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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
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    File URL: http://dx.doi.org/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.
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    Citations

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    Cited by:

    1. Kenneth L. Schultz & Tobias Schoenherr & David Nembhard, 2010. "An Example and a Proposal Concerning the Correlation of Worker Processing Times in Parallel Tasks," Management Science, INFORMS, vol. 56(1), pages 176-191, January.
    2. John W. Boudreau, 2004. "50th Anniversary Article: Organizational Behavior, Strategy, Performance, and Design in Management Science," Management Science, INFORMS, vol. 50(11), pages 1463-1476, November.
    3. Kull, Thomas & Closs, David, 2008. "The risk of second-tier supplier failures in serial supply chains: Implications for order policies and distributor autonomy," European Journal of Operational Research, Elsevier, vol. 186(3), pages 1158-1174, May.
    4. Diwas S. Kc & Christian Terwiesch, 2009. "Impact of Workload on Service Time and Patient Safety: An Econometric Analysis of Hospital Operations," Management Science, INFORMS, vol. 55(9), pages 1486-1498, September.
    5. Jansen, Karen J. & Kristof-Brown, Amy L., 2005. "Marching to the beat of a different drummer: Examining the impact of pacing congruence," Organizational Behavior and Human Decision Processes, Elsevier, vol. 97(2), pages 93-105, July.
    6. Stephen G. Powell & Kenneth L. Schultz, 2004. "Throughput in Serial Lines with State-Dependent Behavior," Management Science, INFORMS, vol. 50(8), pages 1095-1105, August.
    7. Ricardo Mateo, 2006. "The Impact of Absenteeism on the Quality of Assembly Line Production: Is the Value of Worker Experti," Faculty Working Papers 04/06, School of Economics and Business Administration, University of Navarra.
    8. Sameer Hasija & Edieal Pinker & Robert A. Shumsky, 2010. "OM Practice--Work Expands to Fill the Time Available: Capacity Estimation and Staffing Under Parkinson's Law," Manufacturing & Service Operations Management, INFORMS, vol. 12(1), pages 1-18, September.
    9. Adam Powell & Sergei Savin & Nicos Savva, 2012. "Physician Workload and Hospital Reimbursement: Overworked Physicians Generate Less Revenue per Patient," Manufacturing & Service Operations Management, INFORMS, vol. 14(4), pages 512-528, October.
    10. Hummy Song & Anita L. Tucker & Karen L. Murrell & David R. Vinson, 2015. "Public Relative Performance Feedback in Complex Service Systems: Improving Productivity through the Adoption of Best Practices," Working Papers 96, Brandeis University, Department of Economics and International Businesss School.
    11. Diwas Singh KC & Christian Terwiesch, 2012. "An Econometric Analysis of Patient Flows in the Cardiac Intensive Care Unit," Manufacturing & Service Operations Management, INFORMS, vol. 14(1), pages 50-65, January.
    12. Singer, Marcos & Donoso, Patricio & Rodríguez-Sickert, Carlos, 2008. "A static model of cooperation for group-based incentive plans," International Journal of Production Economics, Elsevier, vol. 115(2), pages 492-501, October.

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