EXCELLENT LEADERSHIP AND STRATEGY DEPLOYMENT

AT ROBERT BOSCH (MALAYSIA) SDN BHD

ABOUT THE COMPANY

The Bosch brand is synonymous with quality and innovation. The company
enhances quality of life in communities with products and services that are both
innovative and beneficial. From humble beginnings, the Bosch Group today is
a leading global supplier of technology and services. In Malaysia since 1923,
Bosch is currently active in the areas of Mobility Solutions, Industrial Technology,
Consumer Goods, and Energy and Building Technology. The company has three
manufacturing arms in Penang providing car multimedia systems, power tools
and automotive steering.

Bosch Car Multimedia (CM) is a business division within the Mobility Solutions
business sector of the Bosch Group, which develops smart integration solutions
for entertainment, navigation, telematics and driver assistance functions,
focusing always on driver safety, driving convenience and reducing energy
consumption.

The CM plant in Penang, Robert Bosch (Malaysia) Sdn Bhd (RBMA) is one the
eight pioneering companies which started operation in the Bayan Lepas Free
Industrial Zone back in 1972. RBMA develops and manufactures navigation and
infotainment systems, integrated head units, car radios, as well as Electronic
Manufacturing Services (EMS) products.

Development of smart solutions for the integration

Automotive Navigation
of entertainment, navigation, telemactis and driver
and Infotainment Systems
assistance functions in the Original Equipment business.

Development of devices and systems for commercial

Professional Systems vehicles: audio, video and navigation systems for
coaches and trucks as well as connectivity solutions.

Manufacture of complex electronic control units and

Manufacturing Services modules for a wide variety of different applications in
the automotive and consumer electronics industries.

Above: Product category

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 Business Excellence Best Practices
Strategy for Organisational Sustainability

“Invented for life is more than a motto. It is reflected in everything we do,”

said Harald Dirsch, RBMA’s commercial managing director. RBMA develops cost-
effective, innovative products according to global demands and standards - a
recipe that contributes to its significant growth and success in Malaysia. “We
practice Bosch’s corporate guidelines – Sauber, Sicher and Sparsam, which
means Clean, Safe and Cost-Effective in English,” he added.

RBMA’s vision is “to be the first choice in developing and manufacturing car
multimedia and electronic products with sustainable profitability”. Together with
all Bosch business sectors, the company’s objective is to produce products that
spark enthusiasm, improve quality of life and help conserve natural resources.
To achieve this, Bosch focuses on customers, shaping change and striving for
excellence. Bosch maintains its strength as a global company by building on its
seven corporate values:

• Future and result focus

• Responsibility and sustainability
• Initiative and determination
• Openness and trust
• Fairness
• Reliability, credibility, legality
• Diversity

Changes in business landscape and consumer preference, as well as rapid

technological development continue to test even the strongest organizations.
Businesses need to adapt to volatility and uncertainty as a way of life. Despite
facing a variety of challenges, RBMA continues to grow and remains competitive.

This article focuses on RBMA’s excellent and impactful business practices

in leadership and planning. Both are managed under a structured policy
deployment process, translating corporate strategy into measurable objectives.

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THE SUCCESS STORY OF A GLOBAL PLAYER

Since 1972, RBMA has sustained and successfully overcome many challenges.
Despite the dynamic market environment of CM, RBMA continues to inspire
its customers with holistic innovative solutions that provide benefits, which
includes hardware, software and data as well as connected services. RBMA
adheres to a set of core values that enable the company to navigate into
unfamiliar territories and grow at a measured pace. Today, RBMA products are
well known for their innovative strength, efficiency, reliability, and quality.

In terms of financial and market aspect, RBMA is in a competitive position.

From 2009 to 2014, RBMA achieved an average of about 41% increase in sales
turnover year-on-year, largely due to strong strategic sales across Europe, North
America and Asia. In 2013, while most companies were affected by the global
sales slowdown, RBMA’s operations continued to expand with an upward
momentum, by improving on resources, competencies and business operation
processes. To win market shares, RBMA in alignment with CM has a targeted
growth rate of more than 10% year on year. In 2014, RBMA’s 1200 employees
generated global sales of more than RM 1.6 billion (EUR 372 million).

In 2012 U.S. Multimedia Quality and Satisfaction Study conducted by JD Power

and Associates, ranked CM amongst the highest customer service satisfaction.
Bosch was also ranked number one in Thailand’s GPS Navigation Benchmark
study. In 2013, Bosch infotainment system produced for Chevrolet MyLink
System was awarded the Best-of-CES (Consumer Electronics Show) in Las Vegas,
U.S.A. Another CM product, NissanConnect was named winner of Telematics
Detroit Industry Newcomer Award 2013/2014. This has truly reflected CM’s
vision of driving convenience and customers’ first choice.

Excellent business practice is evident in the nucleus of RBMA – its employees. Improvement trends
are recorded in employee satisfaction, involvement, and training.

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 Business Excellence Best Practices
Strategy for Organisational Sustainability

RBMA’s excellent performance is also apparent in its winning of prestigious

accolades, such as the Jaguar Land Rover Quality Award (2011), Volvo Cars
Quality Excellence Award (2012), FIAT Chrysler Perfect Quality Award (2012),
MPC-ICC Regional and National level awards (2007 – 2013), and the Proton-MPC
BEx Top 2 (2012). RBMA’s contribution to Penang was also recognized by MIDA
through the ‘8 Samurai Award’.

EXCELLENCE IN LEADERSHIP WITH COLLECTIVE VISION, MISSION AND VALUES

Vision and mission play critical roles in communicating the company’s objectives
to stakeholders, strategy development, and in developing measurable goals.
These roles are interdependent and require strong leadership to ensure they
are effectively communicated so that the whole organization is moving along
its vision and mission. Bosch’s distinct corporate culture, based on common
foundations, is the precondition for business success and the ability to evolve in
the international market environment.

RBMA has developed an excellent leadership system with a clear vision, mission
and values that unite the organization and provide consistency in decisions.
These values are communicated through various methods such as printed
materials (pamphlets, posters, etc), communication sessions (townhall, fireside
chats (Kamingespraech), etc), and the company’s own Bosch Global Network
(Intranet). Senior management, with input and participation from various
levels within the organization, have developed a corporate strategic plan in
concurrence with RBMA’s vision and mission, customer requirements and
business condition.

Participation of senior management at various levels is effectively galvanized

as early as the goal-setting stage. RBMA has clear stages of strategic planning
and goal-setting activities. “Goal-setting is managed under a structured
policy deployment process. Beginning the fourth quarter of each year, senior
management staff from all CM locations worldwide gather at the International
Management Meeting (IMM) forum to discuss key directions of CM based
on market trends and customers’ requirements,” said Lothar Mergili, RBMA’s
technical managing director. Amongst topic discussed includes Balanced
Scorecard (BSC) and CM Target Chart (TC). RBMA has to define their own BSC
and TC and cascade it down to define each department’s BSC and TC together

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with the employees. The overall RBMA and departmental BSC and TC will be
reviewed in the Annual Goal Setting Workshop at the beginning of the year’s
first quarter, in order to facilitate cross-functional discussions and buy off.

To communicate and enhance the understanding of CM’s direction and drive

effective management of resources and focus, a ‘CM Brochure’ is established,
consisting of CM Market, Vision, Mission and focus goals and targets. The
leaders at every level hold a ‘Be One CM’ workshop to discuss and internalize the
contents of the CM Brochure with their team. Company’s goals and directions
are also communicated to employees through plant-wide communication
channels.

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 Business Excellence Best Practices
Strategy for Organisational Sustainability

What makes planning works at RBMA is the existence of a clear flow regarding
how strategy and goals are communicated from the top management to the
entire organization for effective results, as well as strong leadership in promoting
and embracing the business philosophy, vision, mission and core values. RBMA
also demonstrates strong participation at various levels in the development of
the business plan and policy deployment. Company goals and direction from
the top management are effectively communicated to employees at all levels.

To develop desired company culture, RBMA has initiated many impactful change
management and improvement programs. For instance, RBMA has implemented
the ‘Single Digit PPM (Parts Per Million) Program’ to improve product quality
and customer satisfaction; Plant Remodelling Program to improve operations
value stream, capacity and standard; and 5S Revitalization Program to improve
work environment and performance through deviation identification against
standards, determine root causes and eliminate waste.

Training Within Industry (TWI) implementation aims to establish a leadership

coaching culture, increase operators’ knowledge in processes and knowhow
and improve operations goals. Overall StepUp Program on the other hand
aims to establish shop floor leadership excellence training. All these programs
have been effectively conducted and have served as best practices at RBMA to
overcome any gaps between the current and desired state.

In sustaining effective leadership, RBMA’s management uses practical and

effective tools to evaluate and improve personal leadership and involvement
in fulfilling the organizational vision, mission and values. For example, the
Leader Continuous Improvement Process Self-Assessment Tool (CIP SAT) is
used to determine the maturity level of Continuous Improvement Processes
(CIP) in a manager’s area of responsibility and to identify further optimization
opportunities. Meanwhile, Bosch Production System Maturity Assessment
allows the leadership to set the System CIP goals with employees so as to drive
shop floor improvement.

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Above: Associate survey and follow up process

Certification to various standards and legal requirements is another excellent

initiative of RBMA that ensures good governance. Bosch practices its policies
strictly to ensure compliance and corporate governance, in order to achieve
results with honesty, fairness in doing business and to contribute to the
community and the environment. In general, RBMA is compliant to:

• Environmental, Health and Safety (EHS) Policy

• ISO 9001 (Quality Management System)
• TS 16949 (Quality Management System)
• ISO 14001 (Environmental Management System)
• Bosch Central Directives, which contain regulations of Corporate
Departments/Offices for certain subjects

According to Harald Dirsch, in line with Bosch’s value of ‘Responsibility’, the

company is committed to acting in accordance with the interests of society.
Product and services that provide safety to the people, the economic use of
resources, and environmental sustainability are set as priorities. RBMA also
embarks on prodigious corporate social responsibility initiatives, including the
CO2 reduction program and activities focused on giving back to society. These
initiatives are structured, systematically evaluated, continuously improved, and
aligned with Robert Bosch Stiftung GmbH, a charitable foundation.

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 Business Excellence Best Practices
Strategy for Organisational Sustainability

FAILING TO PLAN IS PLANNING TO FAIL

Planning is another important criterion in an excellent business model, which

focuses mainly on strategy development and strategy deployment. RBMA
demonstrates the accomplishment of outstanding strategic planning through a
very structured policy deployment process, which sets the right focus and goals
for the company. The deployment involves translating high-level objectives into
smaller operational pieces depending on annual improvement priorities and
target improvements.

When asked about his views on planning, Lothar Mergili humorously responded,
“Germans generally like to plan. That is why in most German firms, the planning
process tends to be long and detail-oriented. Plans are not implemented until
they have been reviewed thoroughly.”

Organizing and conducting policy deployment at RMBA involves making

organizational commitments and setting goals, as well as assigning or approving
the roles of individuals, the allocation of resources, and the decision making and
review process. Effective Policy deployment ensures all levels of an organization
are in alignment with the business goals and objectives for sustainable business
excellence. The strategy deployment process is conducted through stages of
activities.

RBMA also practices the System CIP approach as a tool to focus on the
individual value streams and to improve standards in terms of materials flow
and information flow. Based on the strategies and goals (such as on Business
Requirements, RBMA BSC and TC) set for the year, the Focus Topics are identified
and the System CIP Projects are derived with the target conditions.

The Focus Topics will define and deploy the System CIP action plans required
in the operations area. The System CIP Projects status and achievements will
be regularly reviewed in the monthly BPS Steering Committee Meeting among
the key stakeholders and plant management. Once the System CIP Project is
completed, it will be transferred into the Point CIP phase to focus on stabilizing
the performance versus the standards. Resource planning to support the
accomplishment of the actions plans is conducted at several stages.

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Above: RBMA Policy Deployment Board

In essence, the best practice at RBMA that make the planning work are the
precise input for planning and the establishment of short and long-term plans and
goals based on the benchmarked business and customer requirements. Besides,
organization-wide participation in the planning process and cascading plans to
all levels, strategy deployment demonstrating specific ownership of plans and
individual goals, strategy deployment establishing resource management, and
strategy deployment delineating the implementation of the plan and involving
regular monitoring of the plan have been well implemented at RBMA.

The strategy deployment process at RBMA has effectively translated

organizational strategy into measurable objectives throughout the various
functions and levels of the organization. Effective strategy deployment at
RBMA is strengthened with a shared corporate culture that offers orientation,
reinforces cohesiveness, and creates identification.

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 Business Excellence Best Practices
Strategy for Organisational Sustainability

FUTURE DIRECTION

When asked about the way forward, enhancing quality of life with solutions that
are both innovative and beneficial remains RBMA’s focus and priority. Smart
integration of people and technology to fulfil the needs of drivers and passenger’s
safety and user-friendliness is continuously emphasize. The uniqueness of
Bosch Global’s company structure allows entrepreneurial freedom and financial
independence for RBMA to continue investing into research, development and
patent applications worldwide.

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