JIT II Partnerships Require Leap of Faith
United Printing was in the unique position in 1986 to be part of Bose Corporation's now-famous JIT II experiment. Under this new approach to managing business logistics, Bose consolidated all its printing with one JIT II partner—United Printing—in exchange for immediate cost reduction, an inplant representative, and a defined ceiling on all pricing.
Twelve years later the JIT II "experiment" is still going strong. The United Printing inplant still maintains an office in the Bose advertising department, with access to worldwide demands, constantly searching for efficiencies and cost reductions.
The inplant also places orders with manufacturing, and processes all the paperwork. Because the standards are already set, the task becomes one of eliminating duplication and errors, and maintaining a seamless direct-to-stock flow of printed material to Bose plants around the world.
Bose wants material when it is needed, not to sit in a warehouse. Responding to constantly changing production schedules without creating costly inventory, or even worse shutting down the line with late shipments, is United Printing's challenge. The direct line of communication in a JIT II partnership lets us anticipate Bose's needs before those needs become problems, and those problems become a crisis.
Before it started its JIT II program, Bose would forecast customer demand, set planning and specifications, then send that information out to buyers for competitive bidding. The company would analyze the bids and respond to the vendors' sales rep. The sales rep would place the order with the plant, which would manufacture and ship.
Under the JIT II program, however, the process is simplified. After Bose forecasts customer demand, the inplant checks every plant's inventory, combining and reducing unit costs for any other needs, then orders the product to ship direct-to-stock to the Bose location.
It takes a leap of faith to share and entrust your JIT II partners with the information they need to make it pay off for both parties, says Sherwin Greenblatt, Bose president. "Everybody wins and performs better," he says.
Stronger supplier alliances allow for more control over budgets and headcount. The benefits for the supplier include increased volume and the opportunity to expand the range of products offered.
JIT II partnerships also can prove to be a case study in faith. Early on in our relationship, Bose's Mexico plant had a spike in production. This demand called for the printing of $45,000 worth of products in a very short time. Here was a great opportunity to make a buck! The inventory was almost zero. This was no time for competitive bidding or old school methods.
United Printing's inplant went to work immediately, but not in the conventional sense. First, we searched the other plants' inventory to see what was readily available. Then we checked with the advertising department and found that this literature was going to be revised for the next printing. This told us that if we printed the ordered product, it would be obsolete in three weeks. But, knowing this did not negate the need for Mexico's production now.
The solution? The inplant was able to borrow enough stock from Bose's Ireland plant to keep Mexico going. This was accomplished with the help of Bose Fleet, which arranged the logistics.
- Bose did not spend $45,000 for product.
- The production line did not shut down.
- The product was revised.
- At the time of the new printing, the borrowed product was replaced with the new version at a lower unit cost because all demands were included in this production run.
Competitive bidding would not have saved 100 percent of the cost.
Twelve years into this unique JIT II arrangement, both partners continue to hone their skills. United Printing has stayed on the leading edge of commercial printing, and has added new services and technologies. The daily challenges of being a JIT II partner keep us sharp and alert to the marketplace, all as a result of Bose's original leap of faith.