Business buying model : Bosch India case study

Business buying model:  Bosch India.

© Prasad Kulkarni, Faculty, 

This case let is prepared in 2008 and updated in 2019.
Introduction to MICO Bosch.

MICO- Bosch is the subsidiary of one of the world’s largest private industrial company Bosch Germany. Motor Industries Company Limited(MICO) founded in the year 1951  and later acquired by Bosch Germany(ibef.org, 2019). The company manufacturers its products from Bengaluru, Naganathpura, Nasik, and Jaipur

It is the largest manufacturer of diesel fuel injection equipment. The company operates in three major segments. They are automotive technology, consumer goods and building technology and industrial technology. 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.  To ensure the adherence to international standards company should have best procurement system in place. 
Key success factors of MICO- Bosch 
 Mico- Bosch success today  is largely due to the adoption of technology. Further, new heights Mico Bosch has reached because of support of the parent company.Added to this, the company has spent considerable amount on research and development. Today, MICO spends 2-3% of total revenue on Research and Development(ibef.org, 2019). Apart from this, the company has diversified into car service business to boost their revenues.
MICO Bosch as the exporter:
 MICO Bosch emerged as the sourcing hub for the parent company. The Mono Block pumps manufactured at Czech republic, Multi cylinder pumps manufactured at Austria, Injectors and Nozzle from France, and regulators from cardiff plant shifted to Manufacture from India and MICO Bosch emerged as the sourcing hub for the parent company.

 Purchasing

 Mico Bosch purchasing department procures the materials from world class suppliers who can supply the goods at best prices. To obtain the required quality and efficiency Bosch always looks for the long term relationship with their suppliers. 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.
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

Procuring the world class product at an affordable price is a challenge. To accomplish that challenge the company has set the following guidelines.

Ø  Customer Satisfaction

Ø  Quality ( Zero defect)

Ø  Supplier Development (training and development)

Ø  Fairness and Openness

Ø  International Activities

Ø  Systems Network

Ø  Market and Products

Ø  Environmental Responsibility

Ø  Continuous Improvement

Ø  Associate Development

As Bosch India procures large assortments it felt the need of dividing the purchasing deprtment 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 sub assemblies 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

Audit score %	Ranking	Meaning
90 to 100	A	Full compliance
80 to less than 90	AB	Mainly compliant
60 to less than 80	B	Conditionally compliant
Less than 60	C	Not compliant

Discussion Questions:

1. ‘Guidelines of BOSCH purchasing can be used as vendor rating parameter’ Do you agree with the statement? Comment.

2. Discuss the advantages of dividing the purchasing department.
References:
1.

(2019). Ibef.org. Retrieved 25 October 2019, from https://www.ibef.org/download/MICO.pdf