An empirical analysis of the effects of structure, behavior, and communication in a just-in-time relationship

A large body of descriptive literature on Just-In-Time (JIT) purchasing has developed since the introduction of the JIT philosophy in the United States by firms seeking to compete successfully in world markets. In JIT purchasing, the emphasis is shifted from an adversary-oriented relationship to a long-term, cooperation-oriented relationship. Experts on JIT purchasing suggest that the relationship between a manufacturer and a supplier should be a partnership, providing benefits to both parties. Essentially, manufacturers and suppliers set up new ways of doing business with each other that included physical as well as behavioral changes. This research project used relational contracting to develop a model of JIT purchasing. The study was conducted for three reasons: (1) to examine the effect of the cooperative partnership arrangement in JIT purchasing in attaining JIT goals, (2) to examine the influence of structure, behavior, and communication on the formation of the cooperative relationship and its influence on JIT outcomes, and (3) to statistically test the JIT model.

Data were gathered from employees of firms which have adopted JIT purchasing methods. A questionnaire was used to measure the JIT outcomes of performance and perception of effectiveness, cooperation, structure, behavior, and communication.

Linear structural modeling (LISREL) was used to study the relationships among the research variables. As hypothesized, cooperation was significantly related to the JIT outcomes of performance and effectiveness and the behavioral variables were significantly related to cooperation. The hypothesized relationship between the behavior variables and domain consensus was also supported. Not supported by the data were the relationship between communication and cooperation and the relationship between structure and cooperation. Stability, the long-teirm nature of the relationship, and the company's commitment to JIT techniques were found to be related to the perceived effectiveness of JIT. Reduction in the number of vendors and sole sourcing were found to be significantly related to JIT performance.