Bosch is committed to Ancillarisation and Outsourcing to remain Competitive

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04-10-2011 | India | Corporate News

Bosch reconfirms no job and income loss and reassures deployment of workmen as an ongoing practise since last 20 years As a professional & global organisation, Bosch needs to maintain global competitiveness, global standards and practices Employee union - MEAs illegal strike has resulted in loss of approximately Rs. 60 Lakhs to State Exchequer and over Rs. 4.0 crores to the Central Exchequer in the last 7 days MEA members are disseminating incorrect information in media about employee friendly company policies, thereby affecting the social goodwill of employees and the company Striking employees are continuously being misguided by external influences Bangalore October 4, 2011: The employee union of Bosch Bangalore Plant MEA (MICO Employees Association) has chosen to continue its Illegal Strike. The MEA declared Tool Down strike on September 28, 2011, beginning with the first shift of production citing reasons of outsourcing of certain non-core activities for modernisation and cost competitiveness. This act by MEA is a gross violation of the terms of agreement signed between the company and the union in the last wage settlement in October 2010 which protects the continuity of all rights, obligations and privileges of either party signed in previous agreements. Bosch reiterates that the decision of ancillarisation and outsourcing of non-core manufacturing processes is imperative for modernization in order to stay globally competitive. Such practices are being used on several occasions by Government and Industry. Outsourcing and ancillarisation followed at Bosch are in accordance with our previous wage settlement and has already become a part of our service condition. Besides, workmen are given one increment and one promotion. This move has in no way resulted in job loss, retrenchment or reduced remuneration and incentives for workmen in last two decades in Bosch. In fact as per company policy, workmen who are redeployed are re-trained are given additional compensation benefits. Ancillarisation and outsourcing are necessary to stay competitive, maintain growth and ensure future survival. Such measures ensure growth of not just the organisation but growth of the employees too.

The average remuneration of Rs 50,000 pm (CTC) to its workmen is one of the highest in the region and industry and is a testament to the significance Bosch assigns to employee betterment and welfare. Sustaining and further extending such benefits will largely depend on the competitive edge of the company in a globally competitive market. The decision to outsource is expected to result in betterment of the organisation and its employees. Despite the illegal strike, Bosch encourages and welcomes willing workmen to come in and resume normal work at the earliest. From the various media reports the company learns that a lot of wrong information is floating and as a responsible company, Bosch would like to clarify that: 1.The Plant is not shut down and some minimum production is being managed by officers as a stop gap arrangement including all essential services which are intact and unaffected. Dispatches to customers across the country are made through the available stocks. 2.MEA is spreading a wrong message on job loss due to outsourcing; Bosch confirms no job loss due to outsourcing. 3.Bosch is a global employer with an employee base of nearly 300,000 world over and is committed to legality and good governance in all its activities. In the interest of the employees and their families, the company, the industry and society at large Bosch hopes that its striking employees shall see reason and resume work at the earliest; and not get misled by union and external influences.

Ancillarisation and technical efficiency of firms: an empirical study of rail coach factory, Kapurthala in Punjab.
Technical efficiency of both parent firms and ancillary units play a significant role in the smooth and successful running of the industry, as a whole. An efficient industry has salient spillover effects on other linked sectors of the economy and ancillarisation (1) helps in this process of development. Infact, the concept of ancillarisation is mainly based on the relationship between the two parties i.e., the parent firm and ancillaries and technical efficiency is a key factor in the long list of factors promoting the growth of ancillarisation in different countries of Europe, America, Asia etc. the issue of ancillarisation deserves special consideration as a possible mean of not only risk reduction but also technical efficiency. Ancillaries produce only few components and part of the entire product which results in specialization and over all efficiency of these firms. The parent firm can be take advantages of the "Specialized Technology" of subcontractors or ancillaries (Watanabe, 1972). In Punjab, government, planners and development agencies are paying special attention to the development of ancillary units for the purpose of technical up-gradation or hi-tech level on the one hand and environment friendly global standard on the other. Ancillarisation is the main basis of industrialization and technical support in Punjab in

industries like sports goods, hosiery, tractor, electronics, bicycle, sewing machines and transport equipments. Empirical evidence in Punjab shows that large number of ancillary units in above mentioned industries act as an engine of industrial growth and meet the requirement of hi-tech standard. Studies of Staley and Morse (1965), UNIDO (1974), Watanabe (1972), Nagraj (1984), Sharma (1990), Singh B. (1995), Poornima C. (2006), Odaka and Kiyokawa (2008) reveal that technical efficiency plays a prime role in different types of ancillarisation, especially in component ancillarisation (2), assembly ancillarisation (3), specialized ancillarisation (4) and cost saving ancillarisation (5). Study of Tommo Marukawa (1995) in China indicates that ancillary units are joining hands with large enterprise group, from technological aspect particularly, in order to survive. Small firms, which produce complementary goods and services as subcontractor to global firms, have high survival probability in the era of globalization, (Singh and Jain, 2007). To quote Inoue (2008), ancillarisation in Japanese manufacturing has uniquely contributed to the technical efficiency of firms. However, studies of ILO (1961), Sapru (1975), Goyal (1984), Gill (1994) and Goldar (2008) show that technical inefficiency of small entrepreneurs is a major hurdle for the development of ancillarisation in India. It is in this context that the Rail Coach Factory (RCF) Kapurthala, owned by Indian Railways, was dedicated to the nation on March 31, 1988 to boost the economy of Punjab in general and technical efficiency in particular. The contribution of RCF and its ancillaries is laudable on technical front and quality standard. RCF has inducted stateof-the-art machines and processes for manufacturing high precision sub assemblies/assemblies like Computer Numeric Controlled Laser Profile, CNC Underwater Plasma cutting machines, Robotic Spot Welding machines, Cold Roll Forming, Profile Projector Tool Rooms etc. In order to have higher technical efficiency, RCF was chosen by the Ministry of Railways to manufacture modern high speed stainless steel coaches with a Transfer of Technology (TOT) agreement with M/s ALSTOM-LH Germany. RCF has par excellence in design improvement, information technology, industrial safety, exports to Asian and African nations and overall technical efficiency. The cumulative production of RCF increased to 21000 coaches in 2008-09. In March 2010, technically sophisticated first double decker AC stainless steel coach of its own type was dedicated to the nation. Its different ancillaries have created a niche on the efficiency ground. RCF and majority of its ancillaries have ISO: 9001 and ISO: 14001 accreditations to their name. It has adopted a Japanese concept (5-S) of work place management for bringing improvement in over all efficiency of the firm. The present paper seeks to focus mainly on technical efficiency of ancillaries of RCF, Kapurthala in Punjab. Specific Objectives of the Study

1. To study relationship between firm's size and efficiency of ancillaries of RCF in Punjab. 2. To examine the impact of exclusive or non-exclusive linkages of ancillaries with the RCF on efficiency of firms.