BMW incorporated lean production and JIT principles in its manufacturing operations. It emphasized close relationships with suppliers to receive parts just-in-time. Production schedules were closely aligned with dealer orders to reduce waste and inventory. BMW also aimed to give customers more flexibility to customize their orders late in the production process through computerized scheduling and tracking systems integrated with suppliers. This allowed for more efficient production runs with less variation to optimize flow.

2. JIT can improve a manufacturing organization's return on investment, quality, and efficiency.

3. Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. This saves warehouse space and costs. However, the complete mechanism for making this work is often misunderstoodMain benefits of JIT include:<br />Reduced setup time. <br />Cutting setup time allows the company to reduce or eliminate inventory for quot;
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time. The tool used here is SMED (single-minute exchange of dies).<br />The flow of goods from warehouse to shelves improves<br /> Small or individual piece lot sizes reduce lot delay inventories, which simplifies inventory flow and its management.<br />Employees with multiple skills are used more efficiently. <br />Having employees trained to work on different parts of the process allows companies to move workers where they are needed.<br />Production scheduling and work hour consistency synchronized with demand. <br />If there is no demand for a product at the time, it is not made. This saves the company money, either by not having to pay workers overtime or by having them focus on other work or participate in training.<br />Increased emphasis on supplier relationships. <br />A company without inventory does not want a supply system problem that creates a part shortage. This makes supplier relationships extremely important.<br />Supplies come in at regular intervals throughout the production day. <br />Supply is synchronized with production demand and the optimal amount of inventory is on hand at any time. When parts move directly from the truck to the point of assembly, the need for storage facilities is reduced.<br />Now after understanding the JIT and Lean Production How BMW was Incorporated the same in their functionality<br />right1360170Industry- Automotive industry<br />Founded-1916 <br />Founder-Franz Josef Popp<br />Headquarters- Munich<br />Key people-Norbert Reithofer, Joachim Milberg (Chairman of the supervisory board<br />Products- Automobiles, motorcycles, bicycles<br />Revenue- €50.68 billion (2009)<br />Operating income- €289 million (2009)<br />Profit- €204 million (2009)<br />Employees- 96,230 (2009)<br />Subsidiaries-Rolls-Royce Motor Cars<br />Website- bmw.com<br />The fundamental usages by the BMW US factory have moved on what the case describes all about. And they term it Post (JIT)<br />The basic emphasis is given to suppliers. Effort is made not to underestimate the role of suppliers<br /> <br />Vehicular delivery on time (day of ordering to delivery date)<br />Flexibility - $300 million capital (overhauling the 8 year old body shop)<br />Following changes are under way<br />Redesigning the vehicles for variation in metal sheets<br />Upcoming 3 series will have 2 variations instead of 16<br />Z3 model will have 8 body variations instead of 12<br />VIN number modification (LEAN Production concept used)<br />Will be assigning the VIN number later as to give customer chance of making changes in the design (customer centric approach)<br />Will give BMW more time for scheduling<br />Computerized system for the dealers<br />Computer ordering system for giving customer the date of delivery, integrating all the workshops and data banking in the Munich center.<br /> <br />Scheduling glitches (LEAN Production used)<br />The Spartanburg Plant (doubling the vehicular stacking capacity)<br />Mechanism to <br /> 1. Temporary shelve half shifts worth of cars at once<br /> 2. Solving scheduling glitches caused by vehicles out of sync<br /> 3. more parts to stand along the assembly line<br /> 4. Reducing load on worker<br />Supplier Side -------- (JIT concept used) <br />Computer system that tracks orders from the dealerships around the world to the part makers in South Carolina and Germany.<br />Production change from supplier side few hours prior to the parts are needed in BMW line.<br />Now -------- suppliers are accustomed locking the production line weeks before the delivery<br /> Challenge starts with the production forecasting<br />Normally manufacturer would be able to forecast the production needs and notify suppliers 6months in advance, 60 % accuracy <br />If (6 weeks prior ---- will give 80% accuracy)<br />Plans to attain (JIT concept used) <br />If (done 4 days ahead ---- will give 100 % results)<br /> For the same (steps have to be taken)<br /> <br /> 1.. lock 100% percent accurate production plan<br /> 2.. advantage of suppliers to liberate suppliers to make last minute changes<br /> 3. Sales orders processed nightly and communicated to the factory planning department<br />Cross-functioning (JIT concept used) <br />Indicator champion—job post champion -- sorting issues in various department to solve schedule problems ex ( one departments functions impacting other)<br />Brand identity ( LEAN Manufacturing )<br />Customized manufacturing -- customization is less in US then in Germany,<br />Customers should get what exactly they want but (will not go the way of 20 day car)<br />Precise schedule will result in the more stable supplier base, by reducing product complexity that will allow the production of new products.<br />That is BMW will bring about changes that will<br />(Every last minute change will bring about any desired output from the<br />Customer will be handled minutely)<br />Thanking you<br />Pratik K.S Negi<br />ISBE (SS 09-11/HR)<br />