At Bosch Mobility’s Suzhou factory (a member of the Global Lighthouse Network designated in 2021), the integration of lean principles and Industry 4.0 technologies has transformed operations, enhancing efficiency and sustainability. The use of AI for predictive maintenance and automated optical inspection has boosted productivity and failure pattern identification, and extensive virtual simulations have enabled the site to achieve more efficient ramp-ups in the production of mobility solutions. Talking with McKinsey’s Forest Hou, Bosch Mobility China COO Norman Roth also explains the benefits of a focus on employee development and a problem-welcoming culture.
This interview has been edited for length and clarity.
Forest Hou, McKinsey: Bosch is a very successful lean production company and also an early pioneer for Industry 4.0. Can you share your assessment of the relationship between lean and Industry 4.0, and how to use both to grow business sustainability?
Norman Roth, Bosch Mobility China: For us, this is two sides of the same coin. It’s about creating transparency—to see the problem, to fix the problem, predict maybe when a problem will happen, and even prescribe some medicine so you have the right countermeasure at hand before the problem happens.
Here’s an example on the predictive maintenance side—in the lean toolbox, you might call it TPM, total productive maintenance. In welding, you have electrodes, which wear out over time. Using historical data, we can train our algorithm to precisely predict when the electrode will wear out. This is where AI helps us very much in increasing productivity, overall equipment effectiveness, and all the other major KPIs we use.
Forest Hou: This is still lean thinking—doing more with less.
Norman Roth: I’m firm in my belief that lean is basic. And I’m sure in the decades to come, it will remain basic. It’s the best weapon to remove waste from the value stream.
Forest Hou: You have unique experience from academia to corporate. Given the recent Industry 4.0 changes, what kinds of ideas come to mind for addressing these complex and challenging environments?
Norman Roth: First, I believe in being nice to people but merciless to the process. I think if you are a humble, modest, and polite leader, and you create an environment where people like to work and are motivated, they can perform at their best level.
On the other side, if you are digging into the facts and challenging the process, this helps you understand the situation in detail and derive the right measures. So be nice to people and tough on the process.
Another idea—and this in line with the thinking of Taiichi Ohno, founder of the Toyota production system—is to develop an “anger” against waste.
Forest Hou: What do you see as the best AI and gen AI use cases? What kinds of changes are happening in these factories, compared to four years ago?
Norman Roth: I think all three Bosch Mobility factories—Changsha, Wuxi, and here in Suzhou—have many good use cases when it comes to the level and penetration of Industry 4.0 applications. Here, we are the most advanced in the SMT area, surface-mounting technology. You saw some optical inspections integrating convolutional neural networks where we look at the printed circuit board (PCB) and identify failure patterns. AI@AOI, an artificial intelligence system that uses automated optical inspection, has significantly increased our productivity here.
Another case that is thriving is the level of simultaneous engineering work. You may have heard about knowledge graphs and knowledge ontology. We use very complete digital models. With knowledge graphs, we model entire production lines. We use extensive simulation with these models and do some improvement work and some bug fixing virtually. This enables us to have much quicker ramp-ups.
Forest Hou: What are some of your more recent gen AI use cases?
Norman Roth: The shop floor here in Suzhou is one of the biggest use cases for gen AI. On any shop floor, you have work instructions, quality assurance matrices, control plans, and quality reporting sheets. To create these documents, we use gen AI models based on historical data. We support facilities, for example, in Europe, India, Thailand, and Mexico. Thanks to gen AI models, you can take a work instruction or a quality document in Chinese, and with one click, translate it into multiple languages generating content tailored to very specific inquiries.
Forest Hou: Electrification and decarbonization are shaping the future of mobility. Can you share a little about your strategy? In particular, how will digital and Industry 4.0 help your sustainability journey?
Norman Roth: We talk about climate action for sure—the circular economy. We talk about a very broad and holistic approach to sustainability, what we call the “cradle-to-grave” approach.
Since 2020, we (more than 400 Bosch Group worldwide locations) are CO2 neutral in Scope 1 and 2 emissions. We work hard on the efficiency side, and here big data and AI help us a lot. If you look at the roofs here in Suzhou, for example, or the entrance gate, you see a lot of solar panels and some shades. We use geothermal energy systems. We also purchase electricity from green sources, which we call “green electricity” because this also counts toward our sustainability targets.
As a last resort, we are offsetting the residual CO2 emissions. We did a profiling of all our machinery, analyzing the usage profiles. Based on that, we switch the machinery on and off. Using AI, we even predict future usage and try to negotiate contracts based on energy consumption predictions. This helps us to be very efficient on the energy usage side.
Forest Hou: Can you share a little more about how your company helps employees with capability building?
Norman Roth: One thing happening for sure is this change toward digitalization, the new world of artificial intelligence. We need to actively embrace the new era and equip ourselves with at least some basic knowledge.
So we set up a talent academy at Bosch Mobility Electronics in China. In the last few years, we have developed more than 100 digital professionals coming from all different domains. We give them a very deep education.
We need to create an environment where people are empowered. Another lean thinking statement is: “Decisions should be taken at the lowest possible level.” This also speeds things up and motivates teams. It’s very motivating if people can decide what they do.
This other one is a favorite of mine, which I hope is also pure lean thinking: It’s how you deal with problems. Cultivate a problem-welcoming culture. Because, in my experience, you will always have problems. The difference between an excellent company and an average company is how they deal with the problems.
In my view, and this lines up with many lean pioneers, if there are no problems, you have the biggest problem.
The Global Lighthouse Network is a World Economic Forum initiative. The initiative was cofounded with McKinsey & Company and is counseled by an advisory board of industry leaders who are working together to shape the future of global manufacturing. The advisory board includes Foxconn Industrial Internet, Johnson & Johnson, Koç Holding, McKinsey & Company, Schneider Electric, and Siemens. Sites and value chains that join the network are designated by an independent panel of experts.
“Our firm is designed to operate as one—a single global partnership united by a strong set of values. We are equally committed to both sides of our mission: attracting and developing a talented and diverse group of colleagues and helping our clients create meaningful and lasting change.
From the C-suite to the front line, we partner with clients to help them innovate more sustainably, achieve lasting gains in performance, and build workforces that will thrive for this generation and the next.”
Please visit the firm link to site