Bmw: the 7-Series Project

Outsourced almost 87% of production activities involving spare parts while maintaining core competencies like R&D, design, quality control and key trademark

→ customized systems – engage in collaborative design efforts with clients and engineers; once designed, system built by manufacturing alliances then installed and supported by FII

Our Chatham factory is manufacturing trucks for its customers ranged from no-frill models to highly customized units for last 17 years. Customers were designing their won trucks which represent 50-80 percent of production volumes. Our technical department spent months to decide manufacturing procedure and accessories. Customers were intolerant of delays, quality problems or other factors that failed to meet their expectations.

Selection of outside suppliers at the initial stage was crucial. Three advantages would benefit from authorized supplier involvement in design and production process. Firstly, they could foresee major problems in the design cycle by pulling their expertise and methodologies. Secondly, this model embedded quality into BMW’s production system up and down the supply chain. Thirdly, supplier was able to realize the critical connection between quality and profit through high customer satisfaction.

The first example, they highlighted that the “advanced design, engineering, and technology” made a significant role on the past successes. Thus, they are sustaining on this approach for further successes by continuing investment on the up-to-date knowledge which will be implemented into the entire processes in order to enhancing their capabilities and experiences. Specifically, to produce specialized vehicles have highest performance, minimal impact on the environment, and crossing the limits of their customers’ expectations in term of unique design and competitive

“The pace of our development and introduction of new and improved vehicles depends on our ability to implement successfully improved technological innovations in design, engineering, and manufacturing, which requires extensive capital investment.” Page 27

We would recommend that BMW use the actual parts instead of substitute parts; for example, using sheet metal instead of fiberglass when developing new series models. This will help BMW detect problems earlier in the production process and make quality improvement a much easier task to achieve. Since they are using suppliers that will manufacture parts using specialized tooling, BMW should also reduce the amount of prototype batches from five to three. The first prototype batch should be done using its current process of hand design, the second prototype will use pre-production process and the third will incorporate the use of specialized tools. Using this process will significantly decrease prototyping cost and lead time.

Continuous development and responsiveness of suppliers at the early age of product development process is critically important. “Honda tries to encourage suppliers’ suggestions early before finalizing drawings, particularly in the area of cost reduction and quality improvement.”

In SPORT mode, the thrust and brake regenerative energy are their peak and thus it is the ideal mode when charging the battery. In HYBRID mode, the battery is charged via by brake energy regenerative, thus not much energy is fed back to the battery in this state.

As a result of the increased demand of cars, the competition among car companies is becoming intense. Although the market of car is the biggest growing market in the world, there are still some companies who make cars failing year after year. However, there are some outstanding car companies such as The BMW Group performing distinctly.

BMW marketing veers towards standardization rather than towards adaptation although it has a combination of both. The aesthetics for instance on its websites and the rest of its marketing mix are similar on all its material reflecting standardization. The classic design accords with the image of the company and does not differentiate according to specific country. So, for instance, users switching from the Taiwanese website to the American one will find the same design. The dominant colors of BMW, too - blue, black, silver and grey- remained the same regardless of country, and the pictures are the same too

The current process is working well to deliver the unique styling and quality that defines BMW, however, it is very time consuming and a major roadblock to reducing the product development time.

The increasing numbers of sub-model cars can also affect the brand quality through increasing any risk issues once launched to the public. Furthermore, according to (Stephen, 2004) Mercedes customers have high expectations about the high quality promised by the company. In 2003, the company disappointed many customers when they sold over 2000 vehicles with an extra option for a navigation system, which were not ready to be delivered at the right time, also accompanied by other mechanical issues. On the other hand, the company made an announcement about its new high quality hydraulic breaking system, which increased its competitiveness in terms of safety and quality against other competitors in the industry.

This work is done to study the improvement of the quality in automobile industry. This chapter consists three sections named as “Problem definition”, “Objectives” and “Methodology of the study” respectively. The section 3.1 named as “Problem definition” describes the challenge or difficulty that is to be solved. The solution may be achieved after fulfilling the objective by using some sub-objectives that are described in section 3.2 named as “Objectives”. The methodology described in section 3.3 in details. This methodology has been devised keeping in mind the view of “Problem definition” and the “Objectives” that are suggested for the fulfilment of the solution for the problem.

"The mission statement up to the year 2020 is clearly defined: the BMW Group is the world 's leading provider of premium products and premium services for individual mobility."