Logistics: Controlling The Flow With Implants
What took so long?
“For us, the decision was a protracted process,” says Scott Thomas, Werner’s Bose account executive in Westfield, Mass. “We had to consider whether we could provide the technology and the personnel to make it work.”
Mr. Thomas is talking about participation in the transportation command center located at Bose’s headquarters in Framingham, Mass. There, representatives of Bose’s major logistics providers sit side by side, each hooked to his company’s shipment tracking base, together managing the flow of materials into Bose’s production facilities.
Over the last two years, Bose has become more vertically integrated. It places greater reliance on its manufacturing plants to make plastics, woods and electronic components. These must be transported between facilities, creating more opportunities to assemble full truckloads.
From Bose’s perspective, the invitation to Werner Enterprises, Omaha, Neb., reflected its increasing reliance on truckload deliveries. “We always had plenty of LTL volume,” says Lance Dixon, formerly Bose’s director of purchasing and logistics and now executive director of the company’s nonprofit JIT II Education and Research Center. “We now have enough truckload volume to make sense to have a truckload carrier in the system.”
The implantation of transportation representatives at Bose is part of its trademarked JIT II system, an elaboration on, and refinement of, just-in-time delivery. JIT II blurs the boundaries between Bose and its suppliers by giving the implants authority within Bose to manage and expedite its supply chain.
hat system has been around for years and has been well publicized. But Bose had been reluctant to publicize the unique patchwork of electronic and human connections that it has created with suppliers to provide global visibility of materials in transit.
“It all started nine or nine and a half years ago when Bose penetrated the automotive market,” says Mr. Dixon. “Before that we sold only consumer electronics. Then we created a custom sound for automobiles. We went into the factory and designed an acoustic system for each car. We sold this to General Motors, and it changed auto sound systems forever.”
But there was a downside for Bose: Logistics became a tremendous problem.
“The car manufacturers gave us much tighter lead times,” Mr. Dixon says. “Sometimes they needed twice as many audio systems as they had originally forecast and ordered. Twelve-week lead times had to be shortened to four.”
One way of coping with this situation might have been to beef up the inventory of parts and components. But that is an expensive proposition, and company presidents, including Bose’s, want to lower, not increase, inventories.
“I proposed increasing subassemblies,” Mr. Dixon says. But Sherwin Greenblatt, president of Bose, disagreed with him. “He said, ‘Don’t solve your problems with my inventory dollars.’ We realized we had to figure out a supply-chain solution.”
The key, it turned out, was to obtain immediate access to the information that transportation companies were able to provide. “Many suppliers can tell you when a shipment has been launched,” Mr. Dixon says. “But you enter a gray zone in a crisis situation and you have a telephone in both ears.”
Mr. Dixon’s solution was to tap into his suppliers’ existing information systems. “I figured that an LTL carrier like Roadway, for example, must have a great computer system. They operate four or five hundred terminals; they have bar-coding for tracking and tracing. The same goes for some of the other major logistics suppliers that we used, such as the Tower Group/McGraw Hill for air freight forwarding.”
For the full story, see the Dec. 14 print edition of Transport Topics. Subscribe today.
