Quality Management And Effective Cost Reduction Achieved Term Paper

Length: 12 pages Sources: 25 Subject: Business - Management Type: Term Paper Paper: #18740139 Related Topics: Quality Assurance, Total Quality Management, Inventory Management, Fixed Costs
Excerpt from Term Paper :

¶ … Quality Management and Effective Cost Reduction Achieved at Bosch GmbH, Germany by Implementation of Its Systems with Special Emphasis on Total Quality Management

Company Profile

"Prevention" -- Quality Management

Product Design

Process Design And It Enabled Solutions

IT Involvement

Material, Manpower, Knowledge and Its Quality

Cost Of Quality

Operations Objectives -- Application Of Quality Management Principle For Better Productivity And Profits

Gap models qm - Quality Management

Tqm - Total Quality Management

ISO - International Standards Organization

CAM - Computer Aided Manufacturing

CAD - Computer Aided Design

In Robert Bosch GmbH, quality management is a holistic approach to a comprehensive assimilation of precise customer requirements, and satisfying customer aspirations by making consistent quality deliveries at the right price, in time and with least hassles to the community around you. Quality management, therefore, involves the effective design of the products, and the processes focused on customer specifications, besides planning the product life cycle, the production process and delivery to the satisfaction of the customer. Quality management also importantly involves evaluation of processes and endurance, with special emphasis on continuous improvement, to ensure the adoption of the latest practices and finally to ensure the best-quality product to the consumer, for which reason it is also referred to as integrated management (BOSCH, 2010).

Company Profile

Robert Bosch GmbH, with its headquarters near Stuttgart, Germany known worldwide for its brand name, "Bosch," is a multinational engineering conglomerate with factories spread in several world locations. They are considered the world's premier supplier of automotive components. However, for this assignment we are referring only to their automotive electrical components like starter motors, alternators, solenoids, and the likes. Founded by Robert Bosch in the year 1886 in Stuttgart, Germany, this company is a world leader in the products manufactured by it. They are also into steering systems, household appliances and power tools, besides security systems and thermo-technology (Bosch, n.d.). With over 350 subsidiaries spread over 60 countries, it has a massive sales wing catering to 150 countries worldwide and employs over 300,000 people. The most interesting part about Bosch is their penchant for reinvestment of profits on research and development, fine tuning all their products to near zero defect accuracy, which are the reasons why their products are seen as synonymous with quality in the world markets. Achieving this level of competences has not been easy for the company, but their massive turnover of about €51.4 billion has in no small measure, helped the company to adopt and apply the latest techniques in quality management. They also have over 4,000 patents pending worldwide (BOSCH, 2012).

Theory of Quality Management

Quality management is all about using management model standards and assessment tools along with the various existing concepts of quality and tools thereof, to enable the businesses to survive and thrive for many years to come. Simply put, these quality management techniques include, a) documenting and improving the processes, b) design the products and services with client's requirements in mind c) bring about a coordination between customers, suppliers and employees both in-house and in outsourcing (Pryor, et all., 2010).

All these principles are being utilized at Robert Bosch, especially, with the introduction of a knowledge-based business model for back-office operations, which supports the functioning of the diverse departments and is vital to the health and profitable conduct of business.

Every organization is bent on success and is always striving to produce the best product or service by using the best technique available, in order to ensure that their order book is always overflowing. Even some large organizations have staff, which is not properly trained in the management systems and, they become motivated only when they are pushed by their customers to install and practice the best-quality management systems that would bring about a sea change in both their attitude and the implementation of the new techniques.

Having realized that a trained, knowledgeable expert and flexible workforce are the focal point from which success emerges in any large organization, Robert Bosch is in a continuous process of recruiting the best talent and have also instituted a high-class training center to mold its workforce for multi-skills and flexibility.

Practical Application of Quality Management -- "Prevention" The Motto Of 2010

At Bosch, high-quality...


They have a quality management system that is custom made to the specific requirements of their various areas of operations. "Prevention" was their motto for the year 2010, and they geared themselves to achieve this, primarily by adopting a strong and sturdy design to withstand rigorous working conditions to which they are subjected. This was achieved by a massive expansion in the area of field testing where the products were tested under most severe conditions. The useful data emerging from these tests would be fed into the system for further continuous improvement, which is another area in which the company has focused heavily. All these factors combine to improve quality, reduce costs, increase customer satisfaction and skyrocket sales (BOSCH, 2010).

Quality Initiatives

Those managers, who wish to educate themselves on quality management must necessarily read about quality models; concepts and tools made famous by quality gurus who preach on how to exceed customer expectations in quality by an open and efficient channel of continuous communication between the management, Frontline associates and customers. Robert Bosch is particular that all its management staffs are familiar with the models of quality management, their concepts and tools, extolled by the renowned quality experts on the means of achieving customer satisfaction by quality initiatives.

This system is based on the extensive awareness of generic strategies, which can be of great help in avoiding, detecting, diagnosing and solving the manifestations of exceptions.

Management Models

Strategic Management Model (Purpose)

Most large organizations have the advantage of experienced managers with exposure to management models and strategic concepts. They also have access to sufficient funding for the job on hand and the formation of special purpose strategic planning department, which is competitively motivated and strategically oriented. A strategic management model is evolved including a SWOT analysis for estimating the firm's in-house strengths and weaknesses as also the external threats and opportunities. The model also incorporates the vision of the company, its values, ultimate goal strategy planning and implementation, measurement and feedback as well as a competitive advantage and critical success (Pryor, et al. 2010).

5 P's Model

Strategic model (referred to as 'Purpose'), is considered as the first of the 5 models necessary for a successful business, but there are four more which make up the 5 P's model. They are the elements of Principles, Processes, People, and Performance.

A figure of the 5 P's model is given below (Source: Pryor, et all., 1998):

Figure: 1

5 P's Model

Purpose (Strategic)





The above figure clearly depicts the correlation between strategy (Purpose) and principles (Structure) as well as the processes which have an influence on employee behavior, eliciting performance out of them. In other words, the strategy seems to drive behavior which in turn attains results. In the above figure, the arrow from performance to strategy (purpose) indicates the importance of feedback in successful strategic planning. In the final analysis, the 5 P's model considered an essential component of strategic quality management is a route taken by the organization, with long-term survival in mind using the features of metrics and measurements to track engage their progress towards world-class status (Pryor, et all., 2010). In all sectors of their automotive electrical industry, Robert Boch has been careful to implement the strategy, and the other elements of principle, processes, people and performance to obtain the best results, by linking these models to one another to reach a world-class organization status.

Quality standards

Several standards and criteria mark the readiness of an organization in both spirit and practice to be subjected to verification by certifying authorities for their level of knowledge and expertise. Some of the major certifications are done by the international organization for standardization (ISO) which includes the ISO 9000 certification which refers to the organization's readiness to meet the a) customers' quality requirement, b) regulatory matters, c) enhancing customer satisfaction and d) continuous improvement as a tool to improve customer satisfaction (ISOa, 2006). Robert Bosch has been certified by ISO 9000 and 14000 and have designated officers to follow op keep in touch with the continuous improvement process both for quality process and assurance as well as environmental matters.

On the other hand, ISO 14000 is mainly to do with the environmental management and emphasizes 1) minimal of harm to the environment and b) the continual improvement for this purpose.

Four Eras of Quality Management have been established for convenience of operations. They are:

a) Inspection -- focusing on product quality

b) Quality Control -- focusing on process quality

c) Quality assurance -- focusing on system quality

d) TQM -- focusing on the people.

The theory and implementation of TQM in Robert Bosch have been dealt with in detail in this assignment. Additionally, they…

Sources Used in Documents:

They have achieved all this with great diligence by pooling of information on common purchase requirements and holding on to a consistent policy in their purchase, and by expanding the cooperation between departments for a better understanding, and consequently, increase in efficiency. They are also setting up a global cross divisional purchasing center for automotive parts to enable economical purchasing activity on several components that are being standardized both for inventory reduction purposes and for the benefit of bulk purchase leading to price reduction (UPCOMING, 2009).


Robert Bosch GmbH has always maintained the human resources development systems in line with the latest business practices, and the latest production technologies that accrue from a highly advanced system of information and production technologies that have been sweeping

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