Inventory Reduction and Productivity Growth: A Comparison of Japanese and US Automotive Sectors

This study asseses the inventory and productivity performance of the Japanese and US automotive industries in recent decades. Within each country we distinguish between vehicle assemblers and parts suppliers. In Japan, assemblers and suppliers made dramatic inventory reductions and productivity gains, particularly during the 1970s. By comparison, we find an unbalanced pattern for the United States: American assembly plants have been streamlined but parts suppliers have stagnated. In both countries our findings suggest a strong association between inventory reduction and productivity growth

Inventory Reduction and Productivity Growth: Evidence from the Japanese Automotive Sector

The literature on JIT production suggests a causal link between work-in-process inventory and manufacturing productivity. Such a connection has been described in numerous case studies but never tested statistically. This paper uses historical data for 52 Japanese automotive companies to evaluate the inventory-productivity relationship. We find that inventory reductions stimulated gains in productivity, rather than vice versa. On average, each 10% reduction in inventory led to about a 1% gain in labor productivity, with a lag of about one year. Significant differences are found among company groups: Toyota affiliates had a shorter lag; while Nissan affiliates demonstrated no productivity effect. Firms that made inventory reductions typically saw an increase in their productivity rank

Inventory Reduction and Productivity Growth: A Comparison of Japanese and US Automotive Sectors

Revised: June 30, 1996This study assesses the inventory and productivity performance of the Japanese and US automotive industries in recent decades. Within each country we distinguish between vehicle assemblers and parts suppliers. In Japan, assemblers and suppliers made dramatic inventory reductions and productivity gains, particularly during the 1970s. By comparison, we find an unbalanced pattern for the United States: American assembly plants have been streamlined, but parts suppliers have stagnated. In both countries our findings suggest a strong association between inventory reduction and productivity growth.The MIT International Motor Vehicle Program, the UCLA Center for International Business Education and Research, and the Institute for International Economic Studies in Tokyo, Japan

Inventory Reduction and Productivity Growth: Linkages in the Japanese Automotive Industry

The literature on JIT production suggests a causal link between work-in-process inventory and manufacturing productivity. Such a connection has been described in numerous case studies but never tested statistically. This paper uses historical data for 52 Japanese automotive companies to evaluate the inventory-productivity relationship. We find that firms increased their productivity rank during periods of substantial inventory reduction. More detailed tests suggest that inventory reductions stimulated gains in productivity: on average, each 10% reduction in inventory led to about a 10% gain in labor productivity, with a lag of about one year. Such effects were more immediate for Toyota affiliates but undetectable for close suppliers of Nissan. These findings imply that inventory reduction served as an important driver of process improvement for many Japanese automotive companies, although some firms emphasized other methods

Measuring the Distribution of Returns Among Stakeholders: Method and Application to US and Japanese Auto Companies

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Inventory Reduction in the Japanese Automotive Sector, 1965-1991

This paper traces the diffusion of just-in-time production in the Japanese automotive sector, as reflected by inventory reductions in a sample of 52 suppliers and assemblers. We show that most inventory reductions occurred during a remarkable burst of activity starting in the late 1960s. Companies affiliated with Toyota were the early adopters but were followed very quickly by others in Japan. By the late 1970s nearly all of the firms in the sample had made drastic reductions in inventory. Work-in-process and suppliers finished goods fell by nearly two thirds on average.The International Motor Vehicle Program, the Center for International Business Education and Research, the UCLA Academic Senate, and the Hoover Institution

The Empirical Determinants of Inventory Levels in High-Volume Manufacturing

This study uses survey data on several hundred automotive suppliers in North America to evaluate the determinants of inventory levels in high-volume discrete parts manufacturing. We assess the magnitude of raw materials, work-in-process, and finished goods inventories, as well as production lot sizes and through-put times. Results are broadly consistent with the EOQ formula and related models of optimal inventory holding. Inventories are shown to be jointly determined by technological factors and managerial practices. Several categories of managerial practices are found to be important. Low inventories are linked to employee training and problem solving activities and frequent communication with customers. More unexpected findings show the absence of inventory differences between USowned and Japanese-owned plants operating in the United States. This suggests that Japanese transplant parts makers have not been completely successful in adapting Japanese manufacturing methods to the US environment.The MIT International Motor Vehicle Program and the UCLA Academic Senate for financial support

Time to discontinuation of atypical versus typical antipsychotics in the naturalistic treatment of schizophrenia

BACKGROUND: There is an ongoing debate over whether atypical antipsychotics are more effective than typical antipsychotics in the treatment of schizophrenia. This naturalistic study compares atypical and typical antipsychotics on time to all-cause medication discontinuation, a recognized index of medication effectiveness in the treatment of schizophrenia. METHODS: We used data from a large, 3-year, observational, non-randomized, multisite study of schizophrenia, conducted in the U.S. between 7/1997 and 9/2003. Patients who were initiated on oral atypical antipsychotics (clozapine, olanzapine, risperidone, quetiapine, or ziprasidone) or oral typical antipsychotics (low, medium, or high potency) were compared on time to all-cause medication discontinuation for 1 year following initiation. Treatment group comparisons were based on treatment episodes using 3 statistical approaches (Kaplan-Meier survival analysis, Cox Proportional Hazards regression model, and propensity score-adjusted bootstrap resampling methods). To further assess the robustness of the findings, sensitivity analyses were performed, including the use of (a) only 1 medication episode for each patient, the one with which the patient was treated first, and (b) all medication episodes, including those simultaneously initiated on more than 1 antipsychotic. RESULTS: Mean time to all-cause medication discontinuation was longer on atypical (N = 1132, 256.3 days) compared to typical antipsychotics (N = 534, 197.2 days; p < .01), and longer on atypicals compared to typicals of high potency (N = 320, 187.5 days; p < .01), medium potency (N = 140, 213.5 days; p < .01), and low potency (N = 74, 208.7 days; p < .01). Among the atypicals, only clozapine, olanzapine, and risperidone had significantly longer time to all-cause medication discontinuation compared to typicals, regardless of potency level, and compared to haloperidol with prophylactic anticholinergic treatment. When compared to perphenazine, a medium-potency typical antipsychotic, only clozapine and olanzapine had a consistently and significantly longer time to all-cause medication discontinuation. Results were confirmed by sensitivity analyses. CONCLUSION: In the usual care of schizophrenia patients, time to medication discontinuation for any cause appears significantly longer for atypical than typical antipsychotics regardless of the typical antipsychotic potency level. Findings were primarily driven by clozapine and olanzapine, and to a lesser extent by risperidone. Furthermore, only clozapine and olanzapine therapy showed consistently and significantly longer treatment duration compared to perphenazine, a medium-potency typical antipsychotic