By on July 7, 2013

electronic-parts-catalogue

1,200 BMWs are sitting at German dealers and cannot be repaired.  The reason: Missing parts. After a software change in BMW’s German parts distribution system, supply with needed parts has become sporadic and unpredictable, Automobilwoche [sub] says. BMW works council chief Manfred Schoch blames cost cuts by BMW’s management:

“There were other solutions, but they wanted to save money. Now it will be getting three times as expensive.”

BMW has started to provide customers with replacement cars. Even that cause problems. “If people want to go on vacation in a Touring, and they are given a sedan, they won’t be happy,” a dealer told Automobilwoche.

A BMW spokesman confirmed the backlog to Reuters, but said the situation is improving.

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28 Comments on “Savings At All Costs: Software Change At BMW Causes Parts Mayhem...”


  • avatar
    BMWnut

    As someone who writes software for a living, I can only wonder what went wrong. The profit motive must have a whole lot to do with it.

    • 0 avatar
      jhefner

      Me too. Sounds like a botched SAP implementation. Happens fairly often, and a badly botched SAP implementation killed at least one company — the material was sitting in the warehouse; but SAP did not know it was there and would not let them check it out; shutting the company down.

      • 0 avatar
        BMWnut

        Way back in 2006, Cadburys was left with warehouses full of chocolate bars after the rollout of a new SAP-based enterprise resource planning (ERP) system led to over-producton. Sounds familiar?

        http://www.erpsoftware-news.com/2006/06/cadburys_implem.html

        • 0 avatar
          LeeK

          Same with Hershey in 1999 when they messed up an SAP implementation and missed the entire Halloween season’s candy shipments. With all ERP projects, it takes tremendous preparation to implement correctly or the results can be disastrous. I guess BMW, a long time SAP user, took some shortcuts and got badly burned. It’s almost never the software’s fault. In my experience, it is usually poor data that ends up being the culprit. If you don’t import old records in exactly the format that SAP requires, you will have a real problem on your hands.

          • 0 avatar
            Thavash

            One of the Japanese big 3 had similar issues with a SAP implementation here in South Africa a few years back. I remember it even got to the media and was bad press for them.

    • 0 avatar
      kjb911

      my company just went to a digital inventory management system from old fashioned hard copy that was then input onto an online excel sheet. Needless to say there hasn’t been a week where counts have been off or items or thousand’s of dollars are unaccounted for. This along with the recent upgrade to our main software and shipping utilities have left us with more headaches than needed…

      • 0 avatar
        jhefner

        Having “digitized” a few operations; the success depends on getting everyone on board, and giving them tools like barcode scanners to do it. If people are just placing or grabbing items off the shelf without scanning or recording them; then any system is going to fail.

        SAP implementations are rough because they eventually run the entire company, And everything has to conform to SAP, and not the opposite. It seems to be a must in large companies; and it takes well paid consultants to pull it off (of which I am not one.)

        • 0 avatar
          redav

          My company was bought by a large company. We had an old software program for orders, inventory, etc. Sure, it needed to be upgraded/replaced, but it worked very well for the job. We were forced to adopt our new parent company’s system (not SAP), which is all but incompatible with the type of work we do. (They are a mass-market manufacturer; we are something of a custom job shop.)

          Orders disappeared. Payments were sent to the wrong places. Raw materials were double-ordered. Reports that used to take planners an hour turned into 3 day ordeals. The software change stunted every order/project we had for well over a year.

          • 0 avatar
            sgeffe

            Amazingly, even a government shop such as where I work has difficulty adapting to these global, one-size-fits-all systems. Thank goodness we didn’t try SAP, though the cluelessness on the part of our users in certain areas on the application (eventually brought out by Larry Elison’s unstoppable ego) is bad enough.

            Well, then again, it ** IS ** gummint!! ‘Nuff said!

      • 0 avatar
        Autobraz

        The new system may have highlighted inventory problems you didn’t know existed with the previous Excel-based system. It is easy to fudge numbers or pretend certain things never happened when there are no controls built into the software logic.

        Now you can start a cycle-counting program, train your team and get the inventory numbers (and more importantly , the processes) really in shape.

      • 0 avatar
        ihatetrees

        There’s nothing wrong with hard copy. With proper employee training and engaged management, Excel (with customization / audit trails) can be an excellent tool. I’ve seen some of this in the pharma field.

        That said, a LOT of ERP software is tedious and shitty for the basic end user who needs to get a job done. A 2nd shift mechanic (@ $35/hour) will not wait 10+ minutes to process a $10 part. Especially if a super is on his ass and doesn’t care.

    • 0 avatar
      Syke

      Sounds like back in 2002 when Ducati North America changed both its part warehouse and the software controlling it. I’d left Ducati Richmond about a month earlier, and ended up coming back on weekends to hit up my inter-dealership contacts for short term parts supplies. My replacement was totally lost, everything was at a standstill, and it was months before they got the mess straightened out.

  • avatar

    Penny Wise.
    Pound Foolish.

    One of my friends got a new 328i. I wonder if this will effect her?

    • 0 avatar
      White Shadow

      Not unless she live in Germany.

    • 0 avatar
      Flybrian

      Godspeed to her. Getting ready to write $1400 check for a replacement ABS module for an ’08 328i sedan – and that WHOLESALE – with 57k miles that apparently “fails all the time” according to a BMW dealer…

      P.S. Its non-serviceable. It works. Or its broke and you need a new one. No rebuilding.

      • 0 avatar
        BMWnut

        There are guys out there who repair these things. It involves cutting open the module with a Dremel tool, removing protective goo and fixing broken wires thinner than human hairs with very special conductive epoxy. At least that’s the story on the E39 where the module sits inches away from the exhaust manifold and (surprise, surprise) gets cooked. Your mileage may vary.

  • avatar
    PeteRR

    We’ve had this happen at work, albeit on a smaller scale. We stock a turbine rotor for our CO2 compressors. They are a 16 week lead time item. The head of purchasing decided to not reorder one since the last one sat on the shelf for 6 years. When one failed our production was curtailed by 10% for 4 weeks until the manufacturer could rush us one. This normally $26k part cost us $60k plus $40k per day in lost tonnage.

    The purchasing manager successfully blamed one of his subordinates for the colossal fuck-up and kept his job.

    • 0 avatar
      schmitt trigger

      “The purchasing manager successfully blamed one of his subordinates for the colossal ****-up and kept his job.”

      This is an universal malaise…..small wonder there have been so many movies made about this issue.

  • avatar
    NMGOM

    As an owner of both a 325i and Z4, all I can say is, “Serves them (BMW) right”. They’ve been trying to “cheap out” a lot a things in the past 5-10 years. It appears that accountants instead of car people are now in charge in Munich. All parts-ordering systems need doudle-checking methods and fail-safe software. Or maybe we should look to the original “iDrive” for an example of BMW’s inability to understand human ergonomics and need for instant short-cut facilities. Yes, I do programing too, but we can look to Porsche for their many buttons and wonder if maybe they know something that BMW forgot…

    ——————–

  • avatar
    gslippy

    Happens everywhere, all too often.

    • 0 avatar
      tresmonos

      It’s happened where I work, but it’s to unsaleable units where we are proving out production ;)

      This is also why automakers will hold onto legacy software so long. A change would essentially drive a system wide ‘launch.’

  • avatar
    Autobraz

    No software can overcome a bad implementation. There are hundreds of ERP and WMS options out there. I know a few but venture to say the majority would work pretty well for BMW. The logic underlying them is pretty straightforward and has been part of the body of knowledge of Operations Management for decades and decades.
    And a bad implementation doesn’t necessarily relate directly to cost cutting. There have been many expensive bad implementations. Place managers love to cut corners though are training (scope and depth) and change management (“we’ll figure out as we go”). Easy to blame the software or the consultants later.
    If anyone at BMW is reading this, I suggest they have a look at a new methodology called Demand Driven MRP. Solves a lot of the issues intrinsic to tradional MRP.

  • avatar
    sportyaccordy

    Hyundai uses the same platform to produce horsepower

  • avatar
    tresmonos

    So this looks to be a BOM issue. BOM’s were probably transferred to a new system and weren’t double checked.

    Any OEM that messes with BOM’s and doesn’t to pre-builds to verify the BOM change is one that doesn’t adhere to quality control or lean principles. And after learning BMW’s lack of production control from my PhD buddy who is developing integrated labor management systems there, this is very believable. Oh well.


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