Doug Bartow Vice President Paint BMW Manufacturing Corp. LLC
BMW MC 17 May 2007 Page 2 Supply Chain Management in a Build To Order Environment The Vehicle Process at BMW Doug Bartow Vice President, Paint BMW Manufacturing Co.
BMW MC 17 May 2007 Page 3 BMW Group. Increasing Complexity in the Product Range Today: 1032 combinations Number of theoretically possible alternatives 1929 1940 1950 1970 1985 2003
BMW MC 17 May 2007 Page 4 Strategy. Build-to-Order Instead of Built-to-Stock BMW optimizes its Built-to-Order strategy Build-to-Stock Sale from stock Production Storage Customer Build-to-Order Customized vehicle Customer Production Customer Advantages of build-to-order compared to build-to-stock – higher level of customer satisfaction due to personalized equipment – better inventory management leading to less sales incentives – increased vehicle equipment contingency – reduction of capital commitment costs
BMW MC 17 May 2007 Page 5 Unpredictable Markets Preparing our processes, our people and our supply chain to be flexible
Production and Supply Chain Process Production System Sales System Dealer order. Purchasing. Logistics Production. Distribution. Hand-over Sales Processes and Online Ordering Productionand Supply. Processes Distribution Process and Hand-over Process Monitoring and Target Control Delivery Sales System Planning Dealer Ordering BMW MC 17 May 2007 Page 6
BMW MC 17 May 2007 Page 7 Process Chain Parts Call-off Horizon Long term requirements go out as forecasts – sent weekly to Suppliers Short term requirements within 3 week window start to have specific orders assigned – sent weekly to Suppliers Sequence requirements are generally sent in daily packages, but can be sub-daily depending on Supplier based on trigger signals in the plant.
BMW MC 17 May 2007 Page 8 Process Chain Parts Supply Methods to BMW Group Plants Direct Delivery = Stock Reception directly to the assembly stock, No warehouse booking necessary JIS Just in Sequence Call off: (SPAB) Delivery: several/day In the order of assembly Warehouse JIT Just in Time Call Off: (SPAB) Delivery: several/day DIMO (Direct Delivery Assembly Line) Call Off Delivery Cycle: Daily or every X days In-house: SEQ Bulk Warehouse/ Sequence WH
BMW MC 17 May 2007 Page 9 Manufacturing Adapting to change -
BMW MC 17 May 2007 Page 10 The Benefits: Who gains from it? Benefit Effects in Production and Supply Build-to-Order strategy has lead to: • A high customer allocation ratio and minimization of capital commitment costs • Production stability, customer delivery punctuality and reduction of through put times • Reliable sequence delivery for the supplier • Less vehicle and parts storage due to a more reliable parts supply • Extended planning period and planning certainty • Sequence suppliers not required to be in close proximity to the assembly plant
BMW MC 17 May 2007 Page 11 Thank you for your attention
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