Tier one supplier Robert Bosch is broadening the role of IT and automation in its operations to boost supply chain efficiency
Information technology continues to find new applications in handling the complexities of the automotive supply chain. Among other things, IT is playing an enhanced role in rationalising the automotive supply chain, notably for inbound and in-plant logistics. Despite this, a lack of IT connectivity can make it hard to achieve a transparent view of a shipment’s status and get access to critical information as a product moves though each stage of the chain.
One firm pushing ahead with multi-purpose IT concepts is Germany-based tier one supplier Robert Bosch. The company, which operates more than 250 plants worldwide, produces fuel and steering systems, chassis systems, and starter motors and generators, among other things. It reported more than $44.8 billion in OEM parts sales in 2015 – the highest among OEM parts suppliers worldwide.
Andreas Mueller, Bosch’s senior expert for ‘internet of things’ (IoT) communication technologies, says a vital part of the firm’s approach now is a pilot of ‘industry 4.0’ – the push towards greater automation and data exchange in manufacturing. The IoT, meanwhile, is connecting everything from individual domestic appliances to delivery vehicles to the internet and exchanging data, including homes, cars, energy systems and appliances, among others.
“In almost all of these areas, Bosch is currently doing business,” he says. “We focus on the three ‘S’s: sensors, software and services. The basic idea is to connect the physical world, which includes products, machines, devices for internal transportation, and so on, with the digital world, in order to create a digital twin. This digital twin is the basis for creating solutions that use the generated data.”
By enhancing transparency, Mueller wants Bosch to deliver data that can help the company better understand its own processes. It can then realise new data-driven solutions for its plants and customers to improve business processes.
From a logistics process perspective, industry 4.0 applies to the end-to-end supply chain including supplier integration, customer integration, transport management and internal plant processes from goods receipt to shipping. “Internally, our drivers for implementing this technology were the need for lean processes, transparency and, of course, process optimisation, which translates into cost reductions,” says Mueller. “The ideas came from various Bosch plants that did optimisation projects and took new technologies into account to support their process work.”
Technology can improve Bosch’s logistics efficiency in a number of different ways, he says: he points to process-oriented and event-driven approaches, the use of open data standards and the use of technology where it is needed.
In this sense, Bosch has set itself on a similar path to other automotive manufacturers, who also strive to introduce more automation and smart technology into their logistics. BMW, for example, has embarked on an ambitious ‘Connected Supply Chain’ project that sets out to use more data, visibility and automation.
Bosch already uses a variety of standard automatic identification (AutoID) technologies such as barcodes and RFID, while it is also developing its own systems, including TraQ, which stands for tracking and quality. TraQ allows tracking of a product’s quality along the entire supply chain, all the way to the customer, using Bosch’s own sensors installed in packaging or in the product itself to record information such as temperature, vibration, light and humidity levels, all of which is sent to the cloud.
“We are also developing a sensor that will measure transportation quality,” says Mueller. “Goods will be inspected at the end of production and then the sensor would take over. As soon as it is in place, the goods will not need quality inspections at destination but can be unloaded directly to the warehouse or production line. This is the first step. Then, the data will be online and will provide quality alerts that will show stock ahead of arrival.”
Bosch expects to release the sensor onto the market in the summer. Mueller says it will promote more stable processes that will lead to lower safety stock levels.
“We focus on the three ‘S’s: sensors, software and services. The basic idea is to connect the physical world, which includes products, machines, devices for internal transportation, and so on, with the digital world, in order to create a digital twin. This digital twin is the basis for creating solutions that use the generated data.” – Andreas Mueller, Robert Bosch
Internal plant logistics is a segment of the supply chain in which Bosch has made significant advances in the areas of IT, automated data collection and smart transport concepts. For example, Bosch began using RFID technology in 2008 in some facilities. “Some plants do not use it. In 2015, we implemented the latest RFID automatic replenishment process with suppliers. Of course, our suppliers must have RFID capabilities as well, so the process is ongoing,” he explains.
One example in internal logistics where the company has introduced RFID is the use of a kanban card. “By using RFID technology, we can now connect the physical kanban process directly to Bosch’s IT system,” Mueller says. “This offers us the opportunity to react directly to what happens in reality, such as the need for parts replenishment. Data generated through the use of industry 4.0 is the basis for process improvements and for additional solutions.”
Going to the ‘gemba’
The logistics and production system also features a ‘go to the gemba’ approach. ‘Gemba’, a Japanese term for ‘actual place’, is used to denote the shopfloor or any other place where value-creating work occurs. “The problem was that ‘go to the gemba’ was not reflected in the IT system,” says Mueller.
“By providing IT information on mobile devices, such as tablets and other platforms, industry 4.0 supports Bosch’s management in leading our plants from the shopfloor. For example, we can increase stock levels in supermarkets [storage areas feeding the manufacturing operation] near the production line if they are below the minimum level.”
Among the logistics elements most significantly influenced by Bosch’s push to use new technology are traceability solutions, including its use of RFID technology for the internal tracking of products, boxes and transport vehicles such as forklifts. Another use of RFID technology is for the automatic reordering of parts within the Bosch production system. A third traceability solution is a standardised data exchange with external partners on a shipment, box, or single product level.
Added to this is the tracking and tracing of products and shipments that use Bosch’s sensors to collect data about the physical parameters and location of objects. Mueller also points to adaptive solutions such as an ‘intra-logistics hub’ for internal transport. This includes a fleet of in-plant vehicles, such as forklifts and automated guided vehicles (AGVs), for internal milkruns, for example from the warehouse to the supermarket area that subsequently feeds the production line with raw materials and brings back empty containers and finished products.
Currently, Bosch uses static milkruns on such routes. “We envision better capabilities for our human-driven milkruns so that they can have more flexibility,” comments Mueller. “By using the data created and collected by the traceability solutions, we are able to optimise our internal transportation system. This involves designing dynamic routing for our internal transport vehicles. We manage our fleet and add autonomous devices to our transport processes.”
These solutions are closely connected to Bosch’s internal warehouse management systems and, using open standards, can be used at its customers’ production sites within their respective IT environments.
Another adaptive solution is Bosch’s external transport management centre: Mueller says the company has established a facility to organise and to optimise transport between Bosch’s plants and between its suppliers and its plants.
Reaping the gains
“We are steadily improving transparency in our processes internally as well as in our processes with our customers,” says Mueller. “The tracking and tracing of shipments, and thereby the improved reliability of on-time delivery for our customers, have helped us to improve our business relationships significantly.
“Logistics becomes more tied to production than ever before. At this point in our use of industry 4.0, however, we have yet to realise its full benefits because it is still in the pilot stage.”
Machine connectivity is another field of improvement. Bosch’s use of smart devices such as barcode scanners is widespread in its warehouses, but these are gradually being enhanced with RFID functionality. The firm has also begun testing smart glasses, he reveals.
Bosch is also aiming to improve in-plant logistics efficiency through the use of autonomous mobile units. For example, it is currently developing the AutoBod, a driverless, self-navigating transport system used for internal transport that is essentially a two-wheeler supported by four stabiliser wheels. It is closely connected to the intra-logistics hub and works in collaboration with Bosch’s forklift and milkrun operations.
“We also attain in-plant collaboration by using the Bosch APAS (Automated Production Assistant), which is an automaton that can work closely with humans.
“This solution also demonstrates that the concept of industry 4.0 does not mean human-free factories, but instead, close and safe human-machine collaboration,” adds Mueller.
Improving visibility and automation have also resulted in lower stockholding requirements and improved material flows, he adds. “We have achieved improvements in process efficiency of up to 10% and have reduced stock in process by up to 30%,” reveals Mueller.
Bosch has a strategy of applying innovations from individual plants more broadly across its organisation. “Solutions are developed internally within Bosch plants and then disseminated organisationally, which helps us to realise efficient processes within the company. Through this, we gain experience and thus can offer solutions for our customers that have been built upon experience,” he explains.
Since the data flow is digitally recorded, more analysis of processes can also be conducted. The better the processes are understood, the better new solutions to support them can be developed. “At a certain point, we will not only be able to react to incidents but we will be able to predict future implications within the supply chain,” says Mueller.
A variety of barriers
The main challenges in Bosch’s drive to use more automation and connectivity stem from the very basics, says Mueller, which include the quality of master data and standardisation of physical processes as well as the standardised usage of technologies along the supply chain. These challenges extend to such issues as process variation, variation in the usage of identification technologies, variation in the physical environment and the influence of human beings, whose reactions can make for unpredictable incidents and thus unknown situations for IT systems.
“As a means of addressing these challenges, we are cooperating with our partners to establish standards,” he says. “Bosch has set up initiatives such as to improve master data quality. We are accumulating data about our suppliers and customers that is more accurate.”
Looking to the future, it is clear that Bosch’s drive towards enhancing its IT systems will continue to develop.
“The next step in the evolution of industry 4.0 as a programme to improve Bosch’s logistics efficiency will be to combine our solutions,” says Mueller. “This will offer our plant a full package of interoperable solutions that will work hand-in-hand and help us take a big step forward.”
“The concept of industry 4.0 does not mean human-free factories, but instead, close and safe human-machine collaboration.” – Andreas Mueller, Robert Bosch