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Bose Corporation

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Bose Corporation

  1. 1. Co r p o r a t i o n Submitted by- Amu Prabhjot Singh-10BM60011 Divya Hamirwasia-10BM60025 Sampurna Rakshit-10BM60077 Siddharth Verma-10BM60086 Swarnabha Shankar Ray-10BM60092
  2. 2. Contents1 Bose history and supplier relationship2 Purchasing Method and participation in JIT II by Bose3 Benefit & Risk analysis for JIT and recommendations4
  3. 3. BOSE History • Dr. Amar Bose and Sherwin Greenbalt started BOSE corporation1964 • Launched 901 using the reflective technology1968 • Launched 501 – smaller version of 9011970 • Approached GM for manufacturing car stereos • Launched 301which fitted into a bookshelf1973 • First Bose sound system in Cadillac servile1982 • Bose systems were incorporated in GM, Honda, Acura, Audi and Nissan1990
  4. 4. Continued..Exploring new markets Corporate Procurement Buying Center• Highest selling manufacturer in • Design engineer, Materials Planner, Buyer Japan, France, Holland & Australia • Vendor salesperson from selling• Believed in good sound is universal organization visits Bose to get orders Pre-1988Broader channels of distribution • Centralized purchasing by Corporate• High-end specialty stores Procurement; delivered to plants• Electronic retailers • No purchasing by plants• Direct marketing 1990 • DecentralizedProduced systems and components • Purchasing by plants against contracts• Integrated systems trend negotiated centrally• Home theater systems• Plug and play equipment
  5. 5. Bose-Supplier Relations • Backward integration • Careful selection of vendors • Vendors not considered partners Bose as a buyer • Expected more commitment from suppliers • Lesser variation from component specified to reduce cost and manufacturing errors • Frequently monitored technology used by vendors • Finalized vendor only after close monitoring of pilot project BOSE manufactures high quality audio systems which are technically superior and looking for vendors on the same line would help them simplify the processTraditional Supply Chain
  6. 6. Purchasing methods Traditional JIT• Longer lead times • Smaller lot sizes•Relatively large lot sizes • More frequent deliveries• Less deliveries at higher quantities • Long-term contracts• Lowest price is main objective • Minimal paper work• Time consuming, formal paperwork • Less formal communication• Formal communication • Shorter lead times • JIT II – Supplier comes into the organization
  7. 7. Will vendors be interested?• The vendors will not be interested – We need to make them aware about the new approach of BOSE (JIT II) . – The benefits of JIT from both the perspectives should be explained – Long term benefits of the approach to be highlighted – CBA should be done to make them interested in this• Both Benefits and risks should be communicated to the vendors Benefits of JIT II Bose Vendor • Opportunity to work long term with Bose Corp.• Access to purchasing, product-expertise and –Possibility of bigger contract with Bose Corp.order fulfillment resource at zero cost – Continuous learning• G&F rep is aware of Bose’s needs • Relationship with Bose gets stronger – Social• Faster delivery – lower lead times Bonding• Reduced number of suppliers • Access to Bose systems, facilities and people• Long-term relationships – Better synchronization of production and• Better quality at reasonably low cost delivery schedules – Interaction with Bose gives insights • Quality ensures good sound reproduction • Improved Profitability• Reduced waste in order processing andinventory
  8. 8. Risks of JIT II Bose Vendor• Lack of top management buy-in/commitment • Financial hit of $80,000 per year• Confidentiality of information – Insufficient volumes from Bose may render• Loss of control on purchasing for Bose relationship unviable• Purchasing might object • A lot of investment in one customer – problems at• Contract makes switching difficult in case of poor Bose may affect G&Fsupplier performance • Need for redesign of existing processes for new – Problems like strikes at supplier may hamper system supply – Inability to react to quick changes can• Possibility of unfair pricing hamper relationship – Effects of inflation & changes in raw material • Inability to supply to upcoming plants in Mexico and prices on vendor price Michigan may affect relationship• Lack of formal criteria to determine when and withwhom to establish JIT II relationships - can createcontractual liabilities
  9. 9. Recommendations• If Vendors agreed, how to deal with other issues – Treating Vendors – Initially a restricted access to be given – Confidential information about competitors will not be shared and so as other sensitive information. – Access to necessary documents is ensured – Over a period of time , the restriction will be minimized to reach the full potential of JIT II approach – Competitors – Competitors should be made sure that confidentiality of critical information will be maintained – Number of suppliers will be drastically reduced in the future• Bose needs to incentivize vendor – Prestige of being a preferred supplier – Bigger share of business for G&F – Reduction in costs can boost profitability for G&F and Bose
  10. 10. Continued.. – Collaboration in other areas such as product design as incentive for G&F to participate – Open access for G&F representative to systems, facilities and personnel – Badges for G&F representative - treated as Bose employeesHow to go about JIT II approach• Criteria for JIT II approach – Suppliers are selected based on the check list containing all the necessary conditions . – Then, Top 3 suppliers are selected – After due consideration about the product quality and quantity they produce one vendor is chosen – A representative from the vendor should be seated in the manufacturing facility to ensure JIT II approach is maintained• Maintaining Fair prices – There should be a constant check in the market about the price. – Innovation from the supplier side should be given due value – Flexibility and quality of the product should be included while comparing the price.
  11. 11. THANK YOU

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