Adoption of Just-in-time Manufacturing By Rural and Urban Plants

H Frederick Gale Jr

doi:10.52324/001c.8831

Abstract

This study investigates the effect of rural location and access to other firms on adoption of just-in-time (JIT) and access to JIT-using customers in a sample of plants representing all manufacturing industries. Nonmetropolitan location, proximity to other firms, and interstate highway access do not appear to be important determinants of JIT involvement. Plants in the East North Central and Mountain regions are more likely than those in the Pacific region to be involved in JIT, when other characteristics are held constant. A number of plant characteristics, including plant size, ownership, age, workforce education, and use of marketing assistance, have significant effects on JIT involvement. However, the statistical models appear to have relatively little explanatory power, suggesting that JIT involvement is largely determined by factors not measured by the model.

Highlights

Just-in-time (JIT) inventory management is part of an approach to manufacturing and distribution that aims to increase efficiency, improve quality control, reduce inventory costs, and permit firms to respond rapidly to changes in demand by accommodating shorter, customized production runs (Germain and Droge 1998; Linge 1991; Nassimbeni 1995)
Introduced to the United States by Japanese-owned auto manufacturers, JIT was adopted by auto and electronics manufacturers during the 1980s and it was quickly adopted in other sectors
Manufacturers in relatively isolated rural locations are not precluded from adopting JIT or selling to other firms that use JIT

Summary

INTRODUCTION

Just-in-time (JIT) inventory management is part of an approach to manufacturing and distribution that aims to increase efficiency, improve quality control, reduce inventory costs, and permit firms to respond rapidly to changes in demand by accommodating shorter, customized production runs (Germain and Droge 1998; Linge 1991; Nassimbeni 1995). This article examines spatial patterns of JIT adoption using a 1996 survey of manufacturing establishments. JIT is an important new innovation, little is known about the extent of its use and its diffusion across firms. This study is the first to look at JIT use across all manufacturing industries. Study of JIT adoption can provide information about the spatial diffusion of a relatively new and important innovation. Studying geographic patterns of JIT adoption is important because there is much uncertainty in the literature about the spatial effects of JIT on industrial location. Effects of several measures of rurality and proximity to other firms on adoption of JIT are estimated, holding plant characteristics constant. This study looks at JIT use in a sample of establishments from all major manufacturing industries. Most surveys of manufacturers have few rural firms, but the survey employed in this study includes a large sample of rural establishments

JUST-IN-TIME AND PROXIMITY AMONG FIRMS

DATA AND METHODOLOGY

DESCRIPTIVE STATISTICS

D Under 100

RESULTS

CONCLUSION