BMW: the 7-Series Project - Case Study Example

BMW: The 7-Series Project BMW: The 7-Series Project Executive Summary BMW’s 7-Series project aims to evaluate the current situation at the company regarding their manufacturing initiatives. The project will address the background profile of the Company, analyze the potent causes and consequences of the new design process currently in progress, and find a rationale for the design process (Rainey, 2005, p. 304). The project is among the greatest innovation in the recent future according to the UN Millennium project, 2013 (p. 76). The study presents an examination of the case and provides possible recommendations that would help improve the current BMW product design process. The study provides an analysis of potential limitations to the recommendations suggested for the design process. Introduction BMW Company is an automobile and motorcycles producer based in Germany. Karl Fredrich Rapp founded BMW in 1917 (Fantacy Cars, 2014, p. 1). CompanyS initial intent after commissioning was to engineer V-12 engines meant for Hungary-Australia. Instigated by the necessity for further finances, Karl renamed the Company as Bayerische Motoren Werke commonly known as BMW. Josef Popp gave the Company the famous name of BMW after he bought it from Karl in 1917. The Company under Popp’s leadership continued with production of airplanes and air force requirements. The Germany authorities banned the Company from producing any automobile for three years after World War. It then resumed production in 1952 but later after seven years of manufacturing the company experienced financial shortage. Due to financial constraints, the company had to sell its interest to Daimler-Benz even though the later was BMW’s rival in the market. However, after contemplation from BMW labor union and with the help of Herbert Quandt, the Company raised increased its shares to 50 percent and took over management of the Company (Kiley, 2004, p. 291). Currently, the Company commands 10 percent of the market share in Europe, America, and Japan. It has a revenue base of up to forty-four billion dollars and employee population of over 105,972 according to BMW report in 2004. The above statistics are indicative of the success and transformation the Company has undergone over the years in quality production and market image (Falloon, 2009, p. 58). Causes and Consequences of BMW’s Current Product Design Process Causes Pre-production tools BMW case study revealed bountiful apparent causes of quality problems evidently resulting from the newly launched design process. For example, the production process at BMW project did not employ the use of pre-production tools in the prototyping process. Pre-production tools such as cars are imperative in helping automobiles companies in early identification of problems of new models destined for industrial production. Pre-production tools should frequently follow prototyping process. After pre-production, the next stage is commercial manufacturing of automobiles followed by distribution of finished products to vendors. Pre-production automobiles also assist in minimizing production costs and wastage of resources. The tools can identify and fix problems and other complications within the production line before manufacturing process proceeds to later stages. Mixed-Model Ramp Up Strategy Another probable cause of the problems associated with BMW current design process was the decision to use mixed-model ramp up strategy during production. In mixed-model ramp up, manufactures integrated the new series of production with the old regime models. The intent of the ramp up model was to increase BMW commercial production in anticipation of the rising automobiles demand around the globe. BMW intended to improve its manufacturing and in the process engaged the strategies of early models in the new 7-series project. The later project aimed at introducing a new brand of automobiles in the market. Suppliers The 7-series project complications also resulted from the BMW strategy of not involving suppliers in the later stages of manufacturing process. Suppliers are critical in improving efficiency of troubleshooting the production process complications owing to their experience on the market trends. Early involvement of employees is also imperative in the creation of a robust relationship between the suppliers and the company. Consequences Pre-Production Tools BMW decision to use different materials and tools during the prototyping process resulted into confusion within the production line. BMW final product models did not conform to the original materials used in the prototyping process. Avoidance of pre-production tools in the initial stages of prototyping resulted into a series of cumulated design and manufacturing problems. The engineers and designers could not quickly identify the inherent mistakes with the production or prototyping process. Late discovery of mistakes led into production of low-quality products that had no relation with the design models. Such complications implicated additional production costs involved in troubleshooting. Moreover, use of clay models and designer’s drawing requires highly skilled artisans to manage the hand-built prototypes. Involvement of more skilled implicated high extra labor costs. Besides, the traditional clay model consumes more time compared to modern per-production tools. Mixed-Model Ramp up Strategy The mixed-model ramp up strategy involved in the pilot production stages resulted into greater confusion among the BMW workers. Production engineers could not easily trace and link the final products to the old models. In addition, the workers could not easily distinguish between the old and thee new models because of the mixed production lines. The mixed-model also made the manufacturing process more complex. Failure to involve pre-production tools in the pilot production stage also resulted to inability in identifying and solving the entire problems associated with the production. The manufacturers also devoted less time to solving minor issues with priority given to major problems. The mixed-model ramp up also compromised the final quality of the new models. Suppliers Late involvement of suppliers in the final stages of manufacturing process resulted into wastage of time correcting the troubleshoot results. Adjustment of the whole manufacturing and design process would also prove to be a time-consuming undertaking. Late involvement of suppliers also disadvantaged BMW, as its suppliers could not readily supply tools or materials for production. Recommendations On Supply network BMW should establish and promote frequent interaction with its suppliers. Global supply chain network is an essential contributor of value creation, innovative strength, and quality. Such supplier chain network would increase the success of BMW. BMW should embrace its corporation with suppliers as a mutual understanding of production and product quality, price credibility, security of supply, and innovative power. In ensuring continued improvement and sustainability within the entire supplier network system, BMW should minimize and manage risks along the supply chain. In managing the risks, BMW should identify and evaluate impending sustainability risks within the supply chain. In addition, BMW should initiate resource efficiency promotions programs as well as qualifying and training programs for its suppliers and employees. Healthier relations with suppliers would assist in involvement of the later in the production process. Moreover, vendors would quickly provide the company with tools and materials needed for production. BMW should also consider association with only potential and reliable customers that would provide timely and quality services. The company should consider involving suppliers earlier in the design of the prototypes. It should also introduce earlier its vendors and suppliers to the new prototypes. Such initial introduction would help in reducing the period spent in production processes (Wang & Nee, 2009, p. 2009). Moreover, suppliers and vendors may help in earlier detection of problems within the production process and even assist in the introduction of forgotten concepts within the design. The suppliers and vendors would also help in the decision-making process of preventing possible future errors within the production line. Such assistance would occur once BMW integrates them in the prototyping and designing process (Rhodes et al., 2009, p. 172). The company should implement and remind their suppliers to use newer approaches for the fabrication of products components. Implementation should accommodate the use of automated technology and very accurate tooling techniques (Monczka et al., 2011, p. 239). The suppliers would then have the task of constructing and shipping major components to BMW for assembling into desired prototypes. Pre-Production Tools and Logistics BMW management should also ensure timely procurement of pre-production tools. Early procurement of pre-production tools would assist the organization in eliminating problems associated with design and manufacturing process. In addition, the automobile company should involve the pre-production devices at the initial stages of prototyping process. BMW should also improve the quality of its launch to help reduce the gap sandwiched between the production process and prototyping with relation to materials and tools used. Closeness of the production output to the prototype assist in early identification of design and production problems. The study also recommended that the Company employ the use of computer-aided design (CAD) in its design process. CAD would endure significant improvement in the quality of the Companies’ products besides consistency and reliability that associates with CAD technology. Besides, with CAD ensure smooth changes whenever needed (Scarlett, 2009, p. 258). Use of modern technology would reduce production costs and directly decrease the market prices of BMW series of cars (Boutellier et al., 2008, p. 176). Production process time would also decrease. Reduction in production time would be economical for the Company, as the products would always reach the market earlier than other Companies would. With the adoption of CAD, the company’s designed prototypes would represent the final model of cars produced. It is also more profitable and convenient for the company to rely more on outsourcing of vehicle parts and other production logistics resource. Though the whole idea of outsourcing may result into layoffs, it would be of the essence that the Company relies on external sources and not invest the companies’ capital in improving production equipment line. The Company should make maximum use of pre-productions tools. Maximizing use of these tools would be economic and productive besides assisting in cost saving. Cost saving is of the essence as the pre-production machines are expensive to acquire. Moreover, earlier application of tools in the production process would save on other production process logistics. The company should employ preventive quality assurance measures to reduce production expenses and shorten re-tooling period. Continuous use of modern technology in production would help in decreasing the effects of attribute deterioration. Training of Employees BMW should also train its employees frequently on new technology of production and design. Training would assist in minimizing complications that may result during the production process, besides; BMW products would be of high quality and in relation with the core competencies. BMW Company should approach the design and production process as a wholesome duty of its entire staff. It should create a platform for coordinating ideas where both the production staff and design engineers operate as a team in brainstorming of ideas that would help in the production of marketable prototypes. The Management should increase the involvement of production staff and not just rely on the engineers for prototypes production. The Company should also minimize backtracking of manufacturing issues by creating more time for testing earlier testing of its prototypes (Styhre, 2007, p. 118). Quality Improvement The project also recommended that the company employ quality improvement form of lean manufacturing process in its designing strategies and concurrently with engineering. In order to advance the quality of its products, BMW needs to maximize the use of its resources and tighten quality standards. The technique that was first engineered by Toyota and if BMW embraced it, they would be competitively advantaged. Quality improvement strategy as a form of lean production results into operational stability. Operational stability contributes to the creation of consistency in tasks, methods, equipment, output of work, and workplace organization. Lean manufacturing principles would assist BMW in continuous improvement of quality and productivity. Lean product design features would help in the simplification of the process of production as well as minimizing the parts used in the production process (Jr, 2006, p. 36). Moreover, applications of design for manufacturing and assembly would assist BMW reducing assembling costs, design complexities and the number of operations during assembly (Evans, 2013, p. 117). The Company should also focus its attention on the prototyping process at the expense of many other issues that have an effect on finally quality of its automobiles. Prototyping would be vital in improving the overall quality of BMW company products besides helping in minimizing production errors. Using pre-production tools would help in earlier detection of production issues. The issues detected within the production line would be possible for solving using pre-production tools before the overall production process reaches its final stages. The BMW Company should also aim at future development strategies. The Company can achieve such prospects through initial and thorough evaluation of its intended product plan. In a product design, the company should organize its work procedures production equipment in accordance to the steps for production. The company should streamline the equipment and labor to an accurate objective. The objectives help in organizing and coordinating the objectives of each department in ensuring quality production standards. The product design further help in instituting backtracking tools that are necessary for identification and correction of mistakes committed in the earlier stages of the production process. The design plan would assist in maintaining straight flow of production materials within the Company. Furthermore, the product design program would be relevant for large-scale batch production. Rationale Pre-production tools The main reason BMW did not employ the use of pre-production tools in the 7-series project was probably due to unawareness or lack of expertise. They preferred to use tradition clay model, which they were accustomed to instead of the efficient pre-production tooling. It was reasonable for BMW to use pre-production tools in the current design process. Pre-production tools were imperative in early troubleshooting and fixed of problems within the production line. Mixed-Ramp-up model BMW chief reasoning of applying mixed-ramp up theory in production of 7-series cars was mainly to meet customers’ requirements. Ramp up method relied on the principle that business operations aim at meeting market demands. The company needed to mix the models of the old and new production lines with the aim of timely production. Shift from 6-series design process to 7-series BMW Company also needed to expand its market share through design and manufacturing of new automobiles. The market demand for 6-series cars had significantly remained constant, and a new series was essential in maintaining a market share. The new 7-series cars designed would significantly increase the market share of BMW Company. Besides, initiation of BMW new product design process would be to initiate reforms in product development and production process. Introduction of new design process would assist the company staff in dealing with boredom of the old design methods. Besides, change is inevitable and matching the globalizing market trends would be of the essence. The BMW staff would however have to undergo induction on how to handle and operate the new technologies. Limitations Quality Improvement The recommendation that BMW employs use of quality improvement strategy as a form of lean manufacturing may result into increased costs and wastes. Such increase in cost of production and resultant wastes is a possibility only if lean manufacturing implementation is not satisfactory. Unsuccessful application would also lower productivity of the company as the lean manufacturing strategy always aims at reducing the number of employees. Low productivity would consequently decrease the market share of BMW. Pre-Production Tools The recommendation that BMW use specified production tools in both pilot and commercial production is expensive. Initial costs of acquiring modern pre-production tools are high and require substantial investment that may not be affordable. It would also be time consuming for BMW Company to procure the right prototyping tools, as the process of acquiring them is extremely expensive. There is also a possibility of delayed launching of BMW products in the market. Similarly, it is expensive to acquire and maintain CAD systems in the manufacturing process. BMW would have to either recruit new experts of CAD or train its existing employees. Recruitment and training process requires substantial investments that would consequently increase the operational costs of the Company (Scarlett, 2009). Such expensive initial investment in CAD and other pre-production tools constrain the Company’s creativity and flexibility. BMW would not easily introduce new designs based on such massive initial investments. Technological investments strategies such as CAD would also raise questions of confidentiality among BMW employees. The company would strain in preventing leakage of its innovative ideas and trade secrets (Wang and Nee, 2009). Recommendation that the company use pre-production tools in prototyping, and pilot productions may also prove to be tiresome and time-consuming. It would be tiresome and time-consuming only if the company does not satisfactorily train its stakeholders. Designers of BMW Company spent two years during the design process entirely. There was no quality considerations during the design process which proved to be time wasting. The two years spent in styling was way too long compared to the period other automobiles companies usually take in designing and introducing their new products to the market. BMW also spent too much time in the design process compared to the two months spent in developing the Japanese luxury carmakers. Recommendation for immediate change in BMW organization would be time-consuming and may imply substantial investments. The changes in the organization would also building of well-established market for the company by the newly introduced members of the group. Besides, the structure changes may have negative The project of designing, developing and launching a very new type product redesigned to meet customer specifications is expensive, time-consuming, and complicated process for BMW Company. Designers within the company had begun developing the design of the new product six years back to invent a suitable alternative for the 7-series cars (Seese et al., 2008, p. 107). The company production engineers did the restructure of the exterior appearance of the model and marketing after its design process by the BMW stylists. Training of Employees The recommendation that BMW trains its employees may proof to be a challenge. It would be costly to train and implement new technological strategies within the shortest time possible. Based on operations management theory, harmony should exist between operations and production costs. Supplier Network In cases where BMW relies on its suppliers to assist in trouble shooting and fixing problems, serious complications may result when the latter fails to provide the right counsel. Suppliers trusted by BMW to supply pre-production tools may increase the costs of production. Such scenarios are possible when costs of supplies are higher than those present in the market. High production costs implicate increase in prices of final products and a consequential decline in market demands (Falloon, 2009). Conclusion and Summary BMW current design process contributed to the production of new modern car brands that dominated the automobiles market. The 7-series project was a novel idea though it faced limitations from the design and production strategies used by BMW. BMW employed use of mixed-model ramp up instead of only a single production line. The company also opted to engage suppliers in the final stages of manufacturing rather than in the pilot production stages. The choices made by BMW during the 7-series project led into a series of complications. The ramp up model resulted into confusion as the final product lost the design characteristics of the initial model. Lack of pre-production tools also meant that the production engineers could not detect complications and fix them earlier in the production line. Late involvement of suppliers in the manufacturing process also led to complications along the production line. The study recommended that BMW engage suppliers, adopt the use of pre-production tools in the pilot production, and design stages to help in earlier troubleshooting. The company should also follow a single production line by differentiating the old model from the new model. 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