JIT II®: Creating the Ultimate Customer/Supplier Partnership

Author(s):

Lance Dixon
Lance Dixon, Executive Director, Bose Corporation, JIT II Education & Research Center, Framingham, MA 01701 508-766-4515.

82nd Annual International Conference Proceedings - 1997 

Concept Summary - JIT II is a concept pioneered by the Bose Corporation which has been implemented widely in US purchasing operations. In Sales, Purchasing & Material Planning applications, the customer planner, buyer & supplier salesman are replaced by an 'Inplant' supplier employee who is empowered to place customer purchase orders on his company. Supplier access and linkage to customer computers is also utilized He also performs concurrent engineering with customer engineering department from within the customer company. 'Vendor managed inventory' and 'automatic material replenishment' are features of JIT II.

JIT II Concept in Practice - In material planning, purchasing and sales traditional planners, buyers and sales personnel have been replaced. In transportation and logistics, no salesman calls. Inventory has been reduced, and a new location and concept in inventory and inventory control created. Material lead times have been reduced and new sales structures have been implemented. The leaders in supply chain integration have given shape to tomorrow. these companies have implemented customer-supplier relationships where "suppliers have been given authority in customer operations."

This is the basic description of JIT II principles and operating techniques.

Background - Industry sources generally give credit for these techniques to Wal-Mart and Proctor & Gamble in the retail field. Quoting from the Wall Street Journal front page feature story, January 13, 1995...."In retailing, a JIT II system is called 'efficient consumer response'. Like JIT II, ECR is based on continually replenishing products rather than building inventories... a few years ago Wal-Mart Stores Inc, pioneered ECR with Proctor & Gamble Co, in a big step in the discount chain's move to everyday low pricing".

In the manufacturing and commercial world, Bose Corporation is given credit. Quoting from the Wall Street Journal..."In the brave new world of procurement, customers are treating their suppliers almost like their own employees ... Vendor sales reps have desks next to the factory floor. Their badge lets them roam wherever they choose, attend production status meetings, stop by the research lab ... they can write a sales order for which the customer is billed. It's called JIT II, the 1990s version of Just-in-Time inventory control. Bose Corp., Framingham, Mass.-based maker of high fidelity systems ... fathered the idea".

Purchasing Magazine states that hundreds, perhaps thousands, of companies now have supplier personnel in residence, operating in customer purchasing and material operations.

Many major corporations have implemented JIT II in the supply chain. IBM and Intel alone have more than 50 onsite JIT II suppliers. Other leading-edge corporations include AT&T, Honeywell, Jorgensen Steel, Castle Metals, Roadway Express, Ingersoll-Rand, Siemens, G&F Industries, Westinghouse, BT Office Products International and scores of others.

To address the demand for JIT II information and education, Bose Corp. has created the JIT II Education & Research Center, which will function as a non-profit organization. A textbook, JIT II Revolution in Buying & Selling, has been published by Cahners Publishing and a companion videotape is utilized in MBA classes worldwide. The Harvard Business School & Darden Graduate School have published JIT II case studies for international distribution.

JIT II's benefits to both customers and suppliers are many, and range from day-to-day capability improvement to strategic advances in the structure of supply chain organization.


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