Introduction:
BMW having high market share in European and U.S luxury car markets, started facing issues with launch product qualities and also facing a fierce competition from Japanese producers. Currently the market share was still stable but the rigorous growth of Japanese producers would affect BMW in future. These Japanese competitors had set higher standards of conformance.
Causes and consequences of BMW’s quality problems with newly launched products
Causes
The launch quality of BMW had never been an issue until Japanese makers entered the European market. The acceptable customer complaints was 10-15 complaints per car 10 years ago and BMW was able to achieve it. However, Lexus seemed to counter this with just 3-5 complaints/year on
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However, the 7 series was at final cycle of prototyping. The 2nd option might lead to a higher cost and higher lead time which affect the launch day that was just 2 years-8 months and 5 days away. And, the employees in the factory shall be will-trained for this new approach. Also, BMW should look at the investment required for the 2nd option and evaluate its feasibility. Hence it shall be evaluated in detail with respect to cost and time before going for either of the options. Due to time constraint, it is recommended to opt for option-1 in case of …show more content…
These kind of complications shall be avoided.
Focus shall be on utilizing pre-production tools while developing the prototypes. Actual material, wherever possible, shall be used in the development of prototypes rather than having substituted parts. Make the prototypes as closer as possible to actual outputs.
Suppliers shall be involved in both design and prototyping. They can foresee the problems in the production process and with parts which BMW miss. Supplier’s expertise would definitely add value to the process. Letting them making the prototype parts would help them to learn about the part before they have to make it in volume.
Above recommendations might improve the quality and reduce the defects & customer complaints. They might also help making the ramp up faster, improving the process and increasing the savings per product launch ---------> Maintain the high quality image, Increase in the market share. However there would be a trade-off on flexibility and creativity.
Recommendations to Chairman von Kuenheim regarding BMW's strategy
Focus on continuous improvement methods – lean manufacturing
BMW is a German car, engine and bike manufacturing company founded in 1916 by Franz Josef Popp. From surveys of 2012 BMWs total revenue was euro76.84 billion, profit was euro 5.12 billion, and the number of employees working in BMW are 1,05,876. It owns the parent company of Rolls Royce motors and also produces and owns Mini Cars. The Brand in 2012 produced 1,17,109 motorcycles and 18,45,186 automobiles under all of its brands. It is also one of the best-selling automobile manufacturers in the world. It is been reported that 44% of the BMW automobile engines are power by diesel and 56% of the engines are powered by petrol. The company has been into various kinds of sponsorships and Public relations activities. BMW has also come up with high end bicycles which are sold through dealerships and online selling. BMW has also powered in sports cars, BMW cars have 20 of the formula races. BMW is also an engine supplier and supplies engine to Williams, Arrows, Brabham and Benetton. In june 2012 forbes.com listed BMW as the no1 most reputed company in the world. For the last eight years BMW has been ranked market leader in the Dow Jones Sustainability Indexes.
BMW soon realized that many threats impacted its market share in U.S. The Japanese auto manufacturers started building plants in the U.S. to deal with the increased U.S. demand at a lower cost than importing their cars. BMW's U.S. export situation was made even worse by the appreciation of German mark and additionally the higher German labor costs. As a result, the decision was made in 1991 to bui...
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