INTERNATIONAL INSTITUTE OF PLANNING AND MANAGEMENT
LEAN + Flexible
Professor A.B Raju
Pratik K S Negi
Manufacturing in BMW
(Usage of Lean and JIT production)
Bayerische Motoren Werke AG (BMW), (literally English: Bavarian Motor Works) is a
German automobile, motorcycle and engine manufacturing company founded in 1916. It
also owns and produces the MINI brand, and is the parent company of Rolls-Royce
Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands.
BMW is known for its performance and luxury vehicles
After World War I, BMW was forced to cease aircraft (engine) production by the terms of
the Treaty. The company consequently shifted to motorcycle production in 1923 once
the restrictions of the treaty started to be lifted, followed by automobiles in 1928–29
The circular blue and white BMW logo or roundel is portrayed by BMW as the
movement of an aircraft propeller, to signify the white blades cutting through the blue
sky – an interpretation that BMW adopted for
convenience in 1929, twelve years after the roundel
was created, combined with the white and blue colors
of the flag of Bavaria, reversed to produce the BMW
However, the origin of the logo being based on the
movement of a propeller is in dispute, according to an
article recently posted by the New York times, quoting
"At the BMW Museum in Munich, Anne Schmidt-
Possiwal, explained that the blue-and-white company
logo did not represent a spinning propeller, but was
meant to show the colors of the Free State of Bavaria."
BMW's first significant aircraft engine was the BMW
IIIa inline-six liquid-cooled engine of 1918, much
preferred for its high-altitude performance. With
German rearmament in the 1930s, the company again began producing aircraft engines
for the Luftwaffe. Among its successful World War II engine designs were the BMW
132 and BMW 801 air-cooled radial engines, and the pioneering BMW 003 flow turbojet,
which powered the tiny, 1944-1945-era jet-powered "emergency fighter",
BMW 003 jet engine was tested in the A-1b version of the world's first jet fighter,
the Messerschmitt Me 262, but BMW engines failed on takeoff, a major setback for the
jet fighter program until successful testing with Junkers engines.
By 1959 the automotive division of BMW was in financial difficulties and a shareholders
meeting was held to decide whether to go into liquidation or find a way of carrying on. It
was decided to carry on and to try to cash in on the current economy car boom enjoyed
so successfully by some of Germany's ex-aircraft manufacturers such as Messerschmitt
and Heinkel. The rights to manufacture the Italian Iso Isetta were bought, the tiny cars
themselves were to be powered by a modified form of BMW's own motorcycle engine.
This was moderately successful and helped the company get back on its feet. The
controlling majority shareholder of the BMW Aktiengesellschaft since 1959 is the
Quandt family, which owns about 46% of the stock. The rest is in public float.
BMW bought the British Rover Group (which at the time consisted of the Rover, Land
Rover and MG brands as well as the rights to defunct brands
including Austin and Morris), and owned it for six years. By 2000, Rover was making
huge losses and BMW decided to sell the combine. The MG and Rover brands were
sold to the Phoenix Consortium to form MG Rover, while Land Rover was taken over
by Ford. BMW, meanwhile, retained the rights to build the new MINI, which was
launched in 2001.
Approaches in BMW.
Premium means exceptional for the customer. This added value becomes tangible
through the superior product substance and superior quality of the BMW Group's
emotionally appealing automobiles and motorcycles.
BMW production is committed to fulfilling premium demands related to product quality
and to meeting deadlines. Some 70,000 employees in 23 locations ensure that every
customer receives his or her tailor-made vehicle on time – throughout the world. We do
this with our "Customer-oriented Sales and Production Process", or COSP for short.
The principle behind COSP is that the car ordered by the customer defines the
production process – not the car planned by the company. In this way, the customer can
make last-minute changes to the equipment and accessories they‘ve ordered shortly
before the vehicle goes to assembly – without delaying the date of delivery.
The performance capability of the BMW Group's production network depends on the
special commitment, identification, and know-how of its employees. In addition to future-
oriented technologies and the most modern equipment, our employees are the central
element in the manufacture of premium products. Systematic linking of internal and
external partners as well as targeted knowledge transfer ensures both today and in the
future that the customer will obtain his dream automobile by the agreed-upon delivery
date and in the high quality expected of all "made by BMW Group" vehicles.
Flexible working hours
The over 70,000 employees of the worldwide production network are united in their
common enthusiasm for all of the concern's vehicles, their quest to achieve highest
quality results in all working processes, and their will to make a significant contribution
to the BMW Group's success now and in the future. Innovative forms of work are
important factors for stimulating performance, creativity, and gratification in the
workplace. The BMW Group uses over 300 successful work-schedule models. These
enable the corporation to utilize its plants flexibly and react to customer as well as
market demands – and at the same time, to respond to the needs of its employees.
To improve efficient use of resources (material, energy, water) by products as well as
during production, a precise balance between ecological and economical issues must
be sought after.
In addition to the BMW Group's recycling strategy with its core elements RDZ
(German: Recycling und Demontagezentrum; English: Recycling and Disassembly
Center), Design-for-Recycling, and Material Labeling, the BMW Group focuses
primarily on the most efficient possible use of resources in intelligent systems.
Water is the basis of all life. In production – where almost one-third of all waste water
accumulates – we have succeeded in promoting exceptionally frugal use of water.
This has been made possible by
closed cooling cycles, closed-circulation water usage and waste water treatment
equipment, and the use of future-oriented technologies such as powdered clear
varnish as well.
To save energy, production uses sophisticated central routing technology, for
example. This enables energy-using components to be turned on and off precisely
when needed. In addition, the use of heat reclamation equipment, use of industrial
waste heat, and cold generation in absorption equipment supports the development
of circulation systems. This makes it possible to exploit primary energy to a high
degree, ensuring an energy supply which is also environmentally friendly.
Example: Waste material – avoidance, then utilization.
The BMW Group places great value on designing products which are optimised for
recycling as well as separating and utilizing waste materials which accrue during
production. Care is taken, for example, only to transfer waste materials to recovery
and cleanup partners who have passed the BMW Group's recovery audit. Our
uppermost goal, however, is to not accrue waste materials in the first place. Each
location has responsible employees who use a waste material information system to
optimise processes and procedures. This system enables a precise overview of the
flow of waste materials. This enables the continual development of further strategies
for waste reduction and avoidance
Customer Centric approach
The goal of BMW Group Production is to deliver the customer's custom-tailored
premium automobile or motorcycle by the agreed-upon deadline in our customary high
This claim requires us to continually develop our processes and structures further, and
thus, to adapt regularly to new situations. As a learning organization, the BMW Group
must recognize changing demands at an early stage and orient itself rapidly and flexibly
to new conditions. One example of this is our "Customer-oriented sales and production
process", or KOVP as it is abbreviated in German.
The tradition of quality at the BMW Group permeates all work processes of the
worldwide production network. A comprehensive, multi-level quality management
system ensures quality in all work processes as well as components and materials, and
ultimately - products. But above all, the BMW Group orients its quality management
system to the needs of its customers.
One foundation of "Made by BMW Group" is our employees. "Customer-oriented
thought and action" - abbreviated in German as "KDH" - is part of corporation
philosophy and anchors our goal of achieving perfect results in all manufacturing areas.
Our employees' attitude to quality from the very beginning, continuing along the entire
process chain, prevents mistakes and ensures continual improvement.
"Made by BMW Group" seal of approval.
In addition to successful, regularly recurring certification of the quality management
system of all production plants according to DIN EN ISO 9000 ff., external studies in the
automobile industry attest to the first-class quality level of the BMW Group's
manufacturing plants. The renowned US American market research institute J.D. Power
& Associates has confirmed the first-class standards of the BMW Group Production
Examples include the Golden Plant Award received by the Rosslyn plant in 2002, the
prize for the best automobile plant in Europe received by the Munich plant in 2001, the
five prizes received by the BMW plant in Dingolfing, and the silver and bronze awards
with which the Regensburg plant was decorated
Quantum leap in flexibility and throughput time
KOVP gives customers new dimensions of service: simple, online ordering processes at
the dealer's, immediate, binding order confirmation and delivery date, flexibility when
changes are desired, information on order status, and on-time delivery.
One of KOVP's most remarkable features is its high flexibility for customers. Requests
for chassis changes (including motor, colour, and equipment) can be handled up until
circa one week before assembly - without affecting the agreed-upon delivery date.
Today, up to 120,000 BMW change requests are realized per month
In 2006, BMW produced 1,366,838 four-wheeled vehicles, which were manufactured in
five countries. In 2009, it manufactured 1,258,417 four-wheeled vehicles. In 2009, BMW
Motorrad produced 82,631 motorcycles.
Country Make Cars (2006) Cars (2008) Models
Germany BMW 905,057 901,898 Others
United Kingdom Mini 187,454 235,019 All Minis
Austria BMW 114,306 82,863 BMW X3
USA BMW 105,172 170,741 BMW X5, X6
South Africa BMW 54,782 47,980 BMW 3-Series
Total 1,366,838 1,439,918
The New Class was a line of compact sedans and coupes starting with the 1962 1500
and continuing through the last 2002s in 1977.
Powered by BMW's celebrated four-
cylinder M10 engine, the New Class models featured a
fully independent suspension, Mac Pherson struts in
front, and front disc brakes. Initially a family of four-
door sedans and two-door coupes, the New Class line
was broadened to two-door sports sedans with the
addition of the 02 Series 1600 and 2002 in 1966.
Sharing little in common with the rest of the line beyond power train, the sporty siblings
caught auto enthusiasts' attention and established BMW as an international brand.
Precursors to the famed BMW 3 Series, the two-door' success cemented the firm's
future as an upper tier performance car maker. New Class four-doors with numbers
ending in "0" were replaced by the larger BMW 5 Series in 1972. The upscale 2000C
and 2000CS coupes were replaced by the six-cylinder BMW E9, introduced in 1969.
The 1 Series, launched in 2004, is BMW's smallest car, and available in
coupe/convertible (E82/E88) and hatchback (E81/E87) forms. The 3 Series, a compact
executive car manufactured since model year 1975, is
currently in its fifth generation (E90); models include
the sport sedan (E90), station wagon (E91), coupe
(E92), and convertible (E93). The 5 Series is a mid-
size executive car, available in sedan (E60) and station
wagon (E61) forms. The 5 Series Gran Turismo (F07),
beginning in 2010, will create a segment between
station wagons and crossover SUV.
BMW 7-Series (F01)
BMW's full-size flagship executive sedan is the 7 Series. Typically, BMW introduces
many of their innovations first in the 7 Series, such as the somewhat
controversial drive system. The 7 Series Hydrogen, featuring one of the world's
first hydrogen fueled internal combustion engines, is fueled by liquid hydrogen and
emits only clean water vapor. The latest generation (F01) debuted in 2009. Based on
the 5 Series' platform, the 6 Series is BMW's grand touring luxury sport
coupe/convertible (E63/E64). A 2-seater roadster and coupe which succeeded the Z3,
the Z4 (E85) has been sold since 2002.
BMW X3 SUV (E83)
The X3 (E83), BMW's first crossover SUV (called SAV or "Sports Activity Vehicle" by
BMW) debuted in 2003 and is based on the E46/16 3 Series platform. Marketed in
Europe as an off-roader, it benefits from BMW's drive all-wheel drive system. The all-
wheel drive X5 (E70) is a mid-size luxury SUV (SAV) sold by BMW since 2000. A 4-seat
crossover SUV released by BMW in December 2007, the X6 is marketed as a "Sports
Activity Coupe" (SAC) by BMW. The upcoming X1 extends the BMW Sports Activity
Series model lineup.
1 Series (E81) (2004–present) Hatchback, coupe and convertible
3 Series (E90) (2005–present) Sedan, coupe, convertiblen and wagon
5 Series (F10) (2010–present) Sedan and Wagon
5 Series Gran Turismo (2009–present) Progressive Activity Sedan
6 Series (E63) (2003–present) Coupe and convertible
7 Series (F01) (2008–present) Sedan
X1 (2009–present) Compact Crossover SUV/Sports Activity Vehicle (SAV)
X3 (E83) (2003-present) Compact Crossover SUV/Sports Activity Vehicle (SAV)
X5 (E70) (2006–present) Compact Crossover SUV/Sports Activity Vehicle (SAV)
BMW M models
Based on the 3 Series, the M3 defined an entirely new
market for BMW: a race-ready production vehicle.
Since its debut, the M3 is heralded in enthusiast
circles, in large part due to its unique geometry and
award winning engines. The newest V8-powered
platform became available the Autumn of 2007 in
Europe, and second quarter of 2008 for the U.S. in
coupe (E92), and later the cabriolet (E93), and sedan
(E90) variants. Based on the 5 Series, the M5 is the M division's V10-powered version
of the E60 5 Series. The M6 is the M division's version of the 6 Series, and shares its
drivetrain with the M5. The Z4 M, or M Coupe/M Roadster, is the M division's version of
the Z4. The X5M is the M division's version of the X5, and the X6M is the M division's
version of the X6. Both the X5M and X6M share the same V8 twin scroll twin turbo.
M3 Sedan, Coupe, Convertible and Wagon
M5 Sedan and Wagon
M6 Coupe and Convertible
X5 M SAV
X6 M SAV
Isle of Man TT – in 1939 BMW became the first foreign
manufacturer to win the Isle of Mann TT race
with Georg Meier
Dakar Rally – BMW motorcycles have won the Dakar
rally six times. In 1981, 1983, 1984, 1985, 1999, and
Superbike World Championship – BMW returned to
premier road racing in 2009 with their all new
superbike, the BMW S1000RR.
BMW has a history of success in Formula One. BMW powered cars have won 20 races.
In 2006 BMW took over the Sauber team and became Formula One constructors. In
2007 and 2008 the team enjoyed some success. The most recent win is a lone
constructor team's victory by BMW Sauber F1 Team, on 8 June 2008, at the Canadian
Grand Prix with Robert Kubica driving.
Driver championship: 1 (1983)
Constructor championship: 0 (Runner-up 2002, 2003, 2007)
Grand Prix wins: 20
Podium finishes: 76
Pole positions: 33
Fastest laps: 33
BMW was an engine supplier to Williams, Benetton, Brabham, and Arrows. Notable
drivers who have started their Formula One careers with BMW include Jenson
Button, Juan Pablo Montoya, and Sebastian Vettel.
In July 2009, BMW announced that it would withdraw from Formula One at the end of
the 2009 season. The team was sold back to the previous owner, Peter Sauber, who
still at the beginning of the 2010 season has yet to drop the BMW part of the name of
The company is a charter member of the U.S. Environmental Protection Agency's (EPA)
National Environmental Achievement Track, which recognizes companies for their
environmental stewardship and performance. It is also a member of the South Carolina
Environmental Excellence Program and is on the Dow Jones Sustainability Group
Index, which rates environmentally friendly companies. BMW has taken measures
to reduce the impact the company has on the environment. It is trying to design less-
polluting cars by making existing models more efficient, as well as developing
environmentally friendly fuels for future vehicles. Possibilities include: electric power,
hybrid power (combustion, engines and electric motors) hydrogen engines.
BMW offers 49 models with EU5/6 emissions norm and nearly 20 models with CO2
output less than 140 g/km, which puts it on the lowest tax group and therefore could
provide the future owner with eco-bonus offered from some European countries.
However, there have been some criticisms directed at BMW, and in particular,
accusations of green wash in reference to their BMW Hydrogen 7. Some critics claim
that the emissions produced during hydrogen fuel production outweigh the reduction of
tailpipe emissions, and that the Hydrogen 7 is a distraction from more immediate,
practical solutions for car pollution
South Africa -- BMWs have been assembled in South Africa since 1968
United States -- BMW Manufacturing Co has been manufacturing the X5 and, more
recently, the X6 in Greer near Spartanburg, South Carolina, USA.
The smaller X3 is
slated to begin production in Spartanburg in 2009–20
China-- Signing a deal in 2003 for the production of sedans in China.
Canada -- In October 2008, BMW Group Canada was named one of Greater Toronto's
Top Employers by Media corp. Canada.
Austria --- The BMW X3 is also made by Magna Steyr, a subsidiary of a Canadian
company, in Graz, Austria under license from BMW
Egypt -- Bavarian Auto Group is a multinational group of companies established in
March 2003 when it was appointed as the sole importer of BMW and MINI in Egypt, with
exclusive rights for import, assembly, distribution, sales and after-sales support of BMW
products in Egypt.
India-- BMW India was established in 2006 as a sales subsidiary
in Gurgaon (National Capital Region). A state-of-the-art assembly plant for BMW
3 and 5 Series started operation in early 2007 in Chennai. Construction of the
plant started in January 2006 with an initial investment of more than one billion
Indian Rupees. The plant started operation in the first quarter of 2007 and
produces the different variants of BMW 3 Series and BMW 5 Series
WHAT IS LEAN PRODUCTION SYSTEM
Lean manufacturing or lean
production, which is often
known simply as "Lean", is a
production practice that
considers the expenditure of
resources for any goal other
than the creation of value for
the end customer to be
wasteful, and thus a target for
elimination. Working from the
perspective of the customer
who consumes a product or
service, "value" is defined as
any action or process that a
customer would be willing to
Lean is centered on preserving value with less work
Lean manufacturing is a variation on the theme of efficiency based on optimizing flow; it
is a present-day instance of the recurring theme in human history toward increasing
efficiency, decreasing waste, and using empirical methods to decide what matters,
rather than uncritically accepting pre-existing ideas. Lean is the set of "tools" that assist
in the identification and steady elimination of waste
Lean is about doing more with less: less time, inventory, space, labor, and money.
"Lean manufacturing", shorthand for a commitment to eliminating waste, simplifying
procedures and speeding up production.
Lean Manufacturing (also known as the Toyota production System is, in its most basic
form, the systematic elimination of waste – overproduction, waiting, transportation,
inventory, motion, over-processing, defective units –and the implementation of the
concepts of continuous flow and customer pull.
Five areas drive lean manufacturing/production:
Just as mass production is recognized as the production system of the 20th century,
lean production is viewed as the production system of the 21st century.
Benefits of Lean Production
Establishment and mastering of a lean production system would allow you to achieve
the following benefits:
Waste reduction by 80%
Production cost reduction by 50%
Manufacturing cycle times decreased by 50%
Labor reduction by 50% while maintaining or increasing throughput
Inventory reduction by 80% while increasing customer service levels
Capacity in current facilities increase by 50%
Higher system flexibility in reacting to changes in requirements improved
More strategic focus
Improved cash flow through increasing shipping and billing frequencies
However, by continually focusing on waste reduction, there are truly no end to the
benefits that can be achieved.
Characteristics of a Lean Enterprise
Integrated single piece continuous workflow
Close integration of the whole Value Chain from raw material to finished product
through partnership oriented relations with suppliers and distributors
JIT (Just in Time) Processing: a part moves to a production operation, is
processed immediately, and moves immediately to the next operation
Short order-to-ship cycles times; small batch production capability that is
synchronized to shipping schedules
Production is based on orders rather than forecasts; production planning is driven
by customer demand or "pull" and not to suit machine loading or inflexible work
flows on the shop floor.
Minimal inventories at each stage of the production process
Quick changeovers of machines and equipment allow different products to be
produced with one-piece flow in small batches
Layout is based on product flow
(TQM)Total Quality Control -Active involvement by workers in trouble shooting and
problem solving to improve quality and eliminate wastes.
Defect prevention rather than inspection and rework by building quality in the
process and implementing real time quality feedback procedures.
Goals of lean manufacturing
Improve quality: To stay competitive in
today‘s marketplace, a company must
understand its customers' wants and needs
and design processes to meet their
expectations and requirements.
Eliminate waste: Waste is any activity that
consumes time, resources, or space but does
not add any value to the product or service.
There are seven types of waste:
1. Transport (unnecessary movement of
2. Inventory (excess inventory not directly required for current orders)
3. Motion (extra steps taken by employees because of inefficient layout)
4. Waiting (periods of inactivity)
5. Overproduction (occurs when production should have stopped)
6. Over Processing (rework and reprocessing)
7. Defects (do not conform to specifications or expectations)
Reduce time: Reducing the time it takes to finish an activity from start to finish is one
of the most effective ways to eliminate waste and lower costs.
Reduce total costs: To minimize cost, a company must produce only to customer
demand. Overproduction increases a company‘s inventory costs because of storage
Flexible manufacturing with lean strategy
o Bmw‘s is betting that flexible manufacturing, not lean is the next big thing in auto
manufacturing. The article quotes rich Morris, a vice president at bmw‘s U.S.
operations as noting that ―everyone has to become more flexible.―
o flexibility was defined as both the ability to shift production of different models
among different plants as demand shifts among different global markets. it can
also manifest itself as building different models of autos within the same plant.
this is somewhat different than designing overall manufacturing capability on the
basis of pure lean methodologies,
o where complete efficiency becomes the overriding goal. there is also a hybrid
combination model, similar to toyota that attempts to build and distribute vehicles
in the leanest plants, but in the fastest cycle-time to customer orders.
o this type of argument comes up frequently and can sometimes take many views,
depending on a supply chain professional‘s built-in bias or training. in the case of
bmw, the context is defined as the overall need of customers. morris indicates
that ―in 2008, 70 percent of (bmw‘s)
o production was built to customer order.‖ the alternative, which many other auto
manufacturers practice is to schedule production based on dealers‘ orders, which
is their best forecast as to what customers may buy, or i might add, which options
can be the most profitable for dealers. the disadvantage is duly noted, that being
that the customer has to often compromise his or her needs to what may be
available for sale.
o my view is similar to bmw in that any production or supply chain model has to
have its first priority focused on the needs of the overall customer. because bmw
is a premium brand that differentiates on performance and features of its
vehicles, flexibility makes sense.
o bmw vehicles are very expensive, hence having many unsold finished vehicles in
inventory is not efficient.
o contrast this approach with the recent market introduction by tata of the nano
automobile in india. here, the vehicle has been designed with very limited
options and marketed to a very cost-sensitive, entry-level consumer.
o tata elected to go with a highly lean and efficient manufacturing process focused
on vehicle sub-assembles, which are shipped to actual dealers who assemble
the final car configuration based on a consumer order
Flexibility as Morris means it is defined in a couple of ways. One is the ability to
shift production of different models among different plants, as demand shifts in
different global markets.
BMW has made a specialty of offering a very wide array of factory-installed
options that can be ordered individually, while mass-market brands are cutting
back on variety.
―Sometimes it takes two years (for us) to build the exact same vehicle twice,‖
Morris said in a recent press briefing at BMW of North America headquarters in
Woodcliff Lake, N.
BMW builds most of its vehicles with specific colors, features and options the
way individual customers order them via a dealer. ―In 2008, 70 percent of the
production was built to customer order,‖
The alternative, and the way most other brands do it, is to build most cars the
way dealers order them, to be retailed out of dealer inventory. That represents
the dealers‘ best guess at what customers will buy. The advantage is that most
U.S. customers want to take delivery right away. That‘s only possible when the
car is already on the lot. The factory also saves manufacturing costs and
complexity by reducing variations
BMW customers can change their orders within five days of when their car is
built. That‘s much later in the process than other brands
That kind of flexibility isn‘t perfect, because the most flexible plants aren‘t the
most ―lean,‖ for instance in terms of the inventory of parts the plant has to keep
handy. On the other hand, the leanest plants that can build cars the fastest
also need to become more flexible
WHAT IS JIT
The philosophy of JIT is simple: inventory is
waste. JIT inventory systems expose hidden
causes of inventory keeping, and are therefore
not a simple solution for a company to adopt. The
company must follow an array of new methods to
manage the consequences of the change. The
ideas in this way of working come from many
different disciplines including statistics, industrial
engineering, production management, and
behavioral science. The JIT inventory philosophy
defines how inventory is viewed and how it
relates to management.
Just-in-time (JIT) is an inventory strategy that strives to improve a business's
return on investment by reducing in-process inventory and associated carrying
JIT can improve a manufacturing organization's return on investment, quality,
Quick notice that stock depletion requires personnel to order new stock is critical
to the inventory reduction at the center of JIT. This saves warehouse space and
costs. However, the complete mechanism for making this work is often
Main benefits of JIT include:
Reduced setup time.
Cutting setup time allows the company to reduce or eliminate inventory for
"changeover" time. The tool used here is SMED (single-minute exchange of
The flow of goods from warehouse to shelves improves
Small or individual piece lot sizes reduce lot delay inventories, which simplifies
inventory flow and its management.
Employees with multiple skills are used more efficiently.
Having employees trained to work on different parts of the process allows
companies to move workers where they are needed.
Production scheduling and work hour consistency synchronized with demand.
If there is no demand for a product at the time, it is not made. This saves the
company money, either by not having to pay workers overtime or by having them
focus on other work or participate in training.
Increased emphasis on supplier relationships.
A company without inventory does not want a supply system problem that
creates a part shortage. This makes supplier relationships extremely important.
Supplies come in at regular intervals throughout the production day.
HOW BMW HAS USED THE
JIT and Lean Production
Now after understanding the JIT and Lean Production
How BMW was Incorporated the same in their functionality
The fundamental usages by the BMW US factory have
moved on what they describe all about. And they term it
The basic emphasis is given to suppliers. Effort is made
not to underestimate the role of suppliers
Vehicular delivery on time (day of ordering to delivery
Flexibility - $300 million capital (overhauling the 8 year old body shop)
Following changes are under way
Redesigning the vehicles for variation in metal sheets
Upcoming 3 series will have 2 variations instead of 16
Z3 model will have 8 body variations instead of 12
VIN number modification (LEAN Production concept used)
o Will be assigning the VIN number later as to give customer chance of making
changes in the design (customer centric approach)
o Will give BMW more time for scheduling
Computerized system for the dealers
Computer ordering system for giving customer the date of delivery, integrating all the
workshops and data banking in the Munich center.
Scheduling glitches (LEAN Production used)
The Spartanburg Plant (doubling the vehicular stacking capacity)
1. Temporary shelve half shifts worth of cars at once
2. Solving scheduling glitches caused by vehicles out of sync
3. More parts to stand along the assembly line
4. Reducing load on worker
Supplier Side -------- (JIT concept used)
Computer system that tracks orders from the dealerships around the world to the part
makers in South Carolina and Germany.
Production change from supplier side few hours prior to the parts
Are needed in BMW line.
Suppliers are accustomed locking the production line weeks before the delivery
Challenge starts with the production forecasting
Normally manufacturer would be able to forecast the production needs and notify
6months in advance,
With 60 % accuracy
If (6 weeks prior ---- will give 80% accuracy)
Plans to attain (JIT concept used)
If (done 4 days ahead ---- will give 100 % results)
For the same (steps have to be taken)
1. Lock 100% percent accurate production plan
2. Advantage of suppliers to liberate suppliers to make last minute changes
3. Sales orders processed nightly and communicated to the factory planning
Cross-functioning (JIT concept used)
Job post champion
sorting issues in various department to solve schedule problems
ex ( one departments functions impacting other)
Brand identity ( LEAN Manufacturing )
Customized manufacturing -- customization is less in US then in Germany,
Customers should get what exactly they want but (will not go the way of 20 day car)
Precise schedule will result in the more stable supplier base, by reducing product
complexity that will allow the production of new products.
BMW supplier network
New initiatives by the company in Lean and JIT principles
That is BMW will bring about changes that will (Every last minute change will
bring about any desired output from the Customer will be handled minutely).
MINI production strategy adopted by the BMW Group, with special emphasis on
the MINI Production Triangle set up in 2006.
The department managers, engineers and computer software developers at
BMW AG's U.S. factory are about to drop-kick the auto plant into a new era. Call
it the ``post-just-in-time'' era
`Don't forget the suppliers,'' says Helmut Leube, president of BMW
Manufacturing Corp. in Spartanburg County, S.C. ``Please don't underestimate
the role of our suppliers in this effort.''
As Leube explains it, ``this effort'' is a shift from the lean, just-in-time production
that automakers have championed since the 1980s to delivery-on-demand.
The South Carolina plant and other BMW plants worldwide are attempting to
make ordering a vehicle from a BMW factory and getting that vehicle on the day
it is promised as easy as possible.
BMW is making major changes, including a $300 million capital expense program
that just completed an overhaul of its nearly 8-year-old body shop. The
manufacturing changes are as diverse as procedures.
In 1998 BMW management launched another damaging restructuring package
— which involved the banking of hours, new shift patterns and redundancies.
Noteworthy is BMW‘s network which has 20% of its suppliers located within a
BMW suspended some production because their supply of parts was disrupted
by the volcanic ash.BMW has said that three plants in Germany had already cut
production ... The moves come as the spread of volcanic ash from Iceland
continues to disrupt European airspace."
BMW the car buyers are allowed to select or modify options, such as changing
the color of leather seats, in the vehicles they order until just one week before
that vehicle starts.
BMW‘s ‗custom-driven‘ selling philosophy, having already undermined the
marketing platform which first attracted BMW to the site.
People who are buying BMW are paying for the engineering and the quality, not
for the breakdown on the plant floor. To achieve such maintenance and reliability
excellence. It‘s all about the driver. (James kron – Manufacturing planning Exe)
BMW plant in Spartanburg SC utilizes a myriad of methods (root causes focus,
design for maintainability, TPM, Condition Monitoring, Standardization,
Etc.(Herman Adams – maintenance planning Exe)
BMW has used these process in a sufficient manner for the manufacturing other
process in the best manner possible.
MY LEARNING and understanding
About the company
BMW is an automobile manufacturing company that is base in Germany and is
know world over for its best automobiles running on the road.
It has its global presence in motto GP and F1 racing circuits plus manufactures
automobiles for general purpose, SUV and MUV vehicles.
BMW believes in outclass product outreach and amazing the customer with the
best practices to collaborate the engineering expertise and the modulated
changes that are brought by the best methods adopted by them in terms of
vehicles every quarter being inspected to the maintenance of customer relation
and augmented experience being provided to the customer using various
methods and technologies being adopted.
BMW has got expertise in the fields of commitment, identification and knowhow
of the employees, they also use a 300+ work scheduling techniques for the
company, they also prefer the usage of recycling and using the best practices for
the betterment of the ecology and company needs
BMW believes in the customer centric approach where in the modifications and
changes are allowed to be done in the vehicle till the last minute. Plus a lot of
flexibility is being given to the employee and dealers with online booking system
for the raw material and modification system for the color, chassis and other
About the process and TQM techniques used
VIN number being given to the customers for the customers for making changes
in the vehicles, many models were modified in accordance to the 8 body
variations and redesigning the metal sheets for the manufacturing purpose.
BMW has introduced the computer aided ordering system for the dealers for
integrating the workshops and thus the fact remains that they have considered all
options for the vehicular stocking has been done so that the overload on the
workers is reduced and it also minimizes the scheduling glitches and thus
promote more parts for the replacement and spare parts to stand alone in the
shelf‘s thus making more flexibility and ensuring less damage and making the
task less difficult for the employee.
BMW has used the JIT concept in the supplier side of the manufacturing. locking
the inventory and planning the inventory weeks before the production, plus they
forecast the production so as to make sure that the 6 weeks prior they inform to
bring in the 80% accuracy in manufacturing and changes thus can be achieved.
BMW has introduced a plan which is 100% lock proof, plus they get the chance
of liberating the supplier and change them as per the requirements of the
company and the specifications thus are maintained by customer by the
BMW also uses a peculiar methodology in which they have generated a concept
of employee champion in which the key job for the process is being identified and
thus this makes a employee the champion of that certain task later making the
job post champion. Thus BMW understand the fact that one department functions
impact the workings of other for the same they have made this mandate and thus
every department tries to work in the minimum error level.
Supplier network is also very stout and focused and it is thus maintained that the
manufacturers are located in the location that is near to the production center for
which many distributors of same spares and inventory are being used. various
other tools are used like standardization and quality focus, root cause analysis is
done to make sure that the products are out of defect the best example that they
have given to the world is the suspension some production because their supply
of parts was disrupted by the volcanic ash
Pratik K.S Negi
ISBE (SS 09-11/HR)