About Bosch Group

About BOSCH Group The BOSCH Group is a leading global supplier of technology and services. In the areas of Automotive Technology, Industrial Technology, Consumer goods & Building Technology, some 281,000 associates generated sales of 45 billion euros in fiscal year 2008. The BOSCH Group comprises of Robert Bosch GmbH and its more than 300 subsidiaries and regional companies in over 60 countries. If its sales and services partners are included, then BOSCH is represented in roughly 150 countries. Each year, BOSCH spends nearly three billion Euros for research and development and applies for more than 3000 patents worldwide. With all its products and services, BOSCH enhances quality of life providing solutions which are both innovative and beneficial. The company was setup in Stuttgart in 1886 by Robert BOSCH( 1861-1942) as ‘ Workshop for Precision Mechanics and Electrical Engineering’. Ninety-two percent of the share capital of Robert BOSCH GmbH is held by Robert BOSCH Stiftung GmbH, a charitable foundation. The majority of the voting rights are held by Robert BOSCH Industrietreuhand KG, an industrial trust. The entrepreneurial ownership functions are carried out by the trust. The remaining shares are held by the BOSCH family and by Robert BOSCH GmbH. The BOSCH slogan ‘Invented for Life’ is a part of its long tradition which it communicates the Group’s core competencies and vision, that include technological leadership, modernity, dynamics, quality and customer orientation.

Nashik Plant of BOSCH (NaP formerly known as MICO-BOSCH) is one of the important establishments of BOSCH in India since last 30 years. In addition to TS 16949, plant is also certified for ISO 14000 the internationally acknowledged certificate for environment protection and OHSAS 18001 (2009). Plant is well equipped with latest in manufacturing, cleanliness and proving of product performance. NaP is manufacturing nozzles, nozzle holders and injectors for classical as well as Euro series.

Introduction to the project During slowdown many orders were canceled, there was decrease in production and this lead to catastrophic effect of excess inventory in the stores. Many big customers decreased there production and many companies were out of business. This was a tough situation in every industry as it was in BOSCH. BOSCH took many steps to make drastic changes for smooth running of the organization. Therefore, considering the size of the business, projects like inventory management, Continuous Improvement Process (CIP), BOSCH Production System (BPS), GEZ (‘Gesamt Eindeckungs Zeit’ i.e. Total coverage in days) etc. are given high importance in BOSCH. The total inventory in BOSCH is further split into following components of inventory:a. Goods in Transit (GIT) b. Raw Materials (ABE) c. Work in Process (WIP) d. Finished Goods (FG) e. Tools and Consumables (BVE) f. Machinery Spares & Replacement Parts (MAZE)

Components of Inventory

These are certain names assigned to all these components and subcomponents, which are the abbreviations of meaning in German language. Out of these Inventory components, I was allotted WIP and FG component to focus on which comes under GEZ.

In supply chain of BOSCH, there are various stores at different levels of supply chain in BOSCH, Nashik plant (NaP). The details are as follows1. Direct material stores 2. Indirect material stores.

Direct material stores:- Direct material are those which are necessary and important for final product. Receiving/Inward Stores (STE) - From pin to Machines all items are receipt and GRN (Goods Receipt Note) is prepared here. Proper Distribution of materials as per PO (Purchase Order) takes place from this stores. SAP system is used to prepare the GRN and it is interlinked to all modules from purchase to supplier payment. Raw Materials stores (S022/R2) – Steel bar are stored in this stores. From this store material is issued to manufacturing of components that may be in-house or outside vendors (Labor Charge (LC) or Supplier Material (SM) basis). Soft Component stores (S021/B2) – All soft components (Components after processing of steel bars from outside vendor or in-house) are stored in this store. These components are then issued further for next operation either in-house or outside.

Finished Components stores (S022/H2) – All components which are ready to use on assembly line are stored here. These may be in-house (WTGP) or Purchase (H2GP). Components are issued to assembly line for production of final product as required from this store. Finished Goods store (V2) – All manufactured items ready for dispatch to the customer come to this store in primary packing. Secondary packing and documentation takes place in this store. Packaging Materials store – All primary and secondary packaging materials in all sizes are stored in this area.

Indirect stores – Indirect materials are those materials which are supporting for final product but are not present in the final product. Tools store (S030/S032) – All tooling material and fixtures, stationary are stored in this store and issued to different shops as per requirement. Oil and chemical stores – This is a part of S030 stores but in view of EMS (Environment Management System) separate location is made for chemical and oils for safety reasons. Gauges store (S034) – Gauges are very important in BOSCH for quality of finished product. Hence Gauge Management System is efficiently handled by this store. Tool- Steel Store (S036) – Some of the important tools and Gauges are manufactured in BOSCH tool room and different types of steel is required for their manufacturing. This store is designed to supply such steel bar especially to tool room as required. Maintenance spares stores (S031) – Machine needs regular maintenance after a period of time. So all maintenance and spares items are kept separate and are handled by this store. Waste disposal store – All factory waste, defective parts, old machines, scrap, etc. are stored disposed from this area.

Why pre-assembly line stores or H2 stores? Every store is important but the reason behind selecting pre-assembly line stores was the value, importance and the condition of the stores. There are three stages of production- Soft stage, ExHard stage and hard stage of production after which finished goods are produced which are finally packed and supplied to the customer. H2 stores comes after Ex-Hard stage of production and it contains two types of materials- WTGP (In-House Manufactured Materials) and H2GP (Purchase Materials). Any shortage in H2 stores causes a huge impact on final production or the assembly line which leads delay in customer delivery. Hence co-ordination with this store is very important. The details of H2 stores is as followsTotal Floor Space – 244.8 Sq. m. Total Avg. Types (WTGP + H2GP) – 2280 H2 stores contain storage equipments like Kardex (A vertical electronic rack with 42 trays), Automatic Storage and Retrieval System (ASRS- A huge mechanical structure interfaced with computer and it has around 200 bins), few racks and fork lift trucks.

The layout of H2 Stores should be as follows as per BPS norms-

Ideal Layout of H2 stores

But because of excess stock the layout changes as follows

Present condition of H2 stores

So as it can be seen from the layout, major problem was of space. Apart from this, other problems were: 1) Too many types (Both WTGP and H2GP). 2) High quantity of nonmoving materials. 3) Piling up of different parts. 4) Difficulty to follow BPS rules. 5) Difficulty to store and locate materials. 6) No free movement of lift trucks/materials.

- Excess stock

Need of the project H2 stores have been an issue of concern for years. Also the business and the production is growing rapidly, so the inventory is also growing with that pace, with the space remaining the same. So the main job in the project was to study the operations of the stores carefully and suggesting probable solutions or options that can be taken to control the inventory. Also the store is related to various departments like Nozzles, Nozzle Holder, Components, Planning, Procurement, Purchase, Quality, etc. So the solution needed the consideration and approval of various department heads. The solution needed to be win-win situation. This required to study the role of various departments. So the necessity of the project was overall improvement or rationalization of H2 stores or inventory management. A target of reducing 25% types of WTGP every year was given this year so as to reduce WTGP in H2 stores to 25% in 2012.

WTGP Category Component Nozzles Nozzle Holder Total

Types before WF 257 542 74 873

25% reduction

50% reduction

75% reduction

Types after WF

Target for 2009

Target for 2010

Target for 2011

242 508 62 812

182 381 47 609

121 254 31 406

61 127 16 203

Also a part of the project was concerned with overall rationalization or improvement of H2 stores as Audit score of it was below target. BOSCH takes 5S audit after every 2 months of various departments depending on different parameters. The reason of low audit score was again shortage of space. So the space was the main concern for which inventory management was very important.