Bose Corporation Case

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How has the company compensated for seasonality?

According to Tom Beeson, by getting better at

anticipation, and by becoming more flexible, which

is where purchasing’s JIT II’" 1 comes in.

JIT II’"

Bose’s innovative procurement concept, an

area within manufacturing’s domain, drives its

very competitive approach to sourcing in world

markets. Lance Dixon, Bose’s director of purchasing

and logistics, has reached agreements with

seven - plastics, printing, metal, transportation,

packaging, resin, and customs brokerage - suppliers

to locate their representatives in-house.

Called "In-plants," these supplier personnel

reolace both the buver and the salesman. Salaries

18

Target

are paid by the supplier, but the in-plant wears a

Bose badge, and has complete access to the company,

from engineering meetings, to the purchase

order system, even to the receiving docks. The Inplant

places orders on himself. What are the benefits

of this scheme?

• The In-plant has access to new product design

programs and can, with his expertise, influence

the design process.

• Bose offers its suppliers an added inceutive to

discover product/process improvements.

Through value analysis on the existing product

base, the supplier keeps one-half of the savings

on cost reductions they create - forever. When

one supplier, for example, recommended that

Bose change a speaker grill from aluminum to

steel, thereby changing the finishing material as

well, the cost dropped 20 percent, ten percent of

which went to the supplier.

• Bose’s vendor engineering function resides in

the procurement organization, so purchasing

can assist suppliers, helping G+F Industries, for

example, reach very high quality levels in plastic

injection molding, through better process control.

• When Bose introduces new products in Massachusetts,

prototypes developed in Boston eventually

move on to a satellite plant. Typically, the

satellite start-up may bring in new suppliers at

the bottom of the learning curve. With JIT II,

some In-plants travel to the satellite to assist.

G& FIndustry’s Chris LaBonte, for example, is

helping Bose’s Arizona operation to get going on

new products that have already been produced in

Massachusetts. Being in on both start-ups eliminates

frantic "your parts don’t work" phone calls,

because LaBonte has identified problems to the

plant in advance.

At the suggestion of Bose management, G& F

purchased a new plant in Ireland, located close to

the customer’s new facility, offering both companies

better access to the Common Market. G& F

can move a proven tool supporting Massachusetts

production to the Irish plant, thereby accelerating

the start-up.

Although the initial focus started with supplier

reps, the company now sends engineers out to

its partners. Steve Parker, whose regular assignment

is plastic tooling procurement, spent three

months with Bose’s plastics supplier. His assignment?

To review each part for process and design

opportunities, tooling, and equipment selection.

JIT II ® Logistics

Paul Tagliamonte, a young, intense hire out

of p.m, is credited with the design and implementation

of Bose’s supercharged on-line, realtime

transportation system. Imagine the power of being

able to tell internal and external customers not

just, "it’s been shipped, you should be seeing it in

three or four days," but "it’s in the Newark terminal,

scheduled to go out at 1pm, you will see it by

5pm!"

• Odor overseas shipments, for those of you who

have ever attempted to expedite U.S. customs, Paul

has created paperless processing and constant monitoring

of material whereabouts. In fact, W. N.

Proctor, Bose’s customs broker, ties into shipping

systems directly, and files clearance documentation

in advance of material movement. That means