BMW and Rosslyn Plants Supply Chain Management and Logistics

BMW and Rosslyn Plants tot up Chain Management and LogisticsBMW (Bayerische Motoren Werke), is arguably a high life machine manufacturing business. BMW group headquarter is in Munich, Germany, however the company is settle exclusively over the world (BMW Group, 2004) More detailed in (Appendix 1). In the previous(predicate) 1973, BMW opened his first put downnational whole caboodle in Rosslyn South Africa (Autointell.com, 2007). gatewayThe shifting business conditions of the 21st century has led to companies facing issues ranging from economical uncertainty to new technologies, globalisation and increasing consumer demands. In the car assiduity, as manufacturers flesh and build fomites globally, their bring home the bacon kitchen stoves turn into increasingly varied with challenges that frequently stand in the way of profitability and higher inventorying stimulateer value such as long order-to-speech draw out times, unpredict equal output schedules, excess inventor y crosswise the fork uping range of mountains, lengthy demand training cycles and lack of visibility of providers. The effect of the global economic meltdown change magnitude the pres reliable on self-propelling executives to make right decisions active their fork out orbit for better carrying into action.This paper will analyze how the German car manufacturer BMW South Africa (SA) at Rosslyn correct operates and how supply image is conceived, sup interfaceed, delivered and develop as rise as identify the inventory centering and the performance improvement that argon affected by the identifying the logistics and supply mountain range vigilance (SCM) governances as a attainable strategy to respond to changing consumer demand.BMW Supply Chain Management lickSupply chain management (SCM) sess be defined as the design and management of seamless, value-added offshoot across organisational boundaries to meet the real demandof the end client (Fawcett et al., 2007). Generally, SCM involves relationships and managing the inflow and barrage of goods, services and information (network) between and within producers, manufacturers and the consumers (Christopher, 2005 Samaranayake, 2005 Gripsrud, 2006). A supply chain includes all activities, functions and facilities (directly or indirectly) in the flow and transformation of goods and services from the corporal stage to the end user (Sherer, 2005). It consists of an upstream supplier network and downstream channel (Mangan et al, 2008).The supply chain process at BMW starts from the customer and ends with the customer. BMW uses built-to-order expression to provide their customers what they want. Customer makes their request online or by dint ofout the dealers. The information is past transmitted to Munich (Germany) which is captured in a central database. Bill distribution is through with(p) to establish cost of manufacturing and deciding where the car will be manufacture (Academicsjournal.org , 2010). This is informed by the nature and design of the product, the cost involved and the lead time. All parts argon complete on built-to-stock foundation on the model life of the car imported. Parts are received at the Cape Town international airport by shipment in the case of South Africa Rosslyn go down (SAP) (Academicsjournal.org, 2010). It is then conveyed to the Rosslyn localize in capital of South Africa where it is then assembly. After assembled, it is taken to the warehouse where it is extended to the dealers set for collection by the customer (Kaps, 2006). Several of the manufacturing, distribution of cars, suppliers of parts, exportation, quality values at BMW and the give of mySAP applied science for steering communication. These processes base be explained as follows.ProductionThe takings practice of cars goes during different shops where precise technologies are practical to make sure that value cars are delivered to customers. The process starts at Body-in-W hite Shop, where diverse pressed torso parts are assembled into a tree trunk shell (Academicsjournal.org, 2010). The next procedure is the Paint Shop, where it is windered according to the customers request. At last the painted carcass goes to Assembly Shop where parts are fixed as per spec ordered by the customer. The essential issue is stretchy manufacturing (Academicsjournal.org, 2010).Paintings of carA painting of car is ductile to manufacture cars which meet the customers exact requests. act upon is an important principle for the customer choosing a car and is an influential selling tool. Each customer is provided with the particularised model require, with personalised features and all the elections ordered, calls for an exceptionally high standard, not only in assembly but as well as in end product and vehicle delivery management (Academicsjournal.org, 2010).However, one of the chief(prenominal) activities on the assembly line occurs at the mix drive the point at which the engine and drive train are mixed to the body of the car. Improvements are do on the assembly line which has made it possible for BMW plant to produce all the 3 Series 4-door model derivatives and option requirements for the local and export market (Academicsjournal.org, 2010).Suppliers and assembly lineBMW Rosslyn plant for interpreter has about 44 local suppliers. Suppliers bring more than 60% of the appliance of severally car to the line. Just in time (JIT) supply processes realise that certain components of the vehicle are on the assembly line fitting in time to be fixed to the exact vehicle they are made for. JIT supply ashess are used to bring door panels, issue systems and rear and front axles to the correct point on the assembly line. development a JIT supply scheme saves space by minimizing stock on the premise (Acamdemicsjournal.org, 2010). Typically, there is only one and a half hours of stock on the line at any set time which prevents vituperate to stock transport be and saves storage. BMW plant delivers world-class worth products to consumers across the globe. All operational production is managed for offering uncompromising, best quality. However individually and all procedure in manufacturing involved the car is checked for process inspections and aptitudes are implemented where needed (Academicsjournal.org, 2010). disseminationBMW plant Vehicle Distribution Centre (VDC) has a distribution facility and a cost-effective storage, bring home the baconing the guard and quality protection of the vehicles. A 200-vehicle car-train loads export vehicles use consecrate railway facilities and off-loads each day import vehicles. For example Rosslyn plant has about 196 dealers locally. Vehicles intended for dealers are loaded onto car carriers and to dealerships around the country, which save the vehicle from any marks wear and scratch prior to delivery to a customer (Academicsjournal.org, 2010). All vehicles are inspected by asso ciates VDC prior to loading to tell that the highest possible levels of quality delivery to dealers are maintained. The VDC provides a mechanical and paint/body workshop for the service and repair of company vehicles in growth to approve used cars. Manufactured vehicles are then transported to Durban (SA) for export. Transportation of vehicles to Durban port is on a daily basis. BMW South Africa (SA) has two train carriers, each one with a storage capacity of 176 units (Academicsjournal.org, 2010). The trains are used to transport imports units from Durban harbour to the VDC in Rosslyn. The vehicles are loaded onto car carrying vessels at the Durban harbour, know as RORO ships. These ships transport vehicles to several marketplaces at the opposite ends of the earth. Cars are conveyed on a bi-monthly basis to the Far East, USA and Australia, respectively (Academicsjournal.org, 2010). The transit outcome differs depending to the destination Japan 23 days, USA 29 49 days, Austral ia 13 22 days (Academicsjournal.org, 2010). property StandardsTo ensure optimum customer happiness, the built quality of the vehicles produced at BMW Rosslyn Plant is measured through a process called Complete Product Audit. This audit compares the quality of a unit to the customers requirements, including technical stipulations, fitment and function. These audits are performedthroughout the build process at specified points. These morose audit standards are set at BMW Germany by the Central Quality department and are the same for all BMW plant (Academicsjournal.org, 2010).Using mySAP at BMWBMW uses mySAP Automotive to inspect assembly rank in real time. MySAP automotive parts use information and registers production validation every three minutes. Although, parts used during assembly are separately from the inventory count, and costs are posted to calculate the value of work in process. mySAP automotive helps to reduce order-to delivery time, reinforces supply chain activitie s in the areas of demand supply by tracking, tracing of material deliveries and improves inventory accuracy across BMW plant enabling significant drop-off time-to customer (Academicsjournals.org, 2010). It also receives custom-configured manufacturing orders from BMWs planning system which include all the parts necessary to manufacture each car. However, BMW sends these long-horizon forecasts and short-horizon JIT delivery schedules to its suppliers. Larger suppliers receive the information via electronic data interchange (EDI) whereas former(a) suppliers access the mySAP automotive supplier portal, where BMW posts the requirements to present up-to-date information on its delivery needs (Academicsjournals.org, 2010). By using only an Internet browser, suppliers can view this information in real time, including purchase documents, engineering documents, wall socket schedules and invoices. When they ship parts, the suppliers send BMW advance shipping notifications (ASNs) to provid e the car manufacturer with exact information on parts counts and delivery dates. Parts arriving at the BMW dock are then received and transferred directly to the line (Academicsjournals.org, 2010).BMW plant has fully unifyd systems and network worldwide because BMW uses a service management system as part of a wider plan to improve supply chain lifecycles. The platform is triggered by complexities in the technology embedded in its cars and subsequent demand for systems to support servicing (Academicsjournals.org, 2010). BMW uses a portal to integrate information and systems with its suppliers which leads to faster information platform for communication however -advance technology applications is also used such as mySAP, JIT manufacturing, built-to-order which are all characteristics of be given manufacturing and innovations (Mangan et al, 2008 Academicsjournals.org, 2010).BMW Rosslyn plant logisticsLogistics is part of the overall strategy of BMW as is part of the supply chain su ch as flows of material, information, people and equipment (BMWGroup.com, 2007).Doing logistics involves various activities such sourcing and buying inputs, managing inventorying, maintaining warehouses, and arranging transportation and delivery.(Mangan et al, 2010 )Logistics play an important role in the manufacturing and the production of BMWs products which are shaped by a very highly and flexible streamlined production network with mature work practice and the virtually progress plants and facilities. As a worldwide player, the BMW Group is represented through its quality products of the BMW, MINI and Rolls-Royce brand in more than 140 countries. A flexible network of 23 production plants in 12 countries ensures that each customer receives the car he has ordered tailored to his specific needs and preferences (BMW Group, 2010).Efficient and flexible assembly at BMW is guaranteed by stylised logistics for an efficient production and a flavorless flow of materials. Proficient l ogistics at BMW ensures unblemished delivery of the parts required exactly on time, with a smooth and accurate flow of parts from BMW Group components or supplier (BMW Group, 2007). My SA second automotive receives custom-configured manufacturing orders from BMWs planning system (Sap.com, 2010). The orders includeMass customizationBMW plants were designed to allow maximum tractableness and effective communications two factors that BMW emphasized for customization of its cars. BMW was reputed for its customization program, which allowed buyers to design their own cars from a set of acquirable options. These orders were then transported to the factory which manufacture them according to the requests, which are then delivered to the buyers in the shortest possible time. In manufacturing world, this social structure is called mass customization (IcmIndia.org, n.d), which is one of the essential enablers of agile supply chain as it combines some(prenominal) advantages of mass custo mization with those of production (IcmIndia, n.d Mangan et al, 2008). Most analysts agree that BMW was one of the crowing implementers of mass customization in the auto industry.BMW promoted differentiation of it products which is an important attribute for lavishness car by proving 1000 bumpers variation, 4000 panels choices and 488 different door panels (See Appendix 2 Interesting facts). A very high percentage of their output is already made to order (Autoexpress.co.uk, 2010).Role of supplier and ITBMW suppliers are located ascend the factory which is makes easy to be accessible and the time waste. The company slip away the supplier constantly in the information loop and the information system for assembly. BMW had a very accurate ERP solution established by SAP. It relate the SCM very well. Once the data entered it reached automatically to production areas (Scribd.com, 2010).BMW at Rosslyn plant is typical example of how this IT practice has been organised using synchronise d logistics. In the BMW example the incoming trucks are set a pager and preparing the specification by radio frequency identification (RFID) tag on stretch which is sent either straight to one of the waiting area or to the waiting bays. When the next loading bay in the delivery/ pickup sequence for a given truck becomes available, the truck is paged to drive up and be unloaded / loaded (Psionteklogix.com, 2010). The RFID unit as well acts as a transponder to recognize the loading bay location of the truck in the factory during its activities, which are monitored by the system. In opposite instances such as at DaimlerChrysler Bremen the incoming trucks for JIT and JIS (Just-In- Second) deliveries all have GPS and radio data units and they are tracked from their starting point at the supplier to the factory (Psionteklogix.com, 2010). By monitoring the progress of the incoming trucks any delays are recognized in advance and the unloading plan amended accordingly. Based on the be aft er arrival of vehicles, the SyncroSupply system can plan the allocation of unloading bays, forklifts and other equipment essential to unload the goods and get them to their final location in the factory. In addition to supplier vehicles the system also manages internal truck movements, inter factory transfers, milk runs, return of empties (psionteklogix.com 2010, Ciltuck.org.uk, 2010).Performance improvementThe automotive industry is currently witnessing rapid increases in the number of models and model variants that are available on the global market. The industry isnow required to meet specific customer requirements in terms of specification and delivery date. Therefore, a natural change in BMW manufacturer shifted towards build-to-order, suggesting dramatic rise in flexibility and responsiveness across supply chain partners by implemented the leagile framework.Leagile is the conclave of the lean and agile paradigms within a total supply chain strategy by positioning the decoupl ing point so as to customer end of the supply chain (downstream) small-arm providing level scheduling supplier end of the supply chain (upstream) from the marketplace (Mangan et al, 2010). In order to succeed leagile supply chain, the upstream at BMW of the decoupling point have best fit the need for responding to an unpredictable demand designed to be lean while downstream agile (Mangan et al, 2008).Critical analysisAlthough the efficient supply chain processes and technology following the process needs to be faultless and as quicker as possible for survival in these uncertain times. BMW plant is quite flexible to customer demands giving the choice for them to request the quality of cars they want at the appropriate price available. Cars are built-to-customers orders rather than by mass production. For example, differentiation techniques are used during painting as well as choices of the car features for comfort, hence flexible manufacturing. They do not hold inventory because the strategy is focused on built-to-order, so cars are made in sequence as the orders are placed using advanced technology such as mySAP which communicates demand planning across the supply chain (BMWGroup.com, 2004 Mangan et al 2008). Hence, BMW acquire characteristics of lean and agile supply chain (BMWGroup, 2004). Therefore the implementation of a framework for leagile supply chain at BMW is best so as to react to changes in the market (Mangan et al, 2008).Traditionally, the BMW has busy mass production strategy focusing on cost reduction (Zhang and Chen, 2006). However, due to globalisation, changes in the business environment etc, there has been a marked shift from the practice (Elkins, 2004 Sweicki and Gerth, 2008). BMW Rosslyn plant and the automobile industry in common have felt the results of the global economic meltdown resulting in a noticeable the actors of the supply decrease in sales and export across the globe (BMWGroup.com, 2007). To alleviate the situation, BMW has focused on strategies cost reduction with suppliers by reducing manufacturing plants. Not surprisingly, cost containment is a concern that figures prominently on the automobile agenda (Mangan et al. 2008). IBM (2009) survey indicates that there are five particular challenges facing auto makers in this economic downturn. This includes risk, customer demand, visibility, cost containment and globalisation which are raising interest rate, raw material, energy cost and unbendable fluctuation. In this uncertain business climate, in addition to lean manufacturing, automobile manufacturers should be agile and responsive in addressing change which is BMW characteristics. A superscript supply chain is a essential to help auto manufacturers plan and differentiate themselves (Academicsjournals.org, 2010). The application of RFID technology at BMW warehouse has enabled the reading of eightfold items simultaneously is an ubiquitous technology which could reduced motivation and job satis faction which could lead to the reduction of operational performance because employee involvement in system design is important (Mangan et al, 2008). However there is the necessity to redesign and delimitate BMW supply chain strategies, operations and layouts thus as to be able to react to varying market demands. It should be accepted that BMW have both lean and agile characteristics and the full implementation of a leagile supply chain is vital for the survival of BMW in this uncertain business times and for the age to come.ConclusionsIn a highly challenging and competitive environment such as today, where supply chain is a popular tool for ameliorate the organisational competitiveness, an efficient and effective supply chain strategy is a must for BMW and their component manufacturers so as to meet changing consumer demands.