Bose Jitii

Should Bose participate in the JIT II program? Should G&F? What are the potential benefits and risks for both companies?

Before being able to answer this question, it is important to look at Bose and what are the qualifying and winning criteria Bose products have. Any criteria that are strategically important should be developed in house, while supporting parts are better outsourced.

JIT II is a further enhanced version of JIT, which depends heavily on the linkages between the different players in the supply chain. JIT was based on information sharing along the supply chain, since at the core of JIT lies the notion of reduced inventory. In order to reduce the bull-whip effect and to promote two-way innovation for new product lines between product designers and suppliers a new system was created. JIT, however relies heavily on the quality of the outsourced products since turnaround time for design and delivery was reduced. With the introduction of parallel development process came JIT II and the incorporation of key outsourcing partners into the contracting company. By designer and supplier working together design and production time can be further reduced and the capabilities of the suppliers can be taken into consideration during the design phase.

JIT II saves time and money as well, but at the same time poses a substantial risk to the contracting company. Cutting edge information is available for the supplier about new product design. The supplier representative has full access to the information. Also, while it saves time, since both contractor and supplier are working on the design at the same time, the contractor ends up not developing potentially core areas of their business therefore leaving themselves exposed to potential new entrants to the industry. From Porter's perspective, suppliers might be able to gain dominant power once they built their knowledge and skill base over the company.

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