BMW Opens a New Plant
In May 2005 ,BMW
opened its new plant
in Leipzig area of
W invested $1.3
Manufacture BMW 3-
Max annual capacity:
Expected to create
5500 jobs in that
Why Leipzig area?
Availability of highly Qualified staff
High standards of superior quality
The Leipzig plant was designed to allow
maximum flexibility and communications
In 1913 , 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, Rapp needed additional financing to
complete this contract.
He partnered with Camillo Castiglioni.The new
partnership company named as Bayerische
Motoren Werke Gmbh.
The company soon get into difficulty due to over
Sold it to Australian industrialist,Franz
The First Aircraft Engine
In 1918 ,Bayersche Motoren Werke
manufactured its first aircraft engine.It
reached up to an altitude of 5000 metres
in 29 minutes, creating a world record.
Treaty of versailles banned Germany from
producing Aircraft. The company shift to
In 1922 , Bayerische flugzeugwerke AG.
Manufacturer of small aircraft merged with
BMW to form BMW AG.
BMW started manufacturing
MotorcycleR32-500 cc Bike designed by
Company started producing cars in the
In 1928-BMW setup a car manufacturing
unit in Eisenach region of Germany.
There they manufactured DIXI cars and
sold under their name.
By early 1930 they started designing
their own cars.
Introduced many successful car’s like 327
saloon and 328 roadster.
In1959 launched BMW 700 of “sporty
exterior´ which was the main selling
They launched other models based on
BMW 700 and won many competitions.
1961 – BMW launched the “Sporty
BMW 1500 launched in 1961
1970: BMW moves its
headquarters to Munich.
In 1970 BMW moved its headquarters to
The building looks like the four cylinder
From 1970 to 1990 they focused on
Like US ,south Africa, Australia, Asia,
Japan, Austria and Bavaria.
In1992 BMW outsold the Mercedes for the
first time in Europe.
The company became the first European
car market to operate in US market.
In1994 BMW attempted to enter in mass
market by bringing British Car m/c MG
The purchase gave the company
ownership of many successful brands like
Mini, Land Rover, and Triumph etc.
But some of the models were clashing
with the BMW model.
In 2000 , BMW sold the MG Rover to
Phoneix consortium for a nominal £10.
Mini and Triumph were held by the BMW
and Land Rover and Range Rover were
sold to Ford.
In Early 2000 BMW launched its 1-series
For launching this car model company
faced many criticism.
In 2004 company added three 3
car brands-BMW, Mini, and Rolls Royce
In 24 cities,12 Countries on 4 different
Company employed 70,000 people.
Customer deliveries increases from
Revenue in 2004=US $ 60.47
billions,Profit=US $ 3.03 billions.
WHY MASS CUSTOMISATION?
◦BMW was reputed for its customisation
◦The orders recived were conveyed to the
factories which manufactured and
delivered to customers in the shortest
◦Meeting particular customer need on a
◦Basically combining the concepts of
mass production with customisation
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
Higher Customer Satisfaction
Great Amount of Flexibility
Perfectly Matching the Need’s of the
Better use of working capital.
Levels out economic fluctuations.
Customer has control over products.
As a result of customization program
there was a stocking more in showrooms.
COSP :Customer oriented sales and
Production process was defined by the
car ordered by the customer.
This was supplemented by the online
ordering system launched by the company
Supply Chain Management
Advance planning was the key reason for the
excellent management for BMW supply chain
B.M.W. had a very efficient ERP solutions
provided by SAP.
It connected the supply chain management very
Once the data entered it reached automatically
to the production areas.
50-70% of the plant was automated
Used extensive use of Robots for heavy manual
Sophisticated machines moved around to help
human efforts. ( Process , fixed
PROCESS FLOW STRUCTURE
ONLINE ORDERING SYSTEM
Platform to showcase the company’sproducts
Good ERP systems
BMW ‘s new plant was constructed in circular
design keeping flexibility in mind.
This was done for future expansion and smooth
flow of process from one stage to another.
Assembly lines designed in such a way that they
can shift between models when demand
fluctuated(each plant produced atleast two
models of cars)
Flexible work programmes where plants operated
in different capacities.
BMW had 300 different worker scheduling
Interchangeability of parts added to flexibility
Customised car was delivered in 12 days
In 2000 , BMW had the lowest delivery
Consumer laws in US : Consumer could
break a car deal at any time before
Integrate customer preferences to the
image that the company carried.
Future of Mass Customisation
Computers ,cars and other industries are
adopting mass customisation.
There was a school of thought which
suggested that mass customisation is not
economical in automobile industries as
they thrived on volumes.
It is widely agreed that the potential of
mass customisation is huge.