Total Effectiveness in a Just‐in‐Time System

Abstract

Discusses the effects of the implementation of Just‐in‐Time (JIT) in the relationships between suppliers and manufacturing companies within Swedish industry. Explores whether such relationships will be beneficial for all parties and create higher total economic effectiveness in the supply relation or if the often more powerful buyer only transfers its stock holding problems to the smaller and weaker part in the buyer‐supplier relation. Two buyer‐supplier relations in the automobile industry are studied, one more from the buyer′s point of view and the other from the supplier′s side. Proves that there are very clear possibilities to get higher total effectiveness in such relations and that mutual benefits are really obtainable. Shows the increased importance of reduced arrival variancy but also that JIT does not necessarily mean an increased traffic intensity. Introduces an important finding by identifying the time interval between the Sequence Locking Instant and the point when the component is needed in Production (SLIP) as the determining factor for JIT relations rather than the physical distance per se.

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