Group 4 Sec B

BMW: The 7-Series Project (A & B)

Background

• Bayerische Motoren Werke(BMW) was founded in 1916 by Gustav Otto.

• Started as a producer of aircraft engines• In 1917, registered its trademark blue

and white rotating propeller still used today

• In late 1920s started producing cars• From 1930s to 1950s built a reputation

for high-performance engineering• In 1959 rescued by a $1 million

investment from the Quandt family • From 1970 to 1990 sales volumes grew

by a factor of 15 and the work force trebled.

• Heavy investments in R&D put the company at the leading edge of technology

Cause and Consequences of Problems

(to be handled for later models)

Problem 1:

• Cause :

Carl-Peter Forster, Director (Prototype and Pilot Manufacturing) had explained about the time being spent on major problems (e.g.. Part fit; need for redesign of tooling) led to decrease in time left to spend on minor problems or fine tuning(e.g. surface finish, alignment).• Consequence :

Higher number of customer complaints despite provision of extra resources for quality assurance, inspection and framework.

Problem 2:

• Cause :

Prototyping done at a separate facility by handcraft artisans and workers by general purpose tools (mallets, hammers).

• Consequence :

Difficult to correctly know what a part is going to look like or fit after manufacturing using production tooling.

Problem 3:

• Cause :

Mixed model ramp up method.

• Consequence :

Hindrance to smooth flow of assembly process/ logistics because of confusion among factory workers.

Problem 4 :

• Cause :

Suppliers involved in the process only after cubing i.e. the final design approval by BMW top management.

• Consequence :

In case of changes in tools or materials is noted/or identified during commercial production or pilot production at factory, the supply of new tools either takes time or are unable to do so, ultimately leading to an increase in the lead time .

Problem 5 :

• Cause :

Long development lead time-The lead time for new and redesigned BMW series averaged at 6 years compared to 4 years for Japanese competitors;

Design strategy.• Consequence :

The longer lead time meant less frequency of introduction of new models and this played on the minds of many consumers who preferred to buy a new model with incremental change than wait for a new model with bold changes.

Launch Quality

Launch Quality

• The development and launch of a complete new model is a complex, excruciating and time taking task for any automobile giant in the world specially BMW.

• BMW began the styling and designing 6 years before the launch while other competitors take 2 years and their Japanese counterparts take about 6 months.

• There is a lot of rejection of drawing model prototypes before the final nod is given to the product.

• They used a typical method of dividing one car into as many as 30 segments or modules like cockpit, braking systems, doors etc.

• An inter-functional team is made of people from design, procurement, product engineering, etc.

• They make sure that the performance of the vehicle is greater than the customer demands and needs like safety, handling, reliability, etc.

5 DESIGN CYCLES OF BMWPro

toty

pin

g Hand made by skilled craftsmen with general tools like chisel, hammer, file etc. to make the components and not using conventional tools

Parts of the prototype and not of same material as the final car to reduce cost eg dashboard made of sheet plastic and not PVC

Both the methods help to reduce time and capital involved

Pilo

t pr

oduc

tion

and

man

ufac

turin

g This is the transition from the final prototype stage to the full scale production scale and is subdivided into 3 stages that would be discussed

next.

Pilo

t p

rod

uct

ion

in

th

e p

ilot

pla

nt It is a simulation

of the actual production facility but much smaller in size.

Conglomerate of high skilled workers and production workers works in the pilot plant

75% of production tools are used and rest are of pre production stage

Several problems specially in assembly, tooling and design are discovered in this

Fact

ory

pilo

t p

rod

uct

ion

ru

n Pilot production is done in the actual factory

Its done 3 months prior to actual production

The cars produced here are not for sale

Cars in very small batches like 20/40/60 are manufactured

All the last minute tool changes and other changes are made before full scale production has to begin

Full

pro

duct

ion r

am

p u

p Also the minute quality details like surface finish, aesthetics , etc.Changes are made at this stage too but they come at a great cost

OBJECTIVES OF THE SYSTEM AND ADVANTAGES

• Employees should be well trained• Maximizing the utility of existing tools• Involving suppliers earlier, i.e., in the prototype stage• Minimize gap between production process and

prototypes• Using well skilled labours to handle and implement

changes in designs and procedure effectively• Involving skilled, experienced and reliable suppliers and

taking their inputs and advices for improvement

Changes BMW should make in its prototyping

and product development process

Changes BMW should make in its prototyping and product development process

• BMW should use pre production tools instead of hand-used tools. Why? a) As till the very end the parts were not exactly as they should look like• Prototype parts should be procured by BMW vendors (suppliers) who supplied material for commercial

production. Why? a) Consistency among design specifications would reduce on mass production b) Vendors could foresee problems in production process.• Outsource it to a vendor to supply fully assembled segments of prototypes eg: BMW cockpit. Why? a) In the future, the supplier can provide entire module of the desired segment. b) The supplier could also be made in charge of of some engineering design work.• BMW should use pilot assembly plant workers instead of prototype specialists. Why? a) Most of the assembly part workers are a part of main production cycle, hence their training would be nn better.

Some other changes that BMW can incorporate to increase in efficiency• Reducing the number of parts used in a product. How?• Using DFM (Design for Manufacturing) and DFA ( Design for Assembly) i.e. integration of

product design and process planning into one common activity.• Use of Concurrent Engineering.

Concurrent engineering

Concurrent Engineering: Also known as simultaneous engineering, is a method of designing and developing products, in which the different stages run simultaneously, rather than consecutively.It decreases product development time and also the time to market, leading to improved productivity and reduced costs.

Business Benefits of Concurrent Engineering

Competitive Advantage - Reduction in time to market means that businesses gain an edge over their competitors.

Enhanced Productivity- Earlier discoveries of design problems means potential issues can be corrected soon, rather than at a later stage in the development process.

Decrease Design and Development Time- Make products which match their customer’s needs, in less time and at a reduced cost

• In the long term, costs would reduce dramatically. As per internal research of BMW, if only early tooling was employed in all parts of BMW 7-Series, the company would save at-least 100 DM million.

• There would be less complaints per car and the company would maintain a high quality Image

• It would reduce the problems associated with brining new models into production

What preparation will be needed to manage the changes?• To incur high initial costs of prototyping because of the use of production grade tools, the

company would need to have high capital investment.• Since designing of prototype would be done in the initial stages itself, leak of the designs

and other trade secrets is possible. So, the company would need to guard more proactively against the same.

• Creative and futuristic designers are needed, who can think of deigns that can be incorporated for at least 12 years in the BMW product life cycle.

What performance dimensions would improve as a result of the proposed changes?

Changes made in the 7-series development

project

Changes made in the 7-series development project

1. Outsourcing the fabrication of interior components,2. Involving more number of workers from pilot assembly line in prototype cycles,3. Starting its initial pilot production runs one year prior to commercial production,4. Completely stopping the production of old model unlike mixed-model approach,5. More involvement of the engineers before production,6. More complete and carefully specified designs are to be submitted by the designers,7. Making it fault intolerant,

Outcomes from the changes

1. Finding problems in the prototype cycle which would generally surface during pilot production and commercial production,2. Increase in the quality,3. Drop of time spent in reworks,4. Shrinkage of time in assembling a batch of prototypes,5. Better communication between departments,6. 23% increase of sales in U.S. market,7. Reached record share of 7.3% in the luxury-performance

segment,

New Product Innovation

Strategy in BMW

Lessons Learnt

• Involve all the stake holders at the earliest

• Assumptions were reduced• Reduced Rework• Getting things right from the outset• Better communication on part of every

verticals

Changes in the Automotive Industry

• Fuel• Materials and Forming• Electronics, Software and Controls

Firms and Industries who can pick up

• Other Large manufacturing companies• Logistics• IT Companies

E-32 (pre 1994)

E-38(post 1994)

That’s all Folks!Thank you!