Just‐in‐time Manufacturing:Its Impact on UK Stock Ratios

Current evidence on the extent of just‐in‐time (JIT) is based mainly on questionnaire surveys, and can give only a partial picture. Uses evidence from official statistics on stock levels, the rationale being that even if the motivation behind JIT is not to reduce stocks, its use should still have this effect. The figures show a substantial reduction in the overall stock ratio in the period since the early 1980s. However,account must be taken of the relationship between the stock ratio and the level of output. There is little evidence of a new relationship having been established. Moreover, stock trends in the vehicle manufacturing industry have been less marked than in manufacturing as a whole. If reductions in stock ratios had been due to the adoption of JIT, we would expect the opposite to be the case. Evidence drawn from aggregate stock data thus provides little support for the idea that the adoption of JIT has been widespread in the UK.