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Q1: What are the unique attributes of Bose Corporation in Supply Chain?

Ans1: Bose Corporation had three manufacturing plants (two planned) where all the manufacturing used to be done. The company depended upon Corporate Procurement for its inventories supply. Corporate Procurement was responsible for locating new vendors and securing new parts, with these vendors being generally involved early on its new product development offers. The main key personnel involved in the Corporate Procurement were Design engineer, materials planner, buyer and vendor salesperson. Secondly, the Bose Corporation changed itself from producing inputs for other plants to producing and manufacturing inputs for itself, i.e. self-sustenance.

Q2: What is their Purchasing Strategy for different products or components? Ans2: Till 1988, most of the companys purchasing was done by corporate procurement, but after 2-3 years it was decentralized in all of its different plants located across globe. Day-to-day purchasing was done in a planned three stage cycle: Business Planning: The marketing department at Bose corp. prepared multi-year business plan. Aggregate production planning: Based on the business plan, the y prepared a production plan that specified the capacity, tooling and material volume that would be needed over the next 1-2 year plan. Production scheduling: Based on the aggregate production plan, schedulers at the plants prepared a detailed master schedule outlining requirements for capacity, personnel and material over the coming 12 months.

Q3: How they decide on outsourcing a component ? Based on what factors ? Ans: Basically there are 3 main problematic factors on which the outsourcing of component revolves. 1. The vendor and Bose have different priorities. They have to prioritize and make a trade off between the two. Sometimes even sourcing from highly capable vendors the schedules and parts do not match the needed/required specifications. 2. Long term vs Short Term The long term relation would make the company get parts at cheaper rates and customizable specifications. But it would be dependent on solely one vendor. Problem with one vendor can disrupt the whole JIT approach. Short term approach can help develop the internal capabilities. 3. Another factor in consideration was that the vendors seldom understand the companys needs and vision. Also internal production or inhouse development if volume was sufficient could lower the costs significantly. These 3 are the main factors of concern before going for sourcing of components.

Q4: What are the different costs in purchasing that affects supply chain 1. 2. 3. 4. 5. 6. 7. 8. Transportation cost Ordering cost Supervisor cost Maintenance cost Storage cost Inventory cost Testing cost Failure cost