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 follows-

1. 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, Ex-
Hard 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 follows-

Total 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

- Excess stock

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.
 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.

25% 50% 75%

reduction reduction reduction
Types
Types Target for Target for Target for
WTGP Category before
after WF 2009 2010 2011
WF
Component 257 242 182 121 61
Nozzles 542 508 381 254 127
Nozzle Holder 74 62 47 31 16
Total 873 812 609 406 203

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.