Presented By:

Abhishek Mandvakar Ankur Kejriwal Hari Mohan Nikhil Abraham Prabhat Singh Vinay Singh

BMWS New Plant

In May 2005 at Leipzig area ,Germany
Gerhard Schroder, Germany Chancellor opened Plant

with Helmut Panke,the Chairman of Company. BMW invested 1.3 billion. Manufacture BMW 3-Series cars. Max annual capacity: 650 cars/day Expected to create 5500 jobs in that area.

The ceremonial process of signing the Plant Establishment Contract.

BMW History
In 1913 in Munich,Germany,Karl Friedrich Rapp established

the Rapp-motorenwerke to manufacture Aircraft Engines.

In 1916
During First World War Company secured contract to

manufacture aircraft for Austria-Hungarian army.

In 1917
In 1917 Rapp needed additional financing to complete this

contract . The partnership with Camillo Castiglioni. The new partnership company named as Bayerische Motoren Werke Gmbh The company soon get into difficulty due to over expansion. Sell it to Australian industrialist,Franz joseph Popp,in 1917

In 1918
Bayersche Motoren Werke manufactured its first

aircraft engine. It reached upto an altitude of 5000 metres in 29 minutes, creating a world record.

In 1919
Treaty of versailles banned Germany from producing

Aircraft. The company shift to manufacture Railway brakes.

In 1922
1922, Bayerische flugzeugwerke AG.
Manufacturer of small aircraft merged with BMW to

form BMW AG.

In 1923
BMW started manufacturing Motorcycle R32-500 cc

Bike designed by Max Friz. Company started producing car in late 1920s.

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From late 1920s to 1950s

In 1928-BMW setup a car manufacturing unit in

Eisenach region of Germany. There they manufacture DIXI cars and sold under their name. By early 1930 they started designing their own cars. And introduced many successful carrs like 327 saloon and 328 roadster

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Saloon 327 & Roadster 328

The roadster especially was the most successful sports car of its time & was nominated as the Car of the Century in 1999 by a panel of Auto experts.

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Background
During second world war BMW again concentrated on

manufacturing of aircraft engines and motorcycles for German army At the end of war they were heavily bombed . During 1950s BMW tried to enter in premium segment market but failed.

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Late 1950s to 1990s

In1959 launched BMW 700 of sporty exterior which

was the main selling point. They launched other models based on BMW 700 and won many competitions.

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BMW 1500
In1961 BMW launched another successful model BMW

1500 With powerful sporty sedan with its front disk brake and four wheel independent.

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Headquarter in Munich
In 1970 BMW moved its headquarter to Munich.
The building looks like the four cylinder of cars.

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Overseas Market
From 1970s to 1990 they focused on exports markets. Like US ,south Africa, Australia, Asia, Japan, Austria

and Bavaria. In 1992 BMW outsold the Mercedes for the first time in Europe. Company became the first European car market to operate in US market. In 1994 BMW attempt to enter in mass market by bringing British Car m/c MG Rover. The purchase gave the company ownership of many successful brands like Mini, Land Rover, and Triumph etc.
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From 2000 to 2005

In 2000 BMW sold the MG Rover to Phoneix consortium

for a nominal 10. Mini and Triumph Hold by the BMW and Land Rover and Range Rover sold to Ford. In Early 2000 BMW launched its 1-series and 6-series. For launching this car model company faced many criticism.

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Mini & Rolls Royace

In 2004 company added three 3 car brands-BMW,

Mini, and Rolls Royce.

In 24 cities,12 Countries on 4 different continents.

Company employed 70,000 people

Customer deliveries increases from 1.2 millions unit. Revenue in 2004=US $ 60.47 billions

Profit=US $ 3.03 billions.

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Operation Strategy Model

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The Mass Customization

What is Mass Customization ??
Meeting particular customers need on a large scale. Basically combining the concepts of mass production

with customization.

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Why Mass-Customization
Drivers of the Idea : One of the criticisms against B.M.W. Was that most of its cars looked alike. As a maker of luxury cars it had to deliver value to its customers. In older system customer had to do away with whatever limited options they had. Total customer satisfaction became the new buzzword.

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Impact on Operations strategy

COSP Customer oriented sales and production.
Production process was defined by the car ordered by

the customer. This was supplemented by the online ordering system launched by the company.

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Customer Oriented Sales and Production Process

The BMW Group introduced an online ordering system in

1998, which gives dealers the option on showing customers their desired car on the screen and confirming the delivery date on the spot.
The time frame in which the vehicle can be built is fixed

within a few seconds, a place in the production process is immediately reserved and the manufacturing logistics department is informed.

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COSP

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Some interesting facts

There were 1032 options available within the B.M.W.

product range. The B.M.W. & series alone offered 1017 variations. The B.M.W. X-5 sports utility vehicle had 1000 bumper variations, 4000 instrument panel choices.

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The Insiders
Advance planning was the key reason for the excellent

management for BMWs supply chain management. B.M.W. had a very efficient ERP solutions provided by SAP. It connected the supply chain management very well. Once the data entered it reached automatically to the production areas.

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Supply Chain
Involves purchasing,

quality and logistics personnel because they are not just developing parts for a vehicle; they are developing a supply chain right up to the supplier. involves management of information flow as well and requires sophisticated information technology.

The planning process

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Focusing on Suppliers
The integration of suppliers into vehicle development and

production is a decisive factor in competition. All of BMWs suppliers use either EDI (Electronic Data Interchange), or Web EDI. Web EDI attaches ERP (for BMW, their SAP software) to the internet and allows partners in communities like South Africa who cannot afford full-blown EDI to communicate with BMW.

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 When they ship parts, suppliers send BMW advance

shipping notifications (ASNs) to provide the car manufacturer with exact information on parts counts and delivery dates. Parts arriving at the BMW dock are then received just-in-time and transferred directly to the line.

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Supplier Network
BMW has invested heavily in sequencing technology to

support its production process. BMW also has developed sophisticated transatlantic communications. It spent more than $35m for the sequencing system at the Spartanburg plant.

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Sequence Center
Reason for outsourcing facility management:
The Sequence Center

assures that the right parts get to the right places at the right times. Was created to feed sequenced and build parts from distant suppliers just in time to the assembly line.

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Sequence Center
It's not often that a warehouse has only one customer, but that is precisely the case with BMW's Sequence Center. The building is located adjacent to the company's Spartanburg, S.C. manufacturing facility and was created to feed sequenced and bulk parts from distant suppliers justin-time to the assembly line. Since the automaker builds the vast majority of its cars to meet customer-selected options, accurate sequencing of individual parts is crucial to manufacturing efficiencies. The process is designed so that a needed part for a particular order is sequenced exactly to match a car body just as it reaches a specific assembly station. In a typical day, 12,000 picks are made and put on 2,200 pallets for delivery to manufacturing.
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Unique Automobiles
Up to 20,000 parts travel the pressings plant through Body-in-

White, and are then painted and assembled to become a perfect whole a unique BMW or MINI.

Every vehicle which rolls off the line is tailor-made according

to the customer's wishes in terms of model, color, interior furnishing and accessories, and engine type.

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Logistics BMW has earned a reputation for producing the highest quality car with the highest level of customer service.
BMWs logistics challenge is to let customers change their

choices right up until the production process starts.

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Time and Flexibility Targets

Reduction of Lead Time 10 Days (process time) On-Time Delivery Reliability 100%

Order Change Flexibility Up to 6 days prior to end of production

None of this would happen with any coordination without BMW's advanced information systems
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Comparative analysis

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Profit Margin

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The operating leverage concept

Statement revenue Quantity sold E.B.I.T. Dec 04 60472.9 1.5 4847.7 Dec 03 52122.2 1.30 4022.9 Dec 02 44315.8 1.07 3455.6

Operating leverage =(%change in E.B.I.T.)/(%change in quantity of goods sold) So we get degree of operating leverage as 0.76
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Synopsis
Mass customization- endless possibilities.
Customer satisfaction and loyalty. Innovation generation. Idea feasibility and implementation through

operational strategy.

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Thank you!!

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