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Abteilung, Datum

Alexander Scholz, BMW Group

NEW TECHNOLOGIES AND INNOVATION IN


THE SUPPLY CHAIN OF BMW GROUP
SUPPLY CHAIN INNOVATIONS 2015
LINT, ANTWERP
26.03.2015
BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
AGENDA.

1 Overview of BMW Group and BMW’s Supply Chain

2 Challenges within BMW’s Supply Chain

3 Solutions based on New Technologies

4 Benefits for the Supply Chain: Examples

5 Success Factors & Conclusion

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
A VERY SUCCESSFUL YEAR 2014 BEHIND US.

2.117.965 + 7,9%

1.811.719 + 9,5%

302.183 - 0,9%

4.063 + 11,9%

123.495 + 7,2%

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
WE OPERATE A GLOBAL PRODUCTION NETWORK.

MINI OXFORD LEIPZIG BMW 1-Series/


BMW i3/i8

REGENSBURG

BMW Local Models


Rolls Royce

GOODWOOD SHENYANG
BMW X-Models* SPARTANBURG BMW 1-,3-Series

MÜNCHEN DINGOLFING

BMW 3-Series BMW 5-,6-,7-Series BMW F06 M

ROSSLYN

BMW 3-Series

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
AGENDA.

1 Overview of BMW Group and BMW’s Supply Chain

2 Challenges within BMW’s Supply Chain

3 Solutions based on New Technologies

4 Benefits for the Supply Chain: Examples

5 Success Factors & Conclusion

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
BMW GROUP IS FACING SOME PARTICULAR
CHALLENGES.
1 Management of global supply chain networks.

2 Best cost country sourcing and natural hedging.

3 Flexibility vs. standardisation.

4 Optimisation of global inventories.

5 Value chain management.

6 New supplier structures/changing supplier structures.

7 Focus on emerging markets (so-called BRIKT markets).

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
MISSION STATEMENT OF THE INTEGRATED SUPPLY
CHAIN FUNCTION: WE SUPPLY FOR SUCCESS!

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
RIGHT PARTS AT THE RIGHT TIME, IN THE RIGHT
QUANTITY/QUALITY, AT RIGHT COST AND THE PLACE.

PURCHASING PROVISION
 Production material.  Material management.
 Indirect purchasing.  Design of the value chain.
 Cost engineering.  Process and structural
 Strategy. planning.
 Complexity management.
Car body
 Sustainability.
Interior, E/E Body-in- Paint
white shop Assembly
Driving dynamics Press
Engine
plant
Drivetrain Production

Investment, goods, services


Provision
Quality management parts
Strategy, management, projects
COMPONENT PRODUCTION Purchasing and Supplier Network QUALITY
 Seats, cockpit, equipment.  Quality validation.
 Bumpers, exterior scopes.  Recourse.
 Light-metal foundry.  Warranty and goodwill.
 Innovative lightweight.  Quality management
F./ Fzg.

construction concepts. system .


t

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
AGENDA.

1 Overview of BMW Group and BMW’s Supply Chain

2 Challenges within BMW’s Supply Chain

3 Solutions based on New Technologies

4 Benefits for the Supply Chain: Examples

5 Success Factors & Conclusion

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
DEPLOYMENT OF WEB 2.0 TECHNOLOGIES TO BETTER
MANAGE SUPPLY CHAIN RISK.

Evolution of the The ease of New services and Common stan- Big data
Internet towards access to techno- software (Blogs, dards are the management
a collaborative logy and services Google Earth basis for the enables insights
network. enables a far etc.) are as easy exchange of into supply
Users do not only greater number to use as com- information chains.
consume con- of users to pub- mon desktop between users
tent, they rather lish content and software and and services (e.g.
contribute con- provide themsel- become increa- XML, RSS etc.).
tent and share ves information. singly powerful.
knowledge.

1 2 3 4 5
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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
ENTERPRISE 3.0 SOLUTIONS SUPPORT THE
REQUIREMENTS OF A GLOBAL SUPPLY CHAIN.
Mission critical requirements Enterprise 3.0

Media Monitoring, Big Data & E-


Secure supply and capacities.
Listening.

Implement flexibility and Geo-visualisation


reactivity within supply chain. with Google Earth.

Guarantee access to Innovation


Sharepoint for distribution.
and state-of-the-art technology.

Optimise internal Innovative tools for collaboration.


and external collaboration. (iPads, NiCe Walls etc.).

Information at the earliest possible point along with integration of different pieces of information allows
quicker response. The long term goal is to manage and to secure a competitive supply chain.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
INNOVATIVE TECHNOLOGIES SUPPORT THE SUPPLY
CHAIN – FROM REACTION TO STRATEGIC SOURCING.
Strategy Idea-to-offer (development) Production

Project
E-Listening Various projects:
technology scouting. Knowledge sharing
with sharepoint 2010.

Supplier selection Capacity management

Verification of locations visualisation of value


chains (Tier-n) for supplier selection
highlighting of chances/risks.

Strategic supplier management

Visualisation and verification of What can be found in the Internet?


supplier locations comparing e.g. compliance, sustainability,
compliance, sustainability and risk financials, press releases.
by location, natural disaster,
political, financial.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
DE-RISKING THE SUPPLY CHAIN BY COMBINING
DIFFERENT SOURCES OF AVAILABLE INFORMATION.
Private org.,
national stats., Government inst., Websites, journals,
NGOs, news agencies educational inst. micro blogs…
NGOs
Pre-defined set-list Pre-defined set-list Undefined set-list
Sustainability, social
Natural risks Activity clusters
aspects, compliance

Sort (type, impact, Sort risks (type, Sort activity clusters


location) impact, location) (type, location)

Processing Processing Processing


and geo-coding and geo-coding and geo-coding

VISUALISATION FRAMEWORK

To be ordered in the Suppliers’ BMW’s


supplier contract geo-codes geo-codes

To be obtained in the Suppliers’ facilities BMW facilities


supplier contract address address

Suppliers suppliers BMW production


(supply chain) facilities

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
E-LISTENING INDENTIFIES, COLLECTS AND
STRUCTURES SUPPLY CHAIN RELEVANT DATA.
Technology Innovation Suppliers
1
Bundles information between
Unstructered BMW’s engineers/buyers and
information
external supplier’ engineers/sales.

Information sor- All information is shared on a


2
ting algorithm
(Example: Google
common platform. Information
Ad, Amazon) is used to evaluate suppliers.

System can be expanded to


incorporate suppliers in the
3 Information innovation process.
delivered to each
Useful user is besboke
information Reduce information overload and
avoid information over-exposure.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
LAYERED COLLECTIVE INTELLIGENCE FRAMEWORK
VISUALIZES DATA.
INPUTS TO THE FRAMEWORK PROCESSING FRONT END

Production Risk layer Opportuni- Commodi- Impact Interaction Global


sites layer ties layer ties layer layer & accessi- locations
bility layer layer

Factory Natural. Innovation. Exhaust Damage. User in- Map high-


locations of systems teraction lights the
sup-pliers. Economic. Sustai- (use case). Frequency and in-put. locations
nability. of occur- and regions
Production Social. Expansion rence. Links with
Supply impac-ted.
sites of to other co- NSI Hot to-
BMW. chain hubs. mmodities Probability. pics search. A number of
Activity such as sub-layers
Supply semi-con- Defines ac- for risks, in-
Chain clusters. cess rights
ductor wa- novations
network Re-search fers. and acces- and oppor-
routes. centres. sibility. tunities.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
SOURCE OF INFORMATION – RELIABLE AND
SUPRANATIONAL.
Information Sources (examples)
Oppor- Wage data Bureau of Labour Statistics (BLS)
tunities Political data National Statistical Institutions
Unemployment Arbeitsmarkt Service Austria (AMS)
Political risk Crime Rate in South Africa: South African Police Service (SAPS)
Trade barriers Market Access Database (European Commission)
Technology cluster German Ministry of Research and Education
Risks Tropical storms National Oceanic and Atmospheric Administration (NOAA)
Wild fires US Wildfires Geomac (USGS)
Global Disaster and Alerting European Commission & United Nations
Coordination System (GDACS)
Climate Climate Hot Map (CHM) Union of Concerned Scientists
(non-profit, at Massachusetts Institute of Technology)
Earthquakes U.S. Geological Survey (USGS)
Floods National Flood Hazard Layer (FEMA)
Vulcanoes U.S. Geological Survey (USGS)

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
CONCLUSION: AN INCREASINGLY COMPLEX WORLD
REQUIRES NEW WAYS TO DEAL WITH.
1 Complexity of products increases, volatility of markets increases.

2 Current information management is short-term oriented (e.g. sustainability, risk etc.).

3 New technologies offer tools to deal with the challenges.

4 Proactive information management needs to be integrated into business processes.

5 4 disciplines: Collection, interpretation, visualisation and distribution.

6 Timely access to information is key differentiator of any supply chain.

7 Organizational change management is a key element to successful implementation.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
AGENDA.

1 Overview of BMW Group and BMW’s Supply Chain

2 Challenges within BMW’s Supply Chain

3 Solutions based on New Technologies

4 Benefits for the Supply Chain: Examples

5 Success Factors & Conclusion

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
GEO-VISUALISATION EXAMPLE: TROPICAL STORM
FORECAST.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
GEO-VISUALISATION EXAMPLE: TROPICAL STORM
FORECAST .

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
GEO-VISUALISATION EXAMPLE: TROPICAL STORM
FORECAST .
Tasks
 Identify relevant suppliers.
 Golbal Disaster und Forecast erkennen.
 Early-warning for BMW supply
chainmanagers.
 Early-warning ansd information for
relevant suppliers (up to tier-3).
 Define counter measures.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
GEO-VISUALISATION EXAMPLE: EARTHQUAKE IN
GREECE.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
GEO-VISUALISATION EXAMPLE: CURRENT US
WILDFIRE.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
GEO-VISUALISATION EXAMPLE: POPOCATEPETL –
50KM RADIUS.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
GEO-VISUALISATION EXAMPLE: NORTH KOREA -
200KM MISSILE RADIUS.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
GEO-VISUALISATION EXAMPLE: REAL-TIME TRAFFIC
AND KEY SUPPLIERS.

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BMW GROUP: NEW TECHNOLOGIES UND INNOVATION.
MEDIA MONITORING: TAG CLOUD BY TECHNOLOGY
AND DETAILS.

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BMW GROUP: NEW TECHNOLOGIES UND INNOVATION.
MEDIA MONITORING: TAG CLOUD BY TECHNOLOGY
AND DETAILS.

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
AGENDA.

1 Overview of BMW Group and BMW’s Supply Chain

2 Challenges within BMW’s Supply Chain

3 Solutions based on New Technologies

4 Benefits for the Supply Chain: Examples

5 Success Factors & Conclusion

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
THE ENTERPRISE 3.0 PROJECT@BMW: SEVEN
SUCCESS FACTORS.

1 Start from a business perspective rather than from an IT solution view

2 Use existing structures wherever possible

3 Implementation needs to follow Agile Project Management

4 Identify relevant pilot categories and start the project step by step

5 Focus on data cleansing, e.g. supplier data

6 Top level sponsorship or top-level attention

7 Organisational change management is a key element to successful implementation

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BMW GROUP: NEW TECHNOLOGIES AND INNOVATION.
Q&A.

Contact Details:

BMW Group
Alexander Scholz
Head of Project Management Supply Chain
alexander.sb.scholz@bmw.de
+49 151 601-20850

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