Outsourcing Strategy 1: JIT II Program for Plastics with G&F Industries

Advantages:

Cost Savings: Implementing a Just-In-Time (JIT) II program with G&F Industries as the vendor for
plastic components can lead to cost savings for Bose Corporation. With a full-time representative
stationed at Bose, G&F can optimize orders, reduce excess inventory, and minimize carrying costs.

Expertise Access: Having a G&F representative at Bose headquarters provides easy access to plastic
molding expertise. This can lead to better problem-solving, improved quality control, and faster
response to design changes or production issues.

Streamlined Procurement: The JIT II program simplifies the procurement process by consolidating
responsibilities. The G&F representative would be responsible for order placement, monitoring
material requirements, and ensuring smooth manufacturing planning, reducing administrative
burden for Bose.

Disadvantages:

Vendor Dependence: Relying on G&F as a single-source vendor for plastics may create a dependency,
and Bose may face risks if G&F experiences production disruptions, quality issues, or financial
difficulties.

Limited Supplier Pool: Choosing G&F as the JIT II vendor for plastics limits the competitive vendor
pool, potentially reducing negotiation leverage and competition, which might lead to higher prices in
the long term.

Outsourcing Strategy 2: Centralized Procurement for Printed Materials with United Printing

Advantages:

Cost Efficiency: Centralizing the procurement of printed materials with United Printing can lead to
cost efficiency through bulk purchasing, standardization, and better negotiation leverage, resulting in
reduced printing costs for Bose Corporation.

Streamlined Processes: A centralized approach simplifies the procurement process, allowing for
standardized quality control, consistent pricing, and reduced administrative complexity across
different departments.

Improved Vendor Relations: Consolidating the relationship with United Printing can lead to better
vendor relationships, which could result in improved service, quality, and reliability.

Disadvantages:
Resistance to Change: Individual departments accustomed to sourcing their own printed materials
may resist the change to a centralized approach, potentially causing internal conflicts and pushback.

Risk of Vendor Dependence: While United Printing may provide cost savings and efficiency, relying on
a single vendor for printed materials may create a vendor dependence, which poses risks if United
Printing faces issues, such as capacity limitations or quality problems.

Alternative Strategy: In-House Procurement and Manufacturing for Critical Components

Advantages:

Control and Quality Assurance: Bringing critical component procurement and manufacturing in-house
provides Bose with complete control over the production process, quality assurance, and adherence
to its high standards.

Reduced Dependency: Reducing reliance on external vendors mitigates the risk of supply chain
disruptions, quality issues, or overpricing.

Greater Flexibility: In-house capabilities allow Bose to respond quickly to design changes,
customizations, and production needs without relying on external partners.

Disadvantages:

Capital Investment: Establishing in-house manufacturing capabilities requires significant capital

investment in machinery, facilities, and skilled labor, which can be a substantial financial burden.

Expertise Development: Developing in-house manufacturing expertise may take time and resources,
and there may be a learning curve before achieving optimal efficiency and quality.

Increased Operational Complexity: Managing in-house production adds complexity to Bose's

operations, including hiring and training staff, maintenance of equipment, and ongoing operational
costs.

The choice between these strategies will depend on Bose's specific needs, financial resources, and
risk tolerance. It may also consider a combination of strategies for different components and
categories.
Strategy
Outsourcing Strategy 1: JIT II
Program for Plastics with G&F
Industries
Outsourcing Strategy 2:
Centralized Procurement for
Printed Materials with United
Printing
Alternative Strategy: In-House
Procurement and
Manufacturing for Critical
Components
Advantages
-Cost Savings
- Vendor Dependence (Risk of
disruptions)
- Expertise Access
- Cost Efficiency
- Streamlined Processes
- - Improved Vendor Relations
-Control and Quality Assurance
- - Reduced Dependency
- Greater Flexibility
Disadvantages
- Limited Supplier Pool
- Streamlined Procurement
- Resistance to Change
- - Risk of Vendor Dependence
(Single vendor)
- Capital Investment (High
upfront costs)
- Expertise Development
(Learning curve)
- Increased Operational
Complexity