QUALITY OF MANAGEMENT
JOURNAL
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Volume 1, Number 1
Autumn 1992
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Autumn
1992
ISSN: 1072-5296
JIT II
A New Approach to Supply Management
JIT
eliminates
inventory and
supplier and
customer work
closer together.
JIT II
eliminates the
buyer and
salesman, and
supplier and
customer work
closer together.
Lance Dixon
Director of Procurement and Logistics
BOSE Corporation
The Bose JIT II approach to supplier relations began in 1987 when I happened to look out my
office door and noticed a top-notch salesman for
G&F Industries, an excellent manufacturer of plastic parts and related items and a major supplier to
Bose Corporation, talking to one of our best buyers.
And I realized what they were doing.
The salesman wasnt selling. The buyer wasnt
buying. These two highly paid people were talking
about day-to-day ordersadministering the relationship.
And I thought, That isnt right. Neither of
them were operating at the high end of their skill
set. The salesman ought to be out opening accounts, not servicing them. The buyer ought to be
working with design engineers, doing value analysis, or going to Malaysia to develop new suppliers.
They were doing work that could be accomplished
more efficiently by:
selecting a person with a skill set different from either salesman or buyer to
manage the ongoing buying relationship
and design engineering interface.
In traditional supply management, a production planner inside your company estimates how
much of a particular part you will need and tells a
buyer in Purchasing. The buyer tells the salesman
who tells his company, and, if all goes well, the
parts arrive on schedule.
Good systems may skip some of these steps.
We had already gone a considerable way toward a
Just-in-Time production system that enabled us
include plastic tooling and parts, metal parts, corrugated packaging, maintenance, repair, and operating supplies, printing, import functions and domestic and international transportation.
JIT II eliminates the salesman and the
buyer, and often the production planner. It also
Lance Dixon is
empowers the supplier in-plant person to practice
Director of
concurrent engineering. He can attend any and
Purchasing &
all design engineering meetings involving his
Logistics for Bose
companys product area. He has full access to Bose
Corporation.
facilities, personnel and data.
Educated at Boston
Once we established these in-plant supplier
University and the
representatives, we discovered they led to imporUniversity of
tant improvements not only in Purchasing, but also
Minnesota, his
in Planning, Engineering, Importing and Transporbackground
tation.
includes
purchasing and
Who is Bose Corporation?
distribution
management. He
Let me provide you with a little background
was formerly
about Bose Corporation. Research performed by
Manager of
Corporate Central Dr. Amar Bose at Massachusetts Institute of Technology (MIT), led to the establishment of Bose
Purchasing at
Honeywell, Inc., in Corporation in 1964, and creation of the revolutionary Bose 901 Direct/Reflecting loudspeaker
Minneapolis, and
was also Director system in 1968. It set a new standard in music
reproduction.
of Purchasing for
Bose designs and manufactures some of the
General Mills'
most
favorably reviewed audio products in the
Kenner Division in
world,
and constantly explores the frontiers of new
Cincinnati.
technologies to improve the relationship between
sound and the listener. For example, Bose noisecanceling headsets flew with the experimental aircraft Voyager on its historic 1986 around-theworld nonstop flight. Bose professional sound
systems are used everywhere sound is important
from the Olympic games to the Queen Elizabeth 2.
Bose provides the sophisticated sound systems in
many top-of-the-line automobiles.
Manufacturing locations are in Framingham,
MA; Westboro, MA; Colebrook, NH; Hillsdale,
MI; and Canada, Mexico and Ireland. Corporate
headquarters is located in Framingham, MA with
sales subsidiaries located worldwide.
tive in the Transportation Department is quite different. The day is spent controlling movement of
freight by truck, sea and air worldwide.
Both Roadway Express (domestic trucking)
and the Proctor, Inc., Division of McGraw Hill
(import/export) provide access to their mainframe
computer systems controlling domestic U.S. and
worldwide material movement. They also provide
professional on-site staff at Bose committed to
total system control, support and interface with
Bose worldwide.
Appropriate on-site computer terminals and
software are at several Bose locations. Bose
achieves an excess of 95% paperless electronic
data interchange (EDI) clearance of inbound freight
through U.S. Customs, which places us in the top
1% of manufacturers, because of the interface
between these computer systems and Customs
computer systems.
A Bose container leaving on a boat from
Kaoshung, Taiwan, or a package on a plane from
Japan is entered into the Proctor computer system
based on information from the freight forwarder at
the location. That data, which outlines every aspect
of the shipment, is sent to the Boston location of
Proctor Inc. From there, it can be accessed by Bose
terminals.
The fingertip availability of that data, essentially real time, allows us to operate our business
differentlyand better. When a day or two is the
difference between on-time delivery and a negative
impact on a Bose factory production schedule, the
JIT II transportation relationship and EDI system
give Bose information that enable us to solve
problems.
When material flowing towards Bose from
locations offshore can be located and routinely
accessed, the material functions as inventory,
just as effectively as such inventory in our plant or
warehouse. This is a major benefit of the JIT II
transportation system.
The Customer/Supplier
Relationship Profile
This system can be implemented for a wide
range of purchased commodities. It can support
production materials such as plastic parts supporting our audio products, non-production materials
such as printed company brochures, maintenance,
repair or office supply materials.
The concept works well in either sole-source or
multiple-supplier-per-commodity situations. But
we only implement one JIT II supplier in a
The Future
Bose plans to bring more suppliers into the JIT
II program. Three more suppliers are nearing
startup on the program.
Bose JIT II suppliers are using the program as
a sales tool and have implemented it with other
customers.
Various companies are proceeding in the general direction with JIT II programs and similar
programs led by various company disciplines.
A 27 minute video presentation is now available with a textbook scheduled for publication this
Fall addressing just-in-time and JIT II.
A series of one-day seminars addressing the
JIT II purchasing and transportation program is
being presented by the MIT Center for Transportation Studies. The next seminar is scheduled for
October 1992.
Assistance to interested companies will be
available from major consulting organizations in
response to such requests.
JIT II is a registered trademark of Bose Corporation. Further information can be obtained by
contacting Bose Corporation, The Mountain,
Framingham, MA; Attention: Lance Dixon, Director of Purchasing & Logistics.
Autumn 1992 18
Journal On-Line
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David Walden, Chairman
Center for Quality of Management
Stephen Graves
Professor & LFM Co-Director
Massachusetts Institute of Technology
Ted Walls
Boston College
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