JOHliNAL Of MANAGERIAL ISSUES

Vol. X\1I Number I Spmi^ 2005: 76-100

Implementing JIT Purchasing: Does the Level of

Technical Complexity in the Production Process Make a
Difference?*
Hale Kaynak
A.ssociale Professor of Operations Management
The University of Texas - Pan .'\mc'rican

Over the last two decades, an in-
creasing number (il companies have
implemented just-in-time purchasing
([ITP) teclniiques in an effort to
shaipen iheir competitive edge (def-
initions of abbrfviatioiis are hsled in
Appendix A). JITP involves the pro-
curement of quahty materials meet-
ing exiict specifications via fn'C|uent.
timely deliveries in small qiianlilies.
Companies within a supply chain it-
self tend to adopl JITP ledmiques to
coordinate aiid integiale tlieir own
inventory management activities.
Thus, JITP imptoves supply chain
management (SC^M) hy synchroniz-
ing the flow of inventfiiy throughout
the snpjjly chain and l>y Joint reduc-
tions in channel inventories (Cooper
el ai, 1997; de Tieville W aL 2004:
Dong et al, 2001; Marklaiui fl al.,
1998; Tan, 2001; Zimmer. 2002).
Ahhough s{)me empirical research
onJITP exists {e.g., .'\nsari, 1984: Faw-
cett and Biroii. 1993; Cermain and
Drc")ge, 1997), scant attenliou has
been paid to the implementation of
JITP in different prodnction systems.
Unfortunately, the research method-
ologies utilized in the studies that do
exist ditiiinished and tlnis limited lhe
vahie ol' theii' findings becau,se (1)
the extent of JITP implementation
was not exaTnined m rompaiiies tliat
employed a mix oi pro{luction proc-
esses (White, 1993: White and Pr>'-
butok, 2001), an important oversight
because Celley et al. (1986) have re-
porlect that most of the companies
they studied that implemented Just-
in-time (JIT) management systems
employed a mix of production proc-
esses and often also implement JIT
manufacturing (Dotig et al.., 2001;

* Funding m cnllrc! ilif datii used in ill is study \\ii,s pjinidcd hy ilic Anicricui Sniictv Ihi'Qii;ilit\ and
the Instllutf loi ,Siip])!y Mnii;igciiicni—National LUICI the Dallas chapicr. The inuh<ir wuukl lik<' Io
thank (lliiulcs (.'.. Fiscliei. IJimaldJ, Ni'wniaii anti the |jiiprr's Iwo anonymous rt-vicwi'is i(jr their
helpful (itninieiits and ,siij>;g('siions. She is also very grau-fiil ui the r^spondetiLs wlm filk-d oui the
questionnaire lor iheir cooperation.

JOURNAt. OK MANAtitRtAl, ISSUES Vol, \\1l Nunihc r I Spring 2005

 T K C I I N K A t . COMIM.KXriY IN I ILK P R O D t i f T I O N P R O C E S S
Fulk-rion d at., 2()0;i; Monc/ka tl al.,
1998). and (2) the nuiltiriimensioii;d
of )ITP w;is cither (ivt-rlocikt-d
r.. ILiiidficlcl 199:^a, 1993b; Hand-
and Painu-si, 1995; White, 1993;
Whitf and Pnhuiok. 2()()1) or nc-
glrctcd U) considci" the possibility thai
Ihc iifrgrogatf o) JITP pi;u ticcs might
not have been inipleini-iitcd with iini-
fotTn diligence (Cionzalt's-Benito ;ind
Spring. 2000).
Research into the implementation
and effectiveness of jITP iti diffcictu
profhtction svstcms is vital hecause in-
iKidiuing )rrP immediately, and
sometimes ptolotindh. ( hangt s pto-
duction ('[lviioittitciiLs. C^oniignra-
tions of prodtiction systems are exten-
sively ievieuc<l iti the literattne
(Bo/arth atid McDetmott, 1998; De-
varaj et aL, 2001; Klutrana. 1999; Kim
and" U-e. 1993; Kotha atul Orne.
1989). Otie isstte frequently raised in
these sttidies is that the itn|)leTneiUa-
tioit of new technologies^llexihle
niantifacturing s^'stems, JIT systems,
([Uiiliiv management—ate teitdering
the piollles ol traditional t\pologies
atid taxotiomies of ptoditcLion sys-
tems iticapable of assistittg manage-
rial decision tnakitig. Altltoitgh the
itnplenteniation of |ITP is oftcti as-
sociated with repetitive pro<hiction
sy.stems (e.g., (iilhert el ni, 1994; Kr;t-
jewski and Rit/man, 2001; Nicolaou,
2002). cvidciue indicates that JITP
can be utilized l)y cotttpanies thai em-
ploy non-repetitive ptoduction sys-
tems or that use a mix of systems. In
short, the literalure on JITP fails to
respotid conchisively to the foUowiitg
research questions:
• Does the extent to whit It JITP prac-
lices are implentented differ wilh
the level of technical ctjmplexity of
the prociuction processes etn-
ployed?
JOl'RNAl. OF MANAOERIAI. ISSUES Vol. XVH Nnmb<T I
77
• Do tintt.s itttpleittenting JITP ex-
hibit the chatacteristics and per-
fonnattce ctiteria ivpically associ-
ated with difleretit levels of
technical cottiplexity?
I'lili/ing the pioduction system
conligtu ations suggestt-d by Wood-
ward (1965) and Hayes and Wheel-
wright (1979). this stttdy contributes
to the de\e!opinent ofJlTP theorv by
answeritig tliese <|tiestiotis. iti ways
that prtnide significatu help itnple-
metitittg [IIP to tttanagers of com-
panies eitiployitig a ittix of produc-
tion systems. Adv(Kating titili/ation of
| r i P t(( hniqties only in a repetitive
prodticiion environmetit cati di.scour-
age sottie matiagers who might oth-
eiAvise be interesied in impk ttienting
JI IP, and tlttis they lose ilu- beneliLs
JITP has to offer. In the following sec-
tioti. a conceptttal model and re-
search h\pothcses. botli derivetl frotn
a literattne review, aie presented. Af-
tei" a descriptioti of research itieth-
odolog\. uhicli includes the research
design. sain|>!e, and ttteasnres ofthe
variables in\estigated. the results of
tlu' attalysis of \ariatice for the extetit
<ifJlTP implenientation attd the level
of technital complexitv^ at the time
are pro\ided. Following the disciiv
sion of the (inditigs and matiagerial
utilit)', the article concltides with im-
plications for further research and
limiuuioits of diis sttidv.
CONCEPTUAL MODEL
Putchasitig is otie of tlti" produc-
tion elentenLs significantly aflected by
the implemetitation of )IT manage-
ttteiu systertis ((Gilbert. 1990: Im and
Lee, 1989). and JITP tecbitiques
streantline purchasing and in\entoiy
maitagemetit, among other cotnpo-
uetit-s of prodttction proces.scs. In the
following sections, the chatacleristics
.Spring 2005
 78 KWNAK
of JITP, technical complexity atid its
relation to different process etiviron-
ments are discussed. Ftirther. the ittt-
plemeniation of JITP pi-actices at dif-
ferent levels of technical complexity
i.s exatnined, and this stttdy's reseatch
hy|jotheses are presented.
Just-In-Time Purchasing (JITP)
The main t haracteristics of [ITP
are reflected in stipplier cooperation,
qttantities delivered, qttality of sui>
plied materials and transportatioit
(Gelinas et at, 1996; Sch{)nbergerand
Gilbert, I98S; W'aters-Fttller, 1995).
Kaytiak (1997) etttpirically validated
these characteristics and fotind thtee
distinct ditnensions: suftpHer quality
mannjrement, fjuatilitics diiivned, and
transpnrlation. These JITP technicjues
are disc ttssed bt iefly in the remainder
of this section.
Supplier Quality Management. Stt[>-
plier (|ualit\ inanagentt-nt is cotti-
prised of sttpplier—hityi-r coopera-
tioit and improved qtiality of supplied
materials. Companies utilizing jITP
techniqttes tealize significant reduc-
tions in the intmher of stippliets (llil-
lesbach H al, 1991; Freelatid, 1991;
Gonzales-Benito, 2002; Handfield.
1993a; Harlait<l, 1996), which eases
the maitagement task. Dealing with
ottly one supplier for a pattictilar
item or items helps establish long-
term stipplier-btiyer relationships.
Moreover, when the pittchiisitig de-
partment deals with a small nuitther
of suppliets, quality aitd deliver)'
problems are easier to solve because
attentioit can be focused on individ-
nal stij)pliers (Atisati and Modattt-ss,
1990; Cooper and Ellram, 199.S).
A significant contribtitor to sttc-
cessftil stipplier relationships is the
early itivohrment of sttjjpliers in the
design of die bttyitig firtn s products/
JOURNAI. OF MANAGERIAL ISSUES Vol. XVII .^JllIll^KT I .Spring 2005
.services ((Jermain aitd Droge, 1997;
Gonzales-Benito, 2002; Hattdfield,
199.Sb; Sancbez and Perez, 2003;
Tretttand Monczka, 1999). Stippliers
can assist purchasers in chocsing ma-
terials attci parts "that can be most ef-
ficiently and eiTectively prodticed
given their production capability"
(Trent and Monczka, 1999: 93t)).
JITP etnphasizes stipplier evalua-
tiott based on product and/or ser\ice
qttality, delivery performance, and
price (An.sari and Modaness, 1990;
Billesbach ft ai, 1991; Vonderembse
W nl, 1995), rather thati on price
alone. Shin el al. luul that improved
supplier relatioit.s enhances "both
suppliers' and buyers' performance
especially when the bttyer emphasizes
quality and delivety as its coitipetitive
prioriues" (2000: 330). When mate-
rials and parts are delivered in small
ItJts and only in required quantities,
qtiality issties become critical because
(lelective materials atid parts, and/or
shortages, might disrttpt prodticiion
(De Toni and Nassimbeni, 2000;
Dion etaL, 1992; O'Neal, 1989).
Quantities Delivered. JITP letjuires
frecitieni and timely delivery of sup-
plied materials in small lots and exact
quantities (Chapman and Carter.
1990: Dion et ni. 1992; Gottzales-
Benito. 2002; Haitdfield, 1993a;
O'Neal, 1987). More important, how-
ever, is the delivery of exact qtiantities
(Ansari and Modarress, 1990; Free-
lattd. 1991: Schoitbergcr and (iilbert,
1983: Willis and Httston, 1990). If
smaller quatttities are delivered, the
shortage stops the buyer's produc-
tion. Delivery of larger cinantities
eliininalesonc of the- benefits of ]fTP,
the reduction of inventory carrying
costs.
Tramportation. L'nderJITP, ttans-
portatiftn agreements base deliven
dales or times on the buyer's sched-
 T K C H N K A I . COMPl.KXITV IN 1 HK PRODlKmON P R ( K : E S S
ulc, rather than the .supplier's sched-
ule (Ansari and Modarress, 1990;
Schonbergt-raiHi (lilhert, 1983).JITP
also stresses on-iime delivery' for (joih
inhoiinfl and otitboiind Ireighi (An-
sari and M(j(larres.s, 1990; Monc/.ka et
aL 1998; Vonderembse ft aL, 1995).
JITI' icqiiiies faster, more responsive
niode.s ol transportation than tradi-
tional purchasing simply because Ire-
qtient deliveries in small tot.s arc ncc-
essarv- (O'Neal. 1987).
Technical Complexity
Technical romplexiiy refers to the
exleiU to which piodudion .syslent.s
are mechanized. In an eiuiroiunent
of high technical complexity, most of
the work is pei1bmic<l by machines.
In low technical complexity en\ii(Hi-
menis, empioyees do most oi the pro-
duction work'(Daft, 1998). Two key
dimensions of technical complexity
are (1) interaction complexity and
(2) non-decoinposahility. Interaction
complexity refers to the configtira-
tion of steps in a production process.
Wiien interactions are complex, the
stejjs in a prodttction process may
consisi of nmltiple and/or dilfictilt-
to-undcrsland iniei^aciiDiis between
machines or between workers and
machines. Non-decoiuposability re-
fers lo the processes in which ihe op-
timization of the overall production
system is diniciilt to achieve by inde-
pendtiitly cimtrolling [irocess varia-
bles (Kluirana. 1999).
In her seminal work. Woodward
(19fi5) classifies production systems
by technical complexity. This da.ssift-
cation .system identifies ihree iiiajcjr
pro<lu<tion technolofry gtoups: (I)
iinii and small batch prodtiction, (2)
large batch and mass prodtiction. and
(3) contintLoiis process production.
Unit and small liaich piodtictior) is
lOt'RNAI. OFMAN.AOI-RlAMSStES Vol. XVII Number 1 Spring
79
low in technical complexity; contin-
uous processes have tbe highest tech-
nical complexity. In a later study,
Hayes and Wheelwiight (1979) intro-
duce four process categories ba.sed
oti the process flow .structures of pro-
duction systems: (1) jumbled flow
(job shop), (2) disconnected line-
flow (l>aU:h), (3) cotinecterl line flow
(assembly line), and (4) continuotis
flow. Flow complexity refers to tbe de-
gree of variability in operations and
ilu-ir setjuence. In jtunbled flow en-
viromuetiLs, where a large variety of
prodticts is manufactured based on
customer specifications, flow com-
plexity is u,sually high becau.se of "dif-
ierent rotitings and variable set-tip
and prodtiction times" (Van Der
Zwaan and De Vries, 2000: 1761).
Tbe literature on prodtiction systems
(Devaraj W ai, 2001; KIturana, 1999;
Kim and I-ee, 1993; Kotba and Orne,
1989) siiggest.s ttiat while unit and
small f>aich production bave tbe
characteristics of job sbop opera-
tions, nuLss production is similar to as-
sembly line processes.
An integraticm of prodtiction sys-
tem configuratious by W'lKxlward
(1963) and Hayes and Wheelwright
(1979) is depicted in Figure I. As
one nujves from ttnit production to
contintious ptochictioti, tlie ic-chrti-
cal complexity iiu rea.ses and flow
complexity decreases. Job shop op-
erations involve a tmiqtie sequence
of processing sieps because re-
sotirces are organized arotmd the
processes. Demand environment
ttncertainty is bigbesi in job shop
operations becatise these firms man-
ufactuic- make-to-orcier (.MTO) ac-
cording to ctistomer-specific
requirements (Handfleld 1993a,
1993b). One of the main problems
typically experienced by job sbf)p
cjperatiotts is loitg delivei") lead
80 KAYNAK

E o .^

O O

JOURNAL OF MANAGERIAL ISStT.S Vol. XVII NmnbL-i 1 Spring 2flO!i

 LM. CoMP[.F.xrn IN n u :
titiies, which occur becaust' neither
the purchasing of reqtiired materials
nor the design aitd tiianttfacturitig
iictivitics begin until orders ure re-
ceived (Bahu, 1999; Markland el al.,
1998). These firiiis have sttiall-scale
operations (Kim and Lee, 1993; Ko-
tha and Orne, 1989) and high tost
strticttirt's, restilling in low pnjfitabil-
ity. Other performance criteria of job
shop operations can be characterized
by high (]tudit)' and, generally, low iii-
ventoiy levels (Kim and Lee. 1993;
McDermott et al, 1997). The work-iit-
process inventory may be high in job
shops, bttt raw materials and Fttiished
goods invetitories are Unv becatt.se
products are made to order, which is
why the literattire characterizes job
shops as low itivetitory operations
(Kim and Lee. 1993; McDeiinott el
al.. 1997).
At the other end of the continuum,
firms employing continttons proc-
esses ntaniifactnre highly standard-
ized produ{ ts and have large-scale op-
etations, which result in low-cost
operations. These firms usually cotn-
pete on prodtict cost ratber than
product qtiality. The literattire de-
scribes continuotis processes as low
qtiality operatiotis (e.g., McDennott
et aL, 1997) because pn)ducLs do noi
possess high-desigti performance
qtiality althotigh they consistently
pt)ssess conforniance quality (Hill,
2000). Delivery lead times of these
firms are short dtie to their make-to
stock (MTS) sirateg\\ which encotir-
ages the niaititenance of large inven-
tories of raw materials and finished
goods. This is why continuous proc-
es.ses are charactetized as high inven-
tory opeiations. (Continuous proc-
esses traditionally have complex
technologies with less ilexibility (Kim
and Lee. 199S; Kotha and Orne,
1989; McDennott el al, 1997).
[OURNAt. OF MANAGERIAL ISSUES
PRODUCTION PROCESS 81
Research Hypotheses
Implemetitation ofJITP at Different
Levels of Technical Complexity. ,\s
pointed out above, the research on
the implementittion and eifectiveness
of JITP tinder different prodttction
systems is limited. Relying on re-
sotitce dependetice theorv, Hand-
Fiold (1993b) suggests that firms op-
erating in an MTO environment (job
shops) face more uncertainty in de-
mand ihaii do MTS firms. To picnide
or ittiprove on-time delivery and de-
crease delivery lead time, and so their
operation is not sabotaged by de-
mand tincertainly, j(jb shops are
sometimes forced to depart from typ-
ical practices and keep large materi-
als and parts invetitories. As an alter-
native for dealing with detnand
tmcertainty, some job shops tiy to re-
dtice the number of suppliers and
form close relationships with the ones
ihey retain in order to keep invento
lies low, which facilitates lhe imple-
mentation ofjriP techniques (Hand-
field, 1993b). Thus, the need to cope
effectively witb demand tnicerlainty
presstnes firms with low technical
complexit)- t(j implement JITP tech-
niques. The literature suggests that
JITP can be applicable in an environ-
ment of low techtiical cotnplexity be-
cause companies opetating in this
environment tistially manufacture
prodticts in small lots and use simple
equipment with short setup times
(Giunipero and O'Neal, 1988; Wal-
leigb, 1986). Tbese are tbe .same
characteristics associated with JIT sys-
tems.
and Piybtitok (2001) ftnd
that JITP is rttost often implemented
in organizations employing repetitive
processes. Procuring large volttmes
gives tirnis more contn*! over stippliets
and often encourages a greater com-
Vol. XVII Numlx r I Spring 2005
82
mlttnent from suppliers to ]l'V deliv-
eries. Bttt tbat may not be tbe otily rea-
son JITP techniqttes are often titilizecJ
in tepetitive production processes.
The need for efficient operation in a
high interaction and non-decomposa-
bility ensironmetit presstires finiis us-
ing highly complex technical proc-
esses lo develop close relationships
with their suppliers. Moreover, man-
ufacturing MTO is increasing among
companies that employ assembly tine
and contintious processes (Safizadeb
and Ritzman, 1997). These compa-
nies may implement JITP also for the
teasons cited by Handfield (1993b).
/Ml in all, it seems tbat any otgani-
zation, whether characterized by low
or high technical cotnplexity, may im-
plement JITP techniques, though
their motivations to do so may diifei\
Thus, the following hypothesis is pro-
po.sed:
Hypii!he\n /: Tlie extent tn whicli JITP
prartircs arc iniplcTiifiiled docs noi ditlcr
at difltTcm levels of the prodiirlinn p i o
cess' R'thiiiciil (iiinpk'xiiy.
Performance of FirvLs Implementing
JITP at Different Levels of Technical
Complexity. A substantial body of evi-
dence exists documenting the posi-
tive effects of JITP techniqties on in-
ventory tnanagement. quality' and
delivery' perfbrniaiue, and linancial
and market performance (e.g., An-
sari and Modarress, 1990; Fawcett
and Birou, 1993; Ciermain and
Droge, 1997; Vonderembse et al.,
1995). The literattire, however, falls
short in analyzing whether all firms
may realize similar benefits from JITP
implementation regaidless of their
productitin process' level of techtiical
complexity.
The results of the study by White
and Piybutok (2001) indicate thai
JITP is significantly correlated with
lower invetuoiy levels in firms thai
JOURNAL OE MANAGERIAL ISSUES Vol, XVII Number 1 Spring 2t)05
KAYNAK
employ repetitive production systems
(high complexity processes). Since
highly complex processes are ttsttally
characterized by high levels of raw
materials and finished goods inven-
tories, it appears that firms operating
in this environmeitl are reducing
their inventories as a resttll of JITP
implemetitation. In firms etiiployitig
non-repetitive production systems,
JITP is significantly related to higher
internal quality (White and Prybutok,
2001), an expected performance cri-
terion for processes of low technical
complexity. Firms witb highly com-
plex processes should also score high
in quality because cttstomers become
more aware of pioduct/setTice qual-
ity and make mote demands than
they once did. Confonnaiice to stan-
dards was once pivotal in obtaining a
competitive advantage, but meeting
standards is now reqtiisite simply lo
be in a market (Flynn et ai, 199.5). In
other word.s, qttality was once an order-
winner, but it has become an wder-
f/7v«;0> (Hill, 2000).
Empirical evidence shows that
firms utilizing proce.sses of low tech-
nical complexity are trying to im-
prove on some performance variables
traditionally considered challenging
(Handfield and Pannesi, 1995; Safi-
zadeh et aL, 1996). Handfield and
Pannesi (1995) find thai implemen-
tation of JITP improved lead time
competitiveness in MTO manufactur-
ing firms. Respondents in the study
by Salizadeh el ai (1996), tegardless
of processes employed in their firms,
attached similar imporuince to deliv-
eiy time and dependability. The re-
searchers also found that no signifi-
cant relation existed between process
choices and financial and market per-
formatice relative to olher companies
operating in the same industry. Thus,
 TECHNICAI. COMPLEXITV- IN Tvn: PRODUCTION PROCESS
tlic literalnre review suggests the fol-
lowing hyptJthesis:
Hypothesis 2: The pcr!bnn:in<-f of firms im-
plfmt'iiting jITP praciires does not dider
with the production process' level of tech-
nical rijniplcxily.
Characteristics of Different Levels of
Technical Complexity. Two characier-
istics of technically complex proc-
esses get further attention in this
study: level of MTO/MTS production
and firm size. While fnnis with proc-
esses of low technical complexity are
tr\ing to reduce their demand uncer-
tainty', companies that mantifacture
MTS in an environineiit of higli tech-
nicai complexity are iiu reasing their
demand uncertainty by switching to
an MTO strategy (Safi/adeh and Ritz-
man, 1997). With the implementa-
tion of JITP. the level of MTO/MTS
should not change signifieantly along
the continuum of processes that are
technically complex. Thu.s, the fol-
lowing hypothesis is pioposed:
Hypothesis 3: [n firms impieineiuiiig |ITP.
the level of MTO/MTS does not differ wiih
the level of the production process' lech-
nical complexitv-
The liteiature (Kim and Lee, 1993;
Kotha and Orne. 1989) argues that
processes of low technical eomplexity
are usually found in small-scale op-
erations whereas companies with
processes of high technical complex-
ity are large-scale operations. Empir-
ical investigations determining
whether this argument holds true for
companies implementing JITP have
not appeared in the literature. Nev-
ertheless, an examination of firm size
at diflerent levels of technical com-
plexity in companies implementing
JITP is important. It is well-known
that a supply chain may he comprised
of firms of various sizes. An under-
standing of firm size operating at dif-
ferent levels of technical complexity
JOURNAI, OF MANAGERIAL ISSUES
can help managers who are imple-
menting JITP decide how to organize
their production systems and recog-
nize at what levels of technical com-
plexity their suppliers implementing
JITP operate. Due to the lack of re-
search on the sizes ol firms imple-
menting JITP at different levels of
technical complexity, a hypothesis re-
garding firm size at different levels of
technical complexity cannot he yet
formulated. Thus, ihe analysis of this
aspect of technical eomplexity is ex-
ploratory.
RESEARCH METHODOLOGY
Researeh Design and Sample
The data for this research were
drawn from a cross-sectional mail sur-
vey that investigated the relation of
total quality management (TQM)
and JITP to fnm perfonnance. The
target population was U.S. firms in
the contiguous 48 states that have im-
plemented TQM and JITP tech-
niques. Based on the results of a pilot
sttidy and power analysis, a sample
size of 1,884 husiness units was tar-
geted. The industries most likely to
employ TQM and [ITP were identi-
fied through a literature review. The
SIC codes of the industries that com-
prised the set from which target re-
spondents would be selected were
provided hy the American Society for
Qtiaiity and the Institute for Supply
Management. In addition to industry
specifications, respondetits had to
meet several other conditions: they
had to he the sole respondent in a
company, they had to be high-rank-
ing, and it had to he likely they would
he knowledgeable ahout their com-
pany's implementation of TQM and
JITP and iheir firms' peribrmance.
Organizations using such job titles as
Vol. XVII Number I Spring ^005
84
quality tnanager, c o n t i n u o u s im-
p r o v e m e n t m a n a g e r , a n d supplier
a n d quality m a n a g e r were likely to
have i m p l e m e n t e d s o m e form ol
TQM and/or JITP techniques.
Following the Total Design Meth-
odology suggested hy Dilhnan
(1978), an initial mailing (that in-
cluded a cover letter and a postage-
paid retum envelope) was followed
up with two reminders. To encourage
a response (Dillman. 1978). partici-
pants were promised a copy of the ag-
gregated survey results and a profile
of theii" companies in relation to
other firms responding to this survey
if they wanted one. A total of 382 us-
able responses were obtained, a
20..S% response rate, which is consid-
ered acceptable for suiTey research
(Miilhotra and (irover. 1998) and is
similai to that received hy other re-
searchers (e.g., Choi and Eboch.
1998; D.isfI ffI,. 2000).
By testing the difference between
early and late respondents on the var-
iables of interest, the non-respouse
bias was estimated (Armstiting and
Overtone, 1977). Two sample t-test
procedures for TQM, JITP, and three
perceived performance factors were
performed on early and late lespon-
deiit.s. The t-test results indicatefi ihai
no significant differences existed in
the means of the variables between
the two response waves. A second test
of non-1 esponse bias involved the
demographics of the firms: number
of empl()yees, annual sales dollars,
and ownership of the organization.
C^hi-square tests were employed to
discover whetlier a significant diller-
ence on the three demographic vari-
ables between early and late respon-
dents existed. Again, restilts indicated
that no significant differences on
demographics existed between the
two waves of responses.
JOURNAL OF M.\NAGt:RlAL ISSUES Vol. XVI[ Number I
KAVTSJAK
Final Sample Demographies
A scale measuring the duration of
JITP implementation was used to en-
sure that firms in the sample utilized
JITP technitjues. Respondents who
reported tliat theii- companies had
not implemented JITP were elimi-
nated from Lhe sample, whieh in-
cluded both manufacturing and sen-
ice films. As this research was focused
on technical complexity, service sec-
tor companies were also eliminated.
Becatise the values for the perform-
ance meastires and types of produc-
tion processes for some fiinis were
missing, the final sample was leduced
to 176 firms.
The majority of respondents held
such titles as president, vice presi-
dent, director, manager, and coordi-
nator. Their functions were related to
quality practices, general manage-
ment, engineering, and purchasing.
It was reasonable to assume that the
responden ts possessed the knowl-
edge reqtiisite for appropriate an-
swers because (1) they worked in or-
ganizations that focused on qnality
improvement aud supply-based strat-
egies, organizations that commonly
have more open communication
than traditioiial organizations (C.il-
bert cl ai, 1994; Jayaram and Viekeiy,
1998; Kiause, 1999) and (2) they
were likely to pay careful attention to
peribrmance measures, which is nec-
essaiy to measure the effectivetie.ss of
JITP practices accurately ((lermain
and Droge. 1997).
Firms in the final sample represent
various manufactmiug industiies
with SIC codes 20 through .'i9. Elec-
trical and electronic industries
(13.1%) were the most well repre-
sented, ibihnved by measuring, ana-
lyzing and controlling instruments
(11.9%), rubber and plastics prod-
Spring 2
 TECHNICAL COMPLEXIIY IN IIIK PRODUCHION PROCESS
ucts (10.2%), fabricated metal piod-
ucLs (10.2%), and machinery and
comptiter (9.7%). The use of a cross-
industry sample in fITP researeh is
suitable because managers, though in
different industries, deal with similar
purchasing practices and relation-
ships (Handfield, 199lib).
Approximately 27.8% of the firms
had 1(10 or fewei- employees, 23.9% of
the firms had between 101 and 250
workers, 14.2% of the firms had 251-
500 on the payroll, and 34.1% of the
firms had more than 500 employees.
Ab(Hit 27.3% of the firms reported
having annual sales of $12.5 million
or less, and 26.8% of the firms had
annual sales between SI2.5 million
and .'$50 million. The firms that had
annual sales between S51 million and
$100 million comprised about 8.5%)
of the final sample, while c<)mpanies
with annual sale.^ of iietween $101
million and $500 million accounted
for 25% of the final sample. Approx-
imately 7.4% of the firms had annual
sales of more than $500 million.
Measures
JITP and Firm Perfonnance. The in-
strniiu'iii aud nu'asuri'h iililized in
this sludy were leased on (JiurcliiU's
(1979) work. The hulk of the items
regarding [ITP scales were adopted
from previtnis stufiies (Ansari, 1984;
Ettlie and Re/a, 1992; Sakakibara el
a/., 1998; Saraph et nl., 1989), as
shown iu Appendix B. Items relating
to performance \ariables were based
on a review of the literattne con-
cerned with strategic management,
marketing and operations manage-
ment (see Appendix B). Their con-
tent validity was established by those
studies. Prior to conducting a [liloi
study, academicians who are knowl-
edgeable about the variables investi-
JOLRN.VL OF MANAC;fc:RlAL 1SSUF.S Vul. XVII Niiiiibt'i 1
85
gated in the main study evaluated
new items that originated in a litera-
ture rexiew. The feed!)aek obtained
during the pilot study helped ensure
thai tlie items were representative of
the jlTP and performance constructs.
Relialiility and unidiTriensionality
of the |ITP and firm performance fac-
tors were established with the neces-
saiT statistical tests such as Cron-
bach's alpha (ex) and exploratory and
confirmatoi'y factor analyses. (For
more details on the research method
and the tests fV)r reliability and factor
analyses, see K:iynak (1997)). Sup-
plier cooperation and supplied ma-
terials qttality formed one factor that
can be called "stipplier quality tnau-
agement." The other items formed
the proposed factors, namely trans-
portatifjn and quantities delivered.
Three factors emerged for the per-
ceived performance construe t: finan-
cial and market perfonnance, quality
performance, and inventory manage-
ment performance. Financial and
maiket perfbiniance refers to the
piofitability of finns. Quality per-
ibrmance refers to product quality
and delivery lead time of purchased
materials and finished prodncts. In-
dicators of inventory management
performance are purchase material
turnover and total inventoiy turno-
ver. Higher inventory turnovers are
associatefl with lower invent<ii7 levels.
As presented in Appendix B, the
values of Cronbach's a obtained for
each scale of [ITP and firm perform-
ance are satisfactor)', exteeding the
threshold value of 0.70 suggested by
Nunnally and Bernstein (1994).
Thus, these results establish the reli-
ability and uuidimensionality of the
measures legiucliug Jl IP aud firm
peif'ormance.
Results of a [)revious study by Kay-
nak (2000) tliat used the same data-
86 KAYNAK
base indicated that the degtee of JITP
implementation wa.s directly and sig-
nificantly related to each perform-
ance factor: financial and market,
quality, and inventoiy management
(/Malues = 0.019, O.OOOl, 0.0210, re-
spectively), and they established cri-
terion-related validity. C Writer ion-re-
lated validity is based on the extent to
which predictions from a theoretical
framework are supported (Venkaira-
nian atid Gram, 19H(i).
Technical Complexity. The instru-
ment asked subjects to report, in per-
centages, the types of production
processes used in their organizations:
job shop, batch, assembly line, and
continuous flow (Hayes and Wlieel-
wrighl, 1979). A categoiy ot" "other"
was provided to reduce the response
bias. The technical complexity of
firms was measured using the com-
plexity levels ofproductioti processes
developed by KJiurana (1999), who
quatitified complexity levels by as-
signing " 3 " to job shop processes,
" 5 " to batch, " 6 " to assembly, and
"10" to continuous processes. The
higher the number, the greater the
complexity. Most of the companies
employed a mix of production proc-
esses. A technical complexity' score
was obtained by inultiphing each of
the percentage ol production proc-
esses employed by the complexity
level and adding the scores together.
MTO/MTS Production. The targei
respondents were asked to teport the
percentages of MTO and MI'S pro-
duction in their firms. In this study,
only the |)ercentage oi production
MTO is used t^ecause using the per-
centage of MTS production also
would be redundant as these two
measures add up to 100 percent.
Size, l h e size of the manuiacturing
firm was measured by the number of
employees. A correlation analysis was
JOURNAL OF MANAGERLU. ISSUES Vut. XVll
performed to examine the relation-
ship between number of employees
and annual sales, another measure of
firm size widely used in the literature
(e.g., Ettlie, 1983; Keats and Hitt,
1988). The two measures showed a
high correlation, a value of 0,82,
which indicated a high convergence
between the two measures.
DATA ANALYSES AND RESULTS
The data analyses employed to lest
the pnjposed hypotheses in this study
were consonant with those in config-
uration research (e.g., Avella ct aL,
1998: Kaufman et al., 2000; Kla.ssen
and Wliybark, 1999). Technical com-
plexity scores were assigned to the
three categories by using SPSS
(2001): processes of low technical
complexity (3.0-4.9), processes of av-
erage technical complexity (5.0 - (j.ti)
and prt>ccsses ol high technical com-
plexity (6.7 - 10.0). This procedure
categorizes the data based on percen-
lile groups, each group including ap-
proximately the same number of
cases. One of the indicators that
groups were effectively distinguished
was the existence of gtoups of similar
sizes (Hair d al.. 1995). Fifty-tour
companies were classified as having
processes of low technical complexity
(POLTC), 63 companies as liaving
processes of average technical com-
plexity (POATC-) and 59 companies
as having processes of high technical
complexity (POHTC). To validate
discrimination among the three
groups, one-way analysis of variaiKe
(ANOVA) was periormed to test the
mean differences of the technical
complexity scores in the three
groups. The results indicated that die
complexity scores for the three
gioups were significantly different (F
statistic = 526.32, /rvalue < 0.000).
Numbci 1
 TECHNICAL COMPLEXITV IN IHK PRODUCTION PROCESS 87

TABLE i

Descriptive Statistics Tor Variables for the Sample and Means of Variables al DitTerent
Levels of Technical Complexity

Variable Descriptive Statistics Means of Variables at Different Levels

for Total Sample of Technical Complexity^
Mean Std. Low Average High
Technical Technical Technical
Complexity Complexity Complexity
Supplier quality 52.20 20.90 50.55 52.77 53.(M
maniigcment
Quantities delivered 46,60 19.30 46,03 45.61 48.16
Transportation 46,80 22.90 42.55 48,46 48.92
Technical complcxily 5.92 2.18 3.57 5.50 8.53
(composite score)
Firm size (ordinal data) 3.20 2.20 2,11 3,37 4,02
Make to order (MTO) 68,25 36.69 82,48 60,16 63.66
production
Quality performance 64.90 14.10 66.07 65,89 62.79
Inventory management 60.20 IX,40 58,14 60.82 61.37
perlbrmancc
Financial and market 62.00 I6.(K) 59,44 63,49 62.72
performance
N for prtx:es.ses of low teehnical complexity = 54. N for processes of average lechnical
complexity = 63, and N for processes of high technical complexity = 59.

The summaled scores for each of ihe
three dimensions of |ITP techniques
and perlbniiance were tiiktilated.
Descriptive statistics tot" the variables
tised in ihi,s researth are piesetited in
Table 1.
.^NOVA was used to te.sl the nieati
(iilleiences of the variables itivesti-
gated in this sLiidy—the intensity of
JITP techniques, perfortnance, the
level of MTO piotltu tioti. and ftrni
size—by technical cotnplexity. The
two assuniption.s of ANOVA are (1)
the normal distrihtition of dependent
variables and (^) equal variances for
all treamient groups (Hair et aL,
1995). Levene statistics for the tests of
equal variances across three technical
ccunplexity groups were sigtiificant
iur the variables fiini si/e and level of
MTO proditttion. Thus, transfortna-
tiotis were pcHbtmed for both firm
size and the level of MTO production
variables. Firm si/e for tbe two groups
was positively skewed so the values for
it were transformed into the natural
logarithm (Hair et al.. 1995). Because
the level ol MTO production is meiis-
ured in percentages, a logit transfor-
tiiation was perfbtnied for its values
(Coheti and Cohen, 198S). After the
transfoniiaiions, the analyses for botb
variables weie rerun, and the Levene
statistics showed equal variances

JOLiR.N.\L OF .\LVN.\GtRL\L ISSUES Vol. XVII Number 1 Spring ^

88 KAYNAK
across ihc ihree groups, statistically
meeting lhe assumptions of ANOVA.
The lesulLs were con.sistent with
Hypothesis 1, indicating that the in-
tensity of jITP lechniques docs not
differ according to the level of tech-
nical complexity (sec Table 2). Finns
can implement JITP iechniqi:es with
the same intensity regardless of the
level of technical complexiiy. No sta-
tistically significant differences ex-
isted among the performance of
firms at three levels of technical (om-
plexily, supporting Hypothe.sis 2. In
light of the results concerning Hy-
pothesis 1, it appears that companies
at variotis levels of lectinical complex-
ity realize simitar benefits as long as
they implenientjlfl* tcchrii(]nes wiili
the same intensity. The .statistical re-
snlts for the level of MTO production
and firm size by the level of technical
complexity are highly signifuanl (/>-
values = 0.003, 0.000, respectively).
Thus, Hypotheses 3 is rejected (re-
call, no hypothesis is offered regard-
ing tinn si/e) because the level of
MTO prodtiction does differ with the
level of technical complexity in the
firms lhat implemented JITP.
P(Kst hoc paii^ise nmltiple compari-
son tests were peiformed lo deter-
mine which means differed in the
third step of the data analyses. The
Bonferioni metbod was chosen as
suitable for these tests because il ad-
justs the obsened significance level
for tnnltiple comparisons. The results
show thai lhe firms wiih POI.TC man-
ufacture MTO signiiicantk higher
than those with processes of average
and high technical complexity (/>va!-
ues = 0.004, 0.025, respectively),
('ompanies lhat have POLTC are sig-
nilicanUy smaller than linns ibai liave
POATC and tho.se that have POHTC:
(/>values = 0.002, 0.000. respec-
tivelv)- Neither the means of lhe lev-
JOURNAL Oi' NLVNACl.RIAl. ISSUKS Vol. X\ll Nuiiihcr I
els of MTO production nor firm size
were significantly different in the
firms with processes of average and
bigh technical complexity. The
means of variables investigated at
three levels of technical complexity
are presented in Table 1.
DISCUSSION AND
IMPLICATIONS FOR MANAGERS
The primaiy purposes of this study
were to investigate if and to what ex-
tent JITP techniques implemented
differs at different levels of technical
complexity, and to see whether firms
implementing JITP exhibit the typi-
cal characteristics and performance
criteria associated with processes op-
erating at differeTit levels of technical
complexity. By testing the suggested
hypotheses derived from tbe lilera-
Uue review, these purposes were ac-
complished. Whatever internal/ex-
ternal pressures for implementing
JITP a firm experiences, no statisti-
cally significant (iifferences in the in-
tensity of implementing JI fP tech-
niques across levels of technical
complexity' appear. This lack of sig-
nificani differences is encouraging
for managers of companies in which
a mix of production sysLcms are em-
ployed because they show that the im-
plementation of JITP is not valuable
exclusively to companies with lepeti-
tive production processes. Based on
lhe results of data analyses and values
presented in Tahle 1, a profile of
technically complex protesses in the
firms implementing JITP is summa-
rized in Table 3. Table 3 indicates
ibat lhe iradilional characteristics
and performaiu e ai diffei eni levels of
technical complexity are changing in
firms impleTiientingJITP as discussed
in the rest of this section.
Sprinj< 2(l()r»
 TECHNItL\L COMPLF.XIT\' IN IHF, PRODUCTION PROCJiSS 89

TABLE 2

Results of Analysis of Variance: Technical Complexity"

Variables p-value
Sitppher quality rnanagement 0.237 0.789
Quantities delivered 0.296 0.744
Transportation 1 -.356 0,260
Firm si/,e (natural log) 13.153 0,()(K)
Make to order (MTO) production (logit) 5.939 0,003
Quality performanee 1.005 0.368
Inventory management performance 0.493 0.750
Financial and market performance 1.023 0,362
N for processes of low technical complexity - 54. /V for processes of average technical
complexity = 63 (62 for the MTO variable due to missing value), atid N for pnxiesses of high
technical complexity = 59 (58 inr the MTO variable due to missing value).

One significant Iniding of this
study was thiit JITP, regardless of the
level of technical cotnplexity, can ini-
piove a fnin's performance in all di-
mensions. Low profitability and long
deliveiy lead times, traditiotially as-
sociated wilh P()I.T('. can be im-
proved by impleinenilng j r i P . Com-
panies with processes of average and
high levels of technical complexity
can maintain about the same quality
and inventor)' levels as those with
POLTC. Thus, lirms that imple-
mented JITP impioved the dimen-
sions of peribrmance traciitionally
considered incompatible with their
production environment. That these
(ompanies fiave achieved better per-
lbrmance than competitors in the
same industry regardless of the level

TABLE 3
Characteristics and Performance at Different Levels of Technical Complexity in
Firms Implementing Just-in-Time Purchasing

Variables Low Technical Average Technical High Technical

Complexity Complexity Complexity
Firm size Small Med iu til to large Medium to large
Demand uncertainty High Higher than average Higher than average
Quality and delivery Better than Better than Better ihan
lead time competitors com pel i tors competilors
Inventory turtiover Better than Better than Better than
competitors competitors competitors
Profitability Better than Better than Better than
competitors competittirs competitors

JOURNAL OF V1ANA(;KRIAI, I.SStiE.S Vc.l. WII Number I 2005

90
of technical complexity is encourag-
ing news for managers who are un-
dcrLakingJITP implementation to en-
hance tlieir competitiveness.
Another .significant finding is that
companies face an increasing le\el of
demand uncertainty becanse the
high degree of demand uncertainty is
strongly associated with MTO pro-
duction (rt. Handfield. 1993b; Va-
chon and Klassen, 2002). Finns wilh
POLTC primarily manufactnre MTO
as expected. The percentage of MTO
production was aboul 00% in the
companies witli processes of average
and higli technical complexity, con-
sistent with the recent literature that
indieates companies are shifting lo
MTO strategies. It appears thai com-
panies with the.se types of complex
processes are manufacttiring MTO in
response lo an increased demand for
ctislomization al a reasonable cost,
which is maintained by low inventoiy
levels. Ftirthermore, the results of this
study confnm Handfield's (1993b)
assertioti that an MTO environment
pressures companies to deal with de-
mand uncertainty by implementing
JITP. Apparently, improved supplier
relations and qnality of incoming ma-
terials, deliveries in small lots, and
better logistics help reduce work-in-
process inventories and material han-
dling costs. These findings show that
JITP can improve performance in an
MTO environmeni. which is tradi-
tionally considered not conducive to
implementing JITP.
Because the extent lo whichJITP is
implemeiiied and ihe benefits de-
rived do not differ with the level of
technical complexity, it is reasonable
to suggest that firm si/e is not an im-
pediment Io the implemenlalion of
JITP. (liven thatJITP improves deliv-
ery lead time (among {)ther peiform-
ance metrics), small finns can imple-
JOLR.NA1. OK .MANAGE RIYVI. ISSLK.S X'c.l, W ' l l
KAYNAK
mentJITP to improve tlie operational
efficacy of their supply chains. The
firm that implements SCM can im-
prove its own performance by help-
ing its small suppliers with limited re-
sources implement effective )ITP
practices.
The resniLs of this study are at odds
with White's findings that "tbe type
of manufacturing process employed
may have a stronger infiuence than
size of organization on how much
benefit JIT implementation provides
for an organization" (1993: 42). This
study indicates that this is not the
case, that benefits accrued through
jlTP are not influenced by manufac-
turing process lype. The realized ben-
efits are similar regardless of the p r o
duction process in place. Several
explanations for this inconsistency
are possible. First, the study by Wliite
(1993) (also Wiiite and Prybutok,
20{)I) did not examine the imple-
mentation of JITP in environments
where a mix of production processes
were being used. Analyzing the pro-
dtu tion processes Irom ibe perspec-
tive of technical complexity enabled
an examinadon of JITP implementa-
tion in organizations that mixed var-
ious production processes. Thus this
stiidv provides a moie accurate rep-
resentation of the production envi-
ronment. Second, JITP is measured
as a single ilem in Hiiite's sttidy, and
thus the item might have been inad-
eqtiale for capturing the domain oi
JITP. Tiiiid, the data in this reseaixh
are more recent, so the results of this
sttidy pro\ide a more current look al
the status of JITP implementation.
FURTHER RESEARCH AND
LIMITATIONS
This study fills a void in the JITP
literature and contributes to the body
Nuiiilx-r 1
 TECHNICAL COMPLEXITV IN THE pRODUcnoN PROCESS
uf knowledge in purcbasing. Given
that 58% of tola! lead time n-prcsenLs
purchase lead time (Ilandfield and
Pannesi, 1995), effective implemen-
tation of JITP is critical for successful
SCM.
In their study, Safizadch W al.
(1996) found tbat some firms witb
continuous processes and batch op-
erations managed to maiuifacinre
ciistoniizcd products by using com-
mon parts and subassemblies, and by
adopting flexible manufacturing sys-
tems. McDcimott ft al. (1997) also
note ibal the Ihms iti tlic U.S. power
tool hidusuy achieved simultaneous
improvements in flexibility, quality,
responsiveness, and cost bv itiiplc-
menting llcxiijlf manufat tuting sys-
tems and grotip technology in addi-
tion to the practices discu.ssed in this
study. One research topic that may be
of interest to botb scholars and man-
agers is documentation of the tech-
nological changes in production en-
virontnt-nts where |ITP techniques
have been implemented. The positive
effects of JIT lecbniqiies sucb as te-
duced set-up times and group tech-
n<jiogy on performance are well doc-
nmented. Uliether companies tbat
have implemetiti-dJITP had othei JIT
technit|ues in use already was not in-
vestigated here bui nuist be investi-
gated in future studies. To reiterate,
companies ihat have POLTC usually
have a jtimhle-flow process structure
with low volume tbat may result in un-
derutilized (apacit\\ A change in lay-
out to grotip technology will enable
these coLnpanies to design stiiatl pio-
duction lines to matiufactuie a fatiiily
of componenLs that bave similar proc-
essing requirements (Krajewski atid
Ritzman. 2001) and realize lhe ben-
efits oi iepetiti\e production systems.
Investigating tlie effect of the pres-
sure on suppliers for JITP deliveries
JOURN/VI, OK MANAGERIAL ISSUES Vol, XVll Number I
91
on the technology in suppliers' pro-
duction einironmenLs might be ati-
other fruitful research topic that can
contribute to more effective SCM be-
cause managers can make necessary
changes in technology along wilh
JITP to imprtjve the performance of
tbeir organizations.
As the research methodology sec-
tioti emphasized, eveiy effort was
made at the design stage of this study
to obtain reliable and valid fmdings.
Nevertheless, this study has several
limitations. As far as consiruct validity
is concerned, the use of seli-rcported
data eonstitutes a major limitation,
primarily because common method
variance (CIMV) is an acknowledged
threat to studies that rely on self-re-
ports. A post hoc analysis of CMV—an
evaluation of key informants, Har-
nian's one factor tesi, and initiiiple
methods and souices—vvas per-
formed in an earlier study hy Kaynak
(1997). The size of this study's sam-
ple, given the time and resource lim-
itations that constrained it, made il
impossible to u.se another method to
gather data or corroborate respon-
dents' reports. Likewise, the major
problem wh<'n invesligating peiform-
ance at the bu.sine,ss tiiiii level is the
difficulty of obtaining objective per-
formance measures. It is widely re-
ported in the literature that manag-
ers are reluctant lo share objective
dala with researchers (e.g., Choi and
I.iker, 1995; Swamidass and Newell,
1987). The same problem was ob-
sei-ved in this study.
Furthennote, archival data for
small and privaie businesses are una-
vailable because these data are re-
ported at the corporate rather ihan
the hiisiness-iinil level. rbi,s ,siate of
affairs makes secondary data on fi-
nancial performance difficult to oh-
tain. Diflictilties like these prompted
Spring 200.5
92 K/WTMAK

Choi and Eboch (1998) and Stanley
and Wisner (2001) to obtain a large
sample hy using perceptual daia. This
study attempted to find secondar^• ob-
jective data on the numher of em-
ployees and annual sales. The high
convergence between self-reported
and archival data on number of em-
ployees (/•= 0.91) and annual sales (r
= 0.87) indicates a high level of re-
sponse consistency. Although the
steps taken do not completely elimi-
nate the possibility of same source,
self-report biases, the results indi-
cated non-significant common
method variance. Overall, validit)'
and reliahility in this sliidy seem ad-
equate.

APPENDIX A
UST OF ABBREVIATIONS

Abbreviation Definition
ANOVA Analysis Of Variance
CMV Common Method Variance
Cronbach's a Cronbach's .\lpha
JIT Just-In-Time
JITP Just-In-Time Purchasing
"MTO Make-To-Order
MIS Make-To-Stock
POATC Processes Of Average Technical (lomplexity
POHTC Processes Of High Technical Complexity
POLTC Processes Of Lciw Technital Complexity
SCM Supply Chain Management
SIC Standard Industrial Classiftcatioti
TQM Total Qnalily Managetnent

OK MAN'ACIKRIAL ISSUES Vol. W I I Niiiulx-r 1

 TECHNI(J\L COMPLEXITV IN IHK PRODUCTION PROCESS

APPENDIX B
MEASURES AND CRONBACH S ALPHA OF THE SCALES

Measurement Items" Cronbach's Alpha and

Sources''

Supplier qiiaiiiy iii;in;if^i-incnt 0.92

1. Extent to wliich long-lcriii relationships are of- Items 1, 4-9 adopted from Sar-
fered to suppliers. aph H al. (19H9); item 10
2. Reduction in the luimbt'rtjfsupplierssinceini- adopted from Elllie and Reza
plementingjust-iiMime purchasin)^ aiid/or to- (1992); items 2. 3. and 11 orig-
tal {]Lialit\ niariagfiJieni. inated ha.se(i on literature (An-
'^. Extent to which suppliers are cvaluaU'd ac- sari and Modarress, 1990: Bil-
cording to quality, deliver)' perforiiiaiKe, and lesbach et at.. 1991: Ereeland,
price, in that order. 1991; ONeal. 1987: Walleigh,
1986).
4. Extent to which suppliers are .selected based
on qiialit}' rather than price or delivery sched-
ule.
5. Reliance on a reasonably few dependable sup-
pliers.
6. Thoroughne.ss of yom- organizations supplier
rating system.
7. Amoniu ol education provided for suppliers by
your organization.
8. Technical assistance provided to the snpplieis
by your organizadon.
9. Involvement of the supplier in your pioduct/
semce developmeiii process.
10. The extent to whit h ihe inspection of incom-
ing parts has heen reduced since vou imple-
mented jnst-in-time purchasing and/oi' total
quality nianagenient.
IL Extent to whicli supplier e<jni()rins lo the exact
quality attributes required on your incoming
parts.

' hi ihis siLidy. a continuous scale wilh the length ui' 100 millimeters was used for the stales of JITP
and rt'liitive perceived performance. The polar poinl.s of scales pertaining to JITP techniques were
noiif = 0 and ver\' high = 1(H». and lo perioriiKince mcitsurcs de.sigiiaied worse dian coinpetilioTi =
0, better than competition - 100.

'• Cronhach's alpha (a) Wius calculated for facli scale. Values o l a equal lo 0.70 or higher arc act c-pl;il)k-
(Nunnally and Bernstein, 1994).

JOURN.AI. OF MANAGERIAL ISSUES Vol. XVII Number I Spring ^

94
APPENDIX B (Continued)

Measurement Items" Cronbach's Alpha and

Sources'*
Quantities delivered 0,75
L Extern lo which vendors supply on a jast-in- hems 1 and 2 adopted from
linic basis. Sakitkibara ct al. (1993): items
2. Extent to which daily shipments are received 3 and 4 originated based on lit-
from most suppliers. erature (Ansari and Modar-
3. Extent to which deliverie.s are received in exact re.ss. 1990; Chapman and Car-
qiiiintities ordered. ter. 1990; Dion et al., 1992;
4. Extent to which deliveries are made in small Freeland, 1991; O'Neal, 1987;
lot sizes. Scbonberger and Cilbert,
19H3; Willis and Huston.
1990).
Transportaiion O.HJi
1. Reduction in the number of carriers since your hems 2 and 3 adopted from
im piemen ting jnst-in-time purchasing. Ansari (1984); items 1 and 4
2. Extent of involvement by purchasing/trans- originated ba.sed on literature
porliitioii/togistics department(s) in designa- (Aiisari and Modarres.s, 1990;
tion of inboiuid carrier, O'Neal. 1987).
3. Extent of involvenierit by piirchasing/irans-
portation/logistics department (s) in inbound
routing,
4. Extent to which transportation service.s are on
contract basis verstis common carrier or deter-
mined by tbe supplier.
Technical complexity Originated based on Khurana
Job shop = 3, Batch - r>. ^-Vssembly line = 6, Con- (1999). Hayes and Wheel-
tinuous (low = 10 wright (1979).
Firm si/c
Number of employees
1 = i-ino. 2 - 101-230, 3 - 2.'.l-.5flO.4 - 501-7.^0,
5 = 7!:A-\,()(W, 6 - LOOl-LnOO, 7 = L50L2,000,
8 — If greater than 2.000 plea.se state the number
Anntial dollar sale.s
1 = up to 3.5 million (M), 2 = 3.51-12.5 M, 3 =
12.51-20 M. 4 = 21-50 M. 5 - 51-100 M, 6 - 101-
500 M. 7 = If over 500 million please state tlie
number
Level of make-to-order {MTO) production
Percentage of prodtiction nuik,e-to-f)rder
Relative perceived pertbmiance
Financial and market perlbnnance 0.88
1. Return on investment All items in this scale were de-
2. Sales growth veloped based on literature re-
3. Profit giowth view (e.g.. Drogc et al., 1994;
4. Market share Venkatraman and Ramanu-
5. Market share growth jam, I9H7; Wardri«/.. 1994).

JOURNAL OF MANAGERIAL ISSUES Vol. XVII Niiinbtr 1 Spring 2005

 T K C H N K J M . COMPLKXIIV IN IIIK P R O D I C U O N PROCESS 95

APPENDIX B (Continued)

Measurement Items' Cronbach's Alpha and

Sources*"
Quality performanct- ().H2
1. Product/service quality All items in this scale were dc-
2. Productiviiy veloped based on literature rc-
3. Cost of scrap and rework as percent of sales view (e.g., Ansari and Modar-
4. Deliver)' lead lime ol' piirtliased innierials ress, 1990; Frt'elaiul, 1991;
5. Deliver\ lead time offmislicd pr(»diicl/ser\icc5 O'Neal, 1987).
hi\entory maiiagemenl performance 0.91
1. Pmchase inaterial turnover All items in ihi.s scale were de-
2. Total inventory ttirnover veloped based on litcrattire re-
view (t'.g., Ansari and Modar-
ress, 1990; Cbapman and
Carter, 1990; Freeland, 1991;
1990).

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