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Introduction to Project Management Systems

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Week 9 Case Study Report Recommendations for BMW _________________________________________ Contents
1. Recommendations 2. Rationale 3. Implementation 4. Alternatives 5. Metrics

Report by: Lee Matthews Venugopol Puddipeddi Kai Zhou Miyake Yasuhiro Fan Wang

1. Recommendations 1.1 We recommend the 3-series Touring station wagon is used as the pilot for the Digital Car Project. Given that there is less pressure in terms of work load and less financial risk in the 3-series project, a more experimental attitude can be adopted by the project stakeholders. If the project is successful, the new processes can be transferred to the 7-series and all other new projects. 1.2 The adoption of a philosophy of kaizen i.e. incremental continuous improvement during the project. The key issue in this case is the development of capabilities such as inter-group collaboration on design and such capabilities are developed incrementally, not overnight, and there is no guarantee of success. 1.3 Benchmark other companies that have attempted to develop similar capabilities to those desired. This will enable BMW to develop a more realistic idea of how long it will take to develop the desired capabilities. Such benchmarking projects can take years and in the mean time BMW can experiment with developing those capabilities on the 3-series project. 1.4 Adopt proven techniques of planned organisational change to develop new capabilities during the course of the project. We recommend a system of rewards and punishment that rewards the desired capabilities and punishes undesirable behaviour, and action research projects to support the desired capabilities. 2. Rationale We feel that the 3-series project is a safer environment in which to develop capabilities as the consequences of failure would not be as severe as in the 7-series project. This has two advantages. Firstly, there will be less risk to BMW financially. Secondly, as there is less risk attached to the 3-series project, it will provide an environment that is more conducive to the development of new capabilities.

We also believe that a long term incremental approach to changing the design development process is more suited to the development of the desired capabilities. Japanese car manufacturers have shown that these capabilities can take decades to develop, and Western companies that have tried to implement Japanese methods as quick fix solutions have invariably failed. A chief advantage of the 3-series project is that they have already starting to pursue the incremental approach to process improvement in the first year of their project and can continue doing so. A final reason not to completely change the current system of design development is that the current system has proven itself to be very effective at developing world class commercially successful cars. We believe that through improving the current process BMW will be able to keep the desirable design capabilities that currently exist in BMW, while developing new capabilities, such as front-loading, that will enable development projects to be finished more quickly in future. 3. Implementation 3.1 Weekly inter-group meetings to promote inter-group collaboration. There are two issues with inter-group collaboration. Firstly, when conducting different activities simultaneously, a change made by one group has the potential to seriously disrupt the activities of another group. If such changes are discussed in meetings, there is less potential for disruption as the changes will be less of a surprise when they are entered in the CAD programme. Secondly, if different groups are reluctant to release imperfect data, such meetings could provide a forum in which the imperfect data of other groups can be discussed. Such meetings would gradually help to build a more cooperative environment in which the imperfect data essential for CAD development is freely exchanged in the better interests of the project.

3.2 Data sharing through storing of group databases on company intranet. This will better facilitate inter-group communication between weekly meetings. Such communication will allow stakeholders to develop a more holistic vision of the project. Blogs could also be added to the databases to better facilitate discussion on a daily basis. 3.3 Physical forum for different groups to meet and discuss problems. Given that BMW has the advantage of having all of its staff working together on one site, we recommend taking advantage of this by establishing a space where designers from different groups can meet to discuss problems. This would be an informal space and would progressively promote inter-group trust and confidence levels, as well as providing a means for simple everyday problems to be discussed and solved. 3.4 Dedicated project team. This will overcome two obstacles to the implementation of the new development system. Firstly, the problem of functional managers being too busy with daily tasks to dedicate resources to re-engineering processes. Secondly, the tendency for group leaders to focus to narrowly on the interests of their own group at the expense of BMWs broader need to re-engineer their processes. A dedicated project team could take a broader view of the project and be in a better position to consider enablers and obstacles to the adoption of front loading. Functional managers should be involved in this team but the team would have to be led by people with a broader strategic outlook. 4. Alternative Recommendation The main alternative to the proposed recommendation is to use the 7-series to radically re-engineer BMWs design development processes. The advantage of doing this is the same as the disadvantage: it would be a high risk project that would have the potential to destroy BMW if unsuccessful. This would be an advantage as it would

motivate BMW designers and managers to make radical changes to the development process. The disadvantage however is that the consequences of failure for the project would be so high that there is the risk that in emergencies the short term goal of getting the job done would undermine the longer term goal of developing a new design process. A second problem is that the 7-series project is already one year old and so far the project has been using the old development process. We feel it could be potentially confusing for project members to find that the length, goals and metrics of the project they are working on have suddenly been changed. Such confusion we feel has the potential to develop into resistance to change. 5. Metrics In order to ensure that front loading does take place in the project, goals are required and a system of metrics to measure their implementation. We recommend measuring performance through benchmarking against Toyota. In Appendix A we have plotted a problem-solving trajectory curve similar to that of Toyotas. On the y axis are the different stages of the BMW project. Firstly, we suggest that a curve also be added that is based on BMWs pervious problem solving trajectory on a similar project. The Toyota curve will act as a goal for the 3-series team to aim towards, while the BMW curve will indicate if there has been any improvement on previous projects. As the project progresses the 3-series project team will plot the percentage of problems which have solved so far compared with the targeted percentage. We wouldnt expect the 3-series project to be able to develop the capabilities required in order to achieve the problem solving performance of Toyota but it is a target against which improvement can be measured. Failure to move in this direction would indicate that new front loading capabilities have not been developed.