Corporation

Submitted by-Amu Prabhjot Singh-10BM60011Divya Hamirwasia-10BM60025Sampurna Rakshit-10BM60077Siddharth Verma-10BM60086Swarnabha Shankar Ray-10BM60092

Contents

• Bose history and supplier relationship• 1

• Purchasing Method and participation in JIT II by Bose• 2

• 3

• 4

Benefit & Risk analysis for JIT and recommendations

BOSE History

1964

•Dr. Amar Bose and Sherwin Greenbalt started BOSE corporation

1968

•Launched 901 using the reflective technology

1970

•Launched 501 – smaller version of 901

•Approached GM for manufacturing car stereos

1973

•Launched 301which fitted into a bookshelf

1982

•First Bose sound system in Cadillac servile

1990

•Bose systems were incorporated in GM, Honda, Acura, Audi and Nissan

Continued..Exploring new markets

• Highest selling manufacturer in Japan,

France, Holland & Australia

• Believed in good sound is universal

Broader channels of distribution

• High-end specialty stores

• Electronic retailers

• Direct marketing

Produced systems and components

• Integrated systems trend

• Home theater systems

• Plug and play equipment

Corporate Procurement Buying Center

• Design engineer, Materials Planner, Buyer

• Vendor salesperson from selling

organization visits Bose to get orders

Pre-1988

• Centralized purchasing by Corporate

Procurement; delivered to plants

• No purchasing by plants

1990

• Decentralized

• Purchasing by plants against contracts

negotiated centrally

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

Purchasing methods

Traditional JIT

• Longer lead times

•Relatively large lot sizes

• Less deliveries at higher quantities

• Lowest price is main objective

• Time consuming, formal paperwork

• Formal communication

• Smaller lot sizes

• More frequent deliveries

• Long-term contracts

• Minimal paper work

• Less formal communication

• Shorter lead times

• JIT II – Supplier comes into the organization

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

Bose Vendor

Benefits of JIT II

• Access to purchasing, product-expertise and

order fulfillment resource at zero cost• G&F rep is aware of Bose’s needs• Faster delivery – lower lead times• Reduced number of suppliers• Long-term relationships• Better quality at reasonably low cost• Quality ensures good sound reproduction

• Reduced waste in order processing and inventory

• Opportunity to work long term with Bose Corp.– Possibility of bigger contract with Bose Corp.– Continuous learning

• Relationship with Bose gets stronger – Social

Bonding• Access to Bose systems, facilities and people

– Better synchronization of production and

delivery schedules– Interaction with Bose gives insights

• Improved Profitability

Bose Vendor

• Lack of top management buy-in/commitment• Confidentiality of information• Loss of control on purchasing for Bose• Purchasing might object• Contract makes switching difficult in case of poor

supplier performance– Problems like strikes at supplier may hamper

supply• Possibility of unfair pricing

– Effects of inflation & changes in raw material

prices on vendor price• Lack of formal criteria to determine when and with

whom to establish JIT II relationships - can create

contractual liabilities

• Financial hit of $80,000 per year– Insufficient volumes from Bose may render

relationship unviable• A lot of investment in one customer – problems at

Bose may affect G&F• Need for redesign of existing processes for new

system– Inability to react to quick changes can hamper

relationship• Inability to supply to upcoming plants in Mexico and

Michigan may affect relationship

Risks of JIT II

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

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.

THANK YOU