Final OM -I
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Transcript of Final OM -I
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BMW: THE DIGITALCAR PROJECT
Group 4
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History of BMW
Bayerische Motoren Werke AG (BMW)(English: Bavarian Motor Works) is a Germanautomobile, motorcycle and engine manufacturingcompany founded in 1916.
It also owns and produces the Mini marque, and isthe parent company of Rolls-Royce Motor Cars.
BMW produces motorcycles under BMWMotorrad and Husqvarna brands.
In 2010, the BMW group produced 1,481,253automobiles and 112,271 motorcycles across allits brands.
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BMW Journey
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What were the competitive challenges in theAutomotive industry when the case was written?
From the Consumer point of view: By the Mid-1990s the Automobile market had become Consumerdriven.
Fickle consumer tastes: The predictability made thecompetitive environment harder to predict.
Competitors: The competition was strong among US,Japanese , Korean and German Car makers.
Competition was strongest between MercedesBenz and BMW.
Product development cycle had become animportant factor to leverage competition.
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How is BMW affected?
Running in profits but had slower productdevelopment cycles.
It was decided to reduce the Product
development cycle time by 50% and theproject was named as Digital Car Project .
Hard negotiations with the designers,
engineers, and Middle-level managers. Risk of the New method failing.
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Question 2
How would you evaluate the productdevelopment process at BMW?
Why does the senior management want to
reengineer the product development process?
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The product developmentprocess Typically a 5 year cycle- involving development of
package and the skin.
Emphasis on intricate designing.
Designers handpicked from art schools and otherindustrial design schools.
Modelers were those who had prior experience inthe field and had mastered the art.
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Design process
The first part included creation of handsketched designs from pencil, charcoal orwater colors.
1922 model by Paul Jaray
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Clay Models
After the paper designs the company createdclay models of the size of 1:2.5 for betterunderstanding the design.
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Clay Models
A final choice of design was made afterdiscussing on the basis of feedback received.A few life size clay models were made to
choose from.
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Digitization of models
Digital sensors were used to digitize data onthe models to be used for computer aideddesign process.
The digitization would help in speeding uprefinements in the design process itself.
BMW relied heavily on handcraftsmanship.They considered it as a reason for theirsuperior designs ultimately leading to successover competitors.
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Evolution of product developmentprocess
The number of prototyping cycles was reducedto 2.
The help of computer based processesensured that parallel processing of informationcould be done.
Identification of potential problems could bedone much earlier in the developmentschedule.
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Evaluating the product developmentprocess
Superior handcraftsmanship demanded extratime which could prove to be hazardous.
Market demand was changing and peoplewanted new models at a faster rate thanbefore.
Japanese and US competitors were workinghard to reduce lead time in order to better suitthe customer needs.
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Evaluating the product developmentprocess
BMW had typically high fixed costs.
The number of units produced of the samemodel were less and they relied on cashingtheir models for a longer period of time.
Extending current process could meanreduction in sales and an inability in recoveringhigh costs.
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Reengineer the product developmentprocess
Reengineering aimed at reducing the productdevelopment time by 50%.
They aimed at streamlining their existing
engineering processes.
Computer aided simulations to be implementedright up to the brainstorming stage.
The actual number of prototypes generated werehigher.
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Question 3
What are the risks if BMW changes its product
development process quickly? What are therisks of changing too slowly?
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Risk: BMW changes its productdevelopment process quickly
Holding back data
One generation of prototypes might besufficient to identify all potential design
problems Employee dissatisfaction
Barrier to Creativity
Time Management
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Risk: BMW changes its productdevelopment process slowly
Delay in time to market
Giving competitive advantage to others
Losing market share to competitors
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Q4: How to implement New DevelopmentProcess
Derivative 3 series project or flagship 7 seriesproject? BMW should go follow more conservative approach
and use derivative 3 series project for implementingNDP BMW management is not familiar with the new process
and structure of the organization may not be prepared tosupport the new process
Changing rapidly can result in compromise in quality forspeed of production, quality product is BMWs USP
Change is not absolutely critical as revenues aregrowing
After gaining experience and learning frommistakes the should im lement the rocess