Bose Corporation is exploring adopting a Just-in-Time inventory system called JIT II where key suppliers would be located onsite. This could provide benefits like reduced lead times and costs. However, vendors may be hesitant due to financial investment required. Bose recommends incentivizing vendors by treating their representatives as employees and offering prestige and business opportunities. Bose would also need criteria to select vendors and ensure fair pricing and confidentiality if adopting JIT II.

1. BOSE CORPORATION
Submitted by-
Amu Prabhjot Singh-10BM60011
Divya Hamirwasia-10BM60025
Sampurna Rakshit-10BM60077
Siddharth Verma-10BM60086
Swarnabha Shankar Ray-10BM60092

2. Contents
1 Bose history and supplier relationship
2 Purchasing Method and participation in JIT II by Bose
3 Benefit & Risk analysis for JIT and recommendations
4

3. BOSE History
• Dr. Amar Bose and Sherwin Greenbalt started BOSE corporation
1964
• Launched 901 using the reflective technology
1968
• Launched 501 – smaller version of 901
1970 • Approached GM for manufacturing car stereos
• Launched 301which fitted into a bookshelf
1973
• First Bose sound system in Cadillac servile
1982
• Bose systems were incorporated in GM, Honda, Acura, Audi and Nissan
1990

4. Continued..
Exploring new markets Corporate Procurement Buying Center
• Highest selling manufacturer in Japan, • Design engineer, Materials Planner, Buyer
France, Holland & Australia
• Vendor salesperson from selling
• Believed in good sound is universal organization visits Bose to get orders
Pre-1988
Broader channels of distribution • Centralized purchasing by Corporate
• High-end specialty stores Procurement; delivered to plants
• Electronic retailers • No purchasing by plants
• Direct marketing 1990
• Decentralized
Produced systems and components • Purchasing by plants against contracts
• Integrated systems trend negotiated centrally
• Home theater systems
• Plug and play equipment

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 process
Traditional Supply Chain

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. 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 and
inventory

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&F
supplier 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 with
whom to establish JIT II relationships - can create
contractual liabilities

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. 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 employees
How 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. THANK YOU