The Globe: How BMW

Is Defusing the
Demographic Time
Bomb
BY. CHRISTOPH LOCH, FABIAN J. STING, NIKOLAUS BAUER AND HELMUT
MAUERMANN

Presented By
Manu M Nair
AM.BU.P2MBA18029
Executive summary

In June 2007, Nikolaus Bauer, the head of BMW’s 2,500-

employee power train plant in Dingolfing, Lower Bavaria,
was worrying about what looked like an inevitable decline in
the productivity of an aging workforce in the years ahead.
With two of his production managers, Peter Jürschick and
Helmut Mauermann (a coauthor, with Bauer), he developed
an innovative, bottom-up approach for improving
productivity
Problem Of AGE

Average age of the BMW plants workers is expected to rise from 39 to

47 by 2017.

WHY IT IS A PROBLEM
 Older workers has less productivity,
 Absenteeism rate is higher among them.
 Health care and insurance is more expensive.
Why just not fire older employees and hire
new young employees.
 BMW is known for the dependable employer.
 There is not enough workforce.
 At the national level it will be interpreted as discriminatory.
 BMW is the largest employees in lower Bavaria. The decision would have political consequences.
Solution
Company launched pilot production line where the average age of workers was 47
years. Modified line in producing rear-axel gearboxes and is operated by 42
employees.
In the beginning of the project, their was a strong resistance among workers against the line and it
was nicknamed as “pensioners”.

WHY?

 Younger workers feared that they will suffer from less productivity of older workers.
 Older workers felt that they would be less productive if moved from their comfort zone.
 Management organised consultations with workers to encourage and explain them the concept of
the new line.
 Management organised workshops and surveys to understand what changes workers would like to
see in new line.
 As a result new lines was combined by the ideas that came from the employees.

“NONE OF THE IDEAS CAME FROM THE TOP”

Examples of ideas from employees to improve the
workplace.
 Wooden flooring-Reduces knee strain and exposure to static electricity jolt.
 Barbershop chairs-Enable short breaks and alternating physical strain.
 Orthopaedic footwear-Reduces strain on feet.
 Magnifying lenses-Reduce eyestrain and minimize sorting errors.
 Adjustable worktables-Ease physical strain and facilitate personnel rotation during
shifts.
 Large-handled gripping tools-Reduce strain on arms.
 Stackable transport containers-Ease physical strain and facilitate personnel
rotation during shifts.
 Larger typeface on computer screens-Reduce eyestrain and minimize sorting
errors.
 Manual hoisting cranes-Reduce strain on back.
Result
 Improvements in line BMW costs just 40,000.
 70 Changes increased the productivity by 7% in one year, bringing it on a par with lines in which
workers were, on average, younger.
 Absenteeism rate dropped to 2%, below the plant average.
 BMW now touts line 2017as a model of productivity and high quality for all plants.
 The line’s target output was increased to 500 units per shift in mid-2008 and to 530 units per shift
in February 2009, in keeping with the plant’s ambitious goals.
 The 10 defects per million quality target was achieved after three months. Current performance
stands at zero defects.
Conclusion
The 2017 line project is a remarkable case of distributed organizational problem solving. The plant’s
top management raised the issue, the production managers ran an experiment, and the line workers
created the solutions. It’s an approach that will become a critical capability for global companies.
THANK YOU