Logistics Strategies to Facilitate Long-Distance Just-in-Time Supply Chain System

Abstract

Just-In-Time (JIT) has become a paradigm in supply chain management since its introduction to the U.S. manufacturing industries in the 1970’s (Chopra & Meindl, 2007). Aiming at total logistics cost reduction and customer service enhancement, JIT generates significant impact on the all logistics aspects for the JIT system participants (Daugherty & Spencer, 1990; Gomes & Mentzer, 1991). As international and domestic competitive pressure increases, an increasing number of companies are adopting JIT principles with the anticipation of productivity advancement, waste reduction, and quality breakthroughs. Experts have agreed that JIT strategy has constituted a potent force in improving the U.S. manufacturing competitiveness (Modarress et al., 2000; Wood & Murphy Jr., 2004). In the present chapter, a long-distance JIT supply chain in a global context is defined as an inter-organizational logistics system which processes physical flows and deliver goods cross across country boundaries at the right time, to the right locations, of the right quantities, and with the right quality (Kreng & Wang, 2005; Wong & Johansen, 2006; Wong et al., 2005). A JIT supply chain entails a highly efficient logistics system as the operational foundation (Bagchi, 1988; Bagchi et al., 1987; Giunipero et al., 2005). Specifically, transportation assumes a much more important role in a JIT system than a conventional multi-echelon supply chain (Schwarz & Weng, 1999). Furthermore, the demand for efficient and integrative distribution centers is drastically higher than the traditional approaches in that shipments entirely rely on distribution centers at each echelon to coordinate and process inbound and outbound flows in a timely manner (Lieb & Millen, 1988). Failure in any particular logistics process could potentially lead to a bottleneck, hindering expected efficiency of JIT systems (Chopra & Meindl, 2007). Initially established in Japan, the JIT production and purchasing concepts are recognized as a cornerstone of the Japanese manufacturing sector success. The original JIT design is embedded in close and tightly connected distribution networks. The networks are supported by innovative logistics arrangements, such as load-switching and freight consolidation to facilitate inbound and outbound flows (Giunipero et al., 2005). In the last decades, supply chain system has evolved from its original local scale to a multi-national, or even global scope; in the meantime, the demand for JIT operations from global marketplace does not diminish. As a result, manufacturers that attempt to implement extended, longdistance JIT systems will need a substantial modification for the original form of the JIT system (Kreng & Wang, 2005; Wong & Johansen, 2006; Wong et al., 2005).