The effect of defense contracting requirements on just in time implementation

摘要

This study examined the impact of defense contracting practices on defense contractors' efforts to improve production and purchasing operations by adopting the just-in-time (JIT) philosophy, a systematic approach of continual improvement. A conceptual model, based on transaction cost economics, was used to describe the buyer/seller relationship. This was defined in terms of cost uncertainty, contract uncertainty, asset specialization, and resource commitment. The research sought to identify the significant contracting elements that determine the level of government administrative control and their impact on JIT implementation. It also sought to identify linkages between government contracting practices and a firm's JIT activities. Data were collected by structured interviews with representatives from five defense electronics firms implementing JIT.;The research found the companies studied were generally free to implement most JIT activities with little or no government restrictions. However, government controls over specifications, quality requirements, and subcontracting activities emerged as serious limitations to JIT production and purchasing efforts. The government's purchasing policies and auditing practices restrict purchasing, somewhat, in establishing the close supplier partnerships required by JIT. Defense contractors were successful in finding ways to implement JIT production and purchasing to a considerable degree. However, they were not very successful in reducing documentation requirements and tried very little to change government policies and practices not supportive of JIT.;Concerning the impact of the contractual relationship, specialized asset requirements (quality requirements), as hypothesized, were the most significant determinants of the impact of government controls on JIT efforts, and the extent of JIT production implementation. Cost uncertainty (cost sharing arrangements), had a moderate but positive impact to JIT implementation, opposite to that anticipated. Resource commitment (use of government financing) was also a significant factor in JIT implementation. Companies who used such financing had their JIT production and purchasing efforts negatively impacted. The role of contract uncertainty was weakest and had mixed effects. Difficult negotiations prior to contract award positively impacted JIT production but negatively impacted JIT purchasing. Difficult negotiations to make contract changes negatively impacted production and purchasing.