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The Effects of Low Inventory on the Development of Productivity Norms

Author

Listed:
  • 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)

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.

Suggested Citation

  • Kenneth L. Schultz & David C. Juran & John W. Boudreau, 1999. "The Effects of Low Inventory on the Development of Productivity Norms," Management Science, INFORMS, vol. 45(12), pages 1664-1678, December.
    • Handle: RePEc:inm:ormnsc:v:45:y:1999:i:12:p:1664-1678
    DOI: 10.1287/mnsc.45.12.1664
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    References listed on IDEAS

    as
    1. Daniel G. Hansen, 1997. "Worker Performance and Group Incentives: A Case Study," ILR Review, Cornell University, ILR School, vol. 51(1), pages 37-49, October.
    2. Kenneth L. Schultz & David C. Juran & John W. Boudreau & John O. McClain & L. Joseph Thomas, 1998. "Modeling and Worker Motivation in JIT Production Systems," Management Science, INFORMS, vol. 44(12-Part-1), pages 1595-1607, December.
    3. Latham, Gary P. & Locke, Edwin A., 1991. "Self-regulation through goal setting," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 212-247, December.
    4. Earley, P. Christopher & Kanfer, Ruth, 1985. "The influence of component participation and role models on goal acceptance, goal satisfaction, and performance," Organizational Behavior and Human Decision Processes, Elsevier, vol. 36(3), pages 378-390, December.
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