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Ajay Das: Michigan State University, East Lansing, Michigan, USA
Robert B. Handfield: Michigan State University, East Lansing, Michigan, USA
Introduction
Just-in-time (JIT) has been written about since the early 1970s. Golhar and Stamm[1] in their literature review identified over 860 published articles on JIT since 1970. If one adds to this figure the large number of unpublished working papers, dissertations and manuscripts, it is clear that a significant amount of attention has been accorded to this area over the past two decades. JIT has become an inherent attribute of the "lean logistics" paradigm, embodying the elimination of non-value-added processes throughout the supply chain.
Concurrently, global sourcing has been consistently attracting attention at both the academic and business levels, due to the increasing recognition of its potential strategic importance to the firm[2, 3, 4]. Firms have now realized that globalization is a fact of life; in order to compete globally, firms must also buy globally. In the words of one executive interviewed in this research: "The world is our market. The world is our supplier".
While global sourcing and JIT logistics constitute independent fields of business strategy and research in themselves, very few practitioners and researchers have sought to explore the possibility and benefits of combining JIT practices with global sourcing. This reticence probably stems from the large number of apparent incompatibilities perceived to exist between the pursuit of JIT policies on the one hand, and the achievement of global sourcing efficiencies, on the other. Companies such as Bose Corp. and TRW have experienced (and are resolving) some of the factors which contribute to this perception. First, JIT calls for single/limited sourcing, the establishment of closer buyer-seller relationships, frequent and small lot size deliveries, enhanced supplier reaction time and supplier flexibility. The Japanese experience with JIT places a premium on supplier location and close personal supplier-customer interaction on a regular, in-depth basis. This may explain the noticeable absence of overseas suppliers in the keiretsus. Conversely, global sourcing is typically associated with multiple carriers, cultural and language problems, not to mention foreign exchange, customs and legal complexities. Overseas transactions affect lead times and lead time variability and carry increased risks of supply disruption. Other common problems in international sourcing include buyer-supplier time zone lags, costs of obtaining...