An agile supply chain will further improve Bosch Automotive Aftermarket’s position in India

Automotive Aftermarket in India is considered to be one of the most complex supply chains which could be attributed to the following factors:

  • A huge growth in vehicle population with increasing variations, with the need to cater for vehicles which are 40 years to a few months old.
  • Higher customer awareness about vehicle upkeep, periodic maintenance and demand for add-on services (e.g. 24/7 breakdown assistance, extended warranty covers, self-repair DIY etc.)
  • The dynamic and inherently unpredictable nature of the aftermarket demand (Difficulty in predicting the part failure)
  • Reaching to varied requirements and being available immediately across the spectrum of retail shops and garages in the country across the shelf.
  • The DIFM (do it for me) segment, which still constitutes a majority of the aftermarket size due to the increasing complexity of vehicle systems and repair requirements and the after-sales service mechanism brought about by the greater use of electronic components in advanced vehicles.

Considering the above, there seems to be a large growth opportunity for automotive OEMs and aftermarket players. Capturing a sizeable market share, managing risks, and creating a disproportionately large impact on customer service can achieve this.

PictographAs a result this opportunity puts a huge pressure on some key deliverable like supply chain, which in the coming future will be even more crucial and companies in this space will need to step up the ante if they have to create a space for themselves in the Indian aftermarket. The challenge here is to maintain long term growth while managing short term volatilities. This is exactly the reason why in Bosch, supply chain is considered as one of the key strategic elements within the Organisation which can help deliver a competitive advantage.

Bosch has an unparalleled network of 35 company owned and operated area and local distribution centres (with advanced warehouse management tools) across the country with the capability to reach majority of requirements within one day. With the use of qualitative tools for planning and inventory structure, Bosch is able to forecast the demand and do predictive planning for new vehicle service requirement as well.

Considering the complexity of the parts (which are highly specific to each vehicle) they have been split into fast, regular running parts and slow moving parts based on history, PLCM etc. This classification along with a tight monitoring on forecasts and focus on orders helps in maintaining the
Pictographcorrect inventory structure in the distribution centres. The combination of the 35 distribution centres and parts classification has resulted in Bosch having one of the lowest inventory levels (which is a benchmark within Bosch, worldwide) but still managing the customer requirements through well set processes and agile working.

In this volatile environment, where information is valued high, Bosch operates with a high level of transparency in the supply chain wherein the customers can view the supply status almost on a daily basis. Alongside, frequency of supply chain planning with suppliers has also been increased to meet the volatility.

PictographThere has been a significant rise in imported content in vehicles over the last few years and this meant that Bosch needed to be ready with the parts, especially in the CV segment where vehicles cannot be off road for a long time. Significant improvement in imported parts availability again by predictive stocking and reducing transport lead time for import parts by up to 80% in the last one year has minimized stock out situations. In the odd cases, where the vehicle does go off road, Bosch has focused processes for special Vehicle Off Road requirements (VOR) with target deliveries in hours.

All the above would not be possible without competent manpower both at a planning level and at the customer level who need to synchronize work together to ensure the customer service levels are always met. Customer relation officers are stationed at our 28 sales offices who are constantly in touch with the customers and the back end to ensure this.

Bosch is aiming at automating the entire process to the next level, which will further increase efficiencies and develop an agile supply chain (like e-commerce players, same day deliveries on VOR, bar coding, advanced planning and optimization tools for predictive planning, use of mobile devices) coupled with optimization of warehouse space (to manage costs) to ensure that we stay best in class. By setting up an agile supply chain Bosch aims to further cement its place in the market where it is already known for reliable high quality products in the aftermarket.

About the author

Vijay Pandey

Vijay Pandey

Regional President, Bosch India Automotive Aftermarket
Mr. Vijay Pandey is the Regional President of the Automotive Aftermarket division of Bosch India, with additional responsibility for SAARC region. Prior to this, Mr. Pandey was responsible for the business of Power Tools in India and the SAARC region. He has prior experience of the automotive aftermarket where he headed logistics.

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