REV. JANUARY 03, 2002
BMW: The 7-Series Project (A)
As he accelerated past the security gates of BMW’s Research and Engineering Center, Carl-Peter Forster, director of Prototype and Pilot Manufacturing, thought about the 7-series project meeting. It was June 12, 1991, exactly two years, eight months, and five days until the scheduled start of production of the completely redesigned 7-series luxury sedan. The project, code-named E-99, was reaching a critical milestone. Over the next several months, engineering prototypes1 had to be designed, built and tested so that one last round of design revisions could be made in time for launch. Traditionally, BMW hand-built and assembled its prototype cars in its in-house prototype shop. The parts were carefully fabricated by highly skilled craftsmen in the company’s model shops and by specialized outside vendors. Meticulous attention to detail resulted in prototype vehicles which very closely reflected the form and function that product designers had laid out in their drawings. At today’s meeting, however, Forster and the cockpit design team, headed by Dr. Hans Rathgeber, would decide whether to try a new process for building the cockpits2 of the 7-series prototype vehicles (Exhibit 1). Under the new approach, prototype cockpit components would be fabricated by outside suppliers using more automated methods, more specialized tooling, and less skilled workers. A single supplier would then construct major subassemblies of the cockpit and ship these to BMW where they would be assembled into prototype vehicles on a pilot assembly line. Under existing practice, all assembly of prototype vehicles was done in the prototype shop. Forster, Rathgeber, and others involved in the interior design of the 7-series believed that the new approach, despite its higher tooling costs and longer lead times, could drastically reduce the problems associated with bringing a new model into production and have a dramatic impact on product quality at launch. Yet, they knew there were risks. The redesigned 7-series would be a particularly visible new product for BMW. To be launched for the 1994 model year, the new 7-series was a “flagship” product and its success or failure would have enormous impact on BMW’s image and standing in the increasingly competitive luxury car market.
1A prototype was a full-scale, working model of the final product created during the development process. 2The cockpit of an automobile consisted of the dashboard, instrument panel, glove compartment, shift console between the
driver and front passenger seat, trim components (such as the air conditioning grills), numerous ducts for the heating and air conditioning systems, conduits for wiring, and a supporting structure. ________________________________________________________________________________________________________________ Professor Gary Pisano prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 1992 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
BMW: The 7-Series Project (A)
Bayerische Motoren Werke (BMW), founded in 1916 by Gustav Otto, the son of a pioneer of the internal combustion engine, began as a producer of aircraft engines.3 In 1917, BMW registered its trademark blue and white rotating propeller still used today. In the late 1920s, BMW began producing cars....