International Supply Case Study bmw outline

Savings through BTO

• In the U.S.
• Potential savings through BTO~ $1500/car*
• Average incentives per car sold ~$1900 in 2002*
• *Miemczyk and Holweg J. Bus. Logistics, 2004

Obstacles/ Requirements

• Inability to supply customized vehicles within “acceptable” timeframes
• Avg. Leadtime for customized vehicles: 6-10 weeks!!!
• Short OTD
• Process/Product/Volume flexibility
• Flexibility from suppliers
• Flexibility from logistics operators

Current BTO Levels

• 1999: % BTO Avg. New Vehicle stock in days
• U.S.: ~ 5% 60-90 days
• U.K.: ~33% 64 days
• Europe: ~48% 55 days
• Japan (Toyota): ~60% 20 days

• Source: Miemczyk and Holweg (2004)

BTO & BMW

• BMW
• BMW’s operations in SC Plant
• BMW’s challenges in BTO
• Available levers for control

BMW USA

• www.bmwusafactory.com

BMW USA

• Z4
• X5

BMW

• “Every customer receives his/her personalized vehicle at a compulsory date – at best at his/her preferred date”
• 100% delivery punctuality
• Flexibility for order change

• Why offer flexibility?

Flexibility

• 0

• 10

• 20

• 30

• -1,0

• -0,5

• 0,0

• 0,5

• 1,0

• 1,5

• 2,0

• 2,5

• days before order freeze

• Comfort seat
• adjustable electronically

• Xenon lights

• Independent vehicle heater

• Navigation systems

• Equipment changes in % (accumulated)

• %

• Source: Goudiano CSCMP 2005