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The just-in-time (JIT) manufacturing revolution has transformed the relationship between buyers and suppliers. Under JIT, purchasing is done in small batches and ideally from a single source as opposed to purchasing large batches from multiple sources. Now, A. Ansari and B. Modarress have written the first full-length book on the various dimensions...
The just-in-time (JIT) manufacturing revolution has transformed the relationship between buyers and suppliers. Under JIT, purchasing is done in small batches and ideally from a single source as opposed to purchasing large batches from multiple sources. Now, A. Ansari and B. Modarress have written the first full-length book on the various dimensions of JIT purchasing based upon their field research in companies that have successfully implemented JIT purchasing practices such as General Motors, Hewlett Packard, Honda, Nissan, Kawasaki, Goodyear, Control Data, Boeing, Matsushita, and Sony. Using information obtained from company documents and professional associations, and through personal interviews with managers in purchasing, production, quality control, engineering/design, and transportation/traffic, the authors show that companies which emphasize the importance of product quality, supplier relationships, delivery performance, and price -- in this order -- have a distinct competitive advantage in the crucial function of purchasing. Instead of being a cost center, as purchasing has traditionally been considered, the purchasing department can add value to the product and become a "quality and productivity" center for the firm. The authors document that implementing JIT purchasing practices can produce dramatic economic improvements. At the Greeley Division of Hewlett Packard, for example, inventory turnover has nearly tripled; scrap cost has declined from 10 percent to 1 percent; and delivery lead time has been reduced from 90 to 64 days. JIT purchasing practices at Kawasaki's Lincoln plant have decreased manufacturing costs from $15 million to $12.6 million in five years. Even greater benefits are envisioned at these companies when the JIT purchasing system is fully developed within the next few years. Today, the purchasing function is becoming increasingly central to decisions made throughout the company. Just-In-Time Purchasing will be an indispensible handbook, not only for purchasing managers and their suppliers, but for managers charged with the development of engineering specifications, new product planning, and plant and equipment responsibilities.
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