Final answer:
Just-in-time (JIT) purchasing is the procurement strategy where parts are delivered only as they are needed for production, minimizing the need for storage and improving quality control. It impacted workers by reducing union jobs and created leverage for workers to influence the supply chain through strategic strikes.
Step-by-step explanation:
Just-in-time (JIT) purchasing is a strategy where a company coordinates the delivery of parts and materials so they arrive just as they are needed for production. This method was adopted by American car manufacturers in the 1980s, following the model of Japanese business innovations. By using JIT purchasing, companies like Honda were able to significantly reduce the need for warehousing by having car parts like bumpers, tires, and fenders delivered daily. As a result, quality control improved since defects became immediately apparent, and suppliers had to be located within a day's drive of the main assembly plants. This shift led to the creation of many parts factories in small towns around major assembly plants. It also fostered a competitive environment among sub-assembly plants that drives down labor costs, affecting wages and benefits for workers.
However, JIT also provides leverage to workers at critical points in the supply chain. For example, if workers at a parts sub-assembly plant go on strike, it can impact the entire production process, causing main assembly and other parts suppliers to halt production. This happened in the mid-1990s when unionized factory workers in Dayton, Ohio, caused a General Motors assembly plant shutdown.
Ultimately, JIT purchasing allows companies to outsource a lot of the work once done by union workers to non-union plants. While it reduces costs and increases efficiency for manufacturers, it has also led to a decrease in union jobs and a potential weakening of workers' bargaining power over wages and benefits.