Bmw: The 7-Series Project

BMW: The 7-Series Project

Similar to current proposal for cockpits in the final stage of design,

The first N-1 stages (of N stage cycle) should be done in prototype shop by craftsmen for flexibility in design.  

1. Pre-production tools should be used for all parts of the final batch (Nth) of 7-series prototypes.

Investment required for pre-production tools for all parts is DM 50 million, which includes DM 7 million for the cockpit. If a passenger’s air-bag side were added or material for dashboard skin changes, the maximum loss would be of DM 7 million but the savings on remaining parts will outweigh it. The cost of material, labor and overhead is also less in case of pre-production tools e.g. 0.3 million saving for cockpits.  On the other hand, if there were no design change in the cockpit, BMW would save a minimum of DM 100 million per product launch along with lower defects and improved customer satisfaction. Thus, the net expected savings is positive.

1. Single vendor to supply for prototype, pilot and commercial runs

Suppliers can foresee problems in production process if they are involved in prototyping and design process. They can rectify problems before commercial production by identifying problems and learning at the prototype and pilot stages.

1. Assembly lines should be used to assemble prototype instead of prototype shop

As the cockpit would be assembled into prototype vehicle on the assembly line of the Engineering center’s pilot plant, any major problems can be spotted earlier and the subsequent stages could be used for fine-tuning.

The minor production and quality problems would be avoided and full production volume could be achieved in 3 months instead of 6 months while ramping up.

This would ensure higher customer satisfaction ultimately which is currently dropping for BMW (10th rank).

For future development projects also, BMW should use pre-production tools for the last batch of prototypes (3rd or 5th cycle depending upon the number of cycles), as latter would have lesser changes at that stage.

• This approach can lead to learning of more manufacturable designs as prototyping would become a locus of integration and interaction between product and process designers and would make product designers more cognizant of manufacturing issues.

Attributes expected to improve:

• Fine-tuned features such as surface look, edges alignment
• Defects per 100 cars will reduce, improved Customer satisfaction, lower complaints per car

Attributes expected to deteriorate:

• Risk of design getting leaked due to involvement of vendors at earlier stage
• Since design has to be frozen earlier, some flexibility will be lost and might result in minor effect on design

Causes of quality problems with newly launched products:

• Problems were undiscovered or unsolved during pilot production. The process of identifying issues and rectifying happened till the final stage and hence there was no time for fine-tuning
• Many parts were hand-made and hence problems surfaced and could be identified only during pilot and commercial runs. Lack of involvement of labor force and suppliers in prototype stage led to huge learning curve later
• Only three-quarters of the production tools were ready when pilot production started and other tools were pre-production tool grade
• Mixed model ramp-up strategy: resulted in increased complexity in logistics and confusion among workers

Consequences of quality problems with newly launched products: