Explain how the benefits claimed for JIT in the above quotation are achieved and why it takes so long to achieve those benefits. (b) Explain how management information systems in general (and management accounting systems in particular) should be developed in order to facilitate and make best use of JIT.
Japanese companies that have used just-in-time (JIT) for five or more years are reporting
close to a 30 per cent increase in labour productivity, a 60 per cent reduction in
inventories, a 90 per cent reduction in quality rejection rates, and a 15 per cent reduction
in necessary plant space. However, implementing a just-in-time system does not occur
overnight. It took Toyota over twenty years to develop its system and realize significant
benefits from it.
Source: Sumer C. Aggrawal, Harvard Business Review
Requirements
(a) Explain how the benefits claimed for JIT in the above quotation are achieved and why
it takes so long to achieve those benefits.
(b) Explain how management information systems in general (and management
accounting systems in particular) should be developed in order to facilitate and make best
use of JIT.
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