0.179, P < 0.01), for Manufacturing-Business Strategy
Linkage SSMB (R²adj = 0.183, P < 0.01), and for Proprietary Equipment SSPE (R²adj =

0.208, P < 0.01).

The results provide full support for hypothesis H1b and give evidence that the association

between the use of manufacturing strategy elements and the level of JIT implementation is

positive and highly significant. Obviously, there are other infrastructure practices that affect

the level of JIT implementation and the importance of their impact on JIT production is out

of the scope of this paper. However, the results suggest that the implementation of

manufacturing strategy elements alone contributes to higher levels of JIT implementation

and development.

To further investigate the effect of country and industry on the association between

manufacturing strategy elements and the level of JIT implementation, we included the

interaction effects between each element of manufacturing strategy and country and industry

control variables. In the second model, we observe that the impact of Achievement of

functional integration SSAF on JIT implementation level is significantly less in Italy than

Japan (P < 0.05). In the third model, Anticipation of New Technologies SSAT is

significantly less in USA than Japan (P < 0.05). In the fourth model, Communication of

Manufacturing Strategy SSCS is significantly less in the Machinery industry than the

Automobile (P < 0.05). In the fifth model, Formal Strategic Planning SSFP is significantly

less in Italy than Japan (P < 0.05). In the seventh model, the impact of Proprietary

Equipment SSPE on JIT implementation level is significantly less in USA and Italy than

Japan (P < 0.1).

Table 7
Regression analysis-dependent variable JIT super scale
Model (1) Model (2) Model (3) Model (4) Model (5) Model (6) Model (7)
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
(Constant) 4.893*** 4.807*** 4.644*** 4.637*** 4.721*** 4.778*** 4.857***
USA 0.132 0.185* 0.296*** 0.282** 0.215* 0.182* 0.109
Italy 0.021 0.048 0.215* 0.324** 0.099 -0.004 0.017
Electronics -0.333*** -0.304*** -0.277** -0.344*** -0.280** -0.252** -0.294***
Machinery -0.413*** -0.288** -0.297*** -0.317*** -0.348*** -0.269** -0.349***
SSAF 0.511**
SSAF*USA -0.148
SSAF*ITA -0.362**
SSAF*ELEC 0.152
SSAF*MACH 0.092
SSAT 0.777***
SSAT*USA -0.346**
SSAT*ITA -0.249
SSAT*ELEC 0.019
SSAT*MACH -0.040
SSCS 0.744***
SSCS*USA 0.163
SSCS*ITA -0.146
SSCS*ELEC -0.083
SSCS*MACH -0.276**
SSFP 0.800***
SSFP*USA -0.175
SSFP*ITA -0.451**
SSFP*ELEC -0.024
SSFP*MACH -0.259
SSMB 0.669***
SSMB*USA -0.142
SSMB*ITA -0.142
SSMB*ELEC -0.131
SSMB*MACH -0.133
SSPE 0.668***
SSPE*USA -0.242*
SSPE*ITA -0.216*
SSPE*ELEC -0.197
SSPE*MACH -0.067
R² 0.152 0.282 0.312 0.396 0.261 0.264 0.288
Adjusted R² 0.112 0.202 0.235 0.329 0.179 0.183 0.208
F 3.851*** 3.535*** 4.080*** 5.909*** 3.181*** 3.234*** 3.634***
* P≤ 0.1.
** P≤ 0.05.
*** P≤ 0.01.

5.2. Hypothesis 2

To test this hypothesis, we used again a multiple regression models using JIT performance

super scale as a dependent variable (table 8). In the first model, we entered the country and

industry control variables: USA, Italy, Electronics, and Machinery. In the next models, we
entered the country and industry control variables, one element of manufacturing strategy,

and the interaction effects between the manufacturing strategy element and the control

variables.

In the first model, we test the impact of country and industry alone on the level of JIT

performance. The model reveals that country and industry insignificantly contribute to the

level of JIT performance (R²adj =0.046, P > 0.1). In this model, electronics industry appears

to have lower levels of JIT performance than Automobile industry at significance level of 0.1.

Hypothesis H2a was almost rejected.

In the next models, we found that the main effect of manufacturing strategy elements on the

explanation of the level of JIT performance is positive and significant except for

Communication of manufacturing strategy SSCS (R²adj = 0.022, P > 0.1). Overall, the

Adjusted R squares of the five significant models reported in table 8 are interpreted as

indicating a relatively strong relationship- for Achievement of functional integration SSAF

(R²adj = 0.142, P < 0.05), for Anticipation of New Technologies SSAT (R²adj = 0.300, P <

0.01), for Formal Strategic Planning SSFP (R²adj = 0.282, P < 0.01), for Manufacturing-

Business Strategy Linkage SSMB (R²adj = 0.203, P < 0.01), and for Proprietary Equipment

SSPE (R²adj = 0.338, P < 0.01).

Hypothesis H2b was almost accepted, and the results suggest that there is a positive and

highly significant association between the manufacturing strategy elements, except for

communication of manufacturing strategy, and the level of JIT performance.

It is surprisingly to find that communication of manufacturing strategy has no direct effect

on JIT performance. This could be attributed to our particular sample which consists of

world class and traditional plants, or to our measurement scales. In addition to that, Ahmad

et al. (2003) suggested that highly competitive plants may not devote much effort to

manufacturing strategy as it could be embedded in their routine decision making processes.

To investigate the effect of country and industry on the association between manufacturing

strategy elements and the level of JIT performance, we included the interaction effects

between each element of manufacturing strategy and the country and industry control

variables. In the second model, we observe that the impact of Achievement of functional

integration SSAF on JIT performance level is less in USA than Japan (P < 0.1). In the third

model, the impact of Anticipation of New Technologies SSAT on JIT performance is

significantly less in USA than Japan (P < 0.01), and slightly lower in Italy than Japan (P <

0.1). In the fifth model, the impact of Formal Strategic Planning SSFP is less in Italy than

Japan (P < 0.1), and significantly less in the electronics (P < 0.05) and Machinery (P < 0.01)

industries than Automobile industry. In the seventh model, the impact of Proprietary

Equipment SSPE on JIT performance level is less in Italy than Japan (P < 0.1).
Table 8
Regression analysis-dependent variable JIT performance
Model (1) Model (2) Model (3) Model (4) Model (5) Model (6) Model (7)
Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient Coefficient
(Constant) 3.833*** 3.739*** 3.475*** 3.654*** 3.479*** 3.681*** 3.763***
USA 0.086 0.132 0.319*** 0.199 0.203* 0.139 0.063
Italy -0.140 -0.093 0.116 0.048 -0.097 -0.158 -0.136
Electronics -0.234* -0.193 -0.146 -0.210 -0.038 -0.148 -0.172
Machinery -0.180 -0.124 -0.016 -0.138 0.031 -0.034 -0.100
SSAF 0.625**
SSAF*USA -0.308*
SSAF*ITA -0.295
SSAF*ELEC 0.141
SSAF*MACH -0.027
SSAT 0.993***
SSAT*USA -0.385***
SSAT*ITA -0.294*
SSAT*ELEC 0.006
SSAT*MACH -0.033
SSCS 0.460
SSCS*USA -0.063
SSCS*ITA -0.095
SSCS*ELEC -0.084
SSCS*MACH -0.124
SSFP 1.324***
SSFP*USA -0.166
SSFP*ITA -0.375*
SSFP*ELEC -0.443**
SSFP*MACH -0.589***
SSMB 0.766***
SSMB*USA -0.265
SSMB*ITA -0.129
SSMB*ELEC 0.034
SSMB*MACH -0.162
SSPE 0.822***
SSPE*USA -0.138
SSPE*ITA -0.195*
SSPE*ELEC -0.074
SSPE*MACH -0.149
R² 0.091 0.233 0.374 0.126 0.282 0.288 0.408
Adjusted R² 0.046 0.142 0.300 0.022 0.197 0.203 0.338
F 2.019 2.559*** 5.042*** 1.212 3.319*** 3.413*** 5.822***
* P≤ 0.1.
** P≤ 0.05.
*** P≤ 0.01.

6. Conclusions

Based on our study, the following conclusions are drawn. First, country and industry alone

explained a significant portion (15.2%) of variation in JIT implementation level. This variance

was mainly explained by the industry, and our analysis did not reveal significant differences

among the three countries-Japan, USA, and Italy in the level of JIT implementation. As for
industry, the results showed that the automobile industry has higher levels of JIT implementation

and significantly differs from electronics and machinery industries.

Second, country and industry alone explained an insignificant portion (9.1%) of variation in JIT

performance level. The results reveal that automobile industry has higher levels of JIT

performance than electronics industry.

Third, this study indicated that manufacturing strategy elements have a positive and significant

impact on JIT implementation and development level. This provides guidance for managers

considering or attempting implementation of JIT production. The results suggest that

manufacturing strategy is an important infrastructure for JIT and should be included to the

traditional infrastructure practices usually associated with JIT production. The results showed

that some manufacturing strategy elements are more implemented in Japan than USA and Italy

(Anticipation of New Technologies, Communication of Manufacturing Strategy, and Formal

Strategic Planning). The results also indicated that the impact of manufacturing strategy elements

on JIT production is higher in Japan than USA and Italy. The results showed that although the

implementation of four manufacturing strategy elements is significantly higher in the automobile

industry than electronics and machinery industries, the impact of manufacturing strategy

elements on JIT production is similar in the three industries except for the communication of

manufacturing strategy where the impact is significantly less in the machinery industry than

automobile.

Fourth, the analysis showed that all the manufacturing strategy elements, except for

Communication of Manufacturing Strategy, have a positive and significant impact on JIT

performance. This finding provides additional support to previous research indicating that JIT

performance does not rely merely on JIT practices, but on the plant’s infrastructure. The results

showed that manufacturing strategy elements are an important infrastructure for JIT success. The
results also indicated that the impact of some manufacturing strategy elements on JIT

performance is higher in Japan among countries and automobile industry among industries.

The limitation of our study is that only three developed countries were included and about half of

the sample plants are world-class, therefore the results may showed some bias and restriction of

range. In addition to that, JIT performance was measured relative to competitors, not to

performance prior to JIT introduction.

Similar research should be undertaken for less developed countries. Also, further research is

needed with a larger sample and additional industries so that casual modeling techniques of

analysis could be applied. Finally, further research is needed to investigate how manufacturing

strategy affects other operational practices and employee involvement.

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 Appendix A
Measures of JIT practices

Daily Schedule Adherence

JSFTN03 We usually meet the production schedule each day.
JSFTN05 Our daily schedule is reasonable to complete on time.
JSFTN06 We usually complete our daily schedule as planned.
JSFTN07* We build time into our daily schedule to allow for machine breakdowns and
unexpected production stoppages.
JSFTN08* We build extra slack into our daily schedule, to allow for catching up.
JSFTR09 We cannot adhere to our schedule on a daily basis.
JSFTR10 It seems like we are always behind schedule.

Equipment Layout
JSPLN02 We have laid out the shop floor so that processes and machines are in close
proximity to each other.
JSMHN01 We have organized our plant floor into manufacturing cells.
JSMHN05 Our machines are grouped according to the product family to which they are
dedicated.
JSMHN06 The layout of our shop floor facilitates low inventories and fast throughput.
JSMHN07 Our processes are located close together, so that material handling and part
storage are minimized.
JSMHN08 We have located our machines to support JIT production flow.

Just-in-Time Delivery by Suppliers

JSVNN01 Our suppliers deliver to us on a just-in-time basis.
JSVNN02 We receive daily shipments from most suppliers.
JSVNN09 We can depend upon on-time delivery from our suppliers.
JSVNN10 Our suppliers are linked with us by a pull system.
JSVNN11 Suppliers frequently deliver materials to us.

Just-in-Time Link with Customers

JSVCN01 Our customers receive just-in-time deliveries from us.
JSVCN02* Most of our customers receive frequent shipments from us.
JSVCN04 We always deliver on time to our customers.
JSVCN05 We can adapt our production schedule to sudden production stoppages by our
customers.
JSVCN06 Our customers have a pull type link with us.
JSVCN07 Our customers are linked with us via JIT systems.

Kanban
JSVNN03 Suppliers fill our kanban containers, rather than filling purchase orders.
JSVNN04 Our suppliers deliver to us in kanban containers, without the use of separate
packaging.
JSPLN06 We use a kanban pull system for production control.
JSPLN07 We use kanban squares, containers or signals for production control.
Setup Time Reduction
JSSUN01 We are aggressively working to lower setup times in our plant.
JSSUN02 We have converted most of our setup time to external time, while the machine is
running.
JSSUN04 We have low setup times of equipment in our plant.
JSSUN05 Our crews practice setups, in order to reduce the time required.
JSSUN07 Our workers are trained to reduce setup time.
JSSUR08 Our setup times seem hopelessly long.
*: Items are deleted

Appendix B
Measures of manufacturing strategy

Achievement of Functional Integration

SSAFN01 The functions in our plant are well integrated.
SSAFN02 Problems between functions are solved easily, in this plant.
SSAFN03 Functional coordination works well in our plant.
SSAFN04 Our business strategy is implemented without conflicts between functions.

Anticipation of New Technologies

SSR4N04 We pursue long-range programs, in order to acquire manufacturing capabilities in
advance of our needs.
SSR4N05 We make an effort to anticipate the potential of new manufacturing practices and
technologies.
SSATN06 Our plant stays on the leading edge of new technology in our industry.
SSATN07 We are constantly thinking of the next generation of manufacturing technology.

Communication of Manufacturing Strategy

SSCSN01 In our plant, goals, objectives and strategies are communicated to me.
SSCSR02 Strategies and goals are communicated primarily to managers.
SSCSN04 I understand the long-run competitive strategy of this plant.

Formal Strategic Planning

SSFPN01 Our plant has a formal strategic planning process, which results in a written
mission, long-range goals and strategies for implementation.
SSFPN03 This plant has a strategic plan, which is put in writing.
SSFPN04 Plant management routinely reviews and updates a long-range strategic plan.
SSFPR05 The plant has an informal strategy, which is not very well defined.

Manufacturing-Business Strategy Linkage

SSR3N02 We have a manufacturing strategy that is actively pursued.
SSR3N03 Our business strategy is translated into manufacturing terms.
SSR3N04 Potential manufacturing investments are screened for consistency with our
business strategy.
SSR3N05 At our plant, manufacturing is kept in step with our business strategy.
SSMBR06 Manufacturing management is not aware of our business strategy.
SSMBR07 Corporate decisions are often made without consideration of the manufacturing
strategy.
Proprietary Equipment
SSR4N01 We actively develop proprietary equipment.
SSPER03* Our equipment is about the same as the rest of the industry.
SSPEN04 We have equipment that is protected by our firm’s patents.
SSPEN05 Proprietary equipment helps us gain a competitive advantage.
SSPER06 We rely on vendors for most of our manufacturing equipment.
SSPEN07 We frequently modify equipment to meet our specific needs.
*: Item is deleted

Appendix C
JIT Performance Scales

Please circle the number that indicates your opinion about how your plant compares to its competition in
your industry, on a global basis.
1: Poor, low end of industry; 2: Equivalent to competitors; 3: Average; 4: Better than average; 5: Superior

On time delivery performance 1 2 3 4 5

Flexibility to change volume 1 2 3 4 5
Inventory turnover 1 2 3 4 5
Cycle time (from raw materials to delivery) 1 2 3 4 5