The Effects of Low Inventory on the Development of Productivity Norms

Kenneth L. Schultz, David C. Juran and John W. Boudreau
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Kenneth L. Schultz: Kelley School of Business, Indiana University, 1309 E 10th Street, Bloomington, Indiana 47401
David C. Juran: Columbia School of Business, 319 Uris Hall, 3022 Broadway, New York, New York 10027
John W. Boudreau: Center for Advanced Human Resource Studies, Cornell University, Ithaca, New York 14853

Management Science, 1999, vol. 45, issue 12, 1664-1678

Abstract: Low inventory, a crucial part of just-in-time (JIT) manufacturing systems, enjoys increasing application worldwide, yet the behavioral effects of such systems remain largely unexplored. Operations research (OR) models of low-inventory systems typically use a simplifying assumption that processing times of individual workers are independent random variables. This leads to predictions that low-inventory systems will exhibit production interruptions leading to lower productivity. Yet empirical results suggest that low-inventory systems do not exhibit the predicted productivity losses. This paper develops a model integrating feedback, goal setting, group cohesiveness, task norms, and peer pressure to predict how individual behavior may adjust to alleviate production interruptions in low-inventory systems. In doing so we integrate previous research on the development of task norms. Operations research models are used to show how norms can significantly improve throughput by decreasing variance and increasing the speed of the slowest workers, even if accompanied by decreases in speed of the fastest workers. Findings suggest that low-inventory systems induce individual and group responses that cause behavioral changes that mitigate production interruptions.

Keywords: group norms; work teams; job design; JIT; cohesiveness; feedback; peer pressure (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (34)

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