Summer Project REPORTOn

“Development Suppliers through Lean Principles”

(April, 2010 to June, 2010)

Undertaken at

Submitted for the partial fulfillment of Post Graduate Diploma in Industrial Engineering (PGDIE)

Under the Guidance of

Mr. Dhanaraj N Prof. A.K. PundirHOD (DS/PUQ-SDT1-IN) Dean, Placements Bosch Limited NITIE, Mumbai

Submitted by

Sudhir Kumar Roll No. 101, Class of 2012

National Institute of Industrial Engineering

Vihar Lake, P.O. NITIE, Mumbai-400087

CERTIFICATE

This is to certify that the project work titled “Development of Suppliers through Lean

Principles” has been successfully completed at BOSCH Group by ‘Sudhir Kumar’ under

my guidance, in partial fulfillment of Post Graduate Diploma in Industrial Engineering at

National Institute of Industrial Engineering (NITIE), Mumbai.

I wish him a bright and prosperous future.

Faculty Guide

Prof. A.K. PUNDIR

Associate Dean, Placement

NITIE, Mumbai

ACKNOWLEDGEMENT

No academic endeavour can be single handedly accomplished. This work is no exception.

Summer Internship gives an opportunity to apply the theoretical knowledge in the actual

working conditions.

I take the opportunity to extend my thanks to Bosch Limited, Bangalore for offering me

platform to gain exposure and garner knowledge in the field of Operation Management and

Supply Chain Management. At the outset I would like to record my gratitude to Mr. Syed

Ehtesham Ahmed, Assistant Manager (HR) for initiating me in this training. I wish to

extend my sincere and heartfelt gratitude to my project guide Mr. Dhanraj. N, HOD

(DS/PUQ-SDT1-IN) for having made my summer training a great learning experience by

their constant guidance, encouragement and extreme support. I would also like to thank Mr.

Karthik B.S., Sr. Engineer (DS/PUQ-SDT1-IN) who helped me at all stages during this

project and whose suggestions were indispensable all through my training and played a

great role in making this a useful project. I would like to express my deep sense of gratitude

to Mr. Raghuvendra, Sr. Engineer (DS/PUQ-SDT1-IN), Mr. Nikhil, Sr. Engineer

(DS/PUQ-SDT1-IN) and Mr. Biswajit Swain Sr. Engineer (DS/PUQ-SDT1-IN) for their

cooperation, valuable guidance and time to time consultation without which I couldn’t have

completed my project. I have been extremely benefited by prestigious association as a

summer intern with BOSCH Group.

I also take immense pleasure in extending my thanks to my faculty guide Prof. A.K. Pundir,

Associate Dean, Placement, NITIE, Mumbai for providing the valuable insight during the

project and for inspiring me to complete the project successfully. Finally, I would also like to

acknowledge Bosch and it’s business associates for their support.

Sudhir Kumar

PGDIE 40, NITIE, Mumbai

Summer Intern, BOSCH Limited

Executive SummaryDaimler India Commercial Vehicle Pvt. Ltd. Is going to launch new commercial vehicle intwo plateform HDT and LDT from mid of 2012. For any commercial vehicle, FrameAssembly is important and critical part. For smooth execution of frame assembly, I didgap analysis in frame assembly activities up to C-Sample (It’s a type of sample product innew product development cycle) delivery. Currently supplier is located in Mumbai andbefore D-Sample (It’s also sample product before start of production) delivery supplierwill stabilize a new frame assembly plant near DICV plant at Chennai.In Gap analysis DICV Goal should be specific and measurable. In this case, I havemapped the whole PSSM activities by data flow modeling tool with proper input, output,controller and mechanism. Analysis includes CFT, supplier, DICV schedule and review ofbusiness documents as well as interviews with team members in various departments.Once all information has been gathered, I mapped whole activities in IDEF (integrationdefinition) model and compared with standard activities along with time schedule of DICVto find the gaps and impacts. Also analyzed the gaps impact in the form of time, cost andquality by survey. By the priority of gap impacts, generated the ideas by brainstormingexercise and evaluated each idea on the basis of cost, risk, return and effectiveness.Approximate 2 yrs remaining for SOP (start of production) and there are so manyactivities remaining and for these activities different depts. will be involved in differentlevel as RASIC form. So prepared the roles and responsibilities in the form of matrix toavoid any kind of ambiguity, and by this way company can save time, cost and also candeal with supplier in better manner. I did backward scheduling of all activities fromsupplier to all DICV depts.For next 2 yrs DICV & Supplier have mutually agreed project time line for frameassembly, which time schedule is created on the basis of most likely happening. Thereare some activities which are more critical as compared to other activities which cancreate over all delay in the project. For next 2 yrs I have prepared optimistic, most likelyand pessimistic schedule and performed risk analysis on the basis of PERT execution. Bythis analysis I was able to find probabilistic completion of critical tasksDICV, PSSM, 14th Jun 2010 Page 7 of 38

Sr. No. TABLE OF CONTENTS Page No.1 Company Background 91.1 Global Presence 91.2 Vision and Core Value 101.3 Key Financial Result 111.4 Position in India (commercial vehicle segment) 121.5 Department Description 121.6 Need and Significance of the Project 132 Project Overview 132.1 Objective 132.2 Scope of the Project 142.3 Methodology of Study 162.4 Proposed Implication of the study 173 Academic Scope 173.1 Management techniques / Methodologies 174.1 Introduction to IDEF approach 184.2 Standard PSSM activities flow 194.3 Frame assembly execution mapping 195 Gap Analysis 195.1 Survey Form 195.2 Data Collection and Analysis 245.3 Brainstorming exercise result 255.4 Screening, analysis of Ideas and final recommendation 276 DFD Method 286.1 Major activities flow in departments 286.2 Department activities analysis in details 306.3 RASIC Methodology 326.4 PSSM RASIC chart 346.5 Backward Scheduling 356.6 DICV activities related to supplier activities and responsibility matrix 357 Project schedule and risk analysis 357.1 PERT Analysis 367.2 Probabilistic completion time of critical activity 36Conclusion 3 8

Reference 39

1. BackgroundA. Company Profile

a) Bosch Group-

The Bosch Group is a leading global supplier of technology and services. It offers products in areas of Automotive Technology, Industrial Technology and Consumer goods & Building Technology. It was founded in 1886 in Germany as a “Workshop for Precision Mechanics and Electrical Engineering” by Robert Bosch. The BOSCH Group today is the largest automotive technology supplier in the world with presence across six continents. It has more than 350 subsidiaries, associated companies and 12000 service centers located in over 150 countries.

Ownership-Ninety-two percent of the shares in Robert Bosch GmbH are held by the charitable foundation Robert Bosch Stiftung.

Clients-

Partners-

b) Bosch Limited-Robert BOSCH India was founded in 1951.With more than 22,500 employees RBIN is the largest manufacturer of diesel fuel injection equipment, auto-electrical, hydraulic gear pumps fir tractor applications, electric power tools, packaging machines, Blaupunkt car multimedia systems and security systems.In India Bosch Group operates with following companies. Robert Bosch GnbH holds 71.8 stakes in Bosch Limited.

Robert Bosch Engineering and Business Solutions Ltd. Bosch Rexroth India Ltd. Bosch Chassis Systems India Ltd. Bosch Automotive Electronic India Pvt. Ltd. Bosch Electrical Drives India Ltd.

Bosch Limited has the following manufacturing facilities in India.

S. No. Plant Code

Presence Since

Location Products

1. BanP 1951 Bangalore Multi, Single Cylinder Fuel Injection Pumps, Common Rail Pumps, VE Pumps

2. NaP 1969 Nasik Nozzles & Injectors, Common Rail Injectors3. NhP 1989 Naganathapura Starter, Alternator, Spark Plug, Engine

Cooling Fan4. JaP 1999 Jaipur VE(Mechanical) Pumps for Domestic Mkt5. VraP 2007 Goa Packaging Machines

Ten Years Financials

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

10

20

30

40

50

60

70

Sales Trend

Years

Sa

les

(R

s. B

illio

n)

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

10

20

30

40

50

60

70

Sales Trend

Years

Sa

les

(R

s. B

illio

n)

2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

10000

20000

30000

40000

50000

Total Sales & Export TrendSales (Rs. Billion) of which Export Sales (Rs. Million)

Years

Sa

les

(R

s M

illio

n)

2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

2000400060008000

10000

Profit Before TaxPBT (Rs. Million)

Years

PA

T (

Rs

. Mill

ion

)

2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

1000200030004000500060007000

Profit After TaxPAT (Rs. Million)

Years

PA

T (

Rs

. Mill

ion

)

Europe59%

Amer-icas18%

*Asia Pacific23%

Market Segment as %Shares of Sales

Bosch Bangalore-

The Company was shifted to Bangalore on 16th November 1953 premature Bosch was in Chennai. A letter of intent for diversification into auto electrical was received in the year 1985 and approval for the import of capital goods was also obtained. Added a number of new machines both at the Bangalore and Nasik factories during 1987 under the modernization program. Also a fourth generation on-line computer facility was installed at the Bangalore factory. The Company was awarded the status of Trading House in the year 1988. The unit added A `Cold Start' facility enabling testing of engine at temperature as low as -20oc. The Centre was appointed as a Bosch Global Development Centre with the global responsibility for design and development of small single cylinder pumps for the entire Bosch Group. Bosch's centre had already developed a new type of single-cylinder pump for vehicular and stationary applications. During the year 1991 technical collaboration agreements were entered for the manufacture of fine horning machines and super finishing machines. In 1992, The Company introduced certain new items such as halogen bulbs, ignition cells, horns, voltage regulators, cluth plates and clutch cover assemblies for the automobile sector. A technical collaboration agreement was made with Witzig and Frank Turnatic GmbH for the mechanical machining systems. Another one agreement was entered with Robert Bosch GmbH, West Germany for the manufacture of bag form fill and sealing machines and also Bosch awarded the ISO 9001 certification by the Technischer Ueberwachungs-Verein, Germany. During the period 1994, two companies became the subsidiary of the Bosch Ltd, namely Motor Industries Software Services Ltd (MISSL) and Motor Industries Trading Ltd.

Vision of Bangalore Plant:Our aim is to sustain profitable growth & market leadership through innovation and continuous improvement.We strive to exceed the expectation of our customers through technology, quality, speed and provide cost effective global solution for manufacture of products.

Our associates and business partners participates in our endeavour and are motivated, informed, creative and open minded.In our efforts, we are guided by Bosch Values. Our commitment for environment protection and our responsibility to the society.

Mission of Bangalore Plant: How we work togetherBeQIK: Quality is our most valued asset

Innovation ensures business tomorrowCustomer orientation inspires customers and associatesGreater speed in everything we do

Be Better: We want continuous improvementWe want to be better than our competitors

Be Bosch: We offer outstanding products and servicesProfit secures the growth and long term survival of our company

Logo

TypePublic, GmbH (Gesellschaft mit beschränkter Haftung) (English: company with limited liability)

Public Limited

IndustryAutomotive, Automation, Major appliances, Packaging, Security

Automotive & Industrial Technology, Consumer Goods and Building Technology

Founded 15 November 1886 16 November 1953Founder Robert Bosch -Headquarters Gerlingen, Germany Bangalore, IndiaAreas Served Worldwide Asia, Africa, EuropeCompetitors Delphi, Johnson Controls, Denso,

BridgestoneDelphi, Denso, Siemens

ClientsKLUEH Security GmbH, Kuehne + Nagel (AG & Co.) KG, Toom BauMarkt GmbH

TATA Motors, Lombardini, Greaves, Kirloskar, TVS, M&M, Ashok Leyland, Bajaj, Force

Partners - -

Key People Franz Fehrenbach (Chairman) VK Viswanathan (MD)Products Automotive parts, Power tools,

Security systemsInline Pumps, PF Pumps, Common Rail Pumps

Revenue €47.3 billion (2010) 6630 Crores (2010)Employees 300,000 (2011) 22,500 (2011)Website www.bosch.com www.boschindia.com

Bosch Global Bosch India

Business Sectors-The three business sectors of Bosch are- Automotive Technology, Industrial Technology and Consumer Goods and Building Technology.

i) Automotive Technology Automotive Aftermarket Diesel Systems Gasoline Systems Diesel and Gasoline ECQ Systems Starter Motors and Generators

ii) Industrial Technology Special Purpose Machines Packaging Technology

iii) Consumer Goods and Building Technology Power Tools Security Systems

Automotive Tech-nology

59%

Industrial Technology14%

*Consumer Goods and Building Technology

27%

Business Divisions as %Shares of Sales

Diesel Systems-

Bosch in India is committed to develop diesel fuel injection products and provide services to meet the stringent emission norms of the future. For instance, Bosch’s in-line fuel injection pumps could cater the full spectrum of diesel systems till BS-II. They

are used in arrange of engines starting from small fixed installations to large earth movers. By increasing pressure capability, improving timing control along with combustion optimization, the in-line pump is able to meet the next level of emission norms of BS-III in major part of country, thereby reducing CO emission by 50%.With the proposed introduction of BS-IV in 13 cities across India, requirement of reduced emissions are quieter engines are making greater demand on the engine and the fuel-injection systems. These demands can be met by common rail fuel injection system that delivers fuel at a high pressure, precise quantity, precise timing and split into multiple injections. Moreover, electronic control in the common rail diesel fuel injection system increases flexibility making the system less polluting, more fuel efficient & capable of meeting future emission norms.

B. Need and the Significance of the Project Work-Major products procured by the Bosch India are steels, castings, forgings, turned and machined parts, sintered components, fasteners, springs, bearings, assemblies, sub-assemblies, packing materials, logistic services and capital goods. To cover the full spectrum of Diesel Systems Bosch is committed to develop diesel fuel injection products that deliver the fuel at high pressure, with precise quantity & at precise timing; also their commitment is to provide services to meet the stringent emission norms of future. MICO Bosch purchasing department has to procure the materials from world class suppliers who can supply the goods at best prices. To ensure the adherence to procuring the world class product at an affordable price is a challenge. For the procurement of goods and services Bosch need strong innovative suppliers with whom they can interact in an open, fair and long term working relationship.Thus, Bosch, in the endeavor to sustain their market leadership, thinks that their business partners form a significant part of their journey. Their strategy is to expose business partners to world class manufacturing practices and make them best in their class. They actively support their suppliers in continuously improving their expertise and respect them as independent businesses.

2. Problem Definition

A. Objective- Bosch uses Indian office as an outsourcing destination for diesel fuel injection equipment and pumps. Therefore, it has to meet the international standards set for engineering products in different countries. The project, “Development of Suppliers through Lean principles” target improvement in quality, cost, & delivery. Under this project we have chosen an A-rated supplier, rated by Bosch itself, to bring out a culture change in its manufacturing system that matches with the vision of Bosch Limited and perfectly aligned with the goal of Bosch Production System and thereby

improving the effectiveness of the plant, equipment, process through the empowerment of the people.

B. Scope- In the context of an increasing globalization of markets and of the company they consciously embrace their social responsibility. Company’s approach to purchasing and logistics is based on the UN basic principles of the Global Compact with regard to respect for human rights, working conditions, environment and strong action against corruption.The Purchasing and Logistics Guidelines form the framework for all purchasing and logistics activities are applied with the aim of balancing the fulfillment of quality, cost and supply targets (QKL). Bosch worldwide is driven by a unique philosophy of BeQIK. This represents Bosch Group's commitment towards Best Quality, Innovation, Customer Satisfaction and Continuous Improvement.The project, “Development of Suppliers through Lean principles” typically spread over a period of 6 months to 3 years. Among more than 350 suppliers Bosch had chosen around 178 potential suppliers. Out of those potential suppliers they had filtered 42 key suppliers and finally they select 7 preferred suppliers under the SDT projects to implement BPS. Under all these activities we have chosen M/s Neri, an A-Rated supplier by Bosch, to implement the TPM concepts on a bottleneck machine. It is engaged in manufacturing of ----------- component used in the assembly of VE Pump.

C. Methodology-

To accomplish that challenge the company has set the following guidelines. Customer Satisfaction Quality ( Zero defect) Supplier Development (training and development) Fairness and Openness International Activities Systems Network Market and Products Environmental Responsibility Continuous Improvement Associate Development

As Bosch India procures large assortments it felt the need of dividing the purchasing department into two divisions. They are corporate logistics and purchase (CLP) and plant logistics and purchase (PLP). Corporate logistics and purchase division sources raw materials, standard components, trade goods and capital goods. They also ensure proper logistics contracts and customs clearance. The plant purchase department is responsible for plant specific parts, machined components, mechanical subassemblies and capital goods.

Any company that wishes to become supply chain member of Bosch India should fulfill following criteria:

1. All suppliers should be QS 9000 certified manufacturers.2. The supplier should get A rating from the company. The rating methodology is given below

S. No. Audit Score Ranking Meaning1. 90 to 100 A Full Compliance2. 80 to less than 90 AB Mainly Complaint3. 60 to less than 80 B Conditionally Complaint4. Less than 60 C Not Complaint

• Cost of “select suppliers and develop/maintain contracts” process per $1,000 revenue

• Number of employees per $1,000 of purchases• Percentage of purchase orders approved electronically• Average time to place a purchase order• Total number of active vendors per $1,000 of purchases• Percentage of value of purchased material that is supplier

certified

Supplier Relationship Process

Restriction of range of analysis; concentration on type A

3. Academic Scope

A. Management Techniques / Methodologies Likely to be Used-

Value Stream Mapping, Value Stream Design, Vision, System CIP, 5S, Visual Management, TPM, Poka Yoke, Leveling, Response System, Point CIP, Flow Oriented Layout, FIFO, Cellular Manufacturing, Standardized Work, MOST, MTM, SMED, Consumption Control, Capacity Planning, System CIP, Point CIP

B. Functional Areas/Subjects Expected to be spanned by Project Assignment

1. System Efficiency and Improvement Techniques

2. Work System Design-I & II3. Industrial Engineering 4. Ergonomics5. Materials Management

6. Operation Planning & Control7. Operation Research-I8. Supply Chain Management9. Service Management &

Manufacturing System

4. Work Plan

Product Family Selection

Drawing of Actual State

Drawing of Target State

Implementation

Understanding how the plant currently works

Draft a common vision for an improved, customer oriented flow of materials & information

Devising & implementing measures, inclusion in policy deployment, regular PDCA Cycle

A. Identify the Distinguishable Stages / Milestones

Preparation

Stabilization

Optimization (TPT,

Inventory)

VSD / VSM

Vision, Metric

CIP

Production Leveling

Process Stabilization, Visualization

Flow

Lot Size Production

Full Production

Value Stream Design, Key Figures, Vision, System CIP Visual Management,

TPM, Poka Yoke, 5S, Leveling, Response System, Point CIP

Flow Oriented Layout, Standard Work, SMED, Consumption Control, System CIP, Point CIP

Training

Goal AgreementGoal Agreement

TPM

Fo

cuse

d

Imp

rove

men

t

Au

ton

om

ou

s M

ain

ten

ance

Pre

ven

tive

M

ain

ten

ance

TP

M E

nab

led

M

AE

Des

ign

Cleanliness Order Discipline Team Work and Continuous Improvement