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BMW: The 7-Series Project (A &


Group 4 Sec B


Bayerische Motoren Werke(BMW) was

founded in 1916 by Gustav Otto.
Started as a producer of aircraft engines
In 1917, registered its trademark blue
and white rotating propeller still used
In late 1920s started producing cars
From 1930s to 1950s built a reputation
for high-performance engineering
In 1959 rescued by a $1 million
investment from the Quandt family
From 1970 to 1990 sales volumes grew
by a factor of 15 and the work force
Heavy investments in R&D put the
company at the leading edge of

Cause and Consequences

of Problems
(to be handled for later

Problem 1:
Cause :
Carl-Peter Forster, Director (Prototype and Pilot
Manufacturing) had explained about the time being spent on
major problems (e.g.. Part fit; need for redesign of tooling)
led to decrease in time left to spend on minor problems or
fine tuning(e.g. surface finish, alignment).
Consequence :
Higher number of customer complaints despite provision of
extra resources for quality assurance, inspection and

Problem 2:
Cause :
Prototyping done at a separate facility by handcraft artisans
and workers by general purpose tools (mallets, hammers).
Consequence :
Difficult to correctly know what a part is going to look like or
fit after manufacturing using production tooling.

Problem 3:
Cause :
Mixed model ramp up method.
Consequence :
Hindrance to smooth flow of assembly process/ logistics
because of confusion among factory workers.

Problem 4 :
Cause :
Suppliers involved in the process only after cubing
i.e. the final design approval by BMW top
Consequence :
In case of changes in tools or materials is noted/or
identified during commercial production or pilot
production at factory, the supply of new tools either
takes time or are unable to do so, ultimately leading
to an increase in the lead time .

Problem 5 :
Cause :
Long development lead time-The lead time for new and
redesigned BMW series averaged at 6 years compared to
4 years for Japanese competitors;
Design strategy.
Consequence :
The longer lead time meant less frequency of introduction
of new models and this played on the minds of many
consumers who preferred to buy a new model with
incremental change than wait for a new model with bold

Launch Quality

Launch Quality

The development and launch of a complete new model is a complex,

excruciating and time taking task for any automobile giant in the world
specially BMW.
BMW began the styling and designing 6 years before the launch while
other competitors take 2 years and their Japanese counterparts take
about 6 months.
There is a lot of rejection of drawing model prototypes before the final
nod is given to the product.
They used a typical method of dividing one car into as many as 30
segments or modules like cockpit, braking systems, doors etc.
An inter-functional team is made of people from design, procurement,
product engineering, etc.
They make sure that the performance of the vehicle is greater than the
customer demands and needs like safety, handling, reliability, etc.



Pilot production
is done in the
actual factory
Its done 3
months prior to
The cars
produced here
are not for sale
Cars in very
small batches
like 20/40/60 are
All the last
minute tool
changes and
other changes
are made before
full scale
production has
to begin

Full production ramp up

It is a simulation
of the actual
production facility
but much smaller
in size.
Conglomerate of
high skilled
workers and
workers works in
the pilot plant
75% of
production tools
are used and
rest are of pre
production stage
specially in
assembly, tooling
and design are
discovered in this

Factory pilot production run

This is the
from the
stage to the
full scale
scale and is
into 3
stages that
would be

Pilot production in the pilot plant

Pilot production and manufacturing

Hand made by
skilled craftsmen
with general
tools like chisel,
hammer, file etc.
to make the
components and
not using
Parts of the
prototype and
not of same
material as the
final car to
reduce cost eg
dashboard made
of sheet plastic
and not PVC
Both the
methods help to
reduce time and
capital involved

Also the
details like
aesthetics ,
are made at
this stage
too but
they come
at a great



Employees should be well trained

Maximizing the utility of existing tools
Involving suppliers earlier, i.e., in the prototype stage
Minimize gap between production process and
Using well skilled labours to handle and implement
changes in designs and procedure effectively
Involving skilled, experienced and reliable suppliers and
taking their inputs and advices for improvement

Changes BMW should

make in its prototyping
and product
development process

Changes BMW should make in its

prototyping and product development

BMW should use pre production tools instead of hand-used tools. Why?
a) As till the very end the parts were not exactly as they should look like
Prototype parts should be procured by BMW vendors (suppliers) who supplied material for commercial
production. Why?
a) Consistency among design specifications would reduce on mass production
b) Vendors could foresee problems in production process.
Outsource it to a vendor to supply fully assembled segments of prototypes eg: BMW cockpit. Why?
a) In the future, the supplier can provide entire module of the desired segment.
b) The supplier could also be made in charge of of some engineering design work.
BMW should use pilot assembly plant workers instead of prototype specialists. Why?
a) Most of the assembly part workers are a part of main production cycle, hence their training would
nn better.
Some other changes that BMW can incorporate to increase in efficiency
Reducing the number of parts used in a product. How?
Using DFM (Design for Manufacturing) and DFA ( Design for Assembly) i.e. integration of
product design and process planning into one common activity.
Use of Concurrent Engineering.

Concurrent engineering
Concurrent Engineering:
Also known as simultaneous engineering, is a method of designing and developing
products, in which the different stages run simultaneously, rather than consecutively.
It decreases product development time and also the time to market, leading to improved
productivity and reduced costs.

Business Benefits of Concurrent

Competitive Advantage Reduction in time to market means that businesses gain an edge over
their competitors.
Enhanced ProductivityEarlier discoveries of design problems means potential issues can be
corrected soon, rather than at a later stage in the development
Decrease Design and Development TimeMake products which match their customers needs, in less time and
at a reduced cost

What performance dimensions would improve

as a result of the proposed changes?

In the long term, costs would reduce dramatically. As per internal research of BMW, if
only early tooling was employed in all parts of BMW 7-Series, the company would save
at-least 100 DM million.
There would be less complaints per car and the company would maintain a high quality
It would reduce the problems associated with brining new models into production

What preparation will be needed to manage the changes?

To incur high initial costs of prototyping because of the use of production grade tools, the
would need to have high capital investment.
Since designing of prototype would be done in the initial stages itself, leak of the designs
and other trade secrets is possible. So, the company would need to guard more
proactively against the same.
Creative and futuristic designers are needed, who can think of deigns that can be
incorporated for at least 12 years in the BMW product life cycle.

Changes made in the 7series development


Changes made in the 7-series

development project
1. Outsourcing the fabrication of interior components,
2. Involving more number of workers from pilot assembly
line in prototype cycles,
3. Starting its initial pilot production runs one year prior to
commercial production,
4. Completely stopping the production of old model unlike
mixed-model approach,
5. More involvement of the engineers before production,
6. More complete and carefully specified designs are to be
submitted by the designers,
7. Making it fault intolerant,

Outcomes from the

1. Finding problems in the prototype cycle which would generally
surface during pilot production and commercial production,
2. Increase in the quality,
3. Drop of time spent in reworks,
4. Shrinkage of time in assembling a batch of prototypes,
5. Better communication between departments,
6. 23% increase of sales in U.S. market,
7. Reached record share of 7.3% in the luxury-performance

New Product
Strategy in BMW

Lessons Learnt
Involve all the stake holders at the
Assumptions were reduced
Reduced Rework
Getting things right from the outset
Better communication on part of every

Changes in the
Automotive Industry
Materials and Forming
Electronics, Software and Controls

Firms and Industries who can

pick up
Other Large manufacturing companies
IT Companies

(post 1994)

(pre 1994)

Thats all Folks!

Thank you!