The Impact of Just-in-Time Manufacturing on Firm Performance in the U.S

Journal of Operations Management 12 (1995) 297-310

University of Alberta School of Business Research Paper No. 2013-211

Posted: 26 May 2013 Last revised: 30 May 2013

See all articles by Mark R. Huson

Mark R. Huson

University of Alberta - Department of Finance and Statistical Analysis

Dhananjay Nanda

University of Miami - Department of Accounting

Date Written: June 23, 1994

Abstract

Just-In-Time manufacturing has been subjected to numerous studies both empirical and methodological. This work attempts to measure the impact of JIT on accounting measures of performance. Most technologies and investments are justified on the basis of their impact on financial and accounting measures which are not easily quantified. Our empirical methodology, simultaneous equation estimation, allows us to isolate the partial effects of JIT on various accounting measures thus gauging the true impact of this method on firm performance. Our results show that after JIT adoption firms reduced the labor content in facilities, increased inventory turnover and enhanced earnings. There was no significant impact on prices charged by the firm. These results support the anecdotal evidence on JIT and the theoretical work done by various authors. Even though the firms studied experienced a downturn in their performance our empirical methodology could identify positive benefits resulting from JIT adoption.

Suggested Citation

Huson, Mark R. and Nanda, Dhananjay, The Impact of Just-in-Time Manufacturing on Firm Performance in the U.S (June 23, 1994). Journal of Operations Management 12 (1995) 297-310; University of Alberta School of Business Research Paper No. 2013-211. Available at SSRN: https://ssrn.com/abstract=2269111

Mark R. Huson (Contact Author)

University of Alberta - Department of Finance and Statistical Analysis ( email )

4-20C Business
University of Alberta
Edmonton, Alberta T6G 2R6
Canada
780-492-2803 (Phone)
780-492-3325 (Fax)

Dhananjay Nanda

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States

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