Business Daily from THE HINDU group of publications
Saturday, Aug 12, 2006
Business Daily from THE HINDU group of publications Saturday, Aug 12, 2006 |
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Corporate
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Outlook Bosch turns to Toyota system for logistics K. Giriprakash
Steamlining Bosch expects to reduce stocks by as much as 30 to 50 per cent because of following the Toyota Production System. The company is gradually trying to outsource manufacture of more components to raise the level of localisation in common rail systems.
Bangalore , Aug. 11 With Rs 1,800 crore riding on Bosch's plant in India that includes the prestigious common rail systems' project, the auto parts' maker has turned to Toyota to streamline its logistics and production system. "We are using the Toyota Production System to reduce inventory levels as well as do away with warehousing," Mico-Bosch's Joint Managing Director, Dr Ferdinand Allerkemp, told Business Line. He said Bosch expects to reduce stocks by as much as 30 to 50 per cent because of following the Toyota Production System. Toyota Production System involves reduction of cost and inventory, the `just-in-time' concept and use of lean manufacturing system. Toyota was able to use the system successfully to become one of the top three car companies in the world. Dr Allerkemp said Mico has customised the Toyota Production System at the Bangalore plant according to the needs of the company. "With such a big project, we needed to find a system, which would help us to reduce costs and also efficiently manage logistics," he said. The adoption of the new system will help Mico to release more working capital towards increasing capacities as well as increasing manpower. "We want to take this system to other plants of our company as well," he said. Mico's General Manager for commercial plant management, Mr Subhash Lovekar, said the company was also in the process of implementing SAP's enterprise resource planning (ERP) system in its plants. "We should be able to roll out SAP in a few months' time," he said. "We are bringing down the inventory levels from several days to a few days. Our target would be to bring it down to a few hours," he added.
To outsource parts making
Dr Allerkemp said one of the major benefits of implementing the Toyota Production System would be reduction in the price of common rail system, which would in turn help vehicle manufacturers to reduce the price of their products. He said the company is gradually trying to outsource manufacture of more components to raise the level of localisation in common rail systems. "We expect the depth of manufacture to reduce gradually through outsourcing and confine our work to core technology," he said. Bosch has already announced an investment of Rs 1,800 crore in India between 2005 and 2008, of which Rs 550 crore has been earmarked for the establishment and expansion of common rail system production in Nashik and Bangalore. The new production line in Bangalore has an initial installed capacity of up to 1,000 common rail high-pressure pumps per day.
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