There are two main causes with resulting consequences in the current product design process of the 7-Series Project A at BMW. The first cause is that BMW builds their prototypes mainly by hand in their shops. These prototypes were made with handmade tools that cost very little to replace or repair. (Pisano, 2002, p.1) By using these handmade tools and various materials the engineers were given great flexibility in following the wishes of the design teams’ desires. It was easy to change small and large details within each part when doing it by hand. There were no special tools needed to make the changes therefore the turnaround time was very quick.
The problems occurred once the pilot production began. Vehicles now assembled in mass began revealing thousands of minor and major problems. Many times the materials used to build the prototypes were different than the materials used for the final production models. (Pisano, 2002, p.6) Materials used on the assembly lines often did not behave the same as the ones on the prototypes. Metal behaves differently when heated. Often times the parts did not fit together creating huge problems. Once the cars were on the pilot production line changes to automated tooling parts were very expensive. It also took months to redesign and redevelop new tooling parts that would meet the new specifications for assembly.
The second cause is related to the first in reference to timelines. Because it took so long to produce a new vehicle, BMW continued to produce older models alongside the new models. This created confusion in the assembly lines. They would make several of the older model versions and then mix in a new one. The leaders at BMW soon realized that more defects were found on vehicles when building models of different types on the same assembly line together. This led to more customer complaints which downgraded the BMW name causing a loss of market share.
The rationale for BMW to change its traditional manufacturing process was that a new approach would permit them to make a superior vehicle in a much quicker timeline. With this new system of car assembly an outside supplier would build the prototype cockpit. (Pisano, 2002, p.1) The pieces would be made using automated methods which would require more precise tooling but would use less skilled laborers. One merchant would make the pieces and manufacture the cockpit. The cockpit would then be sent to BMW to use with other parts to build the prototype. (Pisano, 2002 p.1)
With the old process the design team is able to change the design up until one month before pilot production. With the new changes design must be finalized 32 months prior to production. (Pisano, 2002, p.11) By using the new partially automated prototypes the mass production process will go more smoothly with fewer errors and last minute fixes. The final product will be made just like the prototype. This new idea works because it will cut down on time and money spent making new tooling parts for the assembly line. (Pisano, 2002, p.10) The downside is that the design team would have to stand firm on their early designs. By cutting costs BMW will have a higher profit margin. They will be able to get their new products launched along with or ahead of their competitors.
BMW has a reputation for fine luxury cars. As long as they hire a quality subcontractor to build the cockpit or any other parts, keep an excellent design team on staff, they should be able to regain the market share lost due to time constraints. By optimizing the production of the prototype, using the same materials for it as for the final vehicle, BMW should again be a leader in the luxury car industry.
References
Pisano, Gary, P. BMW: The 7-Series Project (A), Harvard Business School Case 692-083, February 1992. (Revised January 2002.)
