Delving into the complementarity between internal and external Just in Time

Scholars and practitioners suggest that the integration process should follow a sequential-wise approach, from internal integration to external integration towards suppliers and customers. The focus on the sequential nature of the improvement initiatives, though important, has neglected the synergistic effects among practices and literature lacks research on complementarity between different internal and external bundles of practices. The aim of this paper is to test complementarity among internal and external lean bundles on operational performance to build and sustain the firm’s long-term competitiveness. We use HPM III database to study the complementarity among internal JIT, upstream JIT and downstream JIT. We find that complementarity does not hold either between internal and upstream JIT or internal and downstream JIT, but our research proves complementarity between upstream and downstream JIT bundles. The presence of complementarity suggests a simultaneous approach in order to maximize the marginal returns of upstream and downstream JIT bundles.