Case Study | BMW AG

Standardizing logistics and

finance processes to improve
efficiency, transparency and
performance

Fast facts Each of BMW’s European plants had

BearingPoint is helping BMW redesign
and standardize the logistics and
finance processes at its largest plants.
long used different logistics and finance
processes, and each relied on different,
aging legacy systems. To improve
efficiency, transparency and performance,
BMW turned to BearingPoint for redesign
and standardization of its supply chain
processes. The collaboration included the
implementation of the SAP R/3 automo-
tive solution for BMW’s largest plants.

Case Study | Automotive

Fast facts
Lack of standardization made it difficult
for BMW to track material flow and
consumption, as well as maintain other
vital processes efficiently within the
supply chain.
2 Automotive | Case Study
Responding to the need for
change
The BMW group is one of the world’s
largest manufacturers of motorcycles
and automobiles, with 2004 revenues of
44.3 billion euros. Even with its size and
market strength, however, BMW faced a
major operational challenge. Its largest
and most complex plants, located in
Germany and England, used different
logistics and finance processes. More-
over, each plant used a different legacy
system, and those systems were rapidly
aging.
The lack of standardization made it
difficult for BMW to track material flow
and consumption efficiently, as well as
maintain production control, quality
assurance and other vital processes
within the supply chain. The lack of
standardization also made key
accounting procedures more difficult,
especially determining the actual,
real-time costs of parts and materials.
Finally, the lack of standardization
required complex interfaces, produced
redundant data and slowed data flow,
further decreasing efficiency.
BMW engaged BearingPoint as a trusted
advisor to redesign and standardize its
logistics and finance processes because
of our extensive knowledge of the
automobile industry and our long history
of providing supply chain management
support to the world’s largest corpora-
tions. The assignment included helping
BMW develop its strategy, process and
governance, as well as implement the
SAP R/3 automotive solution for its
largest plants.
Designing processes in a
complex supply chain
BMW engaged BearingPoint to imple-
ment a two-stage plan, called STARD
(standardization of logistics processes).
In the first stage, from October 2002
through January 2004, BearingPoint
helped BMW redesign and standardize
logistics and finance processes in the
company’s car manufacturing plants in
Regensburg and Leipzig. In the second
stage, BearingPoint drew on lessons
learned in the first stage. We helped
BMW redesign and standardize logistics
and finance processes at Dingolfing,
Germany, the largest and most complex
car manufacturing plant within the
BMW group, as well as at its plant in
Oxford, England. Implementing the
plan posed several major challenges.
Implementations were taking place in
the company’s largest, highest volume
plants in Germany. The technical systems
involved were diverse and complex, and
they had to be connected in such a way
that they would perform as a single
system. These conditions made main-
taining system performance and stability
a special problem.
In addition, more was required than
simply improving logistics and finance
processes within each plant. BMW’s
central goal was to connect the systems
within each plant to the company’s
central accounting system, so that it
could manage all of the plants almost
as if they were a single plant. Finally,
the plants involved are huge, employing
tens of thousands of people. Introducing
new processes to large numbers of
people and winning support for the
changes presented additional chal-
lenges.
BearingPoint was well positioned to
assist BMW in this ambitious effort.
Starting in the late 1990s, we had
helped the company modernize and
standardize its logistics and finance
processes in plants in Spartanburg,
South Carolina, in China and in South
Africa. We were able to apply the lessons
learned in these collaborations to the
much larger tasks in Germany.
Creating a homogeneous,
integrated structure
A BearingPoint team of more than 100
consultants and software developers is
implementing a redesign and
standardization of BMW supply chain
processes at its key plants. The new
framework (see Figure 1) includes:
• Consistent processes for series parts,
overhead cost parts and maintenance
technology
• Consistent integration of the finance
processes in all logistics processes
Further, maintaining legacy systems had
become increasingly expensive because Fast facts
companies that had built the systems
had gone out of business, and BMW Standardizing logistics processes has cut
the costs and increased the efficiency of
personnel who knew the systems were
material flow, production control, plant
retiring. Introducing standardized SAP
maintenance, quality assurance, mate-
software is lowering IT costs and will
rial requirements planning and other
make it easier for BMW to maintain
aspects of supply chain management.
and support software. In addition,
the company now has centralized
accounting tools that make it much
easier to track all financial aspects
of manufacturing and supply chain
processes.

• Standardized IT systems

• Continuous, complete construction of

the supply processes
Figure 1.
• Easy integration of external suppliers Integration of a distributed system landscape
(SAP to SAP integration)
Data
• Integration of numerous separate SAP distribution Central SAP R/3 System
Purchasing logic
systems
• Vendor master Central invoice verification and
• Scheduling agreement MM
The key technology component Central retrospective
• Purchase orders price changes
supporting BMW’s redesign and
standardization of its supply chain is
FI • Finance, external accounting (FI)
the SAP for Automotive solution. In Central pay.
Bill of materials • Accounts payable, ...
addition, our team worked flexibly and CO • Controlling, internal accounting (CO)
collaboratively to blend BMW’s program • Material master
management tools with tools developed
by BearingPoint for BMW, such as the Plant 6
Application link
Microsoft® Excel-based START COCKPIT. enabling SAP System
Plant 5 2
These tools continue to support change SAP System
Plant 4 2
management and issue management SAP System
Plant 3 2
within the STARD program. Plant 1 SAP System
Plant 2 2
SAP System 2 SAP System 2
Material
Efficiency, transparency and Management
MM PP FI CO MM PP FI CO

• Disposition • Disposition
performance • Goods received • Goods received
• Accounts payable • Accounts payable
BMW is already seeing the results of
standardization. Standardized
logistics processes have cut the costs Goods Electronic Goods Electronic
received receipt received receipt
and increased the efficiency of material (GR) settlement (GR) settlement
flow, production control, plant main- (ERS) (ERS)

tenance, quality assurance, material

requirements planning and other
aspects of supply chain management.

Automotive | Case Study 3

Helping our clients get sustainable, measurable results
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and functional knowledge, as well as solutions customised to clients’ specific needs. The firm ranks high in client satisfaction, has long-
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with a global reach.

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