Name: Rishabh Sanjay Makharia

Roll No: 1611198

What are the causes and consequences of BMW's quality problems with newly launched
products? What should be done to improve "launch quality"?

Cause: The materials used in prototyping and final production are not the same.
Consequence: The results from the analysis in prototyping would be different from the results
obtained in production leading to quality concerns.
Recommendation: Use the same material throughout the development and production
process. This will help reduce quality defects. Further, if we use the same material throughout
the process we can acquire the material in bulk for the prototyping and piloting phases from
the same supplier reducing material cost.

Cause: Use of pre-production and production tools was kept to a minimum in prototyping
process.
Consequence: The prototyping activity is essentially reduced to identifying the look and feel
of the car. Its activity to identify defects and flaws is kept to a minimum. This could also be a
potential reason why a high skilled labour force is required for the prototyping process.
Recommendation: Usage of at least pre-production tools in the prototyping process. This
would help BMW identify flaws in the product, early in the development process, and help
reduce labour cost.

Cause: No involvement of actual production suppliers in the prototyping process.

Consequence: Leads to the re-design of tools and components during the production process
which causes a delay in production.
Recommendation: The supplier should be part of the product development process right from
the prototyping phase. Identification of problems early in the development cycle will help
address the defect on time, reducing delays in development.

Cause: Assembly line workers are not part of the pilot process
Consequence: Unable to completely grasp the process during pilot runs, leading to an
increase in the production time. The mixed model approach only further adds to the
confusion.
Recommendation: Involvement of assembly workers right from the pilot phase will lead to
smoother production runs

Cause: Minor problems like fine tuning of the various components of the car, etc are
overlooked during the pilot process.
Consequence: Such problems surface during the production process leading to delayed
production
Recommendation: Check for major and minor problems rigorously during the pilot process.

Cause: Mixed model approach followed for the ramp up phase of factory production. New
model series are produced on the same production line as the old model series.
Consequence: Leads to confusion among assembly line workers as they must keep switching
between the old and new series models. The logistical complexity also increases.
Recommendation: Use a separate assembly line for the new model series. Cross-train workers
to ensure smooth switching between the old and new model series (and vice versa)
Name: Rishabh Sanjay Makharia
Roll No: 1611198

What are your recommendations to Carl-Peter Forester concerning the 7-series

prototypes? What should he do regarding future development projects?
The BMW 7-series is the flagship product of BMW and is expected to be launch ready within
2 years 8 months. Hence, before we make any changes to the current prototyping process we
need to consider the following:
Flexibility in Product Design & Delay in Product Launch: As per the case, BMW expects
to make one more design revision before it goes pilot ready. This will not be possible if
BMW uses pre-production tools in its prototyping process and outsources component
manufacturing to suppliers. As per Exhibit 7 the final design review (cubbing) of the product
should be complete approximately 18 months before its launch. With a lead time of 6 months
for designing the tools and another 6 months for procuring them, BMW would have to
finalize its design 30 months (See Exhibit 1) before the launch. Given that only 32 months
are left before the launch date if BMW were to make one more design revision later in the
prototyping cycle it would miss the launch date. Considering, this is a flagship product for
BMW and a lot is riding on its success, BMW would not want to delay its launch date.
Hence, it seems to be too late in the process for BMW to consider making any changes to the
7 series prototyping process.

BMW can consider the following recommendations for future development projects
1) Adoption of 3D Concurrent Engineering: Currently, product engineering and process
engineering are carried out separately. Product engineering is primarily completed before
the pilot phase while process engineering begins during the pilot phase. With the
simultaneous adoption of product and process engineering BMW will be able to solve
minor problems like mis-fit of tools and parts that occur during the pilot and production
phases.
3D Concurrent engineering also supports the close interaction of suppliers, manufacturers
and sellers. The involvement of suppliers in the development cycle right from the
prototyping process would help identify issue with components before they reach the
production phase.
2) Enhancement of Strategic Objective: BMW currently focuses on the philosophy make it
right the first time. This results in a long lead time (approximately 8 years) before they
are able to release a new model series to the market. Despite this huge lead time the
number of customer complaints/car is higher for BMW as compared to the Japanese car
manufacturers (1.5 complaints/car) who follow the philosophy of kaizen or continuous
improvement (Exhibit 2). Thus, BMW can adopt a strategy of reducing its development
time (to 4-5 years) for its new model series while at the same time focus on continuous
improvements for its existing model series.

What changes would you recommend in the way BMW develops new models? What
attributes of newly launched products would you expect to improve as a result of these
recommendations? Which attributes might deteriorate?
BMW can change its development process in the following ways
1) Assembly line workers should be incorporated into the pilot process. This will help the
workers ramp up quickly and lead to smoother production runs.
2) Suppliers should be made an active part of the prototyping process. Since suppliers
specialize in the components and materials they manufacture they would more accurately
be able to foresee problems that may arise in the production process. Incorporating them
into the prototype process will also provide them a chance to learn about the components
before they produce it in bulk for the production process. This should lead to an increase
Name: Rishabh Sanjay Makharia
Roll No: 1611198

in quality of the final products and a quicker identification of defects in the development
process.
3) BMW should consider incorporating Design for Manufacturing (DFM) concepts into its
development process. Currently, BMW engineers manufacture to design without taking
into consideration the problems which may arise in mis-fit parts and tools during the
assembly process (pilot and production). If DFM is incorporated into the design of the
product itself, it will reduce troubleshooting problems that occur in the pilot process,
freeing time for the engineers and workers to focus on solving the minor problems which
get overlooked during the pilot phase.
4) Use production materials and pre-production tools, wherever possible, in the prototyping
process. While this will lead to an increase in investment (DM 50 million), it will help
avoid complications that arise due to change in materials later in the development process
as well as help save the company DM 100 million in the long run.
While the above changes will help increase the quality of the product as well as reduce
development and production time, some problems that may arise due to them are
1) Use of DFM in product design will make it difficult to incorporate new technology into
the final product. It may reduce the creativity of the design engineer.
2) Incorporating suppliers into the prototyping process may increase their bargaining power
and hence, lead to them asking higher prices for material supplied.

What recommendations would you make to Chairman von Kuenheim regarding

BMW's strategy to compete against new Japanese entrants into the luxury car market?

Chairman von Keunheim can consider the following strategies to compete against his
Japanese rivals
1) Differentiation strategy which includes both breakthrough innovations and continuous
improvements. Currently, BMW is viewed as a luxury car and more of a wealth symbol.
The cars designed by BMW have an average product life of approximately 12 years but an
average wealthy customer may change his car every 3-4 years. The lead time for a new
model series (breakthrough innovation) is 8 years while the same for a Japanese
competitor is only 4 years. Thus, if a customer is looking to change his car after 4 years he
would most likely purchase a Japanese vehicle rather than a BMW. Thus, von Keunheim
should consider reducing the lead time for his breakthrough innovations (new model
series) to 4 years and follow continuous improvements in between for his old model series
(this would-be derivatives of the model series)
2) Change in Competitor Benchmarking. Currently, BMW has been benchmarking against its
European rivals with respect to the number of customer complaints received per car. While
BMW has been at par or even ahead of its competitors in this metric, it is far behind when
compared to its Japanese rivals who receive only 1.5 customer complaints/car. BMW
should change its competitor benchmark. This will help it strive to deliver better quality.
3) Expand target market to the upper middle class segment. Currently BMW caters only to
the upper-class segment. By targeting the upper middle class segment BMW will be able
to increase its volume of customers which should lead to an increase in sales.

Exhibits
Name: Rishabh Sanjay Makharia
Roll No: 1611198

Exhibit 1: Product Development Cycle of BMW (if pre-production tools used in

prototyping and component manufacturing outsourced to suppliers)

Exhibit 2: BMW vs Japanese Car Manufacturers Learning Curve