INTRODUCTION

Operations management focuses on carefully managing the processes to produce and distribute
products and services. Usually, small businesses do not talk about "operations management", but
they do carry out the activities that management schools typically associate with the phrase
"operations management." Major, overall activities often include product creation, development,
production and distribution. These activities are also associated with Product and Service
Management. However product management is usually in regard to one or more closely related
product -- that is, a product line. Operations management is in regard to all operations within the
organization. Related activities include managing purchases, inventory control, quality control,
storage, logistics and evaluations. A great deal of focus is on efficiency and effectiveness of
processes. Therefore, operations management often includes substantial measurement and
analysis of internal processes. Ultimately, the nature of how operations management is carried
out in an organization depends very much on the nature of products or services in the
organization, for example, retail, manufacturing, wholesale, etc.
(http://managementhelp.org/ops_mgnt/ops_mgnt.htm)

Another definition of Operations management is that it’s the maintenance, control, and
improvement of organizational activities that are required to produce goods or services for
consumers. Operations management has traditionally been associated with manufacturing
activities but can also be applied to the service sector. The measurement and evaluation of
operations is usually undertaken through a process of business appraisal. Efficiency and
effectiveness may be monitored by the application of ISO 9001 quality systems, or total quality
management techniques.
(http://dictionary.bnet.com/definition/Operations+Management.html)

Strategic management on the other hand is the development of corporate strategy, and the
management of an organization according to that strategy. Strategic management focuses on
achieving and maintaining a strong competitive advantage. It involves the application of
corporate strategy to all aspects of the organization, and especially to decision making. As a

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discipline, strategic management developed in the 1970s, but it has evolved in response to
changes in organization structure and corporate culture. With greater empowerment, strategy has
become the concern not just of directors but also of employees at all levels of the organization.
(http://dictionary.bnet.com/definition/Strategic+Management.html)

In order to discuss on the given topic, the following assignment would attempt to draw a link
between the operations strategy and operations management of BMW.

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COMPANY OVERVIEW

Bavarian Motor Works (BMW)

Bayerische Motoren Werke (BMW)
Founder - Matthew Eben Ruark
Founded - 1916

With its brands BMW, MINI and Rolls-Royce, the BMW Group concentrates exclusively on the
premium segments of the international automobile and motorcycle markets, with an outcome that
others in the industry are striving for. From development, through production to the marketing of
its products, the BMW Group displays an uncompromising commitment to the premium claim.

The company is now the world’s leading premium manufacturer in the automotive industry. In
addition to the development, production and marketing of automobiles and motorcycles, the
BMW Group offers its private and business customers a comprehensive range of financial
services.

Under the BMW brand – one of the most prestigious automobile brands in the world – the
company currently offers eight model series, all of which embody the proverbial “ultimate

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driving machine”. With MINI, the BMW Group has also been extremely successful in
positioning its product at the premium end of the small car segment. Rolls-Royce automobiles,
on the other hand, have been synonymous with timeless, everlasting perfection for more than 100
years. In the motorcycle industry as well, the BMW Group has for years played a leading role in
all the segments in which it has an interest. In respect of technology, safety and environmental
protection, BMW motorcycles are among the best on the market.

The Financial Services business also makes an important contribution to the success of the
company.

Producing continuous, lasting value in all areas of its business, the BMW Group is successful
and profitable. Their success is based on the extensive products and market initiatives taken up
by BMW Group.
 
It has a presence with its own sales subsidiaries in 41 countries around the world, and maintains
an extensive network of independent dealers. Approximately 100 other markets are looked after
by importers. The efficiency of the international BMW Group production network forms the
basis for the continued growth of the company. With 23 production sites, the BMW Group is
active in 12 countries – including Chennai in India, where the company opened its latest plant in
2007.

To detect trends at an early stage and put forward appropriate solutions, the BMW Group also
runs a worldwide research and development network.

All the activities of the BMW Group are designed to increase the value of the company
continuously and over the long term. In the view of the Group, long-term growth is generated by
thinking long-term and acting in a sustainable manner. The central factors for success are
concentrating on the premium segment, the skill and dedication of our employees, the maximum
focus on what the customer wants, plus an ability to innovate, which is firmly rooted in the
corporate culture.

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 (http://www.bmwgroup.com/e/nav/index.html?
http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/produktion/produktion.html)

OPERATIONS STRATEGY

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Operations strategy is the long term plan for the operations function that specifies the design and
use of resource to support the business strategy. It’s not possible for an organization to plan in
detail every aspect of its current or future actions, but any organizations can benefit from some
idea of where they are heading and how they could get there. Basically, it is always a
competitive advantage for a company to know exactly which direction it is heading towards.
(Slack, Chambers & Johnston, 2004)

BMW does this by identifying potential and encouraging growth, knowing what they represent
and by recognizing where their strengths lie and making the best use of every opportunity. By
following a clear strategy, BMW attains goals which in essence are the point of departure for
new challenges. This is the philosophy that inspires every individual at the BMW Group. It
influences the company's structure and it plays a vital role in the decision-making process. The
BMW corporate ethos finds its expression in the uncompromising pursuit of the superlative. The
results are the outstanding brands with an unmistakable profile. BMW strives to produce
automobiles and motorcycles which fascinate people all over the world and which win legions of
new admirers every day. This degree of success has seen the BMW Group go from strength to
strength.
 
With the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has its sights
set firmly on the premium sector of the international automobile market. To achieve its aims, the
company knows how to deploy its strengths with an efficiency that is unmatched in the
automotive industry. The strategic objective is clearly defined: The BMW Group is the leading
provider of premium products and premium services for individual mobility.
 
It is the objective and commitment of the BMW Group to come right at the top in all market
segments in which their three brands are represented. BMW produces highly emotional,
individually tailored products with exceptional design and supreme customer benefits which are
clear expressions of their consistent premium strategy. BMW on a more efficient footing at home
has enabled it to expand its product line in all directions. Over the past decade, it has evolved
from a group with six model families--with the 3-, 5- and 7-series cars accounting for the vast

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majority of sales--to one with 11 model families grouped in three distinct brands, BMW, Mini
and Rolls-Royce. Three new model families are in the works, including a luxury sports car. The
Mini, a remnant of the otherwise disastrous 1994 Rover acquisition, has far exceeded all
expectations, and BMW is expanding its production capacity in Britain. The company had
anticipated selling about 100,000 Minis by 2005. In fact, it sold double that number, and
production will hit 240,000 this year. Rolls-Royce won't sell nearly that amount, but it makes up
in price and prestige what it lacks in volume.

(http://www.bmwgroup.com/bmwgroup_prod/e/0_0_www_bmwgroup_com/unternehmen/untern
ehmensprofil/strategie/strategie.html)

LOCATION

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The location of a business’ facilities has a significant impact on the company’s operating cost,
the prices it charges for goods and services, and its ability to compete in the market place.
Analyzing location patterns to discover a firm’s underlying strategy is fascinating (Krajewski &
Ritzman, 1996 p: 337). For example, managers of new car showrooms deliberately locate near
one another because customers prefer to do their comparative shopping in one area. In such
cases, management’s location decision reflects a particular strategy.

Recognizing the strategic impact of location decisions, management first examines the most
important trend in location patterns: the globalization of operations. They then consider the
qualitative factors that influence location choices. Then the management uses some analytic
techniques for making single or multiple facility location decisions (Krajewski & Ritzman,
1996).

The dominant factors in decisions for location:

 Proximity to markets – After determining where the demand is greatest, management

must select a location for the facility that will supply that demand. Locating near markets
is particularly important when the final goods are bulky or heavy and outbound
transportation rates are high.
 Proximity to suppliers and resources – Industries dependent on inputs of bulky or
heavy raw materials emphasize proximity to suppliers and resources. A huge advantage
of locating near suppliers is the ability to maintain lower inventories.
 Utilities, Taxes and Real Estate costs – Important factors that may emerge include
utility costs (like telephone, energy and water), local and estate taxes, financing
incentives offered by local or state governments, relocation costs and land costs.
 Favourable labour climate – Labour climate is a function of wage rates, training
requirements, attitudes towards work, work productivity, and union strength. According
to many executives, weak unions or a low probability of union organizing efforts may be
a distinct advantage.
 Other factors – Factors including communication facilities, construction costs,
accessibility to multiple modes of transportation, insurance costs, competition from other
firms, community attitudes and many others can affect the location decisions of such
large companies.

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The worldwide activities of the BMW Group are coordinated from the corporation’s head office
in Munich. A city landmark in itself, the “four-cylinder” tower at the Olympic park is the heart
of the organization which covers over 150 countries.

The BMW Group is represented through its premium products of the BMW, MINI, and Rolls-
Royce brand in more than 150 countries the world over. Comprised of a network of 23
production plants in 12 countries ensures that each customer receives exactly the car he has
ordered tailored to his specific wishes and preferences. Production follows the market pursuing a
strategy of local production, the BMW Group capitalizes on opportunities to penetrate and
develop markets with a long-term growth potential. This enhances local acceptance in the market
and makes the BMW Group a local player.

The BMW Group pursues this strategy particularly in markets where high import duties obstruct
the importation of completely built-up cars and thus prevent the usual penetration of the market.
Apart from operating local production plants, completely knocked down (CKD) plants serve in
such a case to offer the customer products at competitive prices. In the CKD process, cars are
assembled locally from imported sets of parts and components and are supplemented by parts
produced locally, thus fulfilling the local content requirement imposed by governments. An
important factor of this strategy is natural hedging: A correspondingly high level of purchasing
volume in significant sales regions with different currencies ensures a steady equilibrium in the
flow of merchandise setting off currency fluctuations and trading risks. (Krajewski & Ritzman,
1994)

Apart from BMW, MINI, and Rolls-Royce cars, the BMW Group production network also builds
BMW motorcycles. BMW cars are built at 14 plants the world over.

The backbone of BMW‘s production network is formed by six plants in Dingolfing, Leipzig,
Munich, Regensburg, Rosslyn, and Spartanburg, as well as a joint venture in Shenyang.
Wherever appropriate, the BMW Group integrates external partners into series production, for
example in the production of the BMW X3 in Graz, Austria. But the BMW Group always retains
its leading role and decision-making competences in design, engine construction, purchasing,

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testing, service and warranty matters, based as before on the know-how and control of the BMW
Group.

The BMW Group operates the CKD plants in Chennai and Rayong under its own responsibility,
while in Jakarta, Cairo, Kaliningrad and Kuala Lumpur, BMW cooperates closely with external
partners.

Production of the MINI is in Great Britain, where the “MINI Production Triangle” comprises the
Oxford, Hams Hall, and Swindon Plants. Swindon produces pressings and body components for
MINI cars delivered just-in-time to the Body Assembly Plant in Oxford. Hams Hall builds four-
cylinder petrol engines, which arrive at the assembly line in Oxford just-in-sequence that is
exactly on time and tailored to each car on the assembly line. All Mini Cooper cars for the world
market are manufactured at Plant Oxford.

Rolls-Royce Motor Cars Ltd has been building its cars in Goodwood, in the south of England,
since 2003. Working largely by hand, experienced specialists create the most exclusive cars at
this very special plant dedicated completely to Rolls-Royce.

All BMW motorcycles and most motorcycle engines are built at BMW‘s Motorcycle Plant in
Berlin, where production of the highest standard is combined with truly outstanding tradition:
production of motorcycles, as a matter of principle, involves a large share of craftsmanship and
manual work. The decal lines on various motorcycle components, for example, are still applied
by hand, as in the early years of BMW motorcycle production.

The heart of every vehicle is its engine – which is precisely why the BMW Group has always
focused consistently on the development and production of appropriate power units. The BMW
Group‘s three engine production plants in Hams Hall, Munich, and Steyr supply power units to
the Group‘s worldwide production network supplemented by the production of components at
four plants in Germany in the towns of Berlin, Eisenach, Landshut, and Wackersdorf. The same
standards for quality, safety and prudent use of resources apply worldwide to all BMW Group
plants and products.

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BMW Group marketing subsidiaries are present in the following countries:
Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany,
Great Britain, Greece, Hungary, Indonesia, Ireland, Italy, Japan, Luxembourg, Malaysia,
Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Russia, South
Africa, South Korea, Spain, Sweden, Switzerland, Thailand, USA.
(http://www.bmwgroup.com/bmwgroup_prod/e/0_0_www_bmwgroup_com/unternehmen/untern
ehmensprofil/standorte/standorte.shtml)

FLEXIBILITY
The process of responding to the needs of customer quickly and efficiently is what flexibility is
all about. There are three major types of flexibility- customization, variety and volume
flexibility.

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When a customer buys a BMW there's a twist: he can walk out of the showroom and change his
mind later. A BMW dealer will be happy to oblige with as many changes as the customer cares
to make, until a cutoff point: six days before your particular car goes into production. Not only is
it a handy marketing device--"our cars are tailor-made," BMW's chief executive, Norbert
Reithofer, can boast--but it's also profitable. BMW customers, it turns out, often have second
thoughts. And when they do, they invariably add ever pricier accouterments. The company says
customers change their orders more than 1 million times a year. This basically highlights the
theory of customization which states that the organisation should be able to satisfy the variety of
needs of all its customers by bringing a change in their service and product design.

This ability to cater to fickle tastes is just one manifestation of an extraordinary flexibility that
BMW has injected into a company that sold nearly 1.4 million cars last year, bringing in $65
billion in revenues. It's a flexibility that affects almost everything the firm touches, from the
layout of its assembly lines to the working hours of its administrative staff to relationships with
its unions and key suppliers. BMW has mastered the manufacturing fine art called mass
customization: no two cars rolling through its assembly lines on any given day are identical. Its
factories can cope with a model changeover during the course of a weekend without work
stoppages. Other car companies in Detroit would take weeks.

The degree of customization that is required means BMW isn't as ruthlessly efficient as Toyota
in some respects, including the number of cars produced per worker per day. But there's a
tradeoff. "BMW is not prepared to sacrifice its ability to give consumers the car they want. The
alternative would be reduced costs but not the ability to charge a premium for customized cars,"
says Garel Rhys, an auto-industry expert at Cardiff University. In the end, he says, BMW's
marginal revenue from customization is higher than the marginal cost advantage it gives up.
 
The flexibility also extends to the rhythm of work: BMW has struck deals with its heavily
unionized workforce that enables it to run its factories more or less as demand dictates. This
highlights the theory of volume flexibility which refers to the accelerating as well as decelerating
the rate of production of services or products quickly to control and handle a large fluctuations in
demand. The newest plant of BMW is in Leipzig, where the 3-series and new 1-series hatchback

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cars are built, runs anywhere from 60 to 140 hours per week. Instead of classic two- or three-
shift rosters, the company juggles some 300 working-time permutations to determine optimal use
of its teams of workers, some of whom are contract "perma temps" more common in the U.S.

Robots do most of the work in the body shop, welding, riveting and bonding hundreds of
components together. Robots also apply the four layers of water-based paint to each car. But it's
on the assembly line that BMW differentiates itself from even its Japanese rivals. To be able to
customize each car requires highly sophisticated logistics. Workers stationed at regular intervals
on the line reach back for components in wire baskets that have been rigorously sorted into the
right sequence. In theory, the plant is set up to handle five or six different BMW models
simultaneously, although for the moment it handles two. The factory has been designed so that
new production processes can be added to the assembly line at any time without disrupting the
work flow. This focuses on the variety theory which refers to the handling of a wide range of
services or products efficiently. That's a huge advantage over more traditional lines, which need
to be shut down for any changeover or addition. Several key suppliers are based in the plant,
rather than in a nearby supplier park.
 
BMW has also driven some hard bargains with its workforce. It began to back away from rigid
German working hours in the late 1980s, when it opened a new plant in Regensburg to produce
the 3-series. Its goal even then was to decouple the union-regulated workweek from the amount
of time its factory was in operation. Management made flexible working hours a condition of its
investment in the plant. The demand infuriated the powerful German autoworkers union, IG
Metall, but the syndicate had little choice. "Without these restrictions we wouldn't have come up
with these solutions. We had to be creative," says Ernst Baumann, the board member responsible
for personnel. BMW gained particular concessions from its workers because Leipzig is in
formerly communist eastern Germany, where unemployment has been about double the western
German level and wages have lagged. Under the negotiated agreement, BMW does not pay
higher rates for Saturday work in Leipzig, and employees put in on average two more hours a
week than in western German BMW plants. Moreover, about half the 5,000 workers in Leipzig
are not on BMW's staff; they either work for suppliers such as Faurecia or are so-called lease
workers employed by specialized agencies and used by BMW when needed. That is a relatively

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new but fast-growing phenomenon: the number of lease workers nationally has more than tripled
in the past decade, from 160,000 in 1996 to about 600,000 today, according to the Federal Labor
Office.
(www.time.com/time/magazine/article/0, 9171, 1640398, 00.html)

PROCESS
The BMW Group‘s production network operates hand-in-hand with the Group‘s international research
and development centers as well as external partners. This provides the option to introduce new products
into the market quickly and efficiently, adjusting production without delay to specific customer wishes
and requirements.

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Close cooperation of the BMW Group‘s Research and Innovation Centre in Munich with these research
and development offices the world over ensures ongoing improvement and enhancement of BMW
products. Right from the start in a very early phase of the Product Development Process (PEP), the two
Divisions – Development and Production – cooperate very closely, assuming joint responsibility for the
appropriate completion of each vehicle project as well as the quality and reliability of the cars delivered.
Virtual testing for a smooth start of series production Development of a new vehicle and the production
facilities required would be quite inconceivable today without the use of virtual tools such as computer-
based design programs and complex simulation models. Using 3D simulations and computer models of a
virtual factory, BMW specialists are able to simulate the entire flow of production and present production
conditions very close to subsequent reality. In the production of cars more than 80 per cent of all
processes are now verified and confirmed through virtual reality up front, long before the first production
facilities are actually in place.

Despite the constant increase in model diversity, the BMW Group‘s production network is sufficiently
flexible to build different models and variants at every plant. An important feature in this context is the
universal main assembly line in production, allowing assembly of various models in any sequence on one
and the same production line. This enables the BMW Group to respond flexibly to fluctuations in the
market and individual customer wishes, working to optimum capacity at all plants.

Since it is impossible for a car maker to manufacture all of the 20,000 individual components of each
model in-house in close cooperation with partners is absolutely essential. Production of the BMW X3
outsourced to the city of Graz in Austria shows how complete production by a partner may intelligently
supplement the capacities of the BMW Group and enhance flexibility accordingly.

(http://www.bmwgroup.com/e/nav/index.html?
http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/produktion/produktion.html)

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Sourcehttp://www.bmwgroup.com/e/nav/index.html?http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/produktion/produktion.html

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Sourcehttp://www.bmwgroup.com/e/nav/index.html?http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/produktion/produktion.html

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TOTAL QUALITY MANAGEMENT
Total quality management (TQM) is best thought of as a philosophy of how to approach the organization
of quality improvement. This philosophy, above everything else, stresses the “total” of TQM. It is an
approach that puts quality at the heart of everything this is done by an operation and including all
activities within an operation. This totality can be summarized by the way TQM lays particular stress on
the following (Slack, Chambers & Johnston, 2004):-

 Meeting the needs and expectations of customers

 Covering all parts of the organization
 Including every person in the organization
 Examining all costs that are related to quality, especially failure cost
 Getting things “right first time”
 Developing the systems and procedures which support quality and improvements
 Developing a continuous process of improvement

As defined by ISO, "TQM is a management approach of an organization, centered on quality, based on

the participation of all its members and aiming at long-term success through customer satisfaction, and
benefits to all members of the organization and to society."

TQM requires that the company maintain this quality standard in all aspects of its business. This
requires ensuring that things are done right the first time and that defects and waste are
eliminated from operations. (http://answers.yahoo.com/question/index?qid=20060830050834AAeJ7FX)

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The main objective of TQM is to ultimately satisfy the customer needs. The TQM wheel shown
below helps us to understand the process of total quality management in a better way.

The Total Quality Management Wheel

The wheel shows customer satisfaction as the chief target. In order to achieve this, the employee
must be involved in continuous improvement (the inner circle) to reach quality in the following
areas (represented in the outer circle):

 PRODUCT/SERVICE DESIGN: Design changes often require changes in methods,

materials, or specifications in order to decrease the rate of defective items. Change
invariably increases the risk of making mistakes, therefore stable product and service
designs can help reduce internal quality problems. The need to make design changes in
order to have a competitive edge, BMW tries to carefully test their models and redesigns
them with a focus on simplicity and uniqueness. The manufacturers are very concerned
about the quality of each and every component that are being used to assemble a multi-
functional automobile which is durable, reliable and fuel-efficient.
 PROCESS DESIGN: The design of the process is a key factor affecting the quality of
the products or services. One of the keys to obtaining high quality is concurrent
engineering, in which operations managers and designers work closely together in the
initial phases of product or service design to ensure that production requirements and
process capabilities are synchronized.
 PURCHASING CONSIDERATIONS: Most businesses depend on outside suppliers for
materials, services or certain equipments. Large companies like BMW and Toyota have
thousands of suppliers from all parts of the world, some of which supply the same type of

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 parts. Purchased parts of poor quality can have devastating effects on the quality. For
example the Ford Motor Company lost about 2000 cars each day and had to halt their
production in four cities in the United States of their models named Tempo and Topaz
due to faulty engine parts purchased from outside suppliers. Therefore it is evident that
both the buyer’s approach and specification management are key factors to controlling
supplier quality.
 BENCHMARKING: This is a continuous, systematic process that measures products,
services and practices against those of industry leaders. Companies use this to understand
where they stand in the industry and how to improve their own operations or reach a
certain target. Typical benchmarking tools are: cost per unit, process time per unit,
revenue per unit, return on investment, customer retention rates, etc. Companies like
BMW that are involved in continuous improvement rely on benchmarking to formulate
goals and targets for performance. The four basic steps of benchmarking are:

1. Planning – the collection of data, identifying the process and the firm to be used
for comparison, determining the measures of process performance, etc.
2. Analysis – determining the gap between current process and the benchmark,
identifying the significant causes, etc.
3. Integration – establishing goals, obtaining resources and skilled managers for
accomplishing the goals.
4. Action – developing action plans, teamwork, monitoring progress, developing
cross-functional teams, making improvements.

 DECISION MAKING TOOLS: The first step in improving the quality of an operation
is data collection. There are seven tools for organizing and presenting data:
1. CHECKLISTS
2. HISTOGRAMS
3. PARETO CHARTS
4. SCTATTER DIAGRAMS
5. CAUSE-AND-EFFECT DIAGRAMS
6. GRAPHS
7. DATA SNOOPING

Management must develop the proper tools to manage quality – not only machine or hand
tools, but also statistical methods to control process or incoming materials and to help
identify the sources of quality problems. W. Edwards Deming believed that statistical
methods are the backbone of management’s arsenal of tools for managing quality. He
created a list of 14 points that summarizes his philosophy for achieving better quality
(Deming, 1981-1982). Some of his fundamental ideas include – adopting a new

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 philosophy, cease dependence on mass inspection, drive out fear, institute modern
methods of training and many more.

In a global marketplace a major characteristic that will distinguish those organizations that are
successful will be the quality of leadership, management, employees, work processes, product,
and service. This means that products must not only meet customer and community needs for
value, they must be provided in a continuously improving, timely, cost-effective, innovative, and
productive manner.

In 2000, after the Insurance Institute for Highway Safety--a vehicle safety testing organization--tested
BMW's X5, Institute President Brian O'Neil hailed its performance as outstanding. "BMW has set the
standard for all other manufacturers to aspire to," O'Neil claimed. The BMW X5 had not only
outperformed all of the other SUVs tested, it earned the highest rating the institute had ever given a
vehicle of any type or price range.

 "This achievement speaks not only to BMW's worldwide commitment to the safety of its vehicles, but
also to driver protection instituted in the design and craftsmanship of the X5," boasts Helmut Leube,
president of BMW Manufacturing Corp. In addition to two electronic safeguards, hill descent control and
dynamic stability control, Leube explains that the X5 also boasts BMW's hallmark security package
called FIRST, for Fully Integrated Road Safety Technology.

Better known for their looks, which aspire to reach the aesthetic levels of museum-quality sculpture, as
well as their precision mechanical superiority, BMW vehicles are manufactured to exacting tolerances.
But attaining such an astonishing safety rating is evidence that, for the X5, BMW raised the standard even
higher. "It goes without saying that quality and safety are interrelated," affirms Eduard Walek, BMW's
X5 project leader. "If you can't guarantee that each vehicle which comes off the production lines was
produced in accordance with a high quality standard, you can't ensure a high standard of safety either. But
there's more to it than that. Safety must be designed, simulated, tested and, finally, produced. During all
of these stages, high quality standards must be met as far as computation, construction, testing and
production are concerned."
(http://www.qualitydigest.com/aug01/html/bmw.html)

The BMW X5 is just one example of the company’s relentless pursuit for quality. Since its inception
BMW has focused on producing quality automobile, even if that meant producing less. Often cited as the

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“Ultimate driving machine”, BMW strives to give its customers the quality they gave come to expect
from BMW. Quality begins right from the source. Highly skilled craftsmen and high-tech facilities
cooperate hand-in-hand in the Assembly Shop, where the painted car bodies are completed according to
the customer‘s specific order.

Despite the most advanced and sophisticated plant technology, the assembly of an engine calls for a high
standard of craftsmanship and a wide range of skills and knowledge on the part of all associates involved.
The associates working on the line move along with the cars on their own conveyor belts for several job
processes one after the other. They work together in small groups with a high standard of personal
responsibility.

Ergonomics on the job is particularly important point in the assembly process. Heavy components such as
seats or pre-assembled doors no longer have to be lifted up by the associates themselves, but are rather
moved and placed in position by means of easy-to-handle carrier systems. Swivel units, in turn, maneuver
and move the cars around on the assembly line, helping to avoid tiring and strenuous jobs and operations
which otherwise would have to be performed above head level.

Flexible and efficient assembly is guaranteed by sophisticated logistics for a smooth flow of materials and
efficient production without friction. All parts and components must arrive at the assembly line just-in-
time or even just-in-sequence in the interest of maximum efficiency – and this is only possible if the
suppliers are fully integrated in the production network.

Efficient logistics ensures precise delivery of the parts required exactly on time, with a smooth and
efficient flow of parts from BMW Group component plants or supplier companies. Parts and modules
arrive at the plants either by train or by truck. Many of the parts and components supplied in this process
are then put together in pre-assembly to form complete modules. These structural groups such as the
doors and bumpers as well as the cockpit and seats are subsequently delivered straight to the assembly
line, again in exactly the right sequence.

The highlight in assembly is the so-called “marriage”, where the drive train made up of the engine,
transmission and chassis is bolted on to the body Functional and visual inspection, finally, ensures that all
cars come off the assembly line with the high standard of premium quality so characteristic of a BMW
Group product.

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 (http://www.bmwgroup.com/e/nav/index.html?
http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/produktion/produktion.html)

BIBLIOGRAPHY

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Krajewski, L. J., & Ritzman, L. P. (1996). Operations Management - Strategy and Analysis.
Wesley Publishing Company, Inc.

Slack, Nigel. Chambers Stuart, & Robert Johnston, (2004) Operations management. fourth
edition, Prentice Hall, England.

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