BMW - The way to go
...ewest generation of the 3-series will have 2 body variations “with sunroof or without” as opposed to the previous 16 body variations. This way, a dealer has a 50/50 chance of finding a welded body that can be more easily modified to accommodate the buyer’s custom requirements (Chappell, 2002). BMW has further addressed the production lag by recently completing a $300 million capital expense program to overhaul its 8 year-old South Carolina manufacturing site. Changes included new procedures that delay the stamp of the VIN number on the car (associating it with a specific customer) so that last minute changes can be better accommodated. BMW also engineered a new system that tracks customer orders all around the world and to suppliers (Chappell, 2002). The goal is to have the ability to request order changes from suppliers only a few hours before the parts are needed on the production line. This also helps alleviate the gap discussed below. Another operating gap is the inability for BMW to make last minute changes to customer orders. In 2001, all customer change requests had to be submitted 28 to 32 days prior to scheduled delivery. Using the “unibody” concept, BMW is able to accommodate change up to 10 days prior to manufacturing completion (Chappell, 2001). BMW needs to expand the “unibody” concept to more models to further improve customer satisfaction. Cost is another gap that BMW needs to keep in mind. Although BMW has managed to stay profitable and increase revenue year over year in this tough economic climate, it is only going to get tougher. This is largely due to the rapid increase in competition BMW has most recently confronted with regards to the 3 series. Many high-end car manufacturers are offering the consumers more choice for a similar performance and feel car for a lower price. Competing models include the Audi A4, Lexus IS300, Mercedes C240 and Infiniti G35. In order to maintain its market share BMW needs to find ways to reduce its operating costs. BMW is currently taking a gamble in its recent construction start of a new plant in Leipzig, Germany slotted for completion in 2005. Rather than building a plant in two other nearby locations with labor rates 50 and 75 percent lower than Leipzig, BMW has decided on Leipzig due to other factors. First, they reason that the learning curve will be r...