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Line 2017, How is BMW fighting demographic time bomb

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This presentation is prepared for Crosby MBA MB_Communication class

This presentation is prepared for Crosby MBA MB_Communication class

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  • 1. Line 2017: How is BMW Fighting Demographic Time Bomb
    HabetMadoyan, Crosby MBA
    HabetMadoyan, Crosby MBA
    Line 2017: How is BMW fighting Demographic Time Bomb
  • 2. Line 2017: How is BMW Fighting Demographic Time Bomb
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 8. Company
    BMW was founded in 1916 as a producer of aircraft engines.From 1929 it started to produce automobiles.
    It’s main production facilities are in Germany, Bavaria.
    In 2009 the company sold 1,068,770 cars under the BMW brand.
    Financials 2009
    Revenue € 50.68 bil.
    Net Profit € 210 mil.
    Employees 96,239
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 9. Problem of Age
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
    • Average age of the BMW’s plants workers is expected to rise from 39 to 47 by 2017
    Why is it a problem ?
    Older workers has less productivity.
    Absenteeism rate is higher among them
    Health Care and Insurance is more expensive
  • 10. Problem of Age
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
    Why just not fire older and hire youngers?
    BMW is known for being dependable employer.
    There is not enough young workforce.
    At the national level it will be interpreted as discriminatory.
    BMW is the largest employer in Lower Bavaria. The decision would have political consequences.
  • 11. Solution
    Company launched pilot production line where the average age of workers was 47 years. Modified line is producing rear-axle gearboxes and is operated by 42 employees.
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 12. Solution
    At the beginning of the project, there was strong resistance among workers against the line.
    WHY ?
    -Younger workers feared that they will suffer from less productivity of older workers.
    -Older workers felt they would be less productive if moved from their comfort zones.
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 13. Solution
    Management organized consultations with workers to encourage and explain them the concept of the new line.
    Management organized workshops and surveys to understand what changes workers would like to see in new line.
    As a result new line was combined by the ideas that came from employees
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 14. Solutions
    Examples of the ideas from workers to improve workplace
    Wooden flooring
    -Reduces knee strain and exposure to static electricity jolt
    Orthopedic footwear
    -Reduces strain on feet
    Magnifying lenses
    -Reduces eyestrain and minimizes sorting errors
    Total 70 changes were made
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 15. Results
    Improvements in Line 2017 costs BMW just € 40,000.
    70 changes increased 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%, bellow the plant average.
    BMW now touts Line 2017 as model of productivity and high quality for all its plants.
    BMW has the model of production line with average age of 47 and still have a time to improve it.
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 16. Conclusion
    Ageing of world population is inevitable. However companies can make them less painful.
    BMW made 70 improvements to its Line 2017. All the changes came from workers.
    By spending € 40,000 BMW could increase its productivity by 7% and decrease absenteeism rate to 2%.
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 17. Philosophy
    Preventing problems, instead of trying solve them later.
    Line 2017: How is BMW fighting Demographic Time Bomb
    Habet Madoyan, Crosby MBA
  • 18. Reference
    Christoph H. Loch et al, “How BMW is Defusing the Demographic Time Bomb” Harvard Business Review
    March 2010: 99.
    BMW Group, “Annual Report 2009” http://www.bmwgroup.com/annualreport2009/_downloads/BMW_Group_2009.pdf
    Habet Madoyan, Crosby MBA
    Line 2017: How is BMW fighting Demographic Time Bomb