In capacity management as it relates to BMW.
In today’s global market the ability for a company to change how it operates is an absolute must in this competitive world. The reason that many of these companies need to adapt is so that they can run more efficiently. The more efficient a company operates, the more money it can save.
One method of changing a company’s operation is by leaning out the processes. What this means is to only use processes that a company needs just to operate. These processes can be how the company operates its manufacturing or even its supply chain.It is within the supply chain that many companies see room for modification. Therefore, the supply chain will be the focus of this paper. This week we will look at a case study examining BMW, and how it has changed itssupply chain. Once we have examined the case study, we will summarize and explain an appropriate measurement for BMW’s supply chain performance.
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Next we will describe the impact of global expansion on BMW’s capacity measurement and the role that e-business plays in this expansion.Finally we will explain the role of e-business in the global supply chain, and describe the strategic importance of global capacity management as it relates to BMW. By the end of this paper, readers will have a better understanding of how modifying a company’s supply chain can help it run more efficiently. Before we can begin, we first need to have a better understanding of what the case study discusses.
For years whenever BMW produced a car they assigned a VIN to it at the beginning of production, but now BMW plans to assign a VIN to the vehicle after production.This will allow the company and customers to have more flexibility to modify the vehicle as needed. Along with changing the way that it produces vehicles, BMW plans to change the way its supply chain operates by only keeping a minimum supply of inventory on hand. How BMW plans to change the supply chain is by having the supplier forecast the production rate of BMW. BMW will place orders at the time parts are needed, and it will be up to the supplier to insure that there are enough parts inbound to BMW to cover the order that is placed at anytime.
For this to work, BMW will need to build a computer system that will accurately track customer orders, which then can be used to allow suppliers to see the trend. This means that whenever a customer places an order, BMW will save that information and share it with the suppliers. As orders are placed and filled, suppliers will be able to see trends which will allow them to adjust their supply shipments accordingly. This focus on the changing of how the supply chain operates is the main focus of BMW to insure that its new process will be successful.Now that we have a better understanding of how BMW plans to modify its own internal process, it is time to figure out how they can measure the success or failure of the new changes.
One way that BMW can measure the success of its new process is by tracking how long it takes for a car to be built from the very first step to the time it drives off the assembly line. If vehicles take different amounts of times to be built it can be a sign of uneven flow of materials to the production line.Another way that BMW can measure success is by looking at the number of vehicles that are returned for warranty work.
This measurement looks at the final product. If suppliers are rushed to fulfill orders, they might reduce the quality of the products that they are supplying to BMW. Once those lower quality parts are used in the manufacturing of a new vehicle the end customer will have to return the car to the dealer to be corrected.
Now that we have laid out a way of measuring the success or failure of the new process, we can evaluate the impact of the global expansion of BMW’s e-business.Since the majority of the cars that are ordered from BMW are custom, it is important that the orders are placed correctly. The way to insure this is through BMW implementing a system that allows the customer to browse and select what they want on their vehicle. Once the customer has selected exactly what he or she wants, then that order can be placed into the system and sent directly to the manufacturer. This will allow customers from across the world to build a car that meets their exact specifications no matter where they are.
Since this new system will be used to track each and every customer’s order, BMW will then turn around and use the data that is collected and share it with the suppliers so that they can forecast what parts will be needed during the manufacturing of anew car. This new method of e-business will be the cornerstone for BMW’s new process by allowing suppliers to know what will be needed from them in the future; which in turn will allow an uninterrupted flow of materials in the supply chain.Along with helping BMW with its new process it will also give customers more enjoyment from the vehicle because it is built exactly how they wanted. In conclusion, this case study allowed us to have a much better understanding of how changing a process within a company can cause the company’s supply chain to also change. In this paper we evaluated a case study and summarized the need for BMW’s internal process to lean out its manufacturing process and supply chain.
Next we discussed two different methods of measuring BMW’s supply chain performance that could be used to gage the success or failure of the newly implemented process.We also looked at how BMW’s new e-business could impact its global expansion. Finally we examined the role of e-business in the global supply chain, and described the strategic importance of global capacity management as it relates to BMW. In the end, it is up to BMW to use the new system it has in place to collect the customer’s information and share it with its suppliers to keep the supply chain flowing without interruption. If BMW fails to continue to share that information then the process will fail.