Summary & Recommendation29
In June, 1991, Carl-Peter Forster, director of Prototype and Pilot Manufacturing at BMW had a major decision to make. It was a little less than three and half years into the six year development program for the completely redesigned 7-series luxury sedan. Up to this point, BMW had been following their traditional method of designing automobiles. However, a project meeting was scheduled for that day to decide whether to change to a new approach for prototyping the cockpit of the new 7-series. This new approach would result in higher tooling costs and longer lead times, but the team felt that it could drastically reduce problems downstream and greatly improve the quality of the initial production units.
BMW is a company in a very competitive environment. They compete head-to-head with Daimler-Benz in Germany as well as the new Japanese luxury automobiles hitting the markets. Through the years, BMW’s success can be attributed to their break from traditional car design and through their heavy investment in Research and Development.
To retain their lead, BMW needs to identify and focus on their strategic objectives. To that end, BMW’s upper management set three major strategic objectives to focus on: Increased Product Variety; More Frequent Product Introductions; and Improved Quality of the Newly Launched Models. To meet these objectives, they dedicated the Regensburg plant to make more styles in more colors for different countries. They decided to introduce a new model or new engine every year. And they decided to change the number of complaints they deem acceptable for a launch vehicle.
BMW also needed to change their approach to Quality. Rather than bringing Quality on board in production, they brought Quality in for the entire 6 year development journey; especially during the prototyping phase. Their biggest change was in the prototyping phase. BMW could no longer design parts, and then figure out how to redesign the parts that were producible on tooling designed later. BMW needed to start doing concurrent engineering; designing the parts, designing the tooling; making sure the tooling correctly made the parts, and then making sure everything worked together.
Finally, the BMW design team had to do things right every step of the way. Previously, the designers would rely on the prototype specialists to fix minor issues; and the prototype specials would rely on the manufacturing engineers to fix their minor issues; and everyone would rely on Quality Assurance during Production to fix everything else. BMW’s new approach counted on each member of the team to fully design each part at every step; thus ensuring that they had a complete design for each step of the development process.
The strategic implications of the changes BMW implemented were enormous, if mixed. All indications were that it was the right move; quality was greatly improved, and the market seemed pleased with the final product. But the financial outlay was significantly higher – if the sales did not measure up to predictions, their evolutionary new model could cause BMW serious financial trouble.
Our recommendations to BMW are that they should embrace concurrent engineering. This includes involving the manufacturing team early; reducing the number of trials (thereby reducing the overall cycle time); use production tooling earlier; involve vendors and suppliers; and design products based on platforms.
BMW’s traditional approach for prototyping was to build the components by hand using highly skilled craftsmen using general-purpose tools. They also typically build 3 to 5 full-scale prototypes during the design phase. They typically used lower-grade materials since the design would usually change several times...