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BMW: 7- Series Project

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Fahman Abdul Latheef

on 18 November 2014

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Transcript of BMW: 7- Series Project

Case Study Analysis: BMW -7 Series Project
Question 1
What are the causes and consequences of BMW’s quality problems with newly launched products?
What should be done to improve “launch quality”?
1b. Ways to improve its launch quality ???
What are your recommendations to Carl Peter Forster concerning the 7-series prototypes?
What should he do regarding future development projects?
Group 2:
Dipanshu Katyal (140201043)
Fahman Abdul Latheef (140201046)
Farhan Habib (140201047)
Gaurav Chawla (140201048)
Imad Ahmad Khan (140201054)
1a. Causes and consequences of BMW’s quality problems with newly launched products
Cause 1:
using different tools and materials in the prototyping process as compared to the production models

Current results obtained from materials used in prototype testing may not conform with desired results in final production models

Cause 2:
used part designer’s drawings and clay models rather than pre-production tools in the first prototyping stage for all parts
• Masked many design and manufacturing problems
• Lowers their opportunity to discover and fix quality problems
• Require more highly skilled craftsmen to take care of the hand-built prototype => labour cost and more time taken
Cause 3:
mixed-model ramp up strategy: produces the new series on the same production line as the old models
• Greater confusion among workers and made the logistics more complex
• Not all problems were discovered or solved in the pilot production phase
• People spent a lot of their time identifying and solving the big problems => less time for minor problems and fine tuning
• High customer complaints despite of intensive/extra resrouces for quality assurance, inspection and rework
==> Affected the quality of new models being produced

Cause 4:

let suppliers involve in final engineering drawings and commercial production process late

• If suppliers come across problems during the commercial production => take time for adjustment in design
• Unable to supply the materials or tools that BMW wants to procure

Cause 1:
Minimizing the gap between prototype and production process in terms of tools and materials used.
Cause 2:
Using sudden changeover approach (Exhibit 7)
Giving cross-training for labours to improve the ability and flexibility in switching the design and production of different models.
Cause 3:
Using pre-production tools to build most of prototype parts in early prototyping (expensive investment : DM 50 for entire car)
Cause 4:

• Involving the most reliable suppliers in the industry earlier in the development process and use their experience and skill to improve efficiency in trouble shooting
• Helping the supplier get a more detailed understanding of what they are looking for exactly
• Creating strong, close supplier relationships
Question 2
2 a. Recommendations concerning the 7-Series prototypes
2b. Recommendation Regarding Future Development Projects
Strategic Objective Enhancement
• SO 1: considering and applying lean production/manufacturing
• S0 2: decreasing the development lead time
• S0 3: competitive benchmarking (lower customers’ complaints per car)

Adopt concurrent engineering
• Expanding the relationship with the third party logistic.
• Promoting the interaction, communication among departments and suppliers
• Having specialists and experts participate in the production process.
• Manufacturing capacity extension
• Corporating with potential vendors, suppliers and universities.
• New pre-production tools should be applied at the early prototype stage. Learning from the prototypes.
• Employees in the factory should be well-trained
• Reducing the time spent in development process, prepare for frequently prototypes.
• Maximizing the utilization of the existing grade tools
• Focusing on core competencies and outsource if needed.
• Let suppliers involve earlier in the design of prototype parts.
• Additional single outside vendors to support as well as supplement the company.
2 a. Recommendations concerning the 7-Series prototypes
Question 3
What changes would you recommend in the way BMW develops new models?
What attributes of newly launched products would you expect to improve as a result of these recommendations?
3. Recommended for changes in developing new models and expected improvement
In construction of prototypes for new model: using the actual parts instead of substitute parts
=> Avoid problems, complications
=> The investment will pay off in the long run.
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 concurrent engineering
Simplify the production process & minimizing the number of parts in a product :
+ Design for Manufacturing (DFM)
+ Design for Assembly (DFA)
=> Reduce product assembly cost, number of assembly operations and design complexity for new models
Question 4
Question 4
Point 1: Competitive and Operation strategy
Competitive benchmarking with 1.5 customer complaints per car
Differentiation strategy
Breakthrough >< Continuous improvement ???
=> Focus on on moderately big changes
=> Sig Sixma for operation management
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 Sig Sigma to help improve product quality and operation efficiency
=> Reusing some standard machines and pre-production tools
• With new construction of prototypes: esemble 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

Expected Improvements:
Case Problems

Low quality launch as compared to competitors => customer complaints
Decisions over the Cockpit Design (i.e.: Hand Crafted vs. Automated Production)
Ways to improve operation objectives (quality, flexibility)

Make sure: Performance >/= Customers expectations in such of critical dimensions:
Durability (life-span)
Defects per unit
Scrap level

Question 4
Point 2: Market extension
Limitations for recommendations
Limitation for question 2a
The initial investments: high, costly
Constrain company’s flexibility and creativity to introduce a completely new design
Leak of innovative ideas and trade secretes

2b. Objective 1: limitation (for individual customization strategy)
Costs and wastes can increase if lean manufacturing is not successful
Productivity would be lower
Possibly losing their position and customer
Objective 2: limitation (Decrease the development lead-time)
Hard to keep the quality of product perfectly right
Difficult to make bold and attractive changes in design

Limitation for question 3a:
Using specified production tools => higher cost
Taking longer procurement time to purchase the right materials to do prototypes and production.
Increasing in company’s expenditure for other materials.
Delayed time –to- market is possible.

Limitation for question 4
Requiring ultimate changes in organization
More time and heavy investment to enter and build a presence in a well-established market.
Negative customer's perception on BMW branded cars
3. Recommended for changes in developing new models and expected improvement
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