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IJOPM 28,11

The role of organizational context and infrastructure practices in JIT implementation

Alberto Bayo-Moriones, Alejandro Bello-Pintado and az-de-Cerio Javier Merino-D
Department of Business Administration, Public University of Navarre, Pamplona, Spain
Abstract
Purpose The purpose of this paper is to analyze which factors determine the use of just-in-time (JIT) in companies. More precisely, the paper aims to study the role played by two variables of organizational context (size and age) and three infrastructure practices (advanced manufacturing technologies AMT, quality management, and work organization). Design/methodology/approach The hypotheses were tested using data collected from 203 manufacturing plants with at least 20 employees. Data were collected by means of personal interviews with plant managers. Regression analyses have been performed to test the hypotheses. Findings The results reveal the existence of diversity in the factors that affect the use of the different components of JIT. Infrastructure practices are shown to be more determining than contextual factors. This happens in particular with AMT, basic quality tools and the management of the relationships with suppliers and customers. Research limitations/implications The main limitations of the research are those derived from the cross-sectional character of the data and from information coming from surveys, especially when the measures are subjective. Practical implications The paper stresses the need to develop adequate infrastructures in technology management, quality management and work organization to obtain all the benets of JIT implementation. Originality/value The paper highlights the role of organizational context and, especially, infrastructure practices in the incidence of JIT in the manufacturing industry. Moreover, the identication of different dimensions of JIT systems makes it possible to conclude that the inuence of the different factors considered is not uniform across all JIT elements. Keywords Just in time, Advanced manufacturing technologies, Quality management, Working practices, Spain Paper type Research paper

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Received June 2007 Revised May 2008 Accepted July 2008

International Journal of Operations & Production Management Vol. 28 No. 11, 2008 pp. 1042-1066 q Emerald Group Publishing Limited 0144-3577 DOI 10.1108/01443570810910188

Introduction Just-in-time (JIT) manufacturing systems were developed initially in the Japanese manufacturing industry. More precisely, they come from the improvement of Toyotas production system. These modications were soon adopted by other Japanese companies in the automotive sector and, as early as the 1980s, by American and European companies. Until then companies used mass production systems designed to
The authors acknowledge nancial support from the Department of Education of the Government of Navarre and Spanish Ministry of Education and Science project SEJ2007-66511.

protect them from market uctuations. The Toyota manufacturing system (JIT system), on the contrary, considers these uctuations as inevitable, and tries to synchronize the production process with demand. Therefore, the main target is to eliminate waste and reduce inventories as far as possible. The JIT system requires that all nished and semi-nished products be delivered in the right amount, the appropriate place and at the precise moment they are needed (Monden, 1983; Sakakibara et al., 2001). Whereas a great deal of research has analyzed the effects of JIT on rm performance, there is barely any empirical evidence about the factors that affect their implementation. Deepening the knowledge of the variables associated with the use of JIT practices can contribute enormously to the recognition of what kind of company has difculties in adopting such practices as well as to the identication of the obstacles that prevent their wider diffusion. The objective of this paper is to analyze the factors that determine the use of JIT in rms from a sample of 203 Spanish manufacturing plants. Although for years JIT has been the subject of much research, there is no consensus about its constituent practices. In general, two approaches to JIT are observed. According to some authors with a more operative approach, JIT is a dened set of practices aimed at reducing inventories or to plan production. For example, Flynn et al. (1995, p. 1327) dene JIT practices as:
[. . .] based on the notion of eliminating waste through the simplication of manufacturing processes. Such simplication includes elimination of excess inventories and overly large lot sizes, which cause unnecessarily long customer cycle times.

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On the other hand, there are authors that consider JIT from a broader point of view, turning it into a philosophy of manufacturing oriented towards continuous improvement through the reduction of waste in all the stages of the production process (Sakakibara et al., 2001)[1]. In this paper, we have adopted the rst approach and have considered as JIT practices those that are most directly related to the management of materials ow in the plant. JIT adjusts quite well to the denition of both process and organizational innovation provided by the 3rd edition of the Oslo Manual (OECD and Eurostat, 2005), since its introduction can be considered the implementation of a new or signicantly improved production or delivery method (point 163) and the implementation of a new organisational method in the rms business practices, workplace organisation or external relations (point 177). Moreover, it should also be noted that point 148 of the Oslo Manual states that the minimum requirement for an innovation is that the product, process, marketing method or organisational method must be new (or signicantly improved) to the rm[2]. For these reasons, the organizational context, understood as the structural characteristics of the rm, is to play a remarkable role in the implementation of JIT, since it is associated with very important variables in all processes of adoption of innovations, such as resource availability, risk tolerance and the existence of inertia. This paper analyzes the inuence of two of the variables that best serve to dene a company: size and age. For JIT to be benecial to the company, other activities that support it should be carried out beforehand (Sakakibara et al., 1997, 2001). The development of an adequate infrastructure in other areas of the rm constitutes a fundamental element for the implementation of JIT to contribute to an improvement in manufacturing performance and

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the competitiveness of the plant. In this paper, we focus on three particular infrastructure practices related to: technology, quality management and work organization. The present paper attempts to make a number of contributions to the existing theoretical and empirical literature on JIT. First of all, unlike most of the research conducted on JIT, this paper does not examine the relationship between JIT and performance. Rather, its objective is to analyze the determinants of JIT use, considering simultaneously several explanatory variables, some of which, in spite of their theoretical relevance, have been hardly subjected to empirical scrutiny. A second contribution has to do with the empirical treatment of the practices that belong to JIT. As opposed to the papers that analyze JIT as a homogenous system or those which take individual practices as units of study, the present work performs rigorous factor analysis to identify different dimensions of JIT congured by similar groups of practices. This allows greater depth of analysis of the relationships between the variables and helps to explain better the inuence of the different explanatory variables on the implementation process of JIT. A third contribution has to do with the sample of plants considered in this paper. All manufacturing industries are included. Moreover, the information relates to Spanish rms, Spain being a context where JIT implementation has been hardly studied. The paper is structured as follows. First, there is a review of the literature about the relationship between the different explanatory variables and the use of JIT practices. This review leads to the establishment of ve hypotheses. The following section explains the empirical methodology, describing the data collection process and the measurement of the variables. Then follows the presentation of the results obtained when testing the theoretical hypotheses. Finally, the research ndings and conclusions are discussed. Theory and hypotheses Size Although the benets of JIT practices for small companies have been widely recognized (Manoochehri, 1988; Gunasekaran, 1997; Gunasekaran et al., 2000; Bonavia and Marin, 2006; Aghazadeh, 2008), it is also generally admitted that there is a series of factors that lead to their greater incidence in large companies (White et al., 1999). A commonly mentioned obstacle to the introduction of JIT in small companies is their lower availability of resources. Large companies usually enjoy more nancial and human resources to innovate, and at the same time have better access to the knowledge necessary for the implementation of JIT (Doolen and Hacker, 2005). These greater resources, in addition, allow them to be better prepared to face the possible risks derived from innovation (Osterman, 1994). Moreover, the presence of economies of scale in implementation makes the adoption of JIT more feasible in large companies. In spite of this majority support for the positive relationship between rm size and JIT adoption, reasons for a greater presence of JIT in small rms have also been given. For example, it is argued that, due to greater inertia in large rms, management tasks in such cases are usually more complex and bureaucratic, which makes it more complicated to carry out innovations (Hannan and Freeman, 1984). Similarly, the greater difculties of coordination in large companies, together with the greater interdependences generated by a JIT system, may lead to greater prots in smaller rms.

Although the above-mentioned arguments are applicable to all JIT practices, not all of them are expected to be identically affected in their diffusion by rm size. This is connected to the fact that rm size can be related to the presence of the conditions in which JIT is feasible. One of these conditions is the need for stable demand. Smaller companies usually face a less uniform demand, since it usually comes from large companies, against which they have low-bargaining power (Finch and Cox, 1986). Something similar happens in relation to the ability to receive the materials at the exact moment and in the right amount. Although there are new transport services that facilitate this, it is certainly complicated for a small rm to be in a position to make this kind of demand on suppliers (Manoochehri, 1988). Nevertheless, smaller companies are not at a disadvantage compared to the larger ones as far as the possibility of producing in small lots is concerned (Manoochehri, 1988). For that reason, JIT production focused more on internal aspects, such as the reduction of set-up times, might be more common in smaller companies than JIT deliveries, related to suppliers (Gilbert, 1990; Lee, 1997). Regarding the empirical evidence, most of the research so far has established that the degree of use of JIT practices is greater in larger companies (Im and Lee, 1989; Ahmed et al., 1991; Hum and Ng, 1995; White et al., 1999; Shah and Ward, 2003), although some authors have not found this positive relationship (Lee, 1997; Amoako-Gyampah and Gargeya, 2001). Even though there are opposing arguments about the relationship between size and JIT, on the whole previous theoretical and empirical research tends to show that there is a positive correlation between them: H1. Plant size has a positive effect on the use of JIT practices. Age Firm age may have several kinds of effect on the probability of a company introducing an organizational innovation such as JIT. This multiplicity of inuences precludes a universal theoretical conclusion on the relationship between age and JIT use. The empirical literature on innovations in manufacturing does not present clear results about this question either, as there are studies with quite different results (Becheikh et al., 2006). In favour of a positive impact, it is possible to argue that rm age encourages the introduction of new methods of production organization, since it could reect the amount of resources available for innovation (Galende and de la Fuente, 2003). Older rms may also be more efcient in the implementation of innovations, since they have been able to accumulate the necessary experience and knowledge throughout their history to improve the ability to identify and incorporate new ideas (Cohen and Levinthal, 1990). Another point which supports this positive inuence is that time has provided older rms with opportunities to enter professional networks and to establish stronger links within the value chain, which makes the transmission of new management and organization techniques much easier (Uzzi, 1997). In spite of the above-mentioned arguments, there are also reasons that can be adduced to support the idea of a negative relationship between the age of the company and the introduction of innovations. For instance, the organizational sociology literature points out that the routines of a rm throughout its life tend to reect the

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decisions taken at the moment of its foundation (Stinchcombe, 1965). In the case of JIT, this negative inuence of rms age may have to do with an older workforce that is used to a certain way of doing things and with greater physical barriers to the introduction of practices such as the reduction of machine set-up times (Shah and Ward, 2003). From another perspective, the theories of organizational learning also support the existence of a negative relationship. Given that the greater the use of a given practice, the greater its efciency, older companies will have fewer incentives to adopt innovations, since they will come from a more satisfactory initial situation in terms of performance (Levitt and March, 1988). Although there are opposing arguments for the effect of a rms age, as in other research on innovation in operations management (Ketokivi and Schroeder, 2004a), we are inclined to propose that younger companies have a higher probability of using JIT practices, thus: H2. The age of the plant has a negative effect on the use of JIT practices. Advanced manufacturing technologies In response to more intense and globalized competition, manufacturers are incorporating more exible technologies into their production processes. One of the most outstanding is advanced manufacturing technologies (AMT), a set of tools intended to automate and integrate the different stages of design, manufacturing, planning and control of the product. AMT results from the application of information and manufacturing technologies with the aim of increasing the response ability of the plant and to improve the results of the production process. These technologies have found wide acceptance since, in general, they can be applied, with more or less difculty, to most manufacturing processes. For example, numerical control is applied to systems of mechanizing, cutting and moulding. In the case of robots, they have an extended use in welding, painting, materials treatment and many other unique assembly applications. In some research the relationship between AMT and JIT has been considered so close that JIT is even included as part of AMT (Swamidass and Winch, 2002). For that reason, it is not surprising that other papers highlight the convenience of applying AMT and JIT jointly. For instance, Manoochehri (1988) considers that the layout associated with JIT manufacturing cells is very well adapted to automation. In a typical cell of JIT systems, the proximity of machines favours the work of robots to transfer pieces from one machine to another. The machines and robots in the cell can be controlled by a computer, constituting a exible manufacturing system. However, it should also be underlined that, although JIT facilitates the application of AMT, adoption of the latter is not a necessity. The literature on organizational innovation also offers arguments supporting a positive relationship between the use of AMT and the use of JIT. Firms that behave innovatively do so in different management areas. In this context, Cagliano and Spina (2000), after reviewing the literature on the issue, conclude that rms that want to obtain the best improvement in performance from AMT need them and the new organizational forms to be mutually adapted. In contrast to the above-mentioned reasons, it is also possible to nd arguments that JIT works better in simple technological contexts. Gunn (1987) points out that working

with JIT in a factory that uses AMT is much more complex than in a traditional plant, since JIT must cope with the reduced lead times of AMT, as well as more complex inter-dependencies. Moreover, it is also possible that rms may use AMT as an alternative to JIT because they require less organizational change and discipline. There is hardly any empirical research into the relationship between AMT and the use of JIT practices. Challis et al. (2002), using a sample of companies from New Zealand, nd that the effect of JIT on rm performance is greater at higher levels of AMT. On the other hand, Snell et al. (2000) detect a positive and signicant correlation between the implementation of AMT and JIT. Finally, Zhang et al. (2006) discuss the inter-relationship between AMT and operations improvement practices (OIP), which includes both JIT and other supportive practices, as well as their effects on exible manufacturing competence (FMC). In their study they nd a positive correlation between AMT and OIP adoption and nd that the relationship between AMT and FMC depends on the adoption level of OIP. That is to say, rms that have implemented AMT, in order to achieve good performance, should have a high degree of OIP use. In view of these ndings, it is possible to formulate the next hypothesis: H3. AMT have a positive effect on the use of JIT practices. Quality management Almost from their beginning, the developments of JIT and quality management have gone hand in hand. In fact, the difculties of dening and delimiting both concepts have sometimes caused certain confusion. Flynn et al. (1995) suggest a separation between JIT practices, total quality management (TQM) practices and common or infrastructure practices, analyzing the relationships among them. The practices that they identify as typical of JIT are kanban controls, JIT planning activities, reduction of set-up times and reduction of lot size. On the other hand, statistical control of processes, product design and focus on customers would constitute TQM practices, whereas information feedback, plant environment, management support and the relationship with suppliers would make up the infrastructure practices. The literature provides many references to the importance of quality management for an appropriate implementation of JIT. Generally, TQM and JIT appear as related systems, due to their common objectives of continuous improvement. Although TQM can be implemented without introducing JIT, it is difcult to succeed in introducing JIT practices if the basic principles of TQM have not been previously incorporated (Fullerton and McWatters, 2001). Quality management practices give support to JIT, since they help to establish a necessary control of the production process. If the appearance of defective products is minimized, the product ow becomes smoother and inventory in progress is reduced. Flynn et al. (1995, 1997) indicate that quality management practices favour the use of small lots, since they diminish the need to use safety inventories. In addition, they reduce the number of items that require reprocessing. This shortens lead time, speeds up the response to the demands of the market and, therefore, improves the performance of JIT. Although several techniques and practices are usually included within the frame of quality management (Dean and Bowen, 1994; Hackman and Wageman, 1995), there are

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two dimensions that contribute to distinguish those companies that give quality a strategic priority. These two dimensions are: (1) the use of tools or practices for improvement; and (2) collaboration with suppliers and external customers. The use of tools and methodologies to improve quality, such as six sigma and statistical control of processes, contributes to reduce the defective product ratio in the production process. On the other hand, maintaining close collaboration with suppliers guarantees the quality of supplies (raw materials and components) to a greater extent, which will give rise to a smaller incidence of problems of product quality, something that favours the introduction of JIT (Ramarapu et al., 1995). Tan and Wisner (2003) consider the role of suppliers to be very important in the introduction of JIT, to such an extent that they state that rms should previously have a programme for the assessment of suppliers. Close relationships with customers will also result in better communication and understanding. This will help to reduce the defective product indicators, so JIT will cause fewer problems in practice. The empirical articles which analyze the relationship between the implementation of JIT and TQM show a positive relationship between the two and a synergistic effect regarding their impact on operational performance (Flynn et al., 1995; Sriparavastu and Gupta, 1997; Lau, 2000; Cua et al., 2001). As far as the studies of implementation are concerned, Dreyfus et al. (2004) nd that JIT plants introduce TQM more rigorously than traditional rms. Kannan and Tan (2005) also discuss evidence from a positive association between JIT and TQM, both at the strategic and operational levels. In summary, both the theory and the empirical evidence available lead us to formulate the following hypothesis: H4. Quality management practices, such as the use of quality improvement tools and close collaboration with suppliers and customers, have a positive effect on the use of JIT practices. Work organization In order for the implementation of JIT practices to achieve all its potential benets, the company needs rst to modify work organization in the right direction. Otherwise, it is probable that the rm will face multiple difculties that will render ineffective the investments aimed to introduce changes in production organization (Desphande et al., 1994). Empirical evidence shows that companies that have devoted a great deal of effort to modifying the organization of human resources have reached greater operational efciency, performance effectiveness and competitiveness as a result of the introduction of JIT (Ahmad et al., 2003). The change in the role of human resources that the adoption of JIT involves takes place largely because the production system becomes highly interdependent, due to the reduction of slack resources to a minimum in the different stages of the production process (Ahmad et al., 2003). Human resources must become more predictable and reliable, which demands a greater degree of coordination between the different units and jobs (Forza, 1996). Several modications must take place in work organization so that the rm is prepared to undertake the adoption of a JIT system with guarantees.

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The most outstanding ones are the search for greater worker exibility, empowerment and the use of teams. The lack of worker exibility has been widely discussed as one of the main barriers to the implementation of JIT (Ahmed et al., 1991; Power and Sohal, 2000a; Salaheldin, 2005). The perfect delimitation of jobs in traditional manufacturing is inadequate for the correct operation of JIT. The main target of JIT is production according to demand, which implies that workers carry out the jobs for which they are needed at any moment in time (Niepce and Molleman, 1996). As happens with other resources, the introduction of JIT involves working without slack work times (Forza, 1996). Losses of time are avoided if workers are trained in a great variety of skills, so that they are prepared to perform different jobs and to handle different machines. The greater separation between the stages of the production process also demands that workers perform jobs previously reserved for other functions, such as quality control or data analysis (Dean and Snell, 1991). For that reason, workers must be multi-skilled and trained in a varied range of technical knowledge (Spencer and Guide, 1995). Although JIT can be put into practice with very different approaches and styles, other aspects that favour its successful introduction are a higher provision of autonomy to the employee in his job and greater participation in decision making (Ramarapu et al., 1995; Fullerton and McWatters, 2001). This empowerment may affect not only those issues that are closely linked to the job, but also other aspects such as purchasing, inventory control and cost control (Power and Sohal, 2000a). The fact that decisions are taken directly by workers and not by supervisors improves the systems ability to react to unforeseen circumstances, since the time dedicated to the transmission of information between both levels in the hierarchy is eliminated. Finally, the correct operation of JIT demands teamwork (Im and Lee, 1989; et al., 1994). In a JIT system, the output achieved by a worker is completely Desphande linked to the performance of their co-workers, which makes it necessary to behave as a team and not individually (Forza, 1996). Teamwork and problem solving in groups decentralize decision making and allow better management of uncertainty. In this sense, the implementation of improvement groups as a methodology for problem solving is advisable (Yasin et al., 2003), since the existence of teamwork opens new lines of communication, intensies the exchange of information and facilitates the coordination between the different members of the rm (Power and Sohal, 2000b). In addition, the use of teams reinforces the empowerment and involvement of workers (Power and Sohal, 1997). These arguments allow us to formulate the nal hypothesis: H5. Work organization based on greater worker exibility and empowerment and on the use of teams has a positive effect on the use of JIT practices. Methodology Sample and data collection The data used in the empirical section of the paper were obtained from a survey conducted in 2006 through personal interviews with managers of 203 manufacturing plants in Navarre (Spain) with at least 20 workers. The survey was restricted to establishments of this size because smaller plants often show less formal and more variable production organization and work practices (Cappelli and Neumark, 2001). The plant was chosen as the unit of analysis instead of the rm because the practices studied

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are used and implemented at the plant level. Moreover, it is in the plant where there is a greater knowledge of the management practices applied on the shop oor. Once the plants fullling the above-mentioned requirements were identied, the sample was dened in such way as to guarantee representativeness in size and activity sector. In order to achieve the objectives of the research, a questionnaire was drawn up according to the methodological recommendations offered by Nunnally (1978). A detailed review of the relevant theoretical and empirical literature was carried out prior to the development of the various survey questions. An initial version of the questionnaire was pre-tested in several plants. Based on the results of the pre-test, some modications were introduced, which shaped the nal version of the questionnaire. The data collection process consisted of personal interviews in the plant. The average length of the interviews was 40 minutes. The interviewees were plant managers, who were in most cases either the general manager or the operations manager. The response rate was 47 per cent, an acceptable rate if compared with other recent survey-based research (see, for example, lez and Garc a-Va zquez, 2007). The distribution of the Carr and Kaynak, 2007; Urgal-Gonza sample by industry appears in Table I. Measures Several types of measure were used, according to the nature of the variable. We have distinguished between reective indicators and formative indicators (Diamantopoulos and Winklhofer, 2001; MacKenzie et al., 2005). It is important to note here that, for both types of indicator, reliability and validity analyses differ considerably. Latent construct models with reective indicators posit that co-variation among measures is explained by variation in an underlying common latent factor (Boolen, 1989; Bollen and Lennox, 1991). On the other hand, if the indicators are causing rather than being caused by the latent variable measured, the indicators are known as formative (MacCallum and Browne, 1993). The latent construct model with formative measurement posits that the measures jointly inuence the composite latent construct, and meaning emanates from the measures of the construct, in the sense that the full meaning of the composite latent construct is derived from its measures (MacKenzie et al., 2005). The latent construct with reective indicators is the most common type of measurement model found in the behavioural and organizational literature. As a consequence, there are
Industry Food, drinks and tobacco Textiles, clothing, leather and footwear Wood and cork Paper, publishing and graphic arts Chemical industry Rubber and plastics Non-metallic mineral products Primary metal industries and fabricated metal products Machinery and mechanical equipment Electrical material and equipment, electronics and optics Transport material Other manufacturing industries Total Per cent 15.3 4.9 3.0 7.9 3.0 6.9 7.9 21.7 8.4 6.4 9.4 5.4 100

Table I. Distribution of the sample by industry (percentages)

detailed step-by-step guides for construct specication, item selection and purication, and scale validation (DeVellis, 1991; Spector, 1992). In addition, several exploratory factor analyses (EFA) and conrmatory factor analyses (CFA) have been carried out in order to verify internal consistency reliability, content construct validity (uni-dimensionality of scales), convergent validity and discriminant validity. First, an EFA was performed on the multi-item measures. That is, for the estimation of the internal consistency reliability, the questions of the questionnaire measuring the same concept were grouped together, using Cronbachs a to compute correlation values among the questions. The minimum a coefcient required was 0.60, as recommended by Nunnally (1978). Moreover, a minimum correlation between items of each dimension of 0.30 was chosen (Norusis, 1993). Finally, the specic identity of the different dimensions was checked through the unidimensionality of the constructs, after performing the convergent conrmation tests through exploratory factor analysis. A CFA was performed to validate the constructs. The signicance of the factor regression coefcients between each item and its latent construct was veried (Steenkamp and van Trijp, 1991). The t indices of the model were analyzed. The global t was assessed using the goodness of t index and the root mean square error of approximation (RMSEA). The incremental t indices of measurement using non-normality robust estimation procedures were non-normed t index (NNFI), comparative t index (CFI) and incremental t index (IFI). Parsimonious t indexes were evaluated using the parsimonious goodness of t index. Finally, discriminant validity was veried by comparing the square root of the average variance extracted (AVE) for each construct with its correlation with the other constructs. In the case of the latent formative constructs, their nature renders an internal consistency perspective inappropriate for assessing the suitability of these indicators (Bagozzi, 1994), since under formative measurements the latent variable is determined by its indicators rather than the opposite and content specication is inextricably linked with indicator specication. Consequently, breadth of denition is extremely important to causal indicators (Nunnally and Bernstein, 1994), among other things, because failure to consider all facets of the construct will lead to the exclusion of relevant indicators (Diamantopoulos and Winklhofer, 2001). The multi-collinearity among the indicators was studied to validate the formative constructs (Podsakoff et al., 2006). In this context, a variance ination factor (VIF) below ve is a good indicator of the absence of multi-collinearity (Judge et al., 1988). Several variables in the paper were captured through subjective measures, which might cast some doubts on their reliability. However, Ketokivi and Schroeder (2004b) show that in operations management, perceptual measures correlate well with objective measures. Similarly we would also like to note that when dealing with a sample composed of companies involved in non-homogeneous activities, the use of subjective measures becomes advisable, since objective ones are not easily comparable (Bayo-Moriones and Merino, 2004). To control for the potential effects of common method variance, we took into account several recommendations mentioned in the literature (Podsakoff et al., 2003). For example, we used different response formats for the measurement of the variables. Moreover, we based our items on tested and widely used scales. The pre-test also served as reassurance that the items were not ambiguous and were clearly understood. In order to reduce respondents evaluation apprehension and make them less likely to

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edit their responses to be more socially desirable, anonymity was fully guaranteed. We also conducted Harmans one-factor test. Given that the un-rotated factor analysis of the variables used in the study resulted in 14 factors, with the rst factor explaining only 14 per cent of the common variance, we could say that our ndings are not much affected by the problem of common method variance. JIT practices The questionnaire included 15 items which referred to the implementation of JIT practices. These items were taken from several references on JIT, such as Flynn et al. (1995), Sakakibara et al., 2001, Cua et al. (2001) and Ahmad et al. (2003). The interviewee was asked to show agreement or disagreement with several statements about the implementation of these practices in the plant. The assessment was based on a ve-point Likert scale ranging from 1 strongly disagree to 5 strongly agree. Although the use of a greater number of items is always desirable, the 15 items used are representative of JIT practices and acceptable, given the usual restrictions in survey research. An EFA with varimax rotation on the multi-item measures was performed in order to prove construct reliability. Using internal consistency and factor uni-dimensionality as selection criteria, six items were eliminated and four factors emerged with an eigenvalue greater than one (Table II). These four factors can be identied with the following dimensions of JIT: plant layout, lot size reduction, set-up time reduction, and the use of a kanban system. Also from a theoretical perspective they are adequate since they reect distinct conceptual constructs (Sakakibara et al., 1997). The difference between lot size and set-up time reduction may not be clear, but it should be noted that not all lot size reductions require set-up time reductions such as with purchased inputs and where set-up time may be inconsequential, for example, outside repetitive manufacturing. The CFA, performed to verify whether the constructs were distinct from each other and from single-item measures, indicated that the measurement model with the four factors has a good global, parsimonious and incremental t for all the indices (NNFI 0.92; CFI 0.95; IFI 0.96; RMSEA 0.033). In all cases the variance explained was higher than 50 per cent. Discriminant validity analysis was performed for each factor by comparing the root square of the AVE shared between the constructs and its measures and the correlation with the rest of constructs (Table III). As can be seen, discriminant validity is conrmed, since the root square of AVE for the four constructs is larger than the correlation with the other constructs. Finally, a global indicator of JIT production practices using the former four constructs was also created. It is a formative indicator, since it includes the four different dimensions of JIT production mentioned above: layout, lot size reduction, set-up time reduction and kanban. It is dened as the mean of their values. The absence of multi-collinearity was seen to validate this indicator, as the VIF was lower than ve. Explanatory variables The size of the plant was measured by the logarithm of the number of workers, and age by the logarithm of the number of years since the plant was founded. Age and size are variables that are frequently effectively log-transformed to linearise relationships (Cohen et al., 2003).

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Index mean 3.66 0.789 2.90 2.74 1.93 1.034 0.974 1.048 0.725 0.773

Index SD

Factor loading

Cronbachs a 0.621

AVE 0.564

Layout

Lot size reduction

0.719 0.750 1

0.598 0.820 1

Set-up time reduction

Kanban system

We have laid out the shop oor so that processes and machines are in close proximity to each other Our machines are grouped according to the product family to which they are dedicated Our plant emphasizes putting all tools and xtures in their place We are working to lower lot sizes in our plant Our plant produces many different products Frequently we change the models produced in our plant We have low set-up times of equipment in our plant Plant management emphasizes reducing set-up times We use a kanban pull system for production control 0.777 0.699 0.872 0.847 0.894 0.894 1

Note: All the items are measured on a 1 to 5 Likert scale

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Table II. Dimensions of the JIT production system, descriptives and conrmatory factor analysis results

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The presence of AMT in the plant was captured by an index that reects the degree of utilization of several technologies identied by the literature (Boyer and Pagell, 2000; Jonsson, 2000; Beaumont et al., 2002; Ward et al., 2007). The interviewee had to assess the level of implementation of these technologies in the plant on a zero-to-ten scale. Therefore, the index used to measure AMT is a formative indicator. It is computed as the average of the degree of use of the technologies considered. Table IV displays these technologies, as well as the results of the validity analysis. In order to capture the implementation of quality management, we considered separately the use of advanced and basic improvement tools as well as the management of relationships with suppliers and customers. The rst two variables were constructed as formative indicators from the degree of implementation of two advanced and four basic methodologies and techniques commonly recognized as effective for continuous improvement in manufacturing (Dale et al., 1999). The use of each one of them was evaluated by the manager on a zero-to-ten scale (Table IV). These two variables are calculated as the average of the degree of use of the two advanced and four basic techniques for quality improvement considered. The vertical relationship management variable attempts to reect to what extent there is closeness, collaboration and information exchange with suppliers and customers. With this aim in mind, we considered several practices widely identied in the quality management literature (Saraph et al., 1989) (Table IV). The manager had to assess the degree of implementation of such practices on a one-to-ve Likert scale. The variable used, as in the previous case, is formative and is dened as the average of the nine items examined. Finally, in order to capture the degree to which work organization is focused on worker exibility, empowerment and teamwork, the percentage of workers involved in four related practices was assessed. They are multi-skilling, job rotation, improvement groups and autonomous teams. All these practices have been included in many articles discussing new exible work practices and high-performance work systems (Black and Lynch, 2004; Handel and Levine, 2004). The variable used is a formative indicator dened as the average of the percentage of production workers involved in these four practices (Table IV). All these formative indicators were validated, once the absence of multi-collinearity was determined. The VIF for all these measures was lower than ve. Estimation methods The method used to test the hypotheses was ordinary least squares multiple regression. Five regression models were estimated. In the rst, the global JIT index
Layout Layout Lot size reduction Set-up time reduction Kanban (0.750) 0.295 0.332 0.336 Lot size reduction (0.773) 0.592 0.182 Set-up time reduction Kanban

Table III. Discriminant validity analysis of JIT production dimensions

(0.905) 0.247

(1)

Notes: The diagonal elements indicate the root square of the average variance explained shared between the constructs and its measures. The outside diagonal elements indicate the correlation between the constructs

Variable 4.024 3.174 2.864 0.778 0.719 1.731

Denition

Mean

SD

VIF

Size Age Advanced manufacturing technologies (AMT)

1.381 1.383 1.286 1.198 1.320 1.163 1.350 1.182 1.490 1.428 1.225 1.389 1.078 2.385 1.454 1.454 1.639 2.314 1.298 1.371 1.477 1.544 3.835 0.514 (continued )

Advanced quality tools

Basic quality tools

Vertical relationship

Logarithm of the number of workers in the plant Logarithm of the number of years since the plant was founded Formative index form the use of the following technologies (zero to ten scale) Shop oor data capture Enterprise resource planning Preventive maintenance software Bar coding Articial vision technology Automated-guided vehicles Automated warehousing Computerized numerical control machines Robotics Flexible manufacturing cells CAD/CAM systems Laser technology Formative index from the use of the following advanced tools for continuous improvement (zero to ten scale) Failure mode and effects analysis Design of experiments Formative index from the use of the following basic tools for continuous improvement (zero to ten scale) Six sigma Statistical control process 5S Formal methodologies for solving problems (8D, etc.) Formative index from the following items (one to ve scale)

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Table IV. Explanatory variables, descriptives and construct validity

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Variable

Management

Work organization

Table IV. Denition Mean SD VIF 1.355 1.174 1.325 1.291 1.600 1.780 1.832 2.207 2.323 28.361 20.739 2.269 2.116 1.460 1.504 We strive to establish long-term relationships with suppliers Our suppliers are actively involved in our new product development process We rely on a small number of high-quality suppliers Our suppliers are certied for quality We are frequently in close contact with our customers Our customers give us feedback on quality and delivery performance We strive to be highly responsive to our customers needs We regularly survey our customers requirements We regularly measure customer satisfaction with us Formative index from the following variables Percentage of production workers that rotate jobs in different sections Percentage of production workers skilled to perform different jobs in different sections Percentage of production workers that belong to autonomous work teams Percentage of production workers that take part in problem solving groups

was used as the dependent variable. In the other four models, the dependent variables were the four JIT dimensions identied individually: layout, lot size reduction, set-up time reduction and kanban. Eleven industry dummy variables were included in all the models. Results The rst column in Table V shows the results of the estimation of the model that identies the determinants of JIT practices in the plant as a whole. As can be observed, the coefcients of the variables AMT, basic quality tools, vertical relationship management and work organization are positive and signicant. As far as structural variables are concerned, it should be noted that plant size measured by the logarithm of the number of workers has a negative and signicant effect. On the other hand, plant age also presents a negative coefcient, but it fails to reach signicance at the 10 per cent level. The second column of the table gathers the results relating to the impact of the explanatory variables on JIT layout. In this case, only the coefcients of two of the variables capturing quality management that is, the management of relationships with suppliers and customers and the use of basic quality tools are statistically signicant, both with a positive sign. Neither of the two variables on the structural characteristics of the plant have signicant coefcients. The same applies to AMT, advanced quality tools and work organization. The third column displays the results of the estimation of the explanatory model for lot size reduction. As shown, size has a negative impact on the implementation of these JIT practices. On the other hand, AMT and work organization have a positive and signicant effect on the dependent variable. No signicant inuence has been detected for either advanced and basic quality tools, or for vertical relationship management and plant age. In the case of the third JIT dimension considered, set-up time reduction, the model estimations indicate that AMT have a signicant and positive effect on its adoption, with similar results for vertical relationship management. For the rest of the explanatory variables included in the model no signicant impact was found. The last column in Table V presents the results of the estimation model for the use of a kanban system. As shown, AMT have signicant and positive effects. The same is true for basic quality tools and vertical relationship management, but in these cases with lower statistical signicance. On the other hand, plant age has a negative inuence on kanban implementation. No effect was detected as far as advanced quality management, work organization and plant size are concerned. Although not reported here for space reasons, our ndings for sector dummies show that there are hardly any differences among industries in the adoption of JIT and its four components. The exceptions are the non-metallic mineral products industry for JIT as a whole and paper and textiles industries for kanban. In these cases these sectors show a lower degree of adoption. Discussion and conclusions The results obtained when carrying out the tests of the empirical model conrm three of the ve hypotheses formulated about the implementation of JIT practices in the plant. Only in two cases, those of H1 (plant size) and H2 (age), have the hypotheses been rejected.

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Constant Size Age AMT Advanced quality tools Basic quality tools Vertical relationship management Work organization R2 F

Notes: t-statistics in brackets, industry dummy variables included. *p , 0.10; * *p , 0.05; * * *p , 0.01

Table V. OLS estimations for the determinants of JIT in the plant and its dimensions (n 203) JIT in the plant 2.100 * * * (4.490) 2 0.142 * * (2 2.273) 2 0.073 (2 1.213) 0.120 * * * (4.146) 2 0.039 (2 1.393) 0.086 * * * (3.052) 0.339 * * * (3.686) 0.005 * * (2.207) 36.9 5.717 * * * 2.281 * * * (4. 250) 2 0.096 (2 1.334) 2 0.074 (2 1.072) 0.007 (0.218) 2 0.040 (2 1.233) 0.097 * * * (2.988) 0.470 * * * (4.456) 0.001 (0.143) 27.3 3.667 * * * 1.919 * * (2.435) 2 0.243 * * (2 2.300) 0.141 (1. 389) 0.164 * * * (3.358) 2 0.010 (2 0.203) 0.075 (1.584) 0.248 (1.603) 0.008 * * (2.252) 23.4 2.983 * * * Layout Lot size reduction Set-up time reduction 2. 167 * * (2.444) 2 0.161 (2 1.358) 2 0.014 (2 0.126) 0.155 * * * (2.794) 2 0.077 (2 1.448) 0.081 (1.517) 0.357 * * (2.026) 0.006 (1.390) 17 1.963 * * Kanban 2.048 * * (2.543) 2 0.059 (2 0.545) 2 0.350 * * * (2 3.344) 0.157 * * * (3.141) 2 0.032 (2 0.670) 0.083 * (1.706) 0.272 * (1.713) 0.005 (1.265) 23.6 3.012 * * *

As was already discussed in the argumentation for the hypotheses, the effect of the age of the plant on any type of organizational innovation was not clear. The results of our investigation in this respect conrm this indeterminacy, as it is the only variable not related in a signicant way to the dependent variable. Also, in the case of size, conicting arguments were presented in our theoretical discussion of its relation with the implementation of JIT. If we consider the impact of size on the different JIT dimensions, we may observe that the negative relationship between them established in this paper is based primarily on the relationship between size and lot size reduction. Lot size reduction requires greater agility on the part of the operations system and this ability to respond quickly is more likely to be found in small companies, since they usually present fewer coordination problems. Managerial implications The results obtained for the explanatory infrastructure variables have important implications for the implementation of JIT. In general, terms, our ndings reinforce an idea that should be transmitted to the operations managers of companies, that is, the need to maintain an appropriate organizational infrastructure, with the application of a set of management tools, practices and ideas in different spheres (quality management, new technologies, relationships with suppliers and customers and work organization) in order to support the introduction of JIT practices. Our ndings show that industry does not have a big inuence on the degree of incidence of JIT practices in manufacturing plants. This nding supports the idea that JIT can be applied in any production context. Nonetheless, some exceptions to this general result have been found. More concretely, non-metallic mineral products, paper and textile industries present a lower level of adoption of some JIT practices. This is consistent with the reluctance to the introduction of organizational innovations found for these sectors in Spain (Merino, 2003). As expected, the use of AMT has been found to be related in a very signicant way to the adoption of JIT practices. Although perhaps there is no straightforward technical explanation, our results conrm the idea of the existence of a certain alignment between technological and organizational innovation. If we analyze the relationship with the four dimensions of JIT, we may observe that, with the exception of the practices related to plant layout (proximity, order, etc.), the relationship is positive and signicant. These results are reasonable, since they suggest that the introduction of AMT helps to reduce set-up times and contributes to the ability to produce small lots. In other words, AMT improves manufacturing exibility. These results highlight the existence of substantial complementarities between technological innovation and organizational innovation, such as JIT practices. Firms seem to understand that both aspects are not alternatives, but that there are synergistic effects that make advisable the introduction of changes in technology and equipment together with modications in the organization of the production process. The use of tools for quality improvement and the implementation of JIT are positively related, therefore conrming the hypothesis formulated in the theoretical section of the paper. However, it must be emphasized that the results differ depending on the type of quality tools considered. The positive effect detected appears only for basic tools and not for advanced tools. This nding suggests that even simple techniques for quality improvement can provide the levels of quality required to adopt JIT successfully.

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It can be inferred that, for the implementation of JIT, at the moment companies are not deeming necessary the use of more sophisticated tools for quality improvement. It is also necessary to recognize that the impact of quality management on the different JIT dimensions is varied. For example, a signicant relationship with the implementation of kanban has been identied. This result may be explained by the importance of having good quality indicators (minimum defective product rate) for the kanban planning system to work well. In order to reach this objective, it seems reasonable to suggest that the application of improvement tools will be very useful. In the case of plant layout, the relationship between some of the basic quality improvement practices (for instance, 5S) and some of the items of such dimensions are evident. The intensity of the relationships of the plant with suppliers and customers is strongly associated with the implementation of JIT practices, as was expected in the formulation of the hypotheses. In addition, the relationship with three out of the four JIT dimensions is statistically signicant, with lot size reduction being the exception. It is difcult to explain the absence of a statistically signicant coefcient on lot size reduction, when a priori this variable was expected to be crucial for close relationships with suppliers and customers (fewer problems of material deliveries, better information for production planning, etc.). Finally, the positive and strongly signicant relationship between work organization and the implementation of JIT practices in the plant shows once again the importance of employee participation and involvement for the successful introduction of new methods and techniques in production organization. This has a twofold implication. On the one hand, workers must be prepared to be exible and to perform a wide variety of tasks. At the same time, they must have a positive attitude to facing unexpected problems and be willing to be exible to adjust to the requirements of the production system. Limitations The main limitations of this research are those due to the cross-sectional character of the data, which prevents denitive statements about the causality of relationships among the variables. This study has the disadvantages arising from research based on surveys, especially when the answers are of a subjective nature. As is usual when data from a single country are used, the ndings may not be applicable in other geographical contexts. Several features of Spain should be taken into account for an assessment of this issue. From a cultural perspective, Spain is characterized by high-uncertainty avoidance. Moreover, the effort Spanish companies put into innovation is clearly below the average within OECD countries. Finally, there is a strong presence of foreign MNCs in the manufacturing sector, especially in the region the sample comes from. In general, terms, as these characteristics are shared by the rest of the Southern countries in the European Union, these ndings could be directly generalized to these cases. Although there are marked differences between Spain and other countries, we consider that most of the conclusions of the paper can be taken as universally valid. Regarding the inuence of technological and operational aspects on JIT implementation, such as AMT and quality management, institutional and cultural differences are expected not to have a large impact on the nature of that relationship. In this context, we should point out that the expansion of MNCs leads to greater cross-country homogenization in innovation processes.

Regarding the relationship between JIT and human resources, we would argue that, in view of the strong power of unions in Spain and the need for employers to reach an agreement with them before making any change in this area, our conclusions on this issue are robust. The fact that, even in an unfavourable context, there is a signicant association between work organization and JIT indicates the relevance of human resources in the implementation process.
Notes 1. This vision has also been referred to as big JIT, whereas the former has been referred to as little JIT (Wacker, 2004). 2. JIT has also been deemed to be an innovation in relevant articles in the literature, see, for example, Snell et al. (2000) and Ketokivi and Schroeder (2004a). References Aghazadeh, S.M. (2008), Investigating causal relations between labour productivity and JIT in SMEs, International Journal of Globalisation and Small Business, Vol. 2 No. 4, pp. 362-70. Ahmad, S., Schroeder, R.G. and Sinha, K.K. (2003), The role of infrastructure practices in the effectiveness of JIT practices: implications for plant competitiveness, Journal of Engineering and Technology Management, Vol. 20 No. 3, pp. 161-91. Ahmed, N.U., Tunc, E.A. and Montagno, R.V. (1991), A comparative study of US manufacturing rms at various stages of just-in-time implementation, International Journal of Production Research, Vol. 29 No. 4, pp. 787-802. Amoako-Gyampah, K. and Gargeya, V.B. (2001), Just-in-time manufacturing in Ghana, Industrial Management & Data Systems, Vol. 101 No. 3, pp. 106-13. Bayo-Moriones, A. and Merino, J. (2004), Employee involvement: its interaction with advanced manufacturing technologies, quality management, and inter-rm collaboration, Human Factors and Ergonomics in Manufacturing, Vol. 14 No. 3, pp. 117-34. Beaumont, N., Schroeder, R. and Sohal, A. (2002), Do foreign-owned rms manage advanced manufacturing technology better?, International Journal of Operations & Production Management, Vol. 22 No. 7, pp. 759-71. Becheikh, N., Landry, R. and Amara, N. (2006), Lessons from innovation empirical studies in the manufacturing sector: a systematic review of the literature from 1993-2003, Technovation, Vol. 26 Nos 5/6, pp. 644-64. Black, S.E. and Lynch, L.M. (2004), Whats driving the new economy? The benets of workplace innovation, Economic Journal, Vol. 114 No. 493, pp. 97-116. Bollen, K.A. and Lennox, R. (1991), Conventional wisdom on measurement: a structural equation perspective, Psychological Bulletin, Vol. 110 No. 2, pp. 305-14. Bonavia, T. and Marin, J.A. (2006), An empirical study of lean production in the ceramic tile industry in Spain, International Journal of Operations & Production Management, Vol. 26 No. 5, pp. 505-31. Boyer, K.K. and Pagell, M. (2000), Measurement issues in empirical research: improving measures of operations strategy and advanced manufacturing technologies, Journal of Operations Management, Vol. 18 No. 3, pp. 361-74. Cagliano, R. and Spina, G. (2000), Advanced manufacturing technologies and strategically exible production, Journal of Operations Management, Vol. 18 No. 2, pp. 169-90.

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Fullerton, R.R. and McWatters, C.S. (2001), The production performance benets from JIT implementation, Journal of Operations Management, Vol. 19 No. 1, pp. 81-96. Galende, J. and de la Fuente, J.M. (2003), Internal factors in determining a rms innovative behaviour, Research Policy, Vol. 32 No. 4, pp. 715-36. Gilbert, J.P. (1990), The state of JIT implementation and development in the USA, International Journal of Production Research, Vol. 28 No. 6, pp. 1099-109. Gunasekaran, A. (1997), Implementation of just-in-time in a small company: a case study, Production Planning and Control, Vol. 8 No. 4, pp. 406-12. Gunasekaran, A., Forker, L. and Kobu, B. (2000), Improving operations performance in a small company: a case study, International Journal of Operations & Production Management, Vol. 20 No. 3, pp. 316-35. Gunn, T.G. (1987), Manufacturing for Competitive Advantage: Becoming a World Class Manufacturer, Ballinger, Cambridge, MA. Hackman, R. and Wageman, R. (1995), Total quality management: empirical, conceptual and practical issues, Administrative Science Quarterly, Vol. 40 No. 2, pp. 309-42. Handel, M.J. and Levine, D.I. (2004), Editors introduction: the effects of new work practices on workers, Industrial Relations, Vol. 43 No. 1, pp. 1-43. Hannan, M.T. and Freeman, J. (1984), Structural inertia and organizational change, American Sociological Review, Vol. 49 No. 2, pp. 149-64. Hum, S.H. and Ng, Y.T. (1995), A study of just-in-time practices in Singapore, International Journal of Operations & Production Management, Vol. 15 No. 1, pp. 5-24. Im, J.H. and Lee, S.M. (1989), Implementation of JIT systems in US manufacturing rms, International Journal of Operations & Production Management, Vol. 9 No. 1, pp. 5-14. Jonsson, P. (2000), An empirical taxonomy of advanced manufacturing technology, International Journal of Operations & Production Management, Vol. 20 No. 12, pp. 1446-74. tkepohl, H. and Lee, T.C. (1988), Introduction to the Judge, G., Carter Hill, R., Grifths, W., Lu Theory and Practice of Econometrics, 2nd ed., Wiley, New York, NY. Kannan, V.R. and Tan, K.C. (2005), Just in time, total quality management, and supply chain management: understanding their linkages and impact on business performance, Omega, Vol. 33 No. 2, pp. 153-62. Ketokivi, M.A. and Schroeder, R.G. (2004a), Strategic, structural contingency and institutional explanations in the adoption of innovative manufacturing practices, Journal of Operations Management, Vol. 22 No. 3, pp. 63-89. Ketokivi, M.A. and Schroeder, R.G. (2004b), Perceptual measures of performance: fact or ction?, Journal of Operations Management, Vol. 22 No. 3, pp. 247-64. Lau, R.S.M. (2000), A synergistic analysis of joint JIT-TQM implementation, International Journal of Production Research, Vol. 38 No. 9, pp. 2037-49. Lee, C.Y. (1997), JIT adoption by small manufacturers in Korea, Journal of Small Business Management, Vol. 35 No. 3, pp. 98-107. Levitt, B. and March, J.G. (1988), Organizational learning, Annual Review of Sociology, Vol. 14, pp. 319-40. MacKenzie, S.B., Podsakoff, P.M. and Jarvis, C.B. (2005), The problem of measurement model misspecication in behavioural and organizational research and some recommended solutions, Journal of Applied Psychology, Vol. 90 No. 4, pp. 710-30. Manoochehri, G.H. (1988), JIT for small manufacturers, Journal of Small Business Management, Vol. 26 No. 1, pp. 22-30.

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as British Journal of Industrial Relations, Industrial & Labor Relations Review or International Journal of Production Economics. Alberto Bayo-Moriones is the corresponding author and can be contacted at: abayom@unavarra.es Alejandro Bello-Pintado is an Assistant Professor of Business Economics and Strategic Management in the Faculty of Economics and Business Administration at the Public University of Navarre, Spain. His doctoral thesis focused on the strategic management in the oil industry. He has published articles in several journals and presented papers in national and international congresses. az-de-Cerio is an Industrial Engineer and Lecturer of Operations and Quality Javier Merino-D Management at the Business Administration Department of Public University of Navarre, where he earned his PhD. His main research topics interests are quality management, human resources management and operations management. His research has been published in journals such as International Journal of Production Research, International Journal of Production Economics or Total Quality Management & Business Excellence.

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