Just in Time Purchasing an Approach in Supply Chain Management and Its Relevance to Indian Automotive Industry

Abstract

In today's highly competitive global market place the pressure on organizations to find new ways to create and deliver value to the customers grows ever stronger. There have been many new ideas and concepts in business management over the last thirty or so years, some of which have endured and others discarded. However, perhaps one of the most significant principles to become widely adopted and practiced is that of just in time, or JIT. It is a philosophy as much, as it is a technique; it is based upon the simple idea that wherever possible no activity should take place in the system until there is a need for it.

With increasing pressures on profits, due to the launch of several new models, with marginal differences in prices, Indian Automotive companies would do well to move towards JIT purchasing systems. Given the extent and variety of constraints and the existing purchasing mindset in Indian Automotive industry, it'will take some more time to understand and practice the technique.

This paper attempts to understand the possibilities of implementing JIT technique in the Indian automotive industry. This will help the automotive component manufacturers to effectively formulate their marketing strategies to create value to their OEM customers. It also helps the vehicle manufacturers to be competitive in the end market.