80 The Digital Transformation of Supply Chain Management

Box 3.3 Bossard AG

Bossard is based in Zug, Switzerland, and is a leading service provider of
manufacturing businesses that take advantage of new opportunities arising
from Industry 4.0. Bossard has an extensive global network of service locations,
logistic centers, and application engineering laboratories around the world. By
means of this network, the factories of industrial companies are supplied with
fastening technology products and services with high-quality standards and
standardized systems and processes.
Bossard’s business model was developed in Switzerland and neighboring
countries where the costs of manual labor were high, so saving time spent by
employees on routine tasks translated into hefty saving costs. Therefore, Bos-
sard’s solutions were more appreciated and more competitive in high-cost labor
countries, while in low-cost countries its ability to compete was challenged.
Bossard’s ability to deliver consistent quality and reliable local services at
many locations in the world was an advantage in its becoming a supplier of
multinational companies. Among Bossard’s main customers are Altstom, Sneider
Electric, ABB, General Electric, Bombardier, John Deere, Honeywell, and Siemens.
Core business. Bossard buys large volumes of basic components - screws, nuts,
and bolts, which are base products (’C-parts’) for manufacturing - from a variety of
suppliers, repackages the items for its customers, and delivers them just in time to
manufacturing sites worldwide. Bossard integrates the delivery by providing logis-
tics solutions and participating in the customers’ product development process.
Although these ’C-parts’ are standardized mass-produced items and are not
expensive, their quality is critical for the overall safety and reliability of the prod-
ucts in which they are assembled. An error in choice or defects in quality could
have disastrous consequences for product affordability.
It was the morning of July 25th, 2000, at Charles DeGaulle Airport. Five minutes
before the supersonic Concorde took to runway 26R, a Continental flight headed to
Newark, using the same runway, lost a titanium alloy strip. During the following
takeoff of the Concorde, a piece of this debris cut and ruptured one of the airplane’s
left tires. As the aircraft accelerated down runway 26R, this tire disintegrated and a
piece of it struck the underside of the wing, where fuel tank five was located. Fuel
poured from the tank and ignited. The Concorde had already reached a velocity
where it could not stop safely by the end of the runway, and so it lifted off the
runway with flames hanging from the left wing. The tragic crash that followed
cost the lives of 113 and the image of a truly impressive airliner.
Bossard has gained a strong reputation and competitive advantage for the
extensive testing of its ’C-parts’, such as precise sizing, push and pull pressures,
corrosion protection, surfaces, and coatings. Bossard’s corporate slogan, ’Proven
productivity’, enhances the goal to help industrial customers to improve/up-
grade their productivity.
A query: In a manufacturing world where commoditization puts suppliers’
margins under constant pressure, how was it possible for a Swiss-based supplier
to grow with profitability higher than the industry benchmarks?
Supply chain 4.0. rewriting the rules 81

Box 3.3 Bossard AG (cont'd )

The reply: the adoption of Industry 4.0, which refers to the Fourth Industrial
Revolution as manufacturing converged with the digital economy, in particular
with emerging “big collection systems and analytics”. Bossard decided to ride
this wave of revolution in manufacturing to become the most requested supplier
for companies in the manufacturing sector willing to update their activities with
Industry 4.0 technologies and profoundly innovate their logistics systems.
Bossard offered three types of services: product solutions, application engi-
neering, and factoring logistics.
Product solutions. Bossard does not sell a mere tangible product like a
fastener or a nut but a service. The approach starts with the analysis of the prod-
ucts and the production processes of the customer, whom Bossard can advise
regarding the best solution for the safety and reliability standards required
and for strengthening customer productivity. About half of Bossard’s products
sold are customized products.
Application engineering. Moving from its expertise in technology and logis-
tics, Bossard advises customers regarding their product innovation process in the
search for new products and new solutions and on how to bring both to the mar-
ket faster.
Factory logistics. Bossard helps its customers upgrade their operation pro-
cess through the management concepts of lean management, Smart
manufacturing, and mass customization. Bossard’s service named ’Smart factory
logistics’ enables customers to reduce inventory and procurement costs along
their value chain and value.
To help its customers manage ’C-parts’, including solutions that simplify
ordering, Bossard introduced SmartBin, a fully automated ordering system.
SmartBin constantly checks current stock levels. When the minimum level of
stock is reached, a predefined order quantity is automatically shipped to the cus-
tomer’s warehouse or directly to the point of use. SmartBin was an instant suc-
cess among Bossard’s clients as it helps to optimize the ordering and supply
processes, reducing supply complexity and excessive inventories, increasing pro-
duction and providing data analytics.
In 2014, Boussard introduced SmartBin Flex, a wireless-enabled mobile solu-
tion, and the following year SmartLabel, which triggers the ordering of a prede-
termined quantity of products by pressing a labeled button.
These and other innovations enabled Boussard to implement the ’Smart fac-
tory logistics concept’, by which computer systems monitored the physical pro-
cesses and made decentralized decisions. This Internet of Things (IoT) solution
empowers Bossard to communicate and cooperate in real-time with participants
in the value chain of its clients, offering the company’s services. Bossard’s sales
forces started to use these IoT solutions to provide Vendor-Managed Inventory
(VMI).