“Better Sound through Research” is the motto of Bose Corporation. Bose has been providing high quality sound systems since 1968. Moreover, their policy for it was simple, better sound, better quality, better business. For Bose to achieve this goal they need to either weigh their options to continue their collaboration with their suppliers or start with their own in-house production of all the products. In-house production would give them an advantage of complete control on quality of the product. Now the questions are that does Bose need to continue with JIT II approach, which has been in effect in the company since past 3 years? Or Bose should become vertically integrated to ensure that production lines are well supplied, and to ensure that all components are in-house and best that can be manufactured? Our group recommends that Bose Corporation should stay with JIT II approach. This would give them a competitive edge within the continual changing technology in the industry. It would help built open collaborative setting between Bose and some selected suppliers. The implementation for the JIT II effort would take overall 3 years for all branches.
Summary of Recommendation
Implementation of JIT II:
Growth in Corporate Procurement budget was not keeping up with Bose Corporations needs of increasing staffing levels. In response to this, JIT II was implemented in January 1991. This in effect augmented the Corporate Procurement staff with vendor paid representative who acted as buyers within Bose for their product lines. After 3 years of JIT II implementation, several benefits of the program have been recognized.
Discontinuation of JIT II:
On the other hand, some people in the Bose management and staff are not convinced that JIT II should be continued. They contend that Bose should become more vertically integrated and JIT II may be harming this effort. Our group though recommends that Bose Corporation should continue with JIT II approach, as even the people who do not support the system say that it has few “Grey Areas” in this approach.
After going through the Bose Corporation case, our group pointed out the following situation in Bose Corporation:
• Introduction of JIT II in Bose:
In 1990, revenues of Bose Corporation were $720 million and Corporate Procurement was purchasing $300 million worth of materials. This budget reflected the corporate expansion of Bose. However, most of the available resources were going into efforts to make the situation better in Japan. Corporate Procurement was not keeping up with their needed increases in staffing levels. In response to this JIT II was introduced in Bose in 1991. This in turn augmented the corporate procurement staff with vendor paid representatives who acted as buyers within the Bose.
• Present JIT II situation in Bose:
After 3 years of JIT II implementation, many benefits of the program have been recognized. On the other hand, some of the Bose’s management has not been satisfied with it. They are of the viewpoint that JIT II should be discontinued and vertically integrated system should be developed. They believed that the benefits of JIT II are short-term benefits and it is harming their efforts to implement vertically integrated system.
• Future of JIT II in Bose:
Bose Corporation needs to decide whether it wants to continue with JIT II or go in for vertically integrated system, where in all the products are needed to be made in-house. If Bose continues with JIT II it needs to examine potential modifications to address valid concerns of the program’s detractors. We too recommend that Bose should continue with the JIT II and make efforts to get buy-in and formalize JIT II as its corporate policy.
JIT II : Negative Perceptions
How long a JIT II relationship would last in company growing as fast as Bose? This was...