How does adopting a JIT system affect the firm's relationship with suppliers and how must suppliers change their way of doing business?
The JIT manufacturer will limit the number of suppliers to a few. Long-term contracts are entered into with suppliers. Suppliers' raw material must be top quality with no defects.
Small quantities of raw material are delivered frequently and little or no raw material is maintained by the buyer.
Suppliers must be located close enough to the JIT buyer to deliver small quantities very quickly. The supplier must agree to providing a top-quality product to its JIT customer.
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