CONTINUOUS INTERNAL ASSESSMENT I

LEAN OPERATIONS MANAGEMENT (MBA 343L)

Study on Lean Manufacturing System and identification of its importance for

better productivity and profitability.

Submitted By
SANGEETH V MATHEWS

Register Number
2327747

Under the Guidance of

PROF. DR. SREERENGAN V R

SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST UNIVERSITY, BANGALORE

FEBRUARY 2024
 INDEX

SL.NO CONTENT PAGE NO.

1 INTRODUCTION 1

2 LEAN METHODOLGY AND PRINCIPLES 2-3

3 APPLICATION OF LEAN METHODOLOGY IN BOSCH 4

4 LEAN PRINCIPLES USED IN BOSCH 4-6

5 LEAN TOOLS USED IN BOSCH 6-8

6 CONCLUSION 8
 INTRODUCTION

Bosch, headquartered in Germany, stands as a global engineering and technology conglomerate

founded in 1886. Evolving into the world's largest technology company, Bosch is renowned
for its international provision of goods and services across consumer products, industrial
technology, energy and building technology, and mobility solutions. Notably, Bosch houses its
largest development centre outside Germany in India, dedicated to formulating comprehensive
engineering and technological solutions. The mobility sector constitutes nearly 60% of the
company's overall revenue.
Operating across more than 60 countries, Bosch boasts a workforce exceeding 400,000
individuals. Recognized for its innovation and proficiency across diverse industries, Bosch
commits substantial resources to research and development, fostering inventive technologies
and solutions for various sectors. In the fiscal year 2021, the company reported a revenue of
€71.5 billion.

Bosch embarked on its lean implementation journey as a strategic response to the imperative
for continuous improvement in a fiercely competitive global market. Introducing the 'Bosch
Production System' as part of this initiative, the company adopted lean tools such as value
stream mapping, Kanban, and just-in-time production, all aimed at fostering continuous
enhancement and minimizing waste. Bosch has realized substantial advancements in
productivity, quality, and customer satisfaction through the successful execution of its lean
initiatives.

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 LEAN METHODOLGY AND PRINCIPLES
Lean thinking is a management framework that consists of a theory, techniques, and principles
with the goal of assisting practitioners in enhancing productivity and product quality. Lean
thinking encourages participation across all levels of the organization. At its core, lean
methodology is based on the principles of continuous improvement and delivering value to
customers. It involves identifying and eliminating activities that do not add value, reducing
waste and focusing on the most important tasks.

The five key lean principles;

1. Value: The value is defined by the customer demand and also the timeline of
manufacturing and delivery.
2. Value Stream: Identifying the steps involved in developed a product from raw materials
to the final product.
3. Flow: This helps to eliminate the bottleneck to make sure the steps flow smoothly.
4. Pull: Delivering out the product when there is a demand from the market so that
inventory can be better managed and stocks will not pile up.
5. Perfection: The strive for perfection comes from the concept of continuous
improvement. This helps to follow the above-mentioned points on a regular basis to
reduce or minimize defects.

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Some of the key tools and practices used in lean methodology include value stream mapping,
5S methodology, Just in Time (JIT), Kaizen etc. These tools help to identify the opportunities
for improvement and bring in efficient process. In general, Lean management is a long-term
strategy that emphasizes constant improvement with the goal of improving productivity and
quality.

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 APPLICATION OF LEAN METHODOLOGY IN BOSCH

Throughout its history, Bosch encountered challenges stemming from the industrial revolution,
grappling with issues such as heightened inventory, non-standardized workflows, and safety
concerns. These challenges prompted the company's founder and subsequent leaders to adopt
cutting-edge production methods. An integral objective behind Bosch's incorporation of lean
concepts was the eradication of waste, aiming to enhance efficiency, reduce costs, and
ultimately improve profitability (Siegel, C. 2019).

Before embracing lean tools, Bosch faced several key challenges:

1. Waste: The production process at Bosch witnessed substantial waste, including

overproduction, excess inventory, defects, and waiting time.

2. Inefficiencies: Inefficient workflows, marked by ineffective time, space, and resource

utilization, resulted in bottlenecks and production delays.

3. Quality Issues: Struggling with quality problems such as defects, rework, and customer
complaints posed significant challenges for the company.

4. Safety and Environmental Concerns: Bosch grappled with safety issues like
workplace injuries and environmental hazards, primarily attributed to ineffective safety
protocols and environmental policies.

5. Competition: Escalating competition exerted pressure on Bosch to transition to a more

efficient system to maintain competitiveness in the market.

To address these challenges, as well as related issues like lead time, enhanced flexibility,
increased employee engagement, and customer satisfaction, Bosch initiated its exploration of
lean methodologies by 1970.

LEAN PRINCIPLES USED IN BOSCH:

Bosch has actively applied lean principles across its diverse business units, spanning automotive
technology, power tools, and household appliances, for an extended period. In a significant
move towards enhancing operational efficiency in 2015, Bosch launched a major initiative,
underscoring a dedicated emphasis on lean principles and tools. As an integral component of
this initiative, Bosch inaugurated the Global Lean Academy. This academy serves the purpose
of training employees in lean principles and tools, fostering a culture of continuous
improvement, and facilitating the dissemination of best practices throughout the organization.

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Bosch Production System (BPS):

In all of its locations around the globe in 150 countries, the BOSCH Group has adopted a
distinctive production system known as BPS. There are eight BPS components, which are
represented in figure below.

(Source: ram Bavuluri, S, 2012)

The BOSCH Production System (BPS) places a primary emphasis on achieving perfect quality
and reducing waste. In alignment with BPS principles, Bosch identifies seven types of waste,
encompassing transportation, inventory, waiting time, motion, overproduction, overprocessing,
and defects.

1. Continuous Flow: Bosch adopted a U-shaped work cell to interconnect sub-processes,

effectively reducing non-value-added movements, work in process, and inventory. This
strategic implementation enhances the flow of production processes.

2. Pull System: Introducing a Pull System aligned with customer demand rather than
relying on forecasts or estimates, Bosch coordinates processes across different
departments. This ensures that components produced by one department align with the
needs of another department, streamlining the production of finished products. The
integration of lean principles and technology, including kanban systems and real-time
inventory tracking, facilitates the smooth operation of the Pull System.

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 3. Standardization: To achieve and maintain perfect quality, Bosch employs
standardization in refining and preserving processes. This involves implementing
adjustments to processes and ensuring that all associates are educated about these
changes. The company places a significant focus on standardizing various components
and aims to make operator manuals easily accessible on machines for enhanced service
convenience.

4. Waste Reduction and Continuous Improvement (CIP): This entails undertaking

actions to eliminate the seven types of waste identified in the BOSCH Production
System (BPS), with the ultimate goal of achieving continuous process improvement.
By systematically addressing and reducing these wastes, Bosch aims to enhance
operational efficiency and foster an environment of ongoing improvement in its
production processes.

LEAN TOOLS USED IN BOSCH:

Bosch has strategically employed various lean tools and techniques across its diverse business
sectors to enhance productivity and bolster profitability. Some of the fundamental techniques
include:

1. Just In Time Production (JIT) -Kanban System

• Bosch has integrated Just In Time (JIT) production into its manufacturing processes to
minimize inventory and reduce waste.

• By producing items precisely when and in the quantity required, Bosch has effectively
slashed lead times and inventory costs.

• The implementation of the Kanban system, inspired by the Toyota system in the early
1970s, aimed at diminishing inventory levels. This system, termed "Controlled
Flexible Manufacturing" by Bosch, ensured that each product was ready for delivery
to the subsequent stage at any point in the supply chain.

• The Kanban system facilitated a reduction in lot sizes and contributed to a smoother
production flow, leading to decreased work in progress (WIP) and finished goods
inventories.

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2. Value Stream Mapping (VSM)
• Bosch has leveraged value stream mapping to pinpoint inefficiencies and waste within
its manufacturing processes.

• Analyzing the value stream has enabled Bosch to diminish idle time and the
movement of workers caused by accumulated materials.

• This approach has led to a reduction in lead times, an increase in throughput and
quality, ultimately enhancing overall productivity and profitability.

3. Total Productive Maintenance (TPM)

• Grounded in the principle that every member of the organization is responsible for
maintaining and improving equipment efficiency, Bosch has implemented Total
Productive Maintenance (TPM).
• This implementation aims to enhance equipment reliability and reduce downtime,
resulting in improved equipment uptime, decreased maintenance costs, and heightened
productivity and profitability.

4. Kaizen
• Bosch has effectively embraced Kaizen as an ongoing improvement process to
enhance process efficiency.
• The company employs a method to identify areas of improvement, provides training to
employees on Kaizen principles, engages employees in implementation, and monitors
these activities.
• For instance, an accessible blank card allows every employee to outline areas for
improvement. Managers then analyze these suggestions, fostering a continuous cycle
of improvement throughout the organization.

(Source: Ram Bavuluri, S, 2012)

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 5. 5S Methodology
• The 5S methodology serves as a lean tool employed by Bosch to establish an
organized and productive workspace.
• The five 'S' principles consist of Sort, Set in order, Shine, Standardize, and Sustain.
• Bosch implemented the 5S system by incorporating a cleaning board and card system.
• This approach has proven effective in reducing setup times, consequently contributing
to improved overall quality within the workspace.

CONCLUSION

Struggling from a period of inconsistent work culture, the implementation of lean methodology
helped Bosch to pursue the higher objective of zero-defect production along with 100 percent
delivery fulfilment. This allowed the company to stand out in the market amongst its
competitors.

Significant progress was made in terms of production and profitability. For instance, Bosch
was able to reduce the lead time by almost 90%. Hence, applying lean methodology helps
identify the significant process that hinders productivity and the right tool that results in
continuous improvement and a positive work culture.

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 REFERENCES
i. Anand, A. S., Chandrashekar, R., & Chander, P. (2013). Design and implementation of
lean line concept in pe-pump assembly line. SASTech-Technical Journal of RUAS,
12(2), 21-26.
ii. Domingo, R., Alvarez, R., Melodía Peña, M., & Calvo, R. (2007). Materials flow
improvement in a lean assembly line: a case study. Assembly automation, 27(2),
141147.
iii. Ram Bavuluri, S. (2012). Set up time Reduction and Quality Improvement on the Shop
floor using different lean and quality tools.
iv. Salgado, P., & Varela, L. R. (2010). Cellular manufacturing with Kanbans optimization
in Bosch production system. Roman Rev Precis Mech Opt Mechatron, 37(20), 147-158.
v. Siegel, C. (2019) From production line to data flow, Bosch . Available at:
https://www.bosch.com/stories/from-production-line-to-data-flow/ (Accessed: March
18, 2023).