Essay on The Problem Of Small Businesses

1566 Words Jul 3rd, 2015 null Page
VI. Just In Time Systems in Small Business
Inadequate management of inventory has been shown to be one of the major causes of the failure of small business organizations, with twenty-two percent of small firms reporting to have encountered some inventory control problems. Research indicates that small businesses rarely adopt a just-in-time philosophy. This shows that there must be problems with promoting and deploying a just-in-time system in smaller organizations, even though it can be compatible with a small business in any industry. Some theorize that this is because of a lack of understanding as to what constitute a just-in-time system by small business owners (Ramaswamy & Selladurai, 2002; Erdem & Massey, 1990; Winston & Heiko, 1990).
One study sought to get to the bottom of the reason(s) why small businesses are not implementing the beneficial principles of a just in time system. The authors sent a questionnaire to 111 firms to measure the company’s attitude to the following nine dimensions of a just-in-time inventory system: (1) demand estimation, (2) product perishability, (3) product standardization, (4) information systems, (5) supplier proximity, (6) supplier cohesiveness, (7) vertical integration, (8) spatial efficiency, and (9) delivery timing and quality. After consolidating the results of the surveys the authors found that there was a surprising lack of difference in the perception toward the nine dimensions mentioned between managers in firms that had…

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