Bose Case Study
By: Girdhar Agrawal
Objective: To help Bose Corporation continuously improve, its sustainable competitive edge as technological leader of acoustic science, by analyzing and improving the performance of its Supply Chain. Executive Summary: Bose Corporation, headquartered in Framingham, Massachusetts is one of the largest producers of audio premium speakers. These speakers are used in automobiles, high-fidelity systems and consumer, commercial broadcasting systems. The company has a global supply chain and procures, 20% of its material from foreign suppliers. It also procures, 35% of its materials directly from local suppliers. The firm is trying to move towards, single sourcing many of its 800 to 1,000 parts, in order to make its supply chain more efficient. The company realizes the importance of an efficient supply chain and has undertaken several initiatives to increase the efficiency of its supply chain, which will be discussed further into the case study. Introduction: In this case study, we will try to look at some of the supply chain initiatives that have been undertaken by Bose over the past few years. We will also look at the results of these initiatives and their importance, within Bose’s supply chain. To add to this, we will also try to come up with suggestions, as to how Bose may further improve upon its supply chain. To start with, Bose has developed a detailed supplier performance system, which helps them measure supplier performance overtime. This system has also allowed them to distinguish high performing suppliers form the others, by allowing high performing supplier to apply for a qualified supplier certificate, after a period of six months. This system has also allowed Bose to provide constructive feedback to their suppliers and help set specific goals for underachieving suppliers. Overall, this system has helped Bose measure supplier performance effectively. The second major initiative undertaken by Bose combines global sourcing with just in time (JIT). Under this initiative, Bose has developed a system in partnership with national less-than-truckload carrier for its freight movements. Operating in almost real-time, “this system enables Bose to perform shipping analysis and distribution channel modeling to achieve reliable lowest total cost scenarios.” Overall, this system has helped reduce shipping costs and cycle times drastically for Bose. The third major initiative undertaken by Bose is called JIT II. Under this system, Bose passes on the responsibility of managing supply inventories, within the Bose plant to the supplier itself. This helps in the efficient management of inventories, as suppliers tend to specialize in raw material management. This in turn helps Bose reduce its inventory costs. Issues and Analysis:
1) The entire strategy development process at Bose typically begins with the identification of customer needs. The customers want high quality, technological advanced products with short cycle times. Hence, I believe that the entire strategy is focused on meeting these consumer needs. 2) Under its supplier performance management strategy, Bose needs to ensure that chosen suppliers will realistically, be able to fulfill the performance standards set forth. 3) Purchased quality is very important to Bose, as the quality of the final product depends on the inputs. Hence, as Bose believes in providing quality products to the consumer, it is paramount that they control purchased quality. 4) A just in time purchase system cannot operate without total quality from suppliers. This is because in a just in time system, no time is set aside for product testing as, the lead times to the consumer are short. This in turn means that quality has to be spot on for the just in time system to work. 5) Some components can arrive at the Hillsdale, Michigan, plant with no incoming inspection required because the supplier that supply to...
References: 1) Monczka, Robert M. Purchasing and Supply Chain Management. Mason, OH: South-Western, 2011. Print.
2) Bozarth, Cecil C., and Robert B. Handfield. Introduction to Operations and Supply Chain Management. Boston: Pearson, 2013. Print.
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