In 1986, when John Argitis bought the custom injection molding company where he had worked for eight years, it was doing $1.5 million in sales. Recently, G&F Industries Inc. in Sturbridge, Conn., surpassed the $20 million mark in annual sales. Argitis attributed much of the company's growth during the past two years to a new program called JIT II.
JIT II was developed in the late 1980s by Lance Dixon, director of purchasing for Bose Corp., a maker of high-fidelity sound systems in Framingham, Mass. JIT II involves having supplier employees actually working at the original equipment manufacturer's plant to schedule production and place orders, a job typically performed by OEM pur-chasing agents.
Dixon said the idea came to him while he tried to come up with a way of scheduling orders more efficiently.
Employees from each Bose supplier are given access to all of Bose's material planning requirements and production scheduling, along with the authority to purchase needed components.
The system requires an unprecedented level of trust on the parts of Bose and G&F, since each company exposes its inner workings to the other. Bose implemented JIT II more than two years ago. Argitis is now convinced it is the only way to do business.
``I know that feeling of wondering whether or not I can trust my customer with production information, but JIT II has changed all that,'' since trust is a two-way street, Argitis said.
Because the system works through computer-generated linkups between the two companies, it eliminates a level of purchasing and purchase orders.
Argitis said it also eliminates production scheduling changes and phone calls.
``I used to get 15 phone calls a day from buyers calling to check on orders or delivery schedules, or to make changes to orders,'' he said.
Argitis' phone is silent now because the forecasts are more accurate.
``We take their sales forecasts and plan our production around their forecast,'' Argitis said.
G&F makes regular deliveries to Bose, usually two to three times a day.
The system works best if a supplier is doing at least $1 million in orders with one company, Argitis said. G&F molds 200-300 different parts for Bose. G&F has four customers on the JIT II system, including Avon and Kiddie Products.
JIT II also reduces G&F's need for salespeople. Dixon said the supplier's employees have the ability to sell directly into Bose's design engineering department with new ideas, thus going around purchasing.
``This is concurrent engineering, talking to suppliers very early on, and when the supplier people are on your floor, they have access to seeking out the engineers with ideas,'' Dixon said.
JIT II and Dixon have received so much attention in the past year that Dixon wrote a book called JIT II: Revolution in Buying and Selling, which was released in February. He also travels around the country teaching other companies, such as Honeywell and IBM, how to implement it.
Argitis said the new relationship with Bose was started on a handshake and with no formal contractual agreements. The advantage of the system to Bose is a more streamlined, cost-efficient production operation with fewer glitches.
For G&F, it means not having to rebid contracts every year, wondering whether the work will stay.
``We're not always living on the edge or fighting to get or keep every order,'' Argitis said. ``It's definitely the way of the future, without question.''
G&F operates 36 injection presses with clamping forces of 75-450 tons. It employs 260.