Bose - Just in Time 2

The new basis of competition in many industries is time-based. This means that the focus is on reducing lead time by speeding up the design of new products or responding more quickly to customer demand for existing products. JIT II, a customer-supplier partnership concept pioneered at Bose Corporation and now practiced by major companies and their suppliers, can aid in cutting both design and response lead time. This is done through system integration, a basic process strategy of time-based competition.

By definition, system integration seeks ways to improve coordination between various departments or functional areas. The practice of JIT II links engineering, planning, and purchasing departments and bridges the inter-organization gap between customer and supplier. System integration is achieved because sequential processes are no longer separated by functional or organizational walls.

JIT II Purchasing

In a JIT II relationship, a supplier's sales representative works full-time in a customer firm while being paid by the supplier. The customer serves as the host organization, and the supplier representative-referred to as an in-plant representative, or "in-plant"--functions as an employee of the customer's purchasing department, attending planning meetings and determining material needs. The in-plant is then authorized to purchase materials from the supplier for the customer.

In conventional JIT purchasing, customers and suppliers conduct themselves as partners rather than as adversaries. These partnerships provide long-term contracts to single-source suppliers. In return for the cumulative volume of business, the customer receives frequent deliveries in small quantities of high-quality goods. Benefits reported by JIT purchasing customers include improved communication between customer and supplier and the reduction of lead times, on-hand inventories, space needed for storage, and paperwork.

The partnership practice is continued by JIT II participants. But with...