Question One
Since its inception, Bose has had a high regard for quality. To deliver on the promise of quality that is highlighted in the company’s mission, the company vetted the suppliers by considering the quality of the products as part of the three-pronged criteria (Harvard Business School, 1994). Part of the relationship with the suppliers also entailed the specification of the performance characteristics that formed the benchmark upon which evaluations of quality would be done. Additionally, the first order delivered by the suppliers was a pilot order and subject to scrutiny to determine where the relationship would be continued.
The need to venture into new markets by Bose heightens the need for the delivery of quality products. The drive by the founder to venture into new markets was his belief that there was a universal desire for good sound (Harvard Business School, 1994). It was important that the quality of the products was embedded in the sourcing of materials and the production process. Additionally, the company had already been recognized as the best manufacturer and vendor of component-quality speakers in different markets (Harvard Business School, 1994). This was achieved through the entrenchment of quality in both the procurement and production phases. The close regard for quality and the implementation of stern measure to ensure that only the best materials are used in the production process makes Bose a good buyer.
Question Two
The buying and selling in the business relationship between Bose and G & F occur in different contexts. Buying occurs when Bose purchases the components for the assembly of the speakers and other things in its product line from G & F. It is for this reason that the buyer, who in this case is Bose, supplies G & F with the molds for the plastic material to be supplied to the manufacturing plants of the company. Buying occurred on every other occasion when Bose purchased raw materials for use in its various manufacturing plants. For instance, Bose bought materials worth three hundred million dollars for use in the production of its music systems (Harvard Business School, 1994). Other purchases include buying the print materials to be used in the packaging of the sound products and components (Harvard Business School, 1994).
These materials include the warranty cards, instructional booklets and promotional material. It is noteworthy that for every instance there was buying, selling also occurred. For instance, the twelve vendors who were sourced to supply the printed materials were the sellers (Harvard Business School, 1994). Selling occurred when vendors such as United supplied the print materials to Bose. Selling occurs when G & F sells the plastics and other components to Bose. While Bose is the buyer in these two contexts, Bose is also a seller when it vends its products in the various markets in which it has operations (Harvard Business School, 1994). These markets include countries such as France, the Netherlands, Japan, and Australia among other countries in which the company has operations. Selling also occurred when Bose expanded its distribution channels to deal with retail outlets such as sears, Lechmere, Montgomery Ward and Circuit city (Harvard Business School, 1994).
Question Three
The question as to whether Bose should take part in the Just in Time II can be best answered by exploring the issues that led to the proposal. Firstly, Bose wants to control all the processes that relate to its core business processes so as to provide quality products as promised in its mission statement (Harvard Business School, 1994). However, Bose understands that this is not possible because it cannot produce all the products that it needs to produce its core products. This means that Bose still has to source materials from other vendors.
While a long standing relationship with one vendor to supply the materials required was advantageous in that the vendor would build their capacity to deliver quality materials, the main concern was that Bose would not benefit from the expertise required for the production of the materials (Harvard Business School, 1994). This would delay the implementation of its desire to produce the materials in-house. The other prevailing concern was that the vendors, having different priorities from Bose, would not understand the special needs of quality of materials as well as the employees of the organization would (Harvard Business School, 1994). There still was the need to develop the internal capabilities to produce the required materials because the cost of producing all the components for the assembly of their products was smaller compared to the cost of sourcing the materials externally if this was done in bulk.
Considering these dynamics, it is imperative that the Bose implements the Just in Time II. This is because the implementation of this protocol helps Bose address some of the concerns highlighted above without too many costs and risks. Firstly, the implementation of the Just in Time II enables the Bose to develop its in-house capabilities without producing the components for the assembly of its products (Harvard Business School, 1994). The presence of a representative at Bose would benefit the company in some ways. Firstly, the representative would learn the importance of the quality of the materials in the components provided to the core business processes at Bose. Secondly, the representative of the vendors would provide Bose with the expertise from an engineering perspective whenever it is required, especially when it has to do with components from their commodity area (Harvard Business School, 1994). In the same respect, the vendor representatives would also participate in the resolution of emergent problems. Part of the proposition by Dixon was to have the vendor representatives determining the quantity of the materials to be ordered based on the inventories available and also place requests for the delivery of the components whenever they are needed (Harvard Business School, 1994). Part of the proposal is that the vendor representative is to ensure that Bose does not hold too much stock in inventory. The implementation of the Just In Time protocol would enable the organization limits the component it holds in inventories (Moore & Longenecker, 2008). In addition to this benefit, the implementation of the protocol also enables Bose to streamline the process through which they procure the components for the assembly of their products (Harvard Business School, 1994).
This is achieved by integrating the buying and selling process (Pegels, 2005). The product of the integration also proffers further benefits to Bose. Among other things, the implementation of the Just In time protocol leads to thinning of the human resource at Bose because positions such as procurement officers, Bose buyer representatives and the Bose material planners (Harvard Business School, 1994) which would lead to reduced costs for Bose (García-Alcaraz & Maldonado-Macías, 2016). The implementation of the process also reduces errors because the vendor representative is aware of the quality requirements by Bose. This also leads to the integration of the vendors and the production processes to the development of the products at Bose as well as a reduction in the lead time (Krar & Gill, 2003). In the same respect, Bose gains the control they desired of the production of the subcomponents and the quality of the supplies.
The question as to whether G & F should participate in the Just In Time II is also best answered after a review of the dynamics of its business relationship with Bose. Firstly, G & F supplies a high volume of components to Bose (Harvard Business School, 1994). Logically speaking, a move that benefits the business process at Bose would by extension benefits G & F. It is also worth considering that G & F operates in a technical field. Most of its processes are developed through lengthy periods of research and development, and such knowledge may not be me transferable from one organization to another easily. On the other hand, G & F has access to the proprietary systems and practices of Bose through the access granted to their vendor representative to the production floor and other areas in Bose (Harvard Business School, 1994). The fact that they have to pay the vendor representative is worth the value that he presents for G & F. Considering these dynamics; it is imperative that G & F participates in the Just in Time II protocol.
The implementation of the Just In Time II protocol poses various risks for two companies. For Bose, one potential risk is the access to proprietary knowledge and systems of Bose. The proposal by Dixon was to allow the vendor representative access to all areas within the organization (Harvard Business School, 1994). Bose also runs the risk that the vendor representative attached to the plant will be privy to information that other suppliers have quoted by other suppliers in the case competitive bidding is used and then influence the actions of G & F to win the tenders. From a G & F perspective, one risk is the control that Bose assumes in the supply chain.
References
García-Alcaraz, J. L., & Maldonado-Macías, A. A. (2016). Just-in-time elements and benefits. Cham. Springer.
Harvard Business School. (1994). Bose Corporation: The JIT II Program (A). Boston. Harvard Business School.
Krar, S. F., & Gill, A. R. (2003). Exploring advanced manufacturing technologies. New York, NY: Industrial Press.
Moore, C. W., & Longenecker, J. G. (2008). Managing small business: An entrepreneurial emphasis. Australia: South-Western/Cengage Learning.
Pegels, C. C. (2005). Proven solutions for improving supply chain performance. Greenwich, Conn: IAP - Information Age Publishing Inc.
