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Doug BartowVice President PaintBMW Manufacturing Corp. LLC
Vice President PaintBMW Manufacturing Corp. LLC
BMW MC17 May 2007Page 2
Supply Chain Management in a Build To Order Environment The Vehicle Process at BMW
Doug BartowVice President, PaintBMW Manufacturing Co.
BMW MC17 May 2007Page 3
Number of theoreticallypossible alternatives
1929 20031950 1970 19851940
Today: 1032 combinations
BMW Group.Increasing Complexity in the Product Range
BMW MC17 May 2007Page 4
Build-to-OrderBuild-to-Stock
Sale from stock Customized vehicle
BMW optimizes its Built-to-Order strategy
Advantages of build-to-order compared to build-to-stock
Strategy. Build-to-Order Instead of Built-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
Customer StorageProduction ProductionCustomer Customer
BMW MC17 May 2007Page 5
Unpredictable MarketsPreparing our processes, our people and our supply chain to be flexible
BMW MC17 May 2007Page 6 Production and Supply Chain Process
Process Monitoring and Target Control
Distribution Process and Hand-over
Sales Processes andOnline Ordering
Production- Production- and Supply- and Supply- ProcessesProcesses
Dealer SalesSystem
ProductionSystem
SalesSystem
Dealer
Planning
Dealer orderPurchasingLogisticsProductionDistributionHand-over
Ord
eri
ng
Deliv
ery
BMW MC17 May 2007Page 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 MC17 May 2007Page 8
JIS Just in SequenceCall off: (SPAB)Delivery: several/day
JIT Just in TimeCall Off: (SPAB)Delivery: several/day
DIMO (Direct Delivery Assembly Line)Call OffDelivery Cycle: Daily or every X days
Direct Delivery = Stock Reception directly to the assembly stock, No warehouse booking necessary
In the order of assembly
Process Chain Parts Supply Methods to BMW Group Plants
In-house:SEQ Bulk Warehouse/
Sequence WH
Warehouse
BMW MC17 May 2007Page 9
-
Manufacturing Adapting to change
BMW MC17 May 2007Page 10
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
The Benefits: Who gains from it? Benefit Effects in Production and Supply
BMW MC17 May 2007Page 11
Thank you for your attention