Purchasing and raw materials management in science–based industries

'Just in Time' (JIT) methods have recently been receiving extensive publicity and acclaim as one of the major factors in Japan's industrial success. However, the effort of corporate and plant managers throughout the rest of the industrialized world to adopt and imitate the JIT policy, setting goals of reaching the Japanese inventory levels as closely as possible for work in process and raw materials, have been less than successful. Sometimes, as in the Science–Based Industries, adoption of JIT as a purchasing policy does not yield an optimal solution. The paper distinguishes between 'Big JIT' – the philosophy and strategy of the JIT methods, which can be applied to all types of industries, and the 'Small JIT', the scheduling mechanism – namely the Kanban, which cannot be applied to Science–Based Industry. The paper focuses on purchasing policy in Science–Based Industries, where caution must be exercised in cutting raw materials inventory levels. An analytical model is applied to meet with the requirements of Science–Based Industry.