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Supply Chain Planning for Inbound supply chains of assembly parts

Berlin, Oktober 2009. It is during the beginning of the year 2006, three years before start of production of new Z4 roadster, that BMW Group entrusted Miebach Consulting, the international supply chain consulting company, with its planning reponsibility of inbound supply chains for virtually all assembly parts of its new Z4 roadster.

 
The highly competent Miebach planning team had to take care of about 500 part families, which includes modules, systems, components and parts in every possible variation till the production of the roadster in February 2009.
After a successful start of production (SOP) of the roadster in the beginning of this year we are proud to say that also the ramp up to the production peak volume has been successfully passed.
 
Starting Situation: High Expectations
 
Taking over the responsibility for planning the supply during the concept phase of the car really means product, process and project-related concept development and extensive coordination of planning results with the various stakeholders from BMW’s in-house departments, 3PL and suppliers.
The assignment also comprises the implementation of supply chain concepts from 1st tier supplier over inbound transportation and the internal processes within the factory till point of fit for every part to its respective department of which a vehicle is built.
Consequently, the focus of the planning task was the strategic, conceptual and finally detailed design of material and information flow for every supply chain. Apart from this, the synchronous and continuous proceeding of the vehicle development had to be considered all the time. At the beginning of the planning activity the actual parts and their most suitable load unit are barely known. When getting closer to the start of production the degree of information and detailing were rising rapidly.
 
In this project BMW and Miebach Consulting agreed upon the following criteria as a benchmark for continuous control and final evaluation of the planning quality:
 
  • Economic, environmentally compatible supply processes based on the “value added” orientated production system (WPS) of the BMW Group

  • Significant increase in direct deliveries in comparison to predecessors
  • Adequate Level of Just-in-sequence-delivery
  • Compliance with standard supply sequences
  • Extensive use of standardised load units
  • Flexible line feeding
 
For the high complexity and responsibility of the project scope, the BMW Group had high requirements regarding the experiences of the external partners. Every team member had to bring in international and profound experiences in planning and realizing projects within the automotive industry. Moreover multicultural and social skills were required. Due to the fact that Miebach Consulting put high effort in international in-house trainings and cross-functional teamwork, the BMW’s demand was fairly easy to fulfil for the Miebach consultants involved. 
 
 
Project-Highlight 1: Varying the module responsibilities
 
For structuring the project task, the planning responsibilities for the defined vehicle modules were shared between several experts during the early project phase. In the first place, this was oriented to comply BMW’s internal “KIFA-areas” Karosserie (body), Interieur (interior), Fahrwerk (chassis) and Antrieb (power train). Over the course of the project, it was proposed by Miebach to change this structure in favour of allocation of every team member to suppliers – to realize a true “1 face to the supplier” philosophy. So, planning activities could be focussed significantly and rapid execution was achieved with small, efficient working teams.
 
One of the first tasks of the Miebach team was to setup the logistical database. For the request and comparison of continuously changing states of development of components, article numbers, variants, installation rate and supplier data between research & development, purchasing and logistics department, the supply planners became true interface managers. Besides the definition of logistical requirements towards potential suppliers of the Roadster (internal development code: E89), the consultants supported as well the purchasing department during the selection phase of the suppliers.
From the beginning of the project another main focus was set on the cost driving topics “Design for Logistics” and “Variant Management”. By this, every department involved was informed about when variants were occurring and based on this they were able to store the information into their own actual planning status. Finally, this aspect played an important role in keeping the number of variants of the E89 constant compared to the predecessor instead of raising them.
 
 
Project-Highlight 2: Development of Methods and Tools
 
Right from the beginning of the project Miebach Consulting team was invited to develop specific “Methods and Tools of Supply Chain Planning”. Experiences out of the daily work were transformed into new standards in the context of “lessons learned” meetings. Here, especially the development of the existing planning software MILES (new release) needs to be mentioned since its report area has been modified due to benchmark analysis defined by the Miebach team. As an advantage, supply chain planning no longer has to take time for further export instances in Access or Excel because MILES now enables a fast, transparent and flexible data evaluation. Even in the transition phase between detail planning and realization the project team followed a new concept of project-organization. The realization itself has been started in so called “Core Teams”. This approach lead to an early involvement of every department into the project environment of the E89 under economical aspects regarding the available resources.
 
 
Project-Highlight 3: Bottleneck Factor „Space“
 
The E89 could be integrated into the existing factory layout within a very short period of time and by avoiding additional space requirements.
The required external space of nearly 4.000 m², identified by BMW Group earlier, has been reduced gradually to 0 m² due to consequent planning according to lean principles.
The through-put-time of every single model produced in Regensburg including the new E89 have been analyzed and decreased consequently, as far as it has been useful and possible. By integrating the E89 into the plant, BMW Group and Miebach Consulting agreed to the fact of a high sequence stability - on a reduction of the cumulated backlog by 80%. To cater for unforeseen situations, the cumulated backlog is necessary to allow a re-sorting of parts directly on the shop floor according to a slightly shifted production sequence. The reduction of the cumulated backlog leads as well to a reduction of the required space. The integration of E89 now works without any additional space.
 
 
Project-Highlight 4: Value Stream Mapping and Value Stream Design
 
Every supply process of direct suppliers of E89 has been analyzed strictly by using the methods of value stream mapping and - design. The focus of all value streams started in the “Goods Out area” of the supplier and ended in the “buffer area” of every point of fit in the BMW plant.
 
 
Project-Highlight 5: Enlargement of Miebach Consulting project task: From Supply Chain Planning (pre series) up to serial planning
 
Over the project runtime the fields of activity of the Miebach Team had been extended. In addition to the supply chain planning the series planning of 3-series BMW (cabriolet, coupe, limousine) and 1-series BMW (with 3-doors) already manufactured in Regensburg became part of the planning tasks, as well. In this context, for example, the reduction of an additional safety stock, buffered on a trailer (Warehouse on Wheels) is to be mentioned. Re-Analyzing the supply chain of the bracing tubes by Miebach Consulting lead to the result, that for example the “Schengener convention” was not yet considered regarding the process time in total. Therefore the consultants accomplished a significant reduction of the stock for the bracing tube. Minimizing safety stocks, elimination of rates for trailers, reducing handling costs and reduction of space are only a few keywords that made the processes leaner than before.
 
 
Conclusion
 
Due to very good cooperation between BMW Group and Miebach Consulting, the start of production of E89 in February 2009 was realized exactly as planned. Despite the tight timeframe the project team met the demands to test the start of production especially the critical processes under conditions of mass production. Last but not least, exactly this aspect did guarantee a successful SOP of the Z4 in Regensburg.

 

 
 
 
 
 
 

 

 

 

 

 

 

 

 

 

 

Project report by Christian Wibbe and Dirk Rohde, Miebach Consulting

 

 

 
 

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