Effect of just-in-time purchasing relationships on organizational design, purchasing department configuration, and firm performance

Just-in-time (JIT) purchasing relationships with suppliers involves close collaboration on product development and specifications, and on both product and information flows. The results of a study of 200 U.S. manufacturers demonstrate that the effects of JIT purchasing relationships are pervasive. First, organizational design changes as JIT purchasing increases, and the firm becomes more formalized in performance measurement, more integrated, and more specialized. Decentralization occurs in line-operating decisions but not scheduling. Second, performance is enhanced, with weeks of inbound inventory decreasing and both financial and market performance increasing. However, the configuration of the purchasing function does not change. (C) Elsevier Science Inc. 1997.