The relationship between mini profit-center and JIT system

In many Japanese manufacturing companies there are many cases that JIT production system is jointly used with the mini profit-center. Thus, the theme of this paper is to logically investigate what kinds of advantages will be mutually extended between the mini profit-center system and JIT production system. Mini profit-center system motivates people throughout the company from profit consciousness for them to utilize various JIT techniques to make continuous improvement for cost reduction. On the other hand, the income measurement system in mini profit-center is a kind of "cash-basis" accounting. In order for the income to be a cash flow during the period, there must be a prerequisite condition of mini profit-center system that it completely shortens the production lead-time applying the JIT. This is the benefit that JIT will give to mini profit-center. (C) 2002 Elsevier Science B.V. All rights reserved.