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 cl ose collaboration on product development and specifications, and on bo th product and information flows. The results of a study of 200 U.S. m anufacturers demonstrate that the effects of JIT purchasing relationsh ips are pervasive. First, organizational design changes as JIT purchas ing increases, and the firm becomes more formalized in performance mea surement, more integrated, and more specialized. Decentralization occu rs in line-operating decisions but not scheduling. Second, performance is enhanced, with weeks of inbound inventory decreasing and both fina ncial and market performance increasing. However, the configuration of the purchasing function does not change. (C) Elsevier Science Inc. 19 97.