OPERATIONS MANAGEMENT CIA – 3

By

DATLA PRASANNA

REGISTER

NUMBER 2127834

Under the Guidance of

Prof. SREERENGAN V R

MBA PROGRAMME
SCHOOL OF BUSINESS AND MANAGEMENT
CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE

MARCH 2022

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 INDEX

S. No Title Page No

1 Introduction 1

2 Lean Operation 2

3 Just in Time (JIT) 3

4 JIT at BMW 4

5 Emerging Trends 5

6 Impact of technology innovation and JIT 7

7 Organization strategy vs JIT and Kanban 8

8 Organization challenges 9

9 Managerial implications 9

10 Recency of lean operations in BMW 10

11 Conclusion 11

12 References 12

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INTRODUCTION
Bayerische Motoren Werke AG (BMW), German automobile manufacturer noted for quality
Sedan, SUV and motorcycle. The company is headquartered in Munich.

It started in 1916 as Bayerische Flugzeug-Werke, a manufacturer of airplane motors, however

accepted the name Bayerische Motoren Werke in July 1917 and started delivering bikes
during the 1920s. BMW entered the vehicle business in 1928. The organization's R32 cruiser
set a world speed record that was not broken until 1937. During World War II BMW
fabricated the world's first fly plane motors, utilized by the Luftwaffe, Germany's flying
corps. After the conflict the organization attempted to move into the little vehicle market
however observed that it couldn't contend adequately against Volkswagen's smaller, cheap
cars. By 1959 the organization was nearly chapter 11, and its supervisors were wanting to
offer the firm to Daimler-Benz.

In that year, nonetheless, BMW pulled out of its monetary droop; German business person
Herbert Quandt gained a controlling interest in the organization, and BMW presented its 700
series, before long followed by the similarly fruitful 1500 model. At about a similar time, the
organization presented another series of cruisers that were especially well known in the
United States.

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BMW was solidly settled as a top-notch car brand before the finish of the twentieth century.
In a bombed endeavor to acquire piece of the pie as a game utility vehicle organization,
BMW bought the Rover Group in 1994 yet lost generally $4 billion preceding selling the
Land Rover brand to Ford in 2000. BMW saw extraordinary accomplishment with the
relaunch of the British MINI in 2001, nonetheless, and another British brand, Rolls-Royce,
turned out to be important for BMW in 2003. Individuals from the Quandt family kept on
holding a huge stake in the organization.

LEAN OPERATIONS

Lean operations are a method of running a company by aiming in on giving more prominent
consumer loyalty while limiting the utilization of resources as much as possible. The goal of
lean activities is twofold: Creating value for clients and wiping out waste. Organizations that
focus on lean operation are profoundly concerned about effectiveness. Everything in a
business operation that don't meet a definitive finish of giving clients esteem and expanding
benefits is cut from the organization. Lean operations permit organizations to accomplish
more with less which makes worth and expands benefits.

Lean operation has many benefits. First, the primary goal and advantage of lean operations is
improving efficiency. When everything works similar to a well-orchestrated symphony,
activities improve and benefits increment. Lean operations are concerned about augmenting
productivity. Eliminating waste is a tremendous advantage all by itself. It permits to slice
through the commotion and check out business, truly getting where its assets and
shortcomings are.

Further, organizations that practice lean operations have a solid spotlight on quality. By
eliminating waste and shortcoming, they are left with a better product. The higher product
quality is accomplished by zeroing in on client esteem, which is one of the fundamental goals
of lean tasks. Lean helps to remove defects and further improves the production process so
that quality items are accomplished significantly quicker and with less cash. One more
advantage of lean operation is that it assists to make better utilization of workers.

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JUST IN TIME (JIT)

The way of thinking of Just in Time (JIT) is basic: inventory is waste. JIT inventory system
frameworks uncover stowed away reasons for stock keeping, and are subsequently not a basic
answer for an organization to take on. The organization should follow a variety of new
strategies to deal with the outcomes of the change. The thoughts in this approach to working
come from a wide range of disciplines including insights, modern designing, industrial
engineering, production management, and behavioural science. The JIT stock way of thinking
characterizes how stock is seen and the way that it connects with the management. In the Just
in Time (JIT) is an inventory strategy that endeavors to further develop a business profit from
venture by lessening in-process stock and related conveying costs. JIT can further develop an
assembling association's profit from speculation, quality, and effectiveness. Quick
notification that stock exhaustion expects staff to arrange new stock is basic to the stock
decrease at the focal point of JIT. This saves distribution center space and expenses.
Notwithstanding, the total component for making this work is regularly misconstrued

Principle advantages of JIT include:

 Reduced arrangement time.

 Cutting arrangement time permits the organization to diminish or kill stock for
"changeover" time. The instrument utilized here is SMED (single-minute trade of
passes on).
 The progression of products from stockroom to racks improves.
 Small or individual piece parcel sizes diminish part postpone inventories, which
works on stock stream and it’s the executives.
 Employees with numerous abilities are utilized more productively.
 Having employees trained to chip away at various pieces of the process permits
organizations to move laborers where they are required.
 Production booking and work hour consistency synchronized with demand.
 If there is no demand for an item at that point, it isn't made. This sets aside the
organization cash, either by not compensating laborers double time or by having them
center around other work or take part in preparing.

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  Increased focus on supplier connections
 An organization without stock doesn't need an inventory framework issue that makes
a section deficiency. This makes provider connections critical.
 Supplies come in at regular stretches all through the production day.

JIT at BMW

The JIT and lean production how BMW were incorporated something very similar in their
functionality. The essential utilizations by the BMW US industrial facility have continued on
what they portray about. Also, they term it Post (JIT)

The essential accentuation is given to suppliers. Exertion is made not to underrate the job of
supplier’s Vehicular conveyance on schedule (day of ordering to conveyance date).

Flexibility - $300 million capital (updating the 8-year-old body

shop) Following changes are in progress

⚫ Redesigning the vehicles for variety in metal sheets

⚫ Upcoming 3 series will have 2 varieties rather than 16
⚫ Z3 model will have 8 body varieties rather than 12

VIN number adjustment (LEAN Production idea utilized)

 Will relegate the VIN number later as to allow client opportunity of making changes
in the plan (client driven methodology)
 Will give BMW more opportunity for booking Computerized framework for the
vendors Computer ordering framework for providing client with the date of
conveyance, incorporating every one of the workshops and information banking in the
Munich community

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EMERGING TRENDS

KANBAN and KAIZEN at BMW

Taiichi Ohno, a modern engineer at Toyota, created Kanban to improve producing

proficiency. Kanban is one technique to accomplish JIT. The framework takes its name from
the cards that track production inside a manufacturing plant. Kanban has two primary
capacities, in particular as a control of production and for the purpose of expanding creation.
Its work as a production regulator is obtained by bringing cycles together and fostering a
framework that is timely so the raw materials, parts or items required will come when
required in amounts that are in agreement with the necessities in all work center on the
creation floor, in any event, reaching out to providers connected with the organization. While
its capacity for the purpose of expanding production can be acquired assuming its application
is to utilize an stock level decrease approach. Stock levels can be diminished in a controlled
way by lessening the quantity of Kanban available for use during the creation interaction. The
capacity of Kanban is in utilization of the stockpile chain production is firmly connected with
the fundamental guidelines of Kanban.

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IMPACT OF TECHNOLOGY INNOVATION AND JIT

The accomplishment of a JIT drive relies upon the smooth flow of communication and data
inside the organization. The rise of the Internet and Intranet improves the organization's data
handling and conveying capacities. The utilization of the web and intranet support the
objectives of JIT by decreasing vulnerabilities and diminishing the degree of wellbeing stock,
considered as a loss in JIT.

AI AND JIT

Artificial Intelligence (AI) is the course of robotized decision making through the assortment
and handling of incorporated data from all sources like designing, planning, engineering,
scheduling, testing, delivery, and client care.

The connection between artificial intelligence and JIT is profound. Artificial intelligence
turns into a piece of innovative advances that help JIT objectives by:

⚫ improving usage of production facilities which leads to enhanced productivity

⚫ expanding proficiency through work improvement and computerization
⚫ lessening investments in inventories

ORGANIZATION STRATEGY vs JIT AND KANBAN

BMW's current organization strategy is to focus around our clients and address their issues
which vary across the world. They consolidate spearheading innovations, emotional products
and customized client assistance to make a remarkable unique experience. JIT helps in
improving efficiency. When everything works similar to a well-organized manner, activities
improve and benefits increment. The fundamental advantages of the Just In Time framework
is that it will change the expense viability of the cost, work on the precision of deciding the
expense of the item, lessening the requirement for indirect expense portion, changing the
conduct and relative significance of direct labour costs, and affecting the arrangement of
request and boarding costs. This helps the company in reduction of cost of processes involved
and hence these products can be delivered at a lower price which is good for the customers.
Utilizing the JIT and Kanban inventory management model can prompt expanded consumer
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satisfaction, as organizations can serve them with more proficiency and speed. Organizations
have more command over the assembling system, which makes it more straightforward to
give a fast reaction when clients demand a change.

ORGANIZATION CHALLENGES

Some of the challenges that the organization has to face while implementing JIT are lack of
cooperation among suppliers in correctly supplied material,

 Unavailability of resources to be invested in direct linkages with vendors,

 Lack of education and formal training of workers
 Lack of cooperation from vendors in the form of inconsistent lead times and capacity
constraints imposed by suppliers
 Lack of an accurate forecasting system, strategic planning
 Problems in maintaining time reduction through machine, modification or replacement of
existing equipment, quality problems with supplied material
 Absence of cooperation of suppliers in timing of supplied materials, Reduction in the
levels of work load variability, Problems with machines (Machine failures and
reliability)
 Shortage of information and communication with suppliers, Inability to meet schedule
 Lack of communication between workers and management, Problem in line balancing
 Lack of performance measure, problem in lead times reduction and in layout
modification

MANAGERIAL IMPLICATIONS

The implementation of JIT is not that easy. Properly skilled labour force is required to carry
out the tasks. They should have proper sound knowledge about the machinery too because all
the machines have to work in coordination for the product to be manufactured at the
scheduled time. It requires proper communication between company, suppliers and vendors.
The lack of proper communication can lead to delay of certain process within the production
which can have a huge impact. The managers should be able to forecast the demand with the
help of analytical tools available and plan the production accordingly. Any shortcomings in
the supply chain needs to be immediately noticed by the manager and actions need to be
taken accordingly.

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TRAINING AND DEVELOPMENT

BMW knows the importance of keeping their employees aware about the growing market,
market updations as these helps to them to sustain in the changing market conditions.
Therefore, training and development plays a major role in delivering employees insights on
lean operations components like TPS, JIT etc. BMW constantly put in efforts to recognize the
training needs of its staff and organize training programmes for them accordingly. A
systematic approach to assess training effectiveness is also implemented.

RECENCY OF LEAN OPERATIONS IN BMW

BMW has frequently introduced change with striking decisions at major tipping points.
During the worldwide monetary and financial crisis organization paved its path towards
electric mobility. The super reasonable BMWi3 * was relatively radical is as yet performing
great in the commercial centre right up till the present time.

BMW manufacturing plants are fit for building different drivetrains on a same production
line. Before the finish of 2022, every one of the German vehicle plants will be producing no
less than one complete electric vehicle. This is what adaptability resembles at BMW! They
are empowering their group by creating aptitude and redistributing capabilities. They intend
to take everybody alongside them. This year alone, they will prepare 75,000 employees in
later areas of movement and new main subject areas like mechanical technology, information
investigation, coordinated programming improvement, AI, independent driving and,
obviously, e-mobility. Lean operations and lean manufacturing have a great role to play in the
implementation of all the above-mentioned activities. Lean operation will help BMW to
improve the efficiency of production and also in minimizing the chances of occurrence of
defects. The combined use of JIT and analytics can help them in forecasting the demand and
then plan and deliver the products accordingly without fail.

Sustainability is likewise a significant component for the BMW Group with regards to
contributing pension fund assets. Toward the finish of 2019, the Group took an essential
choice to apply sustainability models to ventures held by its German benefits reserve. The
current aim is on estimating the carbon footprints of critical pieces of these resources from
one viewpoint and the dangers connected to their future execution on the other. They have
adopted several measures to limit the carbon emissions as much as possible.

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CONCLUSION

BMW is a German based automobile manufacturing, known worldwide for its best vehicles
running. It has its worldwide presence in automobile manufacturing sector including SUV
and MUV vehicles. BMW upholds outclass product reach and astonishing the client with the
prescribed procedures to team up the designing aptitude and the balanced changes that are
brought by the best strategies embraced by them as far as vehicles each quarter being
investigated to the support of client connection and increased experience being given to the
client utilizing different techniques and advancements being taken on.

BMW has got aptitude in the fields of responsibility, identifying skill of the employees, they
likewise utilize a 300+ work booking procedures for the organization, they additionally
incline toward the use of reusing and involving the prescribed procedures to improve the
environment and company needs. BMW puts stock in the client driven methodology where in
the adjustments and changes are permitted to be done in the vehicle till the latest possible
second. In addition, a ton of adaptability is being given to the worker and sellers with internet
booking framework for the unrefined substance and alteration framework for the shading,
skeleton and other change.

Regarding the cycle and TQM methods used, VIN number being given to the clients for the
clients for making changes in the vehicles, many models were adjusted in agreement to the 8
body varieties and updating the metal sheets for the assembling purpose. BMW has presented
computer aided ordering framework for the sellers for incorporating the workshops and in
this way the reality stays that they have thought about all choices for the vehicular stocking
has been done as such that the over-burden on the specialists is diminished and it additionally
limits the planning errors and consequently advance more parts for the substitution and extra
parts to remain solitary in the rack's accordingly making greater adaptability and guaranteeing
less harm and making the errand less hard for the representative.

BMW has involved the JIT idea in the supplier side of the assembling. Locking the stock and
arranging the stock a long time before the production, in addition to they estimate the
production in order to ensure that a month and a half earlier they illuminate to get the 80%
precision in assembling and changes in this way can be accomplished.

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REFERENCES

Helmold, M. (2021). Successful Management Strategies and Tools. Management for

Professionals.

Helmold, M. (2021). Kaizen, Lean Management und Digitalisierung. Springer Books.

Helmold, M. (2020). Lean management and kaizen. Springer International Publishing.

Lewin, T. (2020). BMW M: 50 Years of the Ultimate Driving Machines. Motorbooks

International.

Weiss, N., Schreieck, M., Wiesche, M., & Krcmar, H. (2018). From Product to Platform:
How can BMW compete with Platform Giants?. Journal of Information Technology Teaching
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Weng, J., Wei, F., Jaiswal, A., & Noche, B. (2021, July). A Review of Industry 4.0 on
National Level and A Concept of Industry 4.0 Stages based on Technical Level. In 2021 17th
International Conference on Distributed Computing in Sensor Systems (DCOSS) (pp. 252-
258). IEEE.

Boateng, K. A. (2021). Supply chain optimization: The use of different strategies to

effectively improve manufacturing and distribution.

https://www.bmwgroup.com/content/dam/grpw/websites/bmwgroup_com/ir/downloads/en/
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Excellence1.html

https://www.bmwgroup.com/en/innovation/technologies-and-mobility.html

https://www.semanticscholar.org/paper/Implementing-of-Kanban-system-in-project-BMW-
E83-M%C3%ADkov%C3%A1/dc407eceef11456176f52c62af31f3188a6cfa82

https://digital.hbs.edu/platform-rctom/submission/bmw-additive-manufacturing-using-new-
technologies-to-drive-down-production-costs-timelines/

https://en.wikipedia.org/wiki/BMW

https://www.investopedia.com/terms/j/jit.asp

https://www.ifm.eng.cam.ac.uk/research/dstools/jit-just-in-time-manufacturing/

https://study.com/academy/lesson/kaizen-kanban-process-differences.html

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