Organizational agility and change
The above analysis has been done under the
assumption that the changeover from one system
to the other is expensive and that the
uncontrollability of the environment will result in a
different equilibrium. However, an agile
organization will be able to devise an intelligent
information collection and deployment
mechanism that allows the organization to identify
the areas of change in the environment and
respond to it immediately. The response will not
be in the production system alone but also in the
incentive systems.
For example, it is common for firms operating
under the JIT system to control their delivery
environment. Specifically, firms negotiate and
decide on the frequency, quantity and origin of
delivery of parts and supplies. Given such control
they can organize deliveries to occur several times a
week or even several times a day. As a result the
plant layouts are compact and streamlined such
that they provide only minimal storage space
(for parts and WIP inventory) in between