SUPPLY CHAIN MANAGEMENT AT BOSE CORPORATION
Bose Corporation, headquartered in Framingham, Massachusetts, offers an excellent
example of integrated supply chain management.
Bose, a producer of audio premium
speakers used in automobiles, high-fidelity systems, and consumer and commercial
broadcasting systems, was founded in 1964 by Dr. Bose of MIT.
Bose currently maintains
plants in Massachusetts and Michigan as well as Canada, Mexico, and Ireland.
organization, while decentralized, has some overlap that requires coordination between sites.
It manages this coordination by using conference calls between managers, electronic
communication, and joint problem solving.
The company is moving toward single sourcing
many of its 800 to 1,000 parts, which include corrugated paper, particle board and wood, plastic
injected molded parts, fasteners, glues, woofers, and fabric.
Some product components, such as woofers, are sourced overseas.
For example, at
the Hillsdale, Michigan, plant, foreign sourcing accounts for 20% of purchases, with the
remainder of suppliers located immediately within the state of Michigan.
About 35% of the
parts purchased at this site are single sourced, with approximately half of the components
arriving with no incoming inspection performed.
In turn, Bose ships finished products directly to
Delco, Honda, and Nissan and has a record of no missed deliveries.
Normal lead time to
customers is 60 working days, but Bose can expedite shipments in one week and airfreight
them if necessary.
The company has developed a detailed supplier performance system that measures on-
time delivery, quality performance, technical improvements, and supplier suggestions.
is generated twice a month from this system and sent to the supplier providing feedback about
If there is a three-week trend of poor performance, Bose will usually