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

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

EPSILON: an eQTL prioritization framework using similarity measures derived from local networks

Motivation: When genomic data are associated with gene expression data, the resulting expression quantitative trait loci (eQTL) will likely span multiple genes. eQTL prioritization techniques can be used to select the most likely causal gene affecting the expression of a target gene from a list of candidates. As an input, these techniques use physical interaction networks that often contain highly connected genes and unreliable or irrelevant interactions that can interfere with the prioritization process. We present EPSILON, an extendable framework for eQTL prioritization, which mitigates the effect of highly connected genes and unreliable interactions by constructing a local network before a network-based similarity measure is applied to select the true causal gene. Results: We tested the new method on three eQTL datasets derived from yeast data using three different association techniques. A physical interaction network was constructed, and each eQTL in each dataset was prioritized using the EPSILON approach: first, a local network was constructed using a k-trials shortest path algorithm, followed by the calculation of a network-based similarity measure. Three similarity measures were evaluated: random walks, the Laplacian Exponential Diffusion kernel and the Regularized Commute-Time kernel. The aim was to predict knockout interactions from a yeast knockout compendium. EPSILON outperformed two reference prioritization methods, random assignment and shortest path prioritization. Next, we found that using a local network significantly increased prioritization performance in terms of predicted knockout pairs when compared with using exactly the same network similarity measures on the global network, with an average increase in prioritization performance of 8 percentage points (P < 10(-5))

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