Bmw Case

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Executive Summary
BMW has embarked on a mission to cut its notoriously long product development time in half utilizing a newly developed system code named "Digital Car". Senior management has decided to utilize the new process on the 7-series platform. In order to accomplish this goal, BMW is preparing to take advantage of the latest computer technology in car development. At the forefront of the new plan is a debate over the use of computer-aided-styling (CAS). We recommend that BMW implement the Computer Aided Styling system and processes into their production development program.

Key Areas of Concern
The main business problem that BMW is facing is reducing its long product development time. BMW's current design process began in the early 1990s and utilizes a 60 month design cycle. Senior management set a goal of reducing product development time by 50%. This number is extremely aggressive, but necessary. All of its competitors were attempting to shorten development times as well. A main decision that BMW is facing is whether to adopt CAS in place of its traditional "handcrafted" design techniques. The need for a shorter design cycle is being driven by customer demand and the extremely competitive automobile market. Customer tastes are ever changing and are demanding more choices. With the long development times, certain features of the car could be out of style by the time the car makes it to market. If BMW doesn't meet the customer demands, their competitors will.

BMW sells many low volume vehicle models, as compared to its competitors. To be profitable, they rely on longer production runs, to spread their high fixed costs over a greater time period. The trade-off is a lessened ability to react to changing market demand. To achieve this, they must reduce their product development lead-time. BMW's strategy for value creation lies in its meticulous engineering, including design and styling. BMW designers pride themselves in delivering the unique styling that BMW is known for. They strive for designs that generate emotions – "Works of art". This is evident in the fact that many of the designers came from art or industrial design schools. The current design process involves two full size clay models – which are extremely costly and time consuming. However, the use of clay models provides a visual representation of the final product that many felt irreplaceable. By being able to physically see and touch a model of the final product the model can be handcrafted to make the slightest details apparent. Once the models are complete they are captured digitally by a laser scanner and brought into a Computer Aided Design (CAD) System. The current process is working well to deliver the unique styling and quality that defines BMW, however, it is very time consuming and a major roadblock to reducing the product development time.

Senior management utilized the functional managers from the five key process areas that accounted for about 90% of the critical processes involved in product development. These managers identified three main changes to the current system that needed to take place in order to meet the development time reduction goals: Increased parallelization of design tasks, elimination of some design iterations, and quicker completion of the remaining design iterations. These changes would greatly modify the current processes and would need to be carefully implemented to avoid catastrophic results.

·Centralized designers – All employees involved with product development (~5,000) are under one roof. This aids in communication and is essential for coordinating activities while attempting to speed up development time. BMW had been the first major automaker to do this. ·Management Buy-In – The senior and functional managers have bought in to the need to reduce product development time. Their support will be instrumental in directing this major...
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