International Journal of Management (IJM) 
              Volume 12, Issue 2, February 2021, pp.720-730, Article ID: IJM_12_02_071 
              Available online at http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=12&IType=2 
              ISSN Print: 0976-6502 and ISSN Online: 0976-6510 
              DOI: 10.34218/IJM.12.2.2021.071 
              © IAEME Publication      Scopus Indexed 
                    STUDY OF THE IMPACT OF JIT (JUST-IN-
               TIME) IN INVENTORY MANAGEMENT IN THE 
                           AUTOMOBILE SECTOR IN INDIA 
                                                  Shreyas Thakre 
                               Symbiosis Institute of Business Management, Bengaluru,  
                    Symbiosis International (Deemed University) (SIU), Electronic City, Hosur Road, 
                                             Bengaluru, Karnataka, India 
                  ABSTRACT 
                     This paper studied about the impact of implementation of Just-In-Time (JIT) on 
                  Inventory Management system in the automobile sector in India. There are various 
                  factors which have varying correlation which affects the inventory management when 
                  implementing  Just-In-Time  which  we  have  considered  in  this  study.  These  factors 
                  include  supplier  appraisal,  supplier  performance,  Re-order  point,  Lead  time  for 
                  deliveries, JIT knowledge.  
                     For the study we followed a qualitative research method to gain deeper insights 
                  from the management and employees of the firm regarding implementation and impact 
                  of JIT in inventory management for the respective organizations. After conducting in-
                  depth  interviews  with  the  senior  management  as  well  as  the  employees  of  the 
                  organization we were able to generate findings which direct that implementation of JIT 
                  is done in silos and deeper integration needs to be in place. Also proper implementation 
                  of  JIT  governed  by  enterprise  resource  planning  (ERP)  or  database  management 
                  systems (DMS) links suppliers as well as customers to the organization’s planning and 
                  management leads to reduced costs while managing inventory, efficient workflow and 
                  production cycles. Also, the study will depict both the pros and cons of JIT 
                  Key words: JIT (Just-In-Time), Supplier Appraisal, Database Management System, 
                  Supplier Performance, Company Performance 
                  Cite this Article: Shreyas Thakre, Study of the Impact of Jit (Just-In-Time) in Inventory 
                  Management in the Automobile Sector in India, International Journal of Management 
                  (IJM), 12(2), 2021, pp. 720-730. 
                  http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=12&IType=2 
              1. INTRODUCTION 
              All the economies worldwide focus on major sectors that are thriving and would help them 
              grow into a more developed modern economy and one such sector which is blooming is the 
              automotive sector. We see global automobile sector is growing at a tremendous rate of US 
                                                           
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                                                          Shreyas Thakre 
               dollars 20,230 million in the year 2020 and is projected to grow about US dollars 25,720 million 
               in the coming 5 years. Coming to India 2019 statistics, the automobile sector in India has its 
               share of 7.1% in India’s GDP, along with this, this sector has the respective shares of 40% and 
               4.3%  in  global  research  and  development  and  India’s  exports.  India is currently the fourth 
               largest vehicle market and in terms of the volume, it is projected to become the world's third-
               largest automobile industry by 2025.     
                   With new innovations and techniques changing the dynamics of the sector, new players are 
               ready to seize these opportunities. The dawn of new technologies including electric cars, hybrid 
               technology, intelligent database management systems among a few are going to be the driving 
               forces for this sector. Also this new age of technology puts forth an opportunity to modernize 
               the existing structures of management these OEMs possess.  
                   With innovative changes in technology comes innovative changes in the products being 
               manufactured, thus comes the need in efficiently managing inventory in all forms whether being 
               raw materials, work in progress inventory or finished goods inventory. Firms emphasizing on 
               increasing customer focus would focus upon managing inventory via parts logistics as it can 
               drive both efficiency and responsiveness. Managing inventory has a close link with managing 
                                                                                      th
               suppliers as can been seen by a study by Kcral (2007), unlike the 19  century, todays OEMs  
               have reduced their in-house production of parts required for a car from about 45% to a range of 
               25% to  35%. This  shows that suppliers  contribute about 60%  of the parts that make  up a 
               complete car. With a bigger picture to reduce the costs associated in the process of managing 
               inventory, firms strategize to build long-term relations with suppliers via collaborative planning 
               and forecasting thus reducing cost associated both the parties at the same time on developing 
               technology  using  various  database  management  systems.  Also  this  collaboration  becomes 
               important as car buyers today look for a wider range of products which also offer customization 
               as per their needs and wants. Thus to deliver a wider variety of choices, the variety of parts to 
               be handled is definitely going to increase and so will the reliability on the suppliers for these 
               large variety of parts. For example, one major challenge that is faced by German Automaker 
               BMW is that they receive more than 14,000 containers full of parts by 600 suppliers which need 
               to be managed each day. All these parts need to be checked, if defects seen need to be returned 
               and finally the good parts go into the making of a car which are then sent to dealers for sale.  
                   Thus to handle large number of components and  parts, the Just-In-Time (JIT) concept 
               comes into place which was invented by Taiichi Ohno working with Toyota in the 1970s and 
               has been used and developed by various automobile firms since. This concept has helped firms 
               decrease delivery cycles, increase  focus towards  a strategic planning  and  proper inventory 
               logistics operations. Coupled with this concept new enterprise resource planning software have 
               paved way for collaboration across boundaries involving suppliers for various stages to develop 
               the operational flow as well as connect with the demand of the customers.  
                   The major aspect of incorporating JIT is to move towards high capacity recurring process 
               from a lot production system and finally reduce the activities that lead to non-value adding 
               activities creating waste. This can happen when materials required arrive just in time in the 
               right quality, quantity, and price at right place. So a good professional working relationship 
               with  the  right  suppliers,  having  proper  in-flow  and  out-flow  of  information  via  inventory 
               management system or enterprise resource planning systems.  
                   In this paper we will study the impact of various underlying factors while implementing 
               Just-In-Time (JIT) in inventory management which leads to either positive or negative effects 
               on the efficiency and responsiveness of the firms in the Indian automobile sector. These factors 
               will be : 
                   •   Supplier Appraisal 
                    http://iaeme.com/Home/journal/IJM      721                         editor@iaeme.com 
                      Study of the Impact of Jit (Just-In-Time) in Inventory Management in the Automobile Sector in India 
                   •   Delivery cycle  
                   •   Re-order point  
                   •   JIT knowledge 
                   •   Company performances based on employees and management perception  
                   As  the  concept  of  JIT  comes  into  picture,  both  long-term  and  short-term  working 
               relationship with suppliers is vital, what also becomes vital is periodic appraisal of supplier 
               performance in terms of its location from various dealers and the ability to deliver parts to 
               dealers all over India. Connecting distance between suppliers and dealers, the aspect of delivery 
               cycle or delivery lead time arises in terms of JIT, which becomes a significant factor in assessing 
               whether the supplier has the capability and is able to deliver in minimum optimal time, right 
               quality,  quantity  as  well  as  price.  Implementation  of  JIT  superficially  has  been  seen  as  a 
               problem in getting the results that JIT promises, so JIT knowledge within the organization as 
               well as perception of related company performance from both employees and management 
               becomes a key aspect as to why proper implementation of JIT is important.  
               We will be using a qualitative research to gain deeper insights on the impact of these factors 
               of JIT in inventory management.  
               2. RESEARCH PROBLEM 
               Several researches have been conducted on key factors of JIT practices in the Indian automobile 
               sector showing  reasons  behind  inferior  results  in  some  organizations  and  success  in  some 
               others. But these factors have not been considered on gaining deeper understanding of JIT 
               implementation in an organization and how these factors positively or negatively affect changes 
               within the organization as well as success of JIT practices.   
                   Also,  these  factors  consider  both  intrinsic  and  extrinsic  factors  to  the  organization 
               implementing  JIT  practices,  so  changes  in  any  of  these  factors  directly  affect  the  results 
               expected from JIT system on the inventory management system, hence periodic research and 
               analysis becomes vital.  
               3. OBJECTIVES 
               Firms adopt JIT practices as it is known to be a successful concept in managing non-value 
               adding activities thus reducing waste and formulating a cost effective logistics operations. But 
               there are various underlying factors which tend to go unnoticed but have the butterfly effect of 
               deviation of the practices from the results. For example working in silos can lessen the success 
               of JIT practices. Also every organization has a different goal while catering to the market, so 
               JIT practice may not prove beneficial to organizations focusing on responsiveness majorly or 
               are in the  early phase  of product  life cycle. So,  study in  this direction to  understand both 
               positives and negatives of various factors of JIT in inventory management as well as which 
               organization will benefit using these is needed.  
                   •   To determine organizational intrinsic and extrinsic factors affecting JIT practices 
                   •   To examine the relationship between these factors and JIT success 
                   •   To identify how these factors can be beneficial in terms of goals of the organization  
               4. HYPOTHESIS 
                   •   Null hypothesis: Supplier performance in terms of delivery cycle or delivery lead time, 
                       distance to dealers, supplier location and material supplied has no significant impact on 
                       JIT results in inventory management. 
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                                                          Shreyas Thakre 
                       Alternate hypothesis: Supplier performance in terms of delivery cycle or delivery lead 
                       time, distance to dealers, supplier location and material supplied has a significant impact 
                       on JIT results in inventory management. 
                   •   Null hypothesis: Intrinsic factor like JIT knowledge or inventory management practices 
                       doesn’t   affect   perception   of   company   performance   from   both   employees   and 
                       management. 
                       Alternate hypothesis: Intrinsic factors like JIT knowledge or inventory management 
                       practices  affect  perception  of  company  performance  from  both  employees  and 
                       management. 
                   •   Null   hypothesis:   Implementation   of   JIT   practices   is   not   always   beneficial  to 
                       organizations. 
                       Alternate   hypothesis:   Implementation   of   JIT   practices   is   alway   beneficial   to 
                       organizations. 
               5. REVIEW OF LITERATURE 
               Here  we  will  summarize  the  earlier  done  researches  on  JIT  implementation  practices  and 
               underlying factors affecting the results of inventory management. Researchers in the past have 
               conducted many studies which show that holding or carrying large levels of inventories led to 
               poor organization and increase in cost which further directed towards a poor management of 
               the organization, thus a strategic approach towards decreasing the holding of inventory levels 
               and  supplying  materials  only  at  operational  points  in  the  value  chain  when  needed  was 
               suggested by S. L. Adeyemi (2010).  Also research regarding implementation issues of JIT 
               practices in the Indian context was done by V.D. Wakchaure; M.A. Venkatesh; S.P. Kallurkar 
               (2006)  wherein  comparison  with  Japanese  manufacturing  ideologies  was  done  to  identify 
               elements  relating  to  poor  implementation  of  JIT  in  India.  Similar  study  regarding  factors 
               causing barriers to implementation as well as success of JIT practices in Indian organizations 
               was done by Ritesh Kumar Shrivastava and Dr. Sridhar K (2015) to observe various cultural, 
               behavioural, inter and intra departmental organizational factors by sending out questionnaires 
               to various industries.    
                   Research in the field of JIT with respect to both short and long-term strategic operations 
               planning regarding underlying factors such as location planning, supplier performance, travel 
               distances was done to confront basic decision making problems while implementing JIT by  
               Emde and Boysen (2012). In an effort to derive performance measures regarding contributions 
               by  the  adoption  of  JIT  practices  in  the  Indian  manufacturing  industry  was  carried  out  by 
               Gurinder Singh and Inderpreet Singh Ahuja (2014).    
                   Qualitative research of underlying key elements of JIT with regards to the Indian service 
               industries was conducted by Kumar and Grewal (2007) to gain deeper insights importance of 
               JIT as well as what all are the key elements of JIT when it comes to organizations catering 
               services to Indian market. Another such research was carried out by Sandeep Malik, Nishant 
               Pahwa and Dr. Dinesh Khanduja (2011) using scale based survey questionnaires to identify 
               performance of JIT implementation practices in the Indian industries regardless of the size of 
               the company, type of product or process in use. Similar qualitative study regarding key intrinsic 
               elements  on  the  readiness  of  Indian  industries  while  implementing  JIT  was  conducted  by 
               Mahadevan (1997) by sending out survey questionnaires to identify various key underlying 
               aspects that the organizations considered critical while adopting JIT which majorly included 
               the commitment of the management as well as the employees.  
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