BMW: THE 7-SERIES

PROJECT
Group: 3
Abhijeet PGP31364
Vineet PGP31423
Giri PGP31210
Jareth PGP31205
Kranti PGP31360
 Bayerische Motoren Werke
Formed in 1916 by Gustav Otto and started producing aircraft engines.
In 1920 began producing cars.
From 1930-1950 gained reputation for high-performance engineering.
1n 1966 introduced 2nd series (high performance engineering, styling &
comfort).
70% sales were from Europe & 30% from US.

LUXURY CAR MARKET

Had 1.5% share of the world market
Highly competitive market with Prices as high as $1,00,000
Japan was giving fierce competition as compared to Nissan, Toyota, and
Honda.
Was targeting $20,000- $40,000
 Problems faced by BMW

The customer complaints about low quality launch as compared to

competitors.
The decisions to be taken over the Cockpit Design. Either they will be Hand
Crafted or will be automated production.
The ways to improve quality, flexibility and creativity in new models.
Were to be launched in 1994
Introducing new methods of fabrication of interiors
 STRATEGIC ISSUES
Increased Product Variety
More Frequent Product Introduction
Improved Quality Of Newly Launched Models

THE LAUNCH OF REDESIGNED MODEL

Took almost six years
Put more effort in styling and design
Typically BMW product passed through 3-5 design process
BMW Production Timeline
 LAUNCH CYCLE
Pilot
Production &
Manufacturin
g
Start-up
Pilot
Prototyping Production In
At Bmw The Pilot
Plant

Factory Pilot Full

Production Production
Run Ramp-up
BMWs quality problems with newly launched
product?

They use fake tools and materials in the prototype, but in real
production models they use real materials
They use drawings and clay models in prototype rather than
pre-fabrication tools in the first prototype stage
The Mixed-model ramp up strategy. They produces the new
series of BMW on the same production line where the old
models are produced.
The suppliers werent involved in the final engineering drawings
and commercial production process later after
 7-series prototypes : current and
CURRENT future
New pre-fabrication tools at the early prototype stage for more learning
Workforces in the factory should be well-trained and up to date
Focus on core competencies and try to outsource if it is needed
The suppliers should get involved earlier in the design of prototype parts
Customer Relation departments should be improved to higher extent

FUTURE
Strategic Objective Enhancement
Apply lean manufacturing
Reduce development lead time
Lower customer complaints per car
Adopt Parallel Engineering
Expand relation with 3PL
Promote interaction between departments, sellers and suppliers
Increase manufacturing capacity
Hire specialists and experts to participate in the production process
 Recommendations for new models
Prototypes for new models
Using the actual parts instead of substitute parts
Simplify the production process & minimizing the number of parts in a product
Testing all things from the design stage
Beside investment in R&D and styling, need to conduct marketing studies
Employ Lean Product Design elements
Applying synchronized engineering

Expected improvements
Ensembles techniques used to build in high-volume production vehicles
Reducing problems associated with bringing new models into production.
Maintaining high-quality image
Increasing market share
Reduce customer complaints
Be more customer-friendly
 Strategy against Japanese entrants
Competitive and Operations Strategy
BMW: Competitive benchmarking with 1.5 customer complaints per car
Differentiation strategy
Breakthrough
Continuous improvement
Focus on moderately big changes
Sig Sigma for operation management

Market Extension
BMW: Expanding target market to the upper-middle class clients
Increasing customer base, bigger market share and sale volumes
Using lean production to promote customization for variously different ordered products
Focusing on Sig Sigma to help improve product quality and operation efficiency
Reusing some standard machines and pre-production tools
Thank You