GLOBAL RELATIONS BETWEEN INVENTORY, MANUFACTURING LEAD TIME AND DELIVERY DATE PROMISES

Abstract

This paper reports a study of the inventory, lead time and delivery promise data from the Global Manufacturing Research Group. It finds that manufacturing lead time increases as work-in-process inventory increases, as theory suggests. Also, many companies promise delivery in less time than it takes to produce the product, and the difference is not explained by finished goods inventory. The research also shows that the chief benefit of JIT, for those few firms that are achieving benefits, seems to be reduced raw materials