Supply Chain Management: Analysis of Bosch's Distribution Systems

This report provides a comprehensive analysis of the supply chain issues faced by Bosch, a major global company. It begins with an executive summary and an introduction to supply chain management, emphasizing its importance in modern business operations. The report identifies specific challenges Bosch encounters, such as production problems, technological implementation, customer expectations, fuel costs, inflation, skilled labor shortages, government regulations, and environmental issues. To address these challenges, the report proposes an optimal supply chain design based on lean manufacturing principles, including warehousing and transportation strategies. It details the implementation plan, emphasizing strategic alliances with partners and defining key drivers for supply chain success, such as financial value and customer service. The report further analyzes the financial impacts of various supply chain options and concludes with proposed inventory control policies to optimize performance, ensuring efficiency and responsiveness in Bosch's supply chain operations.

RUNNING HEAD: Supply and distribution systems 0
Bosch
Supply and distribution systems

Supply and distribution systems 1
Executive summary
The logistics is a part of the supply chain management and deals with the management of the
goods in an efficient manner. Whereas the supply chain management is a broad term and
comprises connection right from suppliers to the end consumers. The improvement in
technology has brought a lot of changes in the modern supply chain management. It is also
evolved as an improvement over the logistics management. It is related to the development of
the new products, marketing and in the delivery of the products to the customers.
The supply chain management controls the flow of goods and services and involves inventory
and warehousing operations. It pertains to design, planning, execution, evaluation and review
of the supply chain activities with the aim of value creation and competitive advantage. This
report defines supply chain issues faced by the Bosch Germany. The optimal supply chain is
designed in order to meet organizational strategies. Further, the implementation plan is
proposed for the supply chain comprising alliances and the agreements with the partners. The
financial impact of the supply chain options is analyzed. Finally, the inventory control
policies are proposed to optimize performance.

Supply and distribution systems 2
Contents
Executive summary...............................................................................................................................1
Introduction...........................................................................................................................................3
Supply chain issues to develop a proposal for a supply chain................................................................3
Optimal supply chain.............................................................................................................................4
Implementation plan for the supply chain design..................................................................................6
Analysis of the financial impact of the supply chain options.................................................................7
Inventory control policies to optimise performance...............................................................................8
Conclusion.............................................................................................................................................9
References...........................................................................................................................................10

Supply and distribution systems 3
Introduction
A supply chain represents the core standard of the performance. A well-built supply chain
supports expansion, drives customer experience and reduces operational costs. It considers
order processing, outbound schedules, receiving procedures and reverse logistics. It focuses
on the outcomes and external standards. The supply chain management is basically the
process of managing the flow of products from point of origin to the final consumption by the
consumers. This process comprises the marketing, transportation and warehousing channels.
It plays a significant role in the sustainability and the risk management of the process. The
supply chain management process helps in gaining competitive advantage to the company. it
comprises the efforts made by the suppliers in developing and maintaining supply chain to be
effective and economical. The supply chain regulates and manages the production, shipment
and the distribution of the products. The effective supply chain cuts the unnecessary cost and
delivers the products to the customers in a rapid and effective way. This paper has opposed
the issues faced by the Bosch in its supply chain. A framework is also used to regulate a
suitable supply chain for the company. A suitable plan is also suggested for the supply chain.
The financial impacts are also considered of the supply chain and the financial performance is
measured. The inventory control policies have represented effectiveness for the stock items.
Supply chain issues to develop a proposal for a supply chain
Bosch faces supply chain issues on the regular basis. It affects the productivity of the
company. In command to have a strong and productive supply chain, the company needs to
have visibility with the suppliers. The production problems hinder a company to complete the
accomplished targets. The implementation of the new technology on the regular basis has
become a task for Bosch. It has put an influence on the capability layout and on the precision
of the inventory. As a result, it affects the services provided to the customers (Tatoglu,
Bayraktar, Golgeci, Koh, Demirbag & Zaim, 2016). The customers desired to get full
limpidity regarding the evidence about the distribution of goods acquired by them. Due to the
enhanced expectations of the customers, they are less desire to pay for the shipping charges.
On the other side, Bosch faces issues regarding fuel costs. It is one of the severe issues faced
by the company and it affects the distribution and transportation of the products in the global
context. The high costs of the fuel are prospective to upsurge the transportation costs. The
rise in the fuel prices causes mounting surcharges and is added to the rates of the freight. It

Supply and distribution systems 4
affects and reduces revenue and earnings of the Bosch. One more issue is also confronted by
the Bosch regarding the rise in inflation which is faced due to the high fuel prices. The
company is also compelled by the declining demand and the increased agreements along with
the increase in the key cost centers (Prajogo, Oke & Olhager, 2016).
Another issue faced in the supply chain of Bosch is unattainability of the skilled labor. The
problem is faced not only in hiring but in retaining laborers as well. The company has to
comply with the regulations imposed by the federal, state and local governments. The
employees of the company are also not resistant to updated technology. The average
employees of the company are aged 50 are not those resistant to learn new technology
(Rushton, Croucher & Baker, 2014). The new talent is more capable of learning technology
and initiates towards innovations. The environmental issues have been also confronted by the
company regarding the anti-idling and other emissions being imposed by both state and local
government.
The quality and compliance are other issues which affect the supply chain of the Bosch.
Every time the company needs to ensure that it meets international and local standards about
manufacturing, packaging, handling, and shipping of the products. The issue concerning the
passing of quality control and safety tests bothers the supply chain. The company is required
to always keep ready the compliance documents like certification, licenses and documents so
that it can save itself from the unnecessary fines and penalties (Sindi & Roe, 2017). On the
other side, the company is also required to comply with regulations and certifications in order
to manage its suppliers. The supply chain managers are liable for knowing the required
number of suppliers along with the handling of delays (Hugos, 2018).
Optimal supply chain
In order to design an optimal supply chain, the lean manufacturing supply can be
implemented in the supply chain framework of the Bosch. It is helpful in reducing wastage
and resources and maintains the operational presentation of the supply chain. The reduced
number of defects in the manufacturing process causes to increase in the efficiency and
reduction of waste. The great quality leads to more satisfaction and reduces the number of
returns. As a result, fewer resources are needed for returns and issues concerning quality. The
lean supply chain comprises warehousing, conveyance, and the supply. The warehousing in
the lean supply chain management applies to have a hygienic and systematized warehouse. It

Supply and distribution systems 5
supports in augmenting operations, the effectiveness of the preparation and reassurance in
communication. A warehouse should be sufficient enough to dash and tackle the issues
quickly so that the origin sources can be addressed and their repetition can be prohibited
(Touboulic & Walker, 2015). Whenever some part is stock out then the replacement can be
done appropriately and rapidly. For instance, if any leakage is the lift equipment hydraulic
fluid then the warehouse should identify and fix it as soon as possible with the help of 5S
policy. Out of 5S, first S is sort. The warehouse managers of Bosch can species warehouse
with the association of the kind of objects that is a record of the order cycle. An engineer in
the supply chain can be appointed for supervising the warehouse operations linked with the
strategies approved by the Bosch to encounter its objectives. Once the proper criterion is
recognized, it is critical to certify that there is space for every part of the motor in the
warehouse. The stock in the delivery centre should be kept with the intention for a business
deal (Wang, Gunasekaran, Ngai & Papadopoulos, 2016).
The second element out of 5S is Set. It is also inferred as rationalize or straightens. As per
this element, the warehouse is settled as per the picking process. The third element is Shine
which is allied with the hygiene. The functions at warehouse suffer when they are generally
messy and seem disorderly. The clean warehouse offers free space and enhances the
productivity and profitability of the company. It also minimizes the breakdown of equipment
and promotes the safety of the warehouse. The fourth element is identified as Standardize. It
concerns setting standard labels in a lean warehouse. The labels should contain all the
required information of any vessel or product. The fifth element is sustainability and it
defines the success of any organization. According to this, the practices should be kept
systematically and updated (Hazen, Boone, Ezell & Jones-Farmer, 2014). An effective
process is required to be implemented in order to be a successful warehouse. There should be
a transparent method of measuring every transaction taking place in the warehouse. The
warehouse of the company is required to prioritize the constant enhancements in the
processes.
The lean supply chain context can also include lean conveyance practices. It concerns to the
suitable place, time, quantity, price, resources, and services. The conveyance practice is
required to be customer-centric and must add worth to the customers. The transportation
strategy should be fully understood and fulfill the expectations of the customers (Fernie &
Sparks, 2014). On the other side, the distribution strategy should relate to numerous
components and customer’s satisfaction is one of them. It is a critical task to understand the

Supply and distribution systems 6
need of the customers for the lean supply chain of the Bosch. Identifying the petition of the
customers leads to identifying preferences of the customers in the nation. Therefore it is
required to enhance the accuracy of the forecast plans and the quality of the service (Gurtu,
Searcy & Jaber, 2015). This strategy enables distributors and decision makers to articulate
effective replacement strategies, control mechanisms and distribution network structures. It is
necessary to manage the demand of the customers in order to enhance their value and
services of the Bosch.
Implementation plan for the supply chain design
It is critical to classify the capable partners and strategic alliance agreements at the time of
the implementation of the supply chain plan. The type of partners can be identified by their
contribution in the supply chain activities and by determining the number of supply chain
partners such as suppliers, warehouse managers, and logistics companies. In the supply chain
design, the partners can be characterized into 2 parts main partners and the subordinate
partners. The main partners are the part of planned business units and complete the operative
activities for generating motors for the customers in the local nation. On the other side, the
subordinate partners are the companies that propose resources like software, assets, utility,
real estate property and information regarding the supply chain. The supportive partners of
the Bosch are consulting firms, IT service providers, conveyance movers, logistic outsource
companies and online brokers (Wang & Cullinane, 2015). The implementation plan of the
supply chain is required to include the drivers which initiate the supply chain. The drivers
include the instituting of the common goals which are acute for the success of the strategic
alliances. Hence establishing goals is a significant step in the supply chain partnership. The
supply chain partners are needed to figure out the major dynamic forces behind the supply
chain associations in order to attain common goals. These driving forces comprise a monetary
value, transaction’s information, customer service inventiveness along with the different risk
elements.
The consumer service enterprises relate to the contentment of the customers depending on the
accessibility of the products and the retort judgments. The retort time is the critical pointer of
the tractability of the supply chain. It can encompass rime to market and on time distribution.
The other significant factor is a fiscal value which can be described as the proportion of
income to total cost. A supply chain can augment its fiscal value by fast-tracking its sales
income, the efficiency of labor and market share. It should make efforts to reduce its

Supply and distribution systems 7
imperfections, expenses, and severance in the products (Fahimnia, Sarkis & Davarzani,
2015).
The monetary value can be considered by the exploitation of the assets. The utilization of the
assets can be estimated by the factors like inventory turnover, net asset turnover, and cube
utilization. The components other than these return on investment (ROI) and cost behavior.
Some other factors pertaining are information transactions and risk elements. The information
transactions generally include real-time communication and technology transfers. The risk
components contain risk quality failures and information failures (Wang, Wallace, Shen &
Choi, 2015).
Analysis of the fiscal impact of the supply chain preferences
The lean supply chain practices are the set of practices which eliminates waste from the
system. It ensures that everyone in the organization is associated to reach the maximum.
These practices are linked with the upstream and downstream flow of activities linked to
product amenities, evidence and finances aiming to reduce cost and waste in an efficient
manner (Yu, Wang, Zhong & Huang, 2016). The primary elements contain only mandatory
inventories as essential and have just in time inventory. It reduces the lead skills thus
reviewing operations and completing activities at lowest costs. The lean supply chain is
basically a philosophy founded on the deliberate removal of waste and constant enhancement
in the productivity. It turns around the aspects of the reduction of cost and waste. The
implementation of the supply chain strategies leads to the success of the company by reacting
to the needs of the customers. It also aims to reduce costs and improvement in business
procedures (Cosimato & Troisi, 2015).
The lean practices are effective in gaining flexibility, providing better services, cost
reduction, quality, and innovations. The 5 principles of lean thinking are helpful to the
company in gaining financial benefit in various ways. The numbers of the customers can be
enhanced by considering their perceptions. The value can also be enhanced by removing the
activities which do not add value to the organization. The measurements set for the value can
be identified and mapped by the application of the lean supply chain. The value stream
consists of various partners and alliances which are involved in providing goods and services
combined. The lean supply chain initiates the flow by the removal of the wastage (Dubey,
Gunasekaran, Papadopoulos, Childe, Shibin & Wamba, 2017). It also includes mapping of

Supply and distribution systems 8
the value stream in which only 5% is combined with the help of activities. The initiatives
raise 45% value in the service environment. The elimination of the waste in the supply chain
ensures that the products flow without any hindrance and delay. It understands the demand of
the customers and creates a process in response.
In order to eliminate waste and save resources, Bosch should only produce the products
which are preferred and demanded by the customers. The manufacturing of suitable goods
helps in increasing profits along with productivity. The company can pursue its perfection in
the supply chain management with the practice of lean manufacturing (Wisner, Tan & Leong,
2014). The flow and pull can be generated by the identification of the individual process steps
and its prominence enhances when all the steps are linked together. With the continuous
practice of the lean supply chain management, more wastes come in the view of the company
and the process is continued for attaining perfection in the actions which ass value to the
company.
Inventory control policies to optimize performance
The inventory control policies comprise the activities of checking stock of the company. it
manages the movement of inventory under its control. The type of the product influences the
inventory control policies allocated to manage the product (Chen, Wu, Zhang, Djokic &
Harrison, 2016). The inventory control policies control the inventories such as materials,
supplies and fixed assets to determine the value of the inventories. The certain inventory
control policies can be adopted in order to enhance the performance of the company. Bosch
can go for quality programs like ISO, lean manufacturing, Six Sigma, Kaizen and Total
Quality Management (TQM). All the managers in the Bosch are needed to support the quality
programs and implement in the supply chain management. The company should take the
initial step to analyze the current inventory accuracy rate and then take steps to improve it
(Zeng, Wu, Wang, Zhang & Zeng, 2017).
Once the standard is set by the company then the scope for the improvement can be decided.
It can also be measured in both percentage and dollars. The results should be checked the
time on time to implement changes for the improvement and the sustainability. The inventory
optimization process is required to keep modest and least complex. It is because if the Bosch
is not able to explain the process then the process will be considered inappropriate and
insurmountable for the optimization of the inventory. The whole supply chain should be

Supply and distribution systems 9
inspected and a flawless directive metric should be formed to measure from the initial point
to the last target (Waters & Rinsler, 2014). It is helpful in tracking the inventory performance
across the structure. It might also help in improving accuracy in the supply chain.
The advanced policies can be executed in all the fields of the company so that company can
be profited. There should be conducted product traceability in the distribution life cycle of the
goods. The inventory pipeline can be comprised of both inbound and outbound shipments.
The products should be transported only after the action is initiated by the authority. The
authority is required to maintain a record properly (Brandenburg, Govindan, Sarkis &
Seuring, 2014). Furthermore, suitable technology should be designated which getups the
requirements of the Bosch. A constant cycle totalling program should be executed so that a
great level of accurateness can be sustained. This program is one of the finest methods to find
out the problematic areas and helpful in eradicating the physical inventory expenses. Bosch
should make sure that the employees are trained on time and should be updated concerning
the inventory management techniques.
Conclusion
This report concludes that the efficient supply chain communicates effectively, trains
workforce systematically helps in supporting flow of money which are dispersed among the
customers, different partners and the associations of the Bosch. The supply chain
management is helpful in observing the flow of resources updated in the supply chain. The
supply chain promotes the profitability of the company by organizing procedures and brings
into line them by planning, making and supplying different products and services. The lean
practices used by the company are effective in gaining flexibility, providing better services,
cost reduction, quality, and innovations. The 5 principles of lean thinking are helpful to the
company in gaining financial benefit in various ways. Bosch is responsible to make
utilization of the people, procedures and the technology so that the requirements of the
consumers can be confronted easily.

Supply and distribution systems 10
References
Brandenburg, M., Govindan, K., Sarkis, J., & Seuring, S. (2014). Quantitative models for
sustainable supply chain management: Developments and directions. European
journal of operational research, 233(2), 299-312.
Chen, K., Wu, W., Zhang, B., Djokic, S., & Harrison, G. P. (2016). A method to evaluate
total supply capability of distribution systems considering network reconfiguration
and daily load curves. IEEE Transactions on Power systems, 31(3), 2096-2104.
Cosimato, S., & Troisi, O. (2015). Green supply chain management: Practices and tools for
logistics competitiveness and sustainability. The DHL case study. The TQM
Journal, 27(2), 256-276.
Dubey, R., Gunasekaran, A., Papadopoulos, T., Childe, S. J., Shibin, K. T., & Wamba, S. F.
(2017). Sustainable supply chain management: framework and further research
directions. Journal of Cleaner Production, 142, 1119-1130.
Fahimnia, B., Sarkis, J., & Davarzani, H. (2015). Green supply chain management: A review
and bibliometric analysis. International Journal of Production Economics, 162, 101-
114.
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Gurtu, A., Searcy, C., & Jaber, M. Y. (2015). An analysis of keywords used in the literature
on green supply chain management. Management Research Review, 38(2), 166-194.
Hazen, B. T., Boone, C. A., Ezell, J. D., & Jones-Farmer, L. A. (2014). Data quality for data
science, predictive analytics, and big data in supply chain management: An
introduction to the problem and suggestions for research and
applications. International Journal of Production Economics, 154, 72-80.
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
Prajogo, D., Oke, A., & Olhager, J. (2016). Supply chain processes: Linking supply logistics
integration, supply performance, lean processes and competitive

Supply and distribution systems 11
performance. International Journal of Operations & Production Management, 36(2),
220-238.
Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution
management: Understanding the supply chain. Kogan Page Publishers.
Sindi, S., & Roe, M. (2017). The Evolution of Supply Chains and Logistics. In Strategic
Supply Chain Management (pp. 7-25). Palgrave Macmillan, Cham.
Tatoglu, E., Bayraktar, E., Golgeci, I., Koh, S. L., Demirbag, M., & Zaim, S. (2016). How do
supply chain management and information systems practices influence operational
performance? Evidence from emerging country SMEs. International Journal of
Logistics Research and Applications, 19(3), 181-199.
Touboulic, A., & Walker, H. (2015). Theories in sustainable supply chain management: a
structured literature review. International Journal of Physical Distribution &
Logistics Management, 45(1/2), 16-42.
Wang, G., Gunasekaran, A., Ngai, E. W., & Papadopoulos, T. (2016). Big data analytics in
logistics and supply chain management: Certain investigations for research and
applications. International Journal of Production Economics, 176, 98-110.
Wang, T., & Cullinane, K. (2015). The efficiency of European container terminals and
implications for supply chain management. In Port management (pp. 253-272).
Palgrave Macmillan, London.
Wang, Y., Wallace, S. W., Shen, B., & Choi, T. M. (2015). Service supply chain
management: A review of operational models. European Journal of Operational
Research, 247(3), 685-698.
Waters, D., & Rinsler, S. (2014). Global logistics: New directions in supply chain
management. Kogan Page Publishers.
Wisner, J. D., Tan, K. C., & Leong, G. K. (2014). Principles of supply chain management: A
balanced approach. Cengage Learning.
Yu, Y., Wang, X., Zhong, R. Y., & Huang, G. Q. (2016). E-commerce logistics in supply
chain management: Practice perspective. Procedia Cirp, 52, 179-185.