Savings At All Costs: Software Change At BMW Causes Parts Mayhem
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.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Happens everywhere, all too often.
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.
Hyundai uses the same platform to produce horsepower
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.