The perceived impact of JIT implementation on firms’ financial/growth performance

Abstract

This paper argues that solely depending on short‐term financial performance indicators to justify the benefits of JIT implementation is very misleading and could harm a company’s future long‐term survival. The empirical study presented in this paper investigated the effect of (JIT) implementation on the use of operation performance measures. Furthermore, the effect of the JIT implementation and the use of the operating performance measures on firms’ financial/growth performance, as perceived by the managers, was examined. These effects were measured using path analysis to show direct and indirect effects of JIT practices on the other two variables. Analyses indicate that, although correlations do exist between JIT practices and managerial perceptions of a firm’s financial performance, the relationships are mostly the result of spurious effects. Direct and indirect effects realized from the JIT practices on financial/growth performance are almost non‐existent.