Logistics/Supply Chain/Supply Chain Management
Dear sir, i need your help....
Case 1 (14 Marks )
Supply Chain Management at Bose Corporation
Bose Corporation manufactures audio premium speakers used in automobiles, high-fidelity systems and
consumer and commercial broad-casting systems. Head quartered in Framingham, Massachusetts, Bose
Corporation has plants in Massachusetts and Michigan as well as in Canada, Mexico and Ireland. Bose
speakers are the best sellers in Japan, the world leader in consumer electronics. Bose’s competence is in
its electronic engineering skills, ‘but the company attributes much of its business success to its tightly
controlled materials management and excellent Integrated supply chain management.
Bose purchases most of its electronic and other components from independent suppliers scattered around
North America, the Far East and Europe. About 50 percent of its purchases are from foreign suppliers,
the majority of them are from the Far East. Its purchasing organisation while decentralized has some
overlap that requires coordination between sides. Bose attempts to coordinate its globally dispersed
supply chain so that material holding and transportation costs are minimised. This requires component
parts to arrive at Bose’s Massachusetts assembly plant just in time to enter the production process. But
because Bose must remain responsive to its customers, it sometimes must respond quickly to increases in
customer demand for certain speakers so as to remain competitive. Since Bose does not want to hold
extensive inventories at its Massachusetts plant, this need for responsiveness requires Bose’s globally
dispersed supply chain o respond rapidly to increased demand for component parts.
Bose’s materials management function is responsible for coordinating the supply chain to meet both
objectives — minimising transportation and inventory holding costs and yet responding quickly to
customer demands. This function achieves coordination through a sophisticated logistics operation. Most
AN ISO 9001 : 2000 CERTIFIED INTERNATIONAL B-SCHOOL
of Bose’s imports from the Far East come via ships to the West coast and then across North America to
its Massachusetts plant via train. Most of the company’s export also move by ocean freight. Bose does
not hesitate to use airfreight when goods are needed urgently.
Bose has a long standing relationship with W.N. Procter. a Boston based freight forwarder and customs
broker. Procter handles customs clearance and shipping from suppliers to Bose. Procter provides Bose
with up-to-the minute electronic data interchange (EDI) capabilities which enable Bose to track parts as
they move through its global supply chain. Procter provides several other services to Bose such as
selecting overseas agents who can help move goods out of the Far East.
Procter’s well-established network of overseas contacts is especially useful when shipments must be
expedited through foreign customs. Procter also is electronically linked into the US customs system,
which allows it to clear freight electronically as much as five days before a ship arrives at a US port or
hours before an international airfreight shipment arrives - This helps to get goods to Bose’s
manufacturing plant several days sooner.
Bose has developed a detailed supplier performance system that measures on-time delivery, quality
performance, technical improvements and supplier suggestions. A report is generated twice a month from
this system to be sent to the suppliers providing feed-back about supplier performance.
Bose has written contracts with suppliers. After six months of delivery without rejects. Bose certifies the
suppliers as qualified suppliers.
Bose uses a sophisticated transportation system which is the best EDI system n the US. This j system
operates close to real time and allows two-way communication between every one of the freighthandlers’
230 terminals and Bose. Information is updated several times daily. This state-of- the art
system helps Bose’s managers to proactively manage logistics time elements in pursuit of better customer
Perhaps one of the most unique features of Bose’s procurement and logistics system is the development
of JIT II. The basic premise of JIT H is: “the person who can do the best job of ordering and managing
inventory of a particular item is the supplier itself” Bose negotiated with each supplier to provide a full—
time employee at the Bose plant who was responsible for ordering. shipping and receiving materials from
that plant, as well as managing on-site inventories of the items. This was facilitated through an EDT
connection between Bose’s plant and the supplier’s facility.
1. Briefly present the salient features of the integrated supply chain management system at Bose?
2. Discuss how the strategy development process might work at a company like Bose?
3. What should be the relationship between Bose’s supply management strategy and the development of
its performance measurement system?
4. Discuss the importance of quality of purchased components to Bose?
I am sorry to say i cannot answer your academic assignment questions, you need understand and answer them by yourself. But if you have specific queries related to Logistics and SCM concepts then please let me know i will then try to address them.