The set of just-in-time management strategies: An assessment of their impact on plant-level productivity and input-factor substitutability using variable cost function estimates

Many manufacturers in the automobile industry around the world have adopted the just-in-time (JIT) set of management strategies in an effort to improve productivity, efficiency and product quality. This paper provides empirical evidence that supports the idea that JIT manufacturing environments are, in fact, more productive than their non-JIT counterparts. Plant-level cross-sectional data from auto-parts manufacturing firms are used to estimate variable cost functions for a JIT group as well as for a non-JIT group of plants. Differences in cost function characteristics between the two groups are examined and discussed.