Project on Bosch India

Ujjawal Raj
Sanjana Cawla
Rahul Garg
Avitanshi Shrivastava
Sitanshu Kumar Mishra
 Automotive after market purchase process Description at BOSCH INDIA

Title: S.1.2 Procurement Raw Materials (EZRS)

Process owner: BOSCH Limited

Supported by AA/PUR-IN

Subject matter, objective and purpose:

This AA Process Description explains the Procurement of raw materials within AA. The procedure refers to BOSCH OMP Guidelines Procurement
process for purchased products and is the sole owner of the Procurement Management.

All the process mentioned is specific to BOSCH business requirements and have been tailored to meet the BOSCH global
guidelines.

Requirement / Input: Results / Output:

- Market/Customer requirements - Fulfilling Market/Customer requirements
- Global market development e.g. for raw material, - Availability of e.g. competitive
availability, ...
- Fulfilling BU/MF Strategy & Planning
- Material field Strategy & Planning
- Fulfilling Purchasing targets
- Purchasing targets
- RB Regulations and Standards compliance
- RB Regulations and Standards
- Applicable Laws and Standards - Applicable Laws and Standards compliance
1. Scope
Target is to define the minimum requirements for a standardized, systematic procedure to implement new
parts cost efficient, in time, in required quality and under the Corporate Social Responsibility. During the
serial production the process ensures the required level of quality, cost reduction and continuous strategy
planning.
During the product development phase [ 17] (PEP) of a new product the PUR role has to be actively
involved from the beginning of the innovation phase (according to RASIC in PEP) and should integrate
itself in all the phases of development. The start and end date of the different process steps within the PEP
can differ for each BU.
This process description describes the tasks and responsibilities for Procurement of raw materials and is at
this stage applicable for traded goods as mentioned below:
• AA Lubricant
• AA-BC (Brake Components)
• AA- Lighting
• AA-SP (Spark Plugs)
2. Process Description

2.1 Activities/RASIC

Sequence and Roles before SOP see Proj Prod Dev Prod Logi Purc Purc Qual
chapter ect uct elop uctiostics hasi hasi ity
Man Man ment n functng ng Man
R Responsible A Approval S Support (on demand) age age functfunc ion func Qual age
I Information C Cooperation ment ment ion tion tion ity ment
func funct Mg funct
tions ion mt. ion
funct
ion

Input Process Activities Output

Requirement Result

• Agreed strategy with PUR

• Market/Customer requirements 3.2 C A C C R C C
Material Field Strategy & Planning management and responsible
Analog to S1-AA-070 chapter 3.2 buyers

• Ideas and concepts from marketing • Pre study

Innovation Management 3.3 C C C C C R C C
and/or customer • Concept study
• Start of concept
• Start of design

• Project agreement • Released parts from external

• Customer/Market demand supplier
• Product Roadmap Procurement Project prior to SOP • Released external supplier 3.4 C C C S C R C C

• Customer/market requirement • Defined and contracted

specification supplier-base
• Maintained data in ERP
system
• Procurement ready to be done
by series responsible

Supplier and Plant approval • Released supplier 3.5 I C I I C R C

• Market/customer requirements (Defined template)
• Requirements/specifications for
• Failure free part/product 3.6 I C S C C R S
part/product Define and conduct Incoming
Inspection (defined template)

• Enabled supplier ready for SOP 3.7 I C C C C R S

• New or existing Supplier with Supplier Enabling Projects with
improvement potential (Q-C-D) Supplier (Defined template)
 Sequence and Roles after SOP see Proj Prod Dev Prod Logi Purc Purc Qual
chapter ect uct elop uctiostics hasi hasi ity
Man Man ment n functng ng Man
R Responsible A Approval S Support (on demand) age age functfunc ion func Qual age
I Information C Cooperation ment ment ion tion tion ity ment
func funct Mg funct
tions ion mt. ion
funct
ion

Input Process Activities Output

Requirement Result
Supplier Assessment and Scouting

• Supplier performance record • Supplier performance improved 3.8 I C C R C S

• Quality complaint record Complaint Management • Avoidance repeated failures 3.9 I C C R S

(prevention)

• Q-CK-L performance with existing

Supplier Development • Holistic Q-C-D improvement 3.10 C C S S C C R S
supplier

• Released parts from external • Changed data in ERP system

Procurement Project due to Changes
supplier • Released ISIR to external 3.11 C C C S C R C C
• Released external supplier after SOP
Supplier
• Defined and contracted supplier-
base
• Maintained data in ERP system

• Maintained data in ERP system • Achieving of targets planned

• Supplier Strategy
• Material Group Strategy
• Demand structure (yearly
updated in business plan)
• New make or buy decisions
• Relocation
in business plan regarding Q-
C-D
• Improved supplier pyramid
Procurement Management after SOP 3.12 I I C C C R C C
• Achieving of additional
targets (e.g. from BU, plant,
department)
• Relocated production

• Change of material status C/

• Parts not longer required (triggered Phase out Management Not described
from marketing/sales)
(e.g. status 50 in ERP) 3.13 I I I R
yet • No prolongation of contracts R*

*LOG defines end of life together with related departments

Explanation of flow chart shapes:
Mandatory activity Activities can be carried out parallel

Not mandatory activity Only one of the paths can be taken

 2.8.3 Implementation phase
Implementation of the change for the realization of the commercial
potentials.
The mentioned tools
are not mandatory
RASIC
Mentioned activities don’t have to be executed in chronological order
No. Implementation phase Tools Attachm ents PUR PUE* PUQ ENG LOG Mark MOE
/ Links Funct (if Funct Funct eting
ion availa ion/ ion /
ble) Sales

3.11.5_ act.1 Basically all activities from CD00404 [21] section 4.1.6 for implementation of ECO. R

Apply ECR project relevant “Procurement Projects Prior to SOP” Process elements:
Chapt. 3.4.5 Components and Process Release:
RASIC according to chapt. 3.4.5
• 3.4.5 act.4
3.11.5_ act.2 Component and process release and
Chapt. 3.4.6 Ramp up phase:
• 3.4.6 act.1 3.4.6 Ramp up phase
• 3.4.6_act.2
• 3.4.6_act.3

Document exchange according to “Document Exchange” in Procure Management after

3.11.5_ act.3 R S S
SOP

*If PUE function is not available the tasks will be taken over by PUR
2.9 Procure Management after SOP
This activity explains the Procurement Management after SOP for EZRS materials within AA. The
procedure refers to BOSCH Guidelines. The procedure is structured in 4 phases:

3.12.1 Market Evaluation and Scouting 3.12.2 Capacity Planning

Input: Start Input:
Demand structure Demand structure

Evaluate relevant Define monitored

EZRS: EZRS:
Acc. material field increases or
strategy (chapter 3.2) decreases of demand
Additional supplier Check supplier
needed: capacity:
Due to benchmarking e.g. tooling,
of supplier pyramid, machinery
special technical
requirements, target
price is not achieved,
Jump to market
evaluation and
scouting:
Conduct market
scouting: Possible trigger for
Market Evaluation
via e.g. GENESIS,
Adjust capacity with
APIS
suppliers:
Compare bids:
With all affected
With COQ acc. to BU’s/plants using
TCO same source

Output:

Measures to assure
capacity for required
demand

3.12.3 Price Negotiations 3.12.4 Document Exchange

Input: Input:

a Market evaluation, a Triggers are e.g. ECR

business plan release, initial release, on
demand
 Creation of market transparency as a basis for achieving purchasing targets and to avoid single sourcing.
Results can be used for negotiation phase.
The mentioned tools are
Mentioned activities don’t have to be executed in chronological order
RASIC
not mandatory
 No. Market Evaluation & Scouting Tools Attachme ntsPUR PUE* PUQ LOG MFC
/ Links Funct (if Funct (if
ion availa ion availa
ble) ble)

Best
Select relevant EZRS for market evaluation. practice:
PUR-MCR
3.12.1_ act.1 Relocation R S
Take over task for production relocation out of project or management decision. PUR-PL
tracking
file

Supplier
Scan supplier pyramid (acc. to chapter 3.8.5 „Define & Maintain Supplier Pyramid“ in pyramid
3.12.1_ act.2 R
S1-AA-070) and scout market according to material field strategy (see chapter 3.2).
SRM

Market scouting, if additional suppliers needed (e.g. benchmarking of supplier pyramid, GENSIS
3.12.1_ act.3 CP/PSG2 R C
special technical requirements, target price is not achieved, ...). APIS

3.12.1_ act.4 Conduct market evaluation in order to define the supplier which will be inquired. R S S

3.12.1_ act.5 Parts portfolio inquiry to chosen suppliers. SupplyOn R

3.12.1_ act.6 Bid comparison (COQ) according to TCO. TCO R S

TLG
3.12.1_ act.7 Plausibility check of market prices (e.g. shadow calculation, TLG). R S S
SPECTRA

3.12.1_ act.8 Decision on further proceedings (e.g. RPP, supplier change, supplier release, etc). R C C S

*If PUE function is not available the tasks will be taken over by PUR

2.9.2 Capacity planning (series production)

Assurance of necessary capacity at supplier, not applicable for project business.
The mentioned tools are
Mentioned activities don’t have to be executed in chronological order
RASIC
not mandatory
 No. Capacity planning (series production) Tools Attachme nts /PUR PUQ LOG MFC
Links Functi Functi (if
on on availa
ble)

3.12.2_ Define scope of monitored EZRS (e.g. significant increases or decreases of demand out of PUR
R S C C
act.1 technical changes, customer demand, ...). TOMAS

3.12.2_
Check of supplier capacity for monitored EZRS (e.g. tooling, machinery, .). TOMAS R
act.2

3.12.2_
Checking inputs of supplier regarding capacity bottleneck. R C
act.3

3.12.2_
Comparison of required demand and supplier capacity. TOMAS R C
act.4

3.12.2_ Coordination of capacity adjustment with suppliers (including agreement of measures,

R S C
act.5 contract negotiations).

2.9.3 Conduct Annual Price Negotiations and other price negotiations after SOP
Ensuring achievement of material cost targets and contractual assurance of delivery obligation.
The mentioned tools are
Mentioned activities don’t have to be executed in chronological order not mandatory
No. Conduct Annual Price Negotiations and other price negotiations after SOP Tools Attachme ntsPUR PUQ LOG MFC
/ Links Func Func (if
tion tion avail
able)

Definition of negotiation strategy including frequency (annual or multi-year contract)

Neg05-
3.12.3_ act.1 and design (bi-lateral or multi-lateral). Strategy can also be not to negotiate in order to R S
Training
avoid price increase.

3.12.3_ act.2 Conduct and evaluate pricing inquiry according to strategy (chapter 3.2). MERLIN R

SPECTRA
ADVANT
Preparation for price negotiations (strategy, mandate, goals, placement method, design, NEG_Statu s
AGE
3.12.3_ act.3 scenarios, time frame, etc.) including coordination with other affected plants/units using (AA- R
same source (e.g. IBT, CP/MAC, etc). Purchasing PUC)
negotiation
sheet

ADVANT
AGE
3.12.3_ act.4 Conducting price negotiations (e.g. multi-stage, escalation). R
Neg05-
Training
 NEG_Statu s
Meeting-
(AA-
**3.12.3_ Minutes
Documentation of price negotiations PUC) R
act.5 Draft of
contract

3.12.3_ act.6 Obtain approval of negotiation result from manager R

MERLIN
3.12.3_ act.7 Finalize price agreement including signature of both sides Contracts are signed R
according to AA/PU Signature regulations [6] for binding correspondence with suppliers ERP
of direct material. AA-AS signature regulations defined in RPDA [27].

MERLIN
3.12.3_ act.8 Update relevant data in ERP systems R
ERP

3.12.3_ act.9 Communicate results to affected organization units MERLIN R I

2.9.4 Document Exchange

Assure the current part status in each case through (automated) exchange of the necessary technical
documents between RB and suppliers.
The mentioned tools are
Mentioned activities don’t have to be executed in chronological order not mandatory
No. Document Exchange Tools Attachmen ts / PUR PUE* PUQ ENG LOG MFC
Links Funct (if Funct Funct (if
ion availa ion/ ion availa
ble) ble)

3.12.4_ act.1 Check input for exchangeability (e.g. drawing, BOM, etc.) R S C

3.12.4_ act.2 Retrieve documents to be exchanged ERP R

3.12.4_ act.3 Create document exchange package DEX R

SupplyO
3.12.4_ act.4 Send exchange package to suppliers R
n

3.12.4_ act.5 Track and get supplier confirmation R

ERP
3.12.4_ act.6 Store confirmation, information SupplyO R
N

3.12.4_ act.7 Give status information to internal organization, if requested R I I I I