Just-in-Time Inventories in Old Detroit
Michael Schwartz and Andrew Fish Business History July 1998, Volume 40, Number 3, pp. 48ff (24 pages)
Category: Inventory
URL Address: http://proquest.umi.com/pqdweb?Did=000000040162502&Fmt=3&Deli=1&Mtd=1&Idx=2&Sid=1&RQT=309

Executive Summary:

JIT was heralded as a new idea that was the linchpin of the ascendancy of Japanese manufacturers, in particular automobile manufactures, in the global marketplace. However, JIT, instead of being a new and radical idea, may be a repackaging of the much older Detroit production methodology known as "hand-to-mouth".

Questions:

  1. What makes leasing so attractive to today's consumers?
  2. What are the principal ideas and benefits that undergird the JIT system?
  3. What is the hand-to-mouth production methodology?
  4. Why has JIT received so much attention while hand-to-mouth has received so little?
  5. What similar conditions were faced by Toyoto in the late 1940s and the Olds Motor Company after its 1905 fire that encouraged the rise of a JIT system in the 1940s and a hand-to-mouth system in the early 1900s?
  6. The author states that Ford's new production methods substantially undermined hand-to mouth inventory arrangements. What aspects of Ford's production methods helped bring about the demise of the hand-to-mouth system?
  7. In comparing companies that use JIT and companies that use more "traditional" inventory control methods, what effect would the use of JIT have on financial ratios? Would the financial statements of two such companies remain comparable?
  8. Can you think of any factors (economic, political, social, etc.) that might bring about a resurgence of hand-to-mouth and in-house production of parts in the American auto industry, or is outsourcing here to stay for these manufacturers?