International Supply Case Study bmw outline

International Supply Case Study

• BMW

Outline

• BMW- The company
• Build-to-Order & BMW
• BMW Spartanburg Plant
• Products
• Sourcing
• Capacity
• Managing Supply

BMW History

• Founded in 1917
• Built engines for military aircraft
• 1940’s WW2: repairs, manufactured spare parts, agricultural equipment and bicycles
• 1950’s build motorcycles
• Then the cars…
• 1970’s: South Africa Plant
• 1992: US Plant
• 1994: Purchased Rover group (Rover, Land Rover, Mini, MG)
• 1998: Rolls Royce (2003)
• 2000: Sold Rover except Mini

BMW Business Interests

• Automobiles
• BMW
• Mini
• Rolls Royce
• Motorcycles
• Financial services

BMW

• “The BMW Group is the only manufacturer of automobiles and motorcycles worldwide that concentrates entirely on premium standards and outstanding quality for all its brands and across all relevant segments.”
• Premium sector of the international automobile market

BMW Group. Brands and Models.

• Z4

• X5

• X3

• 6
• Series

• Motorcycles

• 1 Series

• 3 Series

• 5 Series

• 7 Series

• Source: Goudiano CSCMP 2005

BMW Group Development and Production Network

• Z8

• Dingolfing

• Munich

• Leipzig

• Regensburg

• Spartanburg

• Rosslyn

• Graz
• (external production)

• Berlin

• Oxford

• Goodwood

• Shenyang

• Source: Goudiano CSCMP 2005

Production Volume

• Total: 1119.1

Production Volume

• Ford’s Worldwide vehicle unit sales of cars and trucks in 2004 (in thousands):
• The Americas 3,915
• Ford Europe and PAG 2,476
• Ford Asia Pacific and Africa 407
• Total 6,798

Challenges

• Excess capacity => Price pressures
• Customer expectations
• Personalization
• Innovation
• Service
• Cost effective factories with flexible manufacturing abilities
• New technologies and material
• Regulations
• ….

Build to Order

• Convert orders to products
• No finished goods inventory
• “Build-to-Order is the capability to quickly build standard or mass-customized products upon receipt of spontaneous orders without forecasts, inventory, or purchasing delays.” (D.M. Anderson)
• Demand pulls production
• WHY BTO?

Why BTO?

• LEAN!!!
• 'Lean production is aimed at the elimination of waste in every area of production including customer relations, product design, supplier networks and factory management. Its goal is to incorporate less human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible.'

Why BTO?

• Other Alternatives
• Build to Stock/Forecast
• Assign to dealers
• Sell from available stock

Built-to-Order vs. Built-to-Forecast

• Built-to-Order

• Built-to-Forecast

• Sale from stock

• Customized vehicle

• higher level of customer satisfaction due to personalization
• better inventory management
• less sales incentives

• Customer

• Storage

• Production

• Production

• Customer

• Customer