Bosch's Initiatives to Avoid Inventory Buildup



Case Code : CLOM001
Publication date : 2009
Subject : Operations
Industry : Auto/ Auto ancillary
Length : 04 Pages
Price : Rs. 100

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Key words:

Production, Demand, Inventory build-up, plant closure, shut-down, lockout, Export Oriented Unit, strike, Bosch Group, severance package, automotive units, BSE


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As a result of the economic slowdown and its impact on the auto industry, Germany-based auto and ancillary company Bosch Group began taking various initiatives to prevent inventory build-up. These included a temporary closedown of some plants and cutting back working hours in some plants in India. Other major auto and auto ancillary companies were also forced to adopted similar initiatives in order to align production with the falling demand.


   Production management
   Inventory management
   Plant management

On January 9, 2009, Bosch Limited (Bosch), the Indian subsidiary of the Germany-based Bosch Group, announced that it would temporarily shut down its plants in India to cope with a fall in the demand for automotive parts. The drop in demand was triggered by factors such as the worldwide economic slowdown, a credit crisis, and also the company's fear of accumulating excess inventory...

Questions for Discussion:

1. Comment on Bosch's initiatives to avoid inventory build up. Discuss the benefits Bosch sought to achieve due to shut-down of production bearing in mind the various costs involved.

2. Analyze the merits and demerits of Bosch's plant shutdown.

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