FUNDAMENTALS OF

SUPPLY CHAIN
MANAGEMENT
Bayerische Motoren Werke (BMW)

Group no. 12

TAZEEM SHARIF
L1F15BBAM0116

SAIRA AFZAL
L1F15BBAM0035

NABIHA BABAR KHAN

L1F15BBAM0100

6/28/2018
Bayerische Motoren Werke (BMW)
BMW is a German high-priced car, sports activities car, motorcycle, and engine Production
Corporation primarily based in 1917. It is one of the high priced automakers in the global. The
corporation based totally in Munich. BMW is the parent enterprise of Mini and Rolls-Royce
Motor automobiles. The agency produces the motorized automobiles under the BMW
Motorsport department and motorcycles beneath BMW, and plug-in-electric powered
automobiles under the BMW-I sub-brand and the general standard performance model
designation within the regular BMW line-up. The Financial Services section offers credit score
sponsoring, renting and distinct services to retail clients.

Product brands Service Marks

BMW DriveNow.
BMW i. ReachNow
BMW M. ParkNow
MINI ChargeNow
MINI John Cooper Works Digital Energy Solutions
Rolls-Royce Motor Cars Alphabet
BMW Motorrad BMW Group Financial Services
DesignWorks

Reasons for which BMW is so successful brand

 There are numerous motives behind its achievement, maximum vital one is fine. It tops in
quality and generation each- sheer driving pleasure. So, universal BMW represents a
pricey revel in. It has additionally got a strong logo picture.
 It capitalizes in expertise and quality. However, the insight of the brand is mainly that of
a luxury brand. Recently, it started announcing some low prices options like its bike
which is going to be introduced to developing markets.
 Quality and reliability are also strong points behind BMW success today. They believe in
excellence in everything they do: service, product quality and customer relationships.
 BMW spends around 25% of their revenues into R&D and it is because of BMW that put
so much of their innovations and advances.
 Porter’s five forces analysis

 Threats of new entrants: Threats of latest player is reliant at the difficulties faces
amid section into the enterprise or passage barriers. The risk of new contestants if there
should get up an incidence of automobile industry is less as good-sized capital price is
needed to installation an assembling plant and get together liner. Additionally, it calls for
funding for new contestants to get an area and the notoriety within the psyches of the
customers.
 Threats of substitutes: BMW has an emblem picture of being ground-breaking and
lavish. It is situated inside the selective automobile run in which there exist several
substitutes for BMW like Mercedes, GM and Toyota. Consequently, the chance of
substitutes for BMW is high.
 Bargaining power of buyers: BMW and its rivals are located as in elite object
move. Here the bartering depth of consumers is excessive in light of the fact that the
customers can choose the item as per the value variety and purchase the items in like
way. Additionally, with ecological issues drifting over the commercial enterprise the
customers have the remaining say with test substitutes available.
 Bargaining power of suppliers: BMW has wonderful shop network administration
framework and had concerned acquaintance with vendors. The haggling depth of
providers is excessive on this industry because the carriers can commit the sticker rate for
the crude substances. Despite the fact that long time relationship with vendors can
demonstrate effective, the last phrase lies quite an awful lot with the carriers.
 Competitive rivalry: Industry has reduced that competition for its items, with its
gadgets focusing at the fragment and positioned comparably. Aggressive contention
became excessive inside the commercial enterprise with the fundamental US and
European markets confronting company rivalry from the Asian marketplace.
 Swot Analysis

Strength:
 BMW is a renowned organization with an excessive function in phrases of branding and
gratitude trouble.
 BMW is capable of preserve its marketplace function lucratively with its hub of 1 in
every of a kind vehicle.
 BMW used superior era for its products that embarked its products format, excellent and
rate.

Weakness
 BMW’s famous photograph have become too extreme and traditional in assessment with
its competition.
 Low value products of its competition.
 Overdependence on US and Europe marketplace.

Opportunity
 Popularity in growing global locations like India and china.
 Flexibility in improvement and manufacturing.
 Low interest prices.

Threats
 Strong competition inside the expensive phase of motors.
 Economic downturn.
 Increase in gasoline prices.
.
Critical Analysis of BMW Supply chain process
The deliver chain control at BMW begins off evolved from the customer
and ends with the purchaser. BMW uses built-to-order shape to provide
their customers what they want. Customer makes their request online or
at some point of the sellers. The records is then transmitted to Munich
(Germany) that is captured in a important database. Bill distribution is
executed to set up charge of producing and identifying where the auto
may be synthetic. This is informed with the resource of the nature and
format of the product, the fee involved and the lead time. All
components are whole on constructed-to-stock basis at the model life of
the car imported. Parts are acquired on the Cape Town worldwide
airport thru shipment in the case of South Africa Rosslyn plant. It is then
conveyed to the Rosslyn plant in Pretoria wherein it is then meeting.
After assembled, it is taken to the warehouse wherein its miles
transported to the dealers set for collection through the client. Several of
the manufacturer, distribution of vehicles, companies of elements,
exportation, nice values at BMW and choice of mySAP era for steerage
conversation. These strategies may be described as follows

Production
The manufacturing exercising of automobiles goes throughout unique stores in
which explicit generation are realistic to make sure that charge automobiles are
added to clients. The approach begins at Body-in-White Shop, wherein numerous
pressed body factors are assembled right into a body shell. The subsequent system
is the Paint Shop, wherein it's far painted consistent with the customers' request. At
last the painted body is going to Assembly Shop wherein components are constant
as regular with specification ordered thru the patron. The vital problem is stretchy
manufacturing.:
Paintings of car:
A painting of car is bendy to fabricate automobiles which meet the clients' exact requests. Color
is a crucial principle for the patron deciding on a vehicle and is an influential marketing tool.
Each customer is supplied with the unique model require, with personalized capabilities and all
of the options ordered, calls for a very high widespread, now not best in assembly but
additionally in production and automobile shipping control. However, one of the foremost
activities on the assembly line occurs at the mix factor: the factor at which the engine and power
teach are "blended" to the body of the automobile. Improvements are made on the assembly line
which has made it feasible for BMW plant to supply all the 3 Series four-door model derivatives
and alternative requirements for the neighborhood and export market.

Suppliers and Assembly line:

BMW Rosslyn plant as an occasion has around forty four close-by suppliers.
Providers convey additional than 60% of the system of each vehicle to the line. In
the nick of time (JIT) supply methods guarantee that specific segments of the
vehicle are at the gathering line basically so as to be consistent to the exact car
they're made for. JIT convey structures are utilized to convey entryway boards,
debilitate structures and back and front axles to the correct point at the gathering
line. Utilizing a JIT convey conspire spares space by limiting stock on the thought.
Commonly, there is best one and a half long periods of stock on hold at any set
time which forestalls damage to stock transport charges and spares carport. BMW
plant offers worldwide superbness extremely worth stock to buyers over the globe.
All operational assembling is controlled for showing uncompromising, best
remarkable. Be that as it may, all way underway of the auto is checked for method
investigations and aptitudes are completed wherein essential.
Distribution:
BMW plant Vehicle Distribution Center (VDC) has a dispersion office and an esteem viable
carport, permitting the insurance and remarkable security of the cars. A 2 hundred car encourage
loads send out engines utilize devoted railroad offices and off-loads each day import autos. For
instance Rosslyn plant has around 196 merchants locally. Vehicles proposed for merchants are
stacked onto car suppliers and to dealerships around the USA, which store the auto from any
imprints put on and scratch before delivery to a client. All vehicles are examined by means of
mates VDC preceding stacking to guarantee that the most ideal phases of outstanding transport to
dealers are kept up. The VDC offers a mechanical and paint/outline workshop for the supplier
and repair of big business engines likewise to affirm utilized vehicles. Produced autos are then
transported to Durban (SA) for send out. Transportation of autos to Durban port is on every day
establishment. BMW South Africa (SA) has show sellers, every one with a capacity ability of
176 gadgets. The trains are utilized to move imports gadgets from Durban harbor to the VDC in
Rosslyn. The cars are stacked onto vehicle wearing vessels on the Durban harbor, called RORO
ships. These boats shipping vehicles to a few commercial centers at the contrary closures of the
earth. Autos are passed on an every other month premise to the Far East, USA and Australia,
separately. The travel term contrasts depending to the goal: Japan - 23 days, USA - 29 - forty
nine days, Australia - thirteen - 22 days.

Quality Standards:
To make sure finest patron pride, the constructed exceptional of the cars produced at BMW
Rosslyn Plant is measured via a manner called Complete Product Audit. This audit compares the
exceptional of a unit to the purchaser's necessities, inclusive of technical specifications, fitment
and function. These audits are completed during the construct method at specified factors. These
strict audit standards are set at BMW Germany by way of the Central Quality branch and are the
same for all BMW plant.

Using mySAP at BMW:

BMW makes use of mySAP Automotive to check out meeting rank in real time. MySAP
automotive components use facts and registers manufacturing validation every three mins.
Although, parts used for the duration of assembly are one by one from the stock depend, and
charges are published to calculate the value of labor in system. MySAP car enables to reduce
order-to delivery time, reinforces deliver chain sports in the areas of call for planning via
tracking, tracing of fabric deliveries and improves inventory accuracy across BMW plant -
allowing significant reduction time-to customer. It additionally gets custom-configured
manufacturing orders from BMW's planning system which consist of all of the elements essential
to fabricate each automobile. However, BMW sends those long-horizon forecasts and quick-
horizon JIT shipping schedules to its suppliers. Larger providers obtain the information through
digital statistics interchange (EDI) whereas different providers get admission to the mySAP
automobile dealer portal, wherein BMW posts the requirements to give up-to-date records on its
transport needs. By using best an Internet browser, suppliers can view this records in real time,
along with buy files, engineering documents, release schedules and invoices. When they ship
components, the provider’s ship BMW develop transport notifications (ASNs) to provide the car
producer with precise statistics on elements counts and shipping dates. Parts arriving at the
BMW dock are then obtained and transferred without delay to the lBMW plant has completely
incorporated structures and network international because BMW makes use of a service control
device as a part of a much broader plan to enhance supply chain lifecycles. The platform is
brought on by complexities within the technology embedded in its automobiles and next demand
for systems to support servicing. BMW uses a portal to integrate statistics and systems with its
suppliers which ends up in quicker statistics platform for communication but -increase
technology programs is likewise used consisting of mySAP, JIT manufacturing, constructed-to-
order which can be all characteristics of lean production and improvements.

BMW Rosslyn plant logistics:

Logistics is a part of the overall approach of BMW as is part of the deliver chain together with
flows of cloth, records, people and system.
Logistics play an important role inside the production and the manufacturing of BMW's
merchandise that are formed by means of a very rather and flexible efficient production network
with mature work exercise and the most superior plants and centers. As a worldwide player, the
BMW Group is represented through its first-rate merchandise of the BMW, MINI and Rolls-
Royce brand in extra than a hundred and forty international locations. A flexible network of 23
manufacturing flora in 12 nations ensures that every consumer gets the automobile he has
ordered tailor-made to his particular needs and preferences.
Efficient and flexible meeting at BMW is guaranteed by means of stylized logistics for an
efficient production and a easy waft of substances. Proficient logistics at BMW guarantees
accurate shipping of the components required exactly on time, with an easy and correct drift of
elements from BMW Group additives or supplier. The orders include:

Mass Customization:
BMW plants were designed to allow most flexibility and powerful communications - two factors
that BMW emphasized for customization of its automobiles. BMW was reputed for its
customization program, which allowed customers to design their personal automobiles from a
hard and fast of to be had alternatives. These orders were then transported to the manufacturing
unit which manufactured them according to the requests, which are then introduced to the buyers
within the shortest possible time. In manufacturing world, this shape is called 'mass
customization', which is one of the crucial enablers of agile supply chain as it combines both
advantages of mass customization with the ones of production. Most analysts agree that BMW
become one of the distinguished implementers of mass customization inside the vehicle
enterprise. BMW promoted differentiation of it products which is an crucial attribute for luxury
vehicle via proving 1000 bumpers variant, 4000 panels alternatives and 488 specific door panels.
A very high percent in their output is already made to reserve.
Role of Supplier and IT:
BMW providers are positioned near the manufacturing facility that's makes easy to be available
and the time waste. The company keep the dealer continuously inside the information loop and
the records gadget for meeting. BMW had a completely accurate ERP answer established by
means of SAP. It related the SCM thoroughly. Once the records entered it reached automatically
to production regions.
BMW at Rosslyn plant is normal instance of ways this IT exercise has been prepared the usage
of synchronized logistics. In the BMW example the incoming vans are set a pager and making
ready the specification by way of radio frequency identity (RFID) tag on arrival that's sent both
directly to one of the waiting location or to the ready bays. When the following loading bay
inside the transport/pickup series for a given truck will become available, the truck is paged to
drive up and be unloaded / loaded. The RFID unit as well acts as a transponder to recognize the
loading bay place of the truck in the manufacturing facility at some stage in its activities, which
are monitored via the gadget. In different times inclusive of at DaimlerChrysler Bremen the
incoming vehicles for JIT and JIS (Just-In- Second) deliveries all have GPS and radio statistics
devices and they may be tracked from their place to begin on the dealer to the manufacturing
facility. By tracking the progress of the incoming vans any delays are identified earlier and the
unloading plan amended accordingly. Based at the planned arrival of automobiles, the
SyncroSupply machine can plan the allocation of unloading bays, forklifts and other equipment
essential to unload the goods and get them to their final region inside the manufacturing facility.
In addition to supplier vehicles the machine additionally manages inner truck movements, inter
factory transfers, milk runs, return of empties.

Performance improvement:
The automotive industry is currently witnessing speedy increases inside the quantity of fashions
and model variations that are available on the global market. The enterprise is now required to
satisfy particular consumer necessities in terms of specification and transport date. Therefore, a
fundamental alternate in BMW manufacturer shifted toward construct-to-order, suggesting
dramatic rise in flexibility and responsiveness throughout supply chain companions through
implemented the leagile framework.

Overall Analysis:
Although the efficient supply chain tactics and technology following the method wishes to be
wonderful and as faster as feasible for survival in these unsure times. BMW plant is quite
flexible to customer needs giving the selection for them to request the sort of cars they need at
the suitable fee available. Cars are constructed-to-customers’ orders rather than through mass
production. For instance, differentiation strategies are used all through portray as well as choices
of the car capabilities for consolation, as a result bendy manufacturing. They do not preserve
inventory because the strategy is centered on built-to-order, so automobiles are made in
collection because the orders are positioned the use of advanced generation including mySAP
which communicates demand planning across the supply chain. Hence, BMW acquire
characteristics of lean and agile deliver chain. Therefore the implementation of a framework for
leagile supply chain at BMW is fine if you want to react to changes inside the marketplace.
Traditionally, the BMW has hired mass manufacturing method specializing in value discount.
However, because of globalization, changes inside the enterprise environment and so on, there
has been a considerable shift from the practice. BMW Rosslyn plant and the automobile industry
in preferred have felt the consequences of the worldwide economic meltdown ensuing in a
important the actors of the deliver lower in sales and export across the globe. To alleviate the
situation, BMW has targeted on techniques cost discount with suppliers by way of reducing
production plant life. Not incredibly, value containment is a challenge that figures prominently
on the car time table. The application of RFID era at BMW warehouse has enabled the studying
of multiple objects concurrently is a ubiquitous generation that could reduce motivation and job
satisfaction which can lead to the discount of operational performance because employee
involvement in system layout is critical. However there may be the necessity to remodel and
redefine BMW deliver chain strategies, operations and layouts thus as so that you can react to
varying marketplace needs. It need to be familiar that BMW have both lean and agile traits and
the total implementation of a leagile deliver chain is important for the survival of BMW in this
unsure business times and for the years yet to come.

Conclusion:
In a notably hard and competitive environment consisting of today, where supply chain is a
popular tool for enhancing the organizational competitiveness, an efficient and effective supply
chain approach is a must for BMW and their factor producers that allows you to meet changing
consumer needs.