1.1 Introduction
Just-In-Time (JIT) Inventory System is a management strategy where materials and supplies are procured and delivered only as needed for production, minimizing inventory holding, reducing waste, and improving operational efficiency. It relies on precise planning, strong supplier coordination, and timely delivery to align inventory with actual demand (Ekakitie et al., 2025). Procurement efficiency refers to the ability of an organization to acquire the right materials, at the right time, in the right quantity and quality, and at the lowest possible cost while maintaining reliable supplier relationships. Efficient procurement contributes significantly to uninterrupted production, cost reduction, and overall organizational competitiveness.
In manufacturing firms, procurement inefficiencies often manifest in the form of delayed deliveries, excess inventory, stock-outs, emergency purchases, and poor supplier performance, all of which negatively affect productivity and profitability (Lysons & Farrington, 2020). This chapter introduces the research by reviewing the background that informed the study, identifying the issues that led to its formulation, and outlining the aim and objectives. It also explains the study's significance, defines its scope, presents the research questions and hypotheses, addresses the limitations, and clarifies important terms used throughout the work.
1.2 Background of Study
Inventory management is a critical component of operational efficiency in manufacturing organizations, influencing production continuity, cost control, and overall competitiveness. The Just-In-Time (JIT) inventory system has emerged as a prominent approach aimed at minimizing inventory holding while ensuring that materials and components are available precisely when needed for production. According to Ohno (1988), JIT is a systematic approach that seeks to eliminate waste by procuring and producing only what is required, at the right time, and in the right quantity. He asserted that the philosophy behind JIT not only reduces storage costs but also fosters better coordination between suppliers and manufacturers.
Procurement efficiency, on the other hand, is defined as the ability of an organization to acquire the necessary materials in the correct quantity, quality, and timing, at optimal costs. Lysons and Farrington (2020) contended that efficient procurement directly contributes to organizational performance by reducing delays, controlling costs, and ensuring the continuous flow of production activities. They reported that procurement inefficiencies, such as stock-outs, emergency purchases, and poor supplier management, negatively impact production schedules and customer satisfaction.
The implementation of JIT in manufacturing firms is widely regarded as a strategy to enhance procurement efficiency. Slack, Brandon-Jones, and Johnston (2019) affirmed that JIT reduces lead times, minimizes excess inventory, and improves supplier relationships, thereby promoting a lean procurement process. Christopher (2016) stated that JIT practices help organizations respond more rapidly to market demand while controlling costs associated with inventory holding and procurement operations.
In the context of the Nigerian manufacturing sector, beverage companies such as 7Up Bottling Company face unique challenges related to procurement and inventory management. According to Heizer, Render, and Munson (2017), manufacturing operations in developing economies are often constrained by infrastructural limitations, supply chain disruptions, and variability in demand, which complicate the implementation of modern inventory systems. They asserted that while JIT has the potential to improve procurement efficiency, its success relies heavily on supplier reliability, effective communication, and accurate demand forecasting. On the other hand, firms that maintain excessive buffer stock to mitigate uncertainties may incur higher holding costs and undermine the principles of JIT.
Several studies have explored the relationship between JIT and operational efficiency in manufacturing. However, few have specifically focused on procurement efficiency in the Nigerian beverage industry. It is therefore imperative to examine the practical impact of JIT on procurement activities, including material availability, cost reduction, lead time management, and supplier coordination within a specific organizational context. This study is set against the backdrop of the need to understand how the adoption of the Just-In-Time inventory system affects procurement efficiency at 7Up Bottling Company.
1.3 Statement of Problems
The existing inventory management system at 7Up Bottling Company faces several challenges that hinder procurement efficiency and overall operational effectiveness. Currently, the company relies on a combination of traditional stockholding practices and periodic procurement, which often results in excessive inventory levels, high storage costs, and material obsolescence. According to Heizer, Render, and Munson (2017), such conventional systems are prone to inefficiencies, including delays in material availability, emergency procurement, and inconsistencies in supplier performance, which can disrupt production schedules.
Furthermore, the lack of a fully integrated Just-In-Time (JIT) inventory system makes it difficult for the company to synchronize procurement with production needs. Lysons and Farrington (2020) asserted that poor coordination between procurement and production units leads to stock-outs or overstocking, both of which negatively affect operational efficiency and cost control.
Lastly, scholars reported that the inefficiencies in the existing system result in higher operational costs, delayed order fulfillment, and reduced responsiveness to market demand. Slack, Brandon-Jones, and Johnston (2019) contended that without a streamlined inventory system, firms struggle to achieve optimal procurement performance and lean operations. It is against this backdrop that this study seeks to investigate the effect of the Just-In-Time inventory system on procurement efficiency at 7Up Bottling Company.
1.4 Purpose of the Study
The purpose of this study is to examine the effect of the Just-In-Time (JIT) inventory system on procurement efficiency in manufacturing organizations, with a particular focus on 7Up Bottling Company. This study aims to identify how the adoption of JIT practices influences material availability, reduces procurement costs, and enhances coordination with suppliers.
1.5 Aim and Objectives of Study
The aim of this study is to investigate the effect of the Just-In-Time inventory system on procurement efficiency at 7Up Bottling Company.
To achieve this aim, the study has the following objectives:
- To assess the impact of JIT on reducing procurement lead time at 7Up Bottling Company.
- To evaluate how JIT influences the cost of procurement in the organization.
- To examine the effect of JIT on supplier coordination and responsiveness.
- To identify challenges associated with implementing JIT in procurement processes.
1.6 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- How does the Just-In-Time inventory system affect procurement lead time at 7Up Bottling Company?
- In what ways does JIT influence the cost of procurement within the organization?
- How does JIT affect supplier coordination and responsiveness in 7Up Bottling Company?
- What challenges are associated with the implementation of JIT in the procurement process?
1.7 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
- H0: The Just-In-Time inventory system has no significant effect on procurement efficiency at 7Up Bottling Company.
- H1: The Just-In-Time inventory system has a significant effect on procurement efficiency at 7Up Bottling Company.
1.8 Significance of Study
The outcome of this research will contribute to policy formulation, decision-making, and academic knowledge in the fields of inventory management and procurement efficiency. Also, policymakers in the manufacturing sector will find the research useful in developing guidelines for effective inventory management.
Furthermore, the management of 7Up Bottling Company will benefit as the study will inform strategies to improve procurement efficiency and reduce operational costs. In addition, employees involved in procurement and inventory management will gain a clearer understanding of how to align JIT practices with production schedules.
Lastly, academics and researchers will benefit as the study will add to the existing body of knowledge on Just-In-Time (JIT) systems and procurement efficiency, providing a foundation for future studies.
1.9 Scope of Study
The study is limited to evaluating the effect of the Just-In-Time inventory system on procurement efficiency at 7Up Bottling Company, located in Lagos State, Nigeria. The research focuses on procurement operations, supplier coordination, lead times, and cost implications within the organization. The study covers procurement activities over the past five years to ensure relevance and accuracy of data.
1.10 Limitations of the Study
During the course of this study, there were some problems encountered which stood as limitations to the research work. Some of the limitations include:
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- Initial Cooperation Delay from Respondents: A particular limitation of this work came as a result of the respondent refusal to offer their cooperation at the initial time they were contacted. This contributed in making the success of this research study difficult.
1.11 Definition of Terms
Just-In-Time (JIT) Inventory System:
According to Ohno (1988), JIT is a production and inventory management system designed to ensure that materials are available exactly when needed, in the right quantity and quality, to minimize waste and reduce inventory costs.
Procurement Efficiency:
Lysons and Farrington (2020) define procurement efficiency as the ability of an organization to acquire the right materials at the right time, in the correct quantity and quality, and at the lowest possible cost while maintaining strong supplier relationships.
Lead Time:
Slack, Brandon-Jones, and Johnston (2019) stated that lead time is the total time taken from placing an order with a supplier to the delivery of materials to the organization.
Supplier Coordination:
Christopher (2016) affirmed that supplier coordination involves the effective communication, collaboration, and management of relationships between an organization and its suppliers to ensure timely delivery of materials.
Operational Efficiency:
Heizer, Render, and Munson (2017) contend that operational efficiency refers to the capability of an organization to optimize resources, reduce wastage, and achieve the desired output with minimal input.
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