An Analysis of Operations Management Concepts Applied to BMW

This report provides a comprehensive analysis of BMW's operations management, examining its competitive priorities, strategic capabilities, and common practices. It explores the importance of operations management to BMW, detailing how it supports the company in achieving its goals through e...Read More

Running head: APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
Application of operations management concepts to BMW
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1APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
Table of Contents
1. Introduction....................................................................................................................2
2. Company’s Competitive Priorities..................................................................................2
2.1 The Corporate Perspectives of the Company.........................................................2
2.2 The Strategies of the Company...............................................................................3
3. Operations Management & the Company.....................................................................4
3.1 Why Operations Management Is Important To Company?.....................................4
3.1.1 Concept of Operations Management at BMW..................................................4
3.1.2 Importance of Operations Management at BMW..............................................5
3.2 How Operations Management Supports the Company in Achieving Its Priorities. .5
3.2.1 Strategic Capabilities by BMW..........................................................................5
3.2.2 Support of Organization Management Principles towards BMW......................6
4. Company’s Common Operations Management Practices............................................7
4.1 The Operational Areas at BMW...............................................................................7
4.2 Impact of Information Technology in Connection to BMW’s Operations.................8
5. Company’s Issues and Resolution................................................................................8
5.1 Issues Experienced By Company?..........................................................................8
5.1.1 Issues faced at BMW............................................................................................8
5.1.2 Need for Resolution..............................................................................................9
5.2 How Operations Management Can Help Resolve Issues.......................................9
5.2.1 The Impact of Supply Chain Management (SCM)................................................9
5.2.2 The Impact of Operations Chain Management...................................................10
6. Company’s Process Map.............................................................................................10
7. Conclusion...................................................................................................................11
References.......................................................................................................................12

2APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
1. Introduction
Bayerische Motoren Werke (BMW), is considered as the largest and popular
automobile company, located in Germany. The company majorly holds responsibility for
manufacturing motorcycles and automobiles. BMW was majorly founded in the year
1916 and was primarily dependable on the manufacturing of aircraft engines, which was
being produced from the year 1917 till 1918, which further continued till 1945. The
company manufactures a diverse range of automobile components and engines based
on competing with other major automobile brands such as Audi and Mercedes-Benz.
The cars manufactured by the multinational company were designed in a world-
class fashion and thus were being listed among the best-selling luxury car segments in
the world (Nair and Reed‐Tsochas 2019). The BMW Company is further reputable for
the production of three major brands that includes MINI, Rolls-Royce and BMW.
The following sections of the report emphasizes over the discussion about the
competitive priorities of the company and the major achievements that have been
focused by them. Further the report also focuses on the facts regarding operations
management that would be an important aspect of the organization, the features
supported by the operations of the organization. Based on the discussed facts over the
operations of the organization, some of the issues, which are being highlighted have
been discussed.
2. Company’s Competitive Priorities
2.1 The Corporate Perspectives of the Company
Unlike all organizations from all across the world, BMW also faces tremendous
competitions from their major competitors. The company allows for different forms of
selection processes based on different external and internal applicants that help in
ensuring the appointment for highly qualified staff (Yawar and Seuring 2017).
Operations management can be considered as a discipline, which is concerned with the
production of services and goods based on transformation of inputs into valuable
outputs.

3APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
Some of the corporate strategies that are used by BMW includes the
implementation of layout strategy, location strategy, human resource, job design supply
chain management and extensive planning for materials requirement. Based on the
implementation of corporate strategies for the company, BMW employs a concentration
and diversification strategy over their corporate strategies. The company also
manufacturers their vehicles and automobile products in various countries, which
includes Mexico, Russia, Austria, Germany, South Africa, U.S.A and United Kingdom.
Hence, they are able to perform a detailed analysis technique for the purpose of
achievement of goal based in particular countries.
2.2 The Strategies of the Company
The BMW Company has exclusively designed their plans based on developing
one of the best form of corporate strategies within the automobile industry all across the
world. The key strategy that would be set for the company is known as sustainability
strategy that primarily ensures that the company would majorly adopt towards the
sustainable operations being achieved within the company (Heizer, Render and Munson
2017). Through the use of effective strategy being used by the company, BMW mainly
pursues towards their mission of producing the best quality of services and products for
their customers based in all parts of the world.
Under the plans developed for corporate sustainability strategy, BMW primarily is
committed towards the development of long-term growth, attainment of higher profits,
and creation of public access towards new segments of customers. It also further
ensures towards the continuous access for incorporating future technologies.
The BMW Company also ensures an effective utilization of risk management
strategies and plans established for business profits. Extreme form of competition in the
market have led the company to develop new kind of business plans and thus
developing new forms of business trends (Fernie and Sparks 2018). Hence, based on
the improvement over their risk management strategies, the company also plans
towards the incorporation of efficient risk management strategies that helps in the
reduction of threats associated towards the company.

4APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
Some of the major risks that are majorly posed as huge forms of threats towards
BMW includes economic, social, political, supply chain and climate risks. Another
specific area in which BMW majorly puts emphasis is based on corporate governance
(Lambert and Enz 2017). The incorporation of corporate governance plans for the
company also helps in building principles based on good corporate governance thus
further gearing towards the creation of long-term company values.
3. Operations Management & the Company
3.1 Why Operations Management Is Important To Company?
3.1.1 Concept of Operations Management at BMW
The concept of operations management within BMW helps towards outlining of
working methodologies for the organization. The importance of utilizing this category
within the business primarily depends on the effective use of strategy implementation
and bringing in better efficiencies towards the management of process undertaken for
the achievement of operational successes (Benckendorff, Xiang and Sheldon 2019).
Importance of operations management also depends on the optimum utilization of
financial, human and other kind of resources.
BMW majorly emphasizes over the factor of operational management as it holds
an utmost critical nature in relation to the different products that are being developed for
their customers. With the possessing of an appropriate form of operation management
strategy for their company, it would be considered as highly important for making a
continuous improvement and steady progress over the preferences and tastes of
customers (Winroth and Bennett 2017). In the present times, the company has made
several advances in the areas of managing quality of their automobile products and
vehicles. These are thus produced by implementation of changes in the sector of
operations management. These are further been done with the adoption of plans based
on total quality management and reengineering, benchmarking and outsourcing based
strategies.
With the major implementation of operational management based activities,
BMW is mainly aiming towards creating a leadership plan for within the highly
competitive market (Villena and Gioia 2018). With respect to the company, the strategy

5APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
based on benchmarking primarily serves the purpose of conducting an internal audit,
which further aims towards the diagnosis of weakness and thus implementing corporate
strategies for turning them towards major strengths of the company.
3.1.2 Importance of Operations Management at BMW
The aspect of operations management in concerns to BMW is considered to be
highly important for achieving the goals set for the business. The following discussed
points would put major stress towards the important aspect of operations management
in relation to BMW. These are:
1. Team Management – This is considered as an important area based on
outlining the working methodologies set for BMW. This aspect would further be able to
put more importance in relation to the dynamics supported for BMW (Vasile and Nicolò
2017). The company employs the process of involving cross-functional teams for the
major purpose of solving problems.
2. Change Management – The impact created by change management within
the organizational perspectives focuses over the management of fast changes that are
currently taking place within the automobile industry of BMW.
3. Strategic Management – Different strategies are being formed by the
management and engineering team at BMW. These strategies are aligned with the
organizational contexts (Tippmann et al. 2018). The importance of strategic
management lies in the effective nature of implementation of strategy and bringing in
major forms of efficiencies towards the work processes.
4. Product Management – This specific category deals with the process of
management of a product from the stage of generation of idea till the providing of sales
services.

6APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
3.2 How Operations Management Supports the Company in Achieving Its
Priorities
3.2.1 Strategic Capabilities by BMW
The impact of strategic capabilities would be considered as helpful based on
achieving the operations at BMW. Some of the strategic capabilities that are enforced
by BMW in order to achieve excellence in operations management are:
1. Engineering Excellence – The BMW Company primarily focuses over
performing excellence over engineering principles that would be allied towards leading-
edge design. This would be majorly focused over driving profitable and successful
expansion (Tate, Bals and Ellram 2018). BMW also emphasizes over the introduction of
new kind of IT options introduced within their new car models, which includes RSS
feeds, MP3 connectivity and others. With the introduction of hybrid engine options,
distinct performance design and high-level of innovation, the company restates their
aspiration to become one of the leading brands in the competitive industry.
2. Value-added Workforce – The Company majorly believes in the fact that
dedicated, young-talented and motivated and employees would be able to contribute
towards the success. Hence, the company primarily invests in millions towards
providing professional training skills to each of their employees who would have
required level of qualifications (Oh and Oetzel 2017). A well-planned and well-
coordinated system based on talented employees would be hired based on ensuring the
competitive nature in the global market.
3. Brand Management – The global brand primarily represents the performance
and sporty nature of the automobiles based on high level of ingenuity and
craftsmanship. BMW has maintained their long holding position in the global competitive
market. The brand name of the company proves the tangible nature while the reputation
of the company is considered as intangible (Lohrke, Frownfelter-Lohrke and Ketchen Jr
2016). One of the vital primary keys leading towards the success of the company is their
authenticity and consistency within their strategies on policies and marketing. The
automobile owners of the company are extremely particular regarding the image of their
brand, which are being used by them.

7APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
3.2.2 Support of Organization Management Principles towards BMW
The priorities that are set by BMW are considered as extremely competitive in
nature. The competitive priority that are set for BMW are considered to be extremely
crucial, which further leads towards the benefits for the company (Khanam, Siddiqui and
Talib 2016). The aspect of operations management would be able to support the
objectives of the company based on the achievement of priorities in consideration of
following ways. These are:
1. The impact of efficient ways of operations management would be able to help
BMW in order to lower the costs of ownership of developed products. Hence, a rigorous
process needs to be followed by the company for the purpose of ensuring efficiencies
within their work procedures.
2. The facility of operations management would also help the company towards
dealing with elasticity and time. Product differentiation in the highly competitive market
would be considered as highly necessary in order to bring newness within their products
and attract the customers (Keegan 2017). BMW focuses over competitive advantage
from their major competitors as they are able to achieve priorities based on product
customization strategies.
3. The impact of operations management would be helpful for the company for
maintaining a consistency and top quality approach based on their automobile models
(Kasemsap 2018). Hence, there is a major need to put focus over the manufacturing of
excellence services and bringing innovation within their products.
4. Company’s Common Operations Management Practices
4.1 The Operational Areas at BMW
There are a diverse range of operational areas in BMW that ensures the
achievement of strategies set for the organization. Some of the major operational areas,
which have been focused by BMW are based on enhancing their customer services,
research and development, maintaining their product operations, sales and marketing
(Hwee 2015). The company also strives towards maintaining efficiency within their
production-based operations.

8APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
Some of the specific operational areas at BMW are:
1. Forecasting – The operation of forecasting is majorly been undertaken by the
company to project sales for their automobiles in different countries. The forecasting is
majorly been performed for projecting market trends in response to their customer
queries based on the introduction of new automobile models in the competitive market.
In 2019, it was reported by the company that they intend to sell 1 million automobile
units. This number has further been expanded at 24% of car sales in the year 2014.
2. Design of Product and Service – New designs of cars have been brought
within the UAE market and this number would increase as per the market demands
(Deresky 2017). The various kind of modifications that are made over the automobile
designs are majorly focused over the production of a high form of suitable performance
vehicle.
3. Capacity – The aspect of strategic capacity planning would be considered as
important for BMW. The company had initiated well-designed facilities that would be
suitable for the company based on expanding in the regional markets.
4. Location – Location planning techniques should be implemented within BMW
based on ensuring an efficient form of delivery of services for their customers (Butler
2016). The company has expanded their existing facilities in newer locations, thus
making their extensive reach to customers in different parts of the world.
4.2 Impact of Information Technology in Connection to BMW’s Operations
With the proliferation of IT based services in different industries, BMW has also
focused towards the implementation of IT technologies within their daily business
operations. One of the project of BMW known as i1.0 had majorly focused on the
development and integration of new IT technologies within their electric vehicles (Ben-
Daya, Hassini and Bahroun 2019). Another project known as i2.0 focuses over the
integration of networked and automated driving, placement of sensor technology,
artificial intelligence and cloud technology within the automotive sector. The main aim of
the company is to deliver their customers with a safe, efficient and intelligent transport
experience.

9APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
5. Company’s Issues and Resolution
5.1 Issues Experienced By Company?
5.1.1 Issues faced at BMW
Some of the major issues that are being faced by the company are:
1. Innovation is one of the major issue that is being faced by the company.
Bringing in product variations might lead the company towards the path of success but it
also might lead them towards failure and lower acceptance rate from customers. Due to
high level of complexities in the design aspect, the costs of manufacturing have
increased tremendously.
2. Competition in the global marketplace remains an issue based on meeting with
the expectations of customers (Brannen, Piekkari and Tietze 2017). Sluggish growth
rate within the global automotive industry has affected the global competition aimed by
BMW.
3. Another issue affecting the global sales of BMW is globalization. This is also
considered as the primary concern and this reason forces the governments to force the
automobile company to adopt green automotive strategies. Hence, the company had to
undergo a huge cost investment based on the incorporation of environment-friendly
engines for their new designed automobile models.
5.1.2 Need for Resolution
The discussed issues that are being faced by BMW lowers their reputation in the
global market, which further impacts their sales and business operations. In order to
enhance their business operations, BMW would need to bring in innovation within their
technological aspects. This could mean that BMW should install a technologically sound
product. One such example of a technological device is Intel Xenon Workstation series,
which would further be helpful for the company based on bringing stability within the
hardware performance of their installed devices (Banerjee, Venaik and Brewer 2019).
This would further bring standard towards the authorizing cost of the automobiles. The
performance factor of the car would also be brought under stability and might get
increased in the future. The improvement in the processor installed within the device

10APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
would help in running new applications and allows new car models to be tested and
created on a virtual basis.
The issue based on competition within the nature of their products could also be
avoided with the introduction of new innovative car models. The new automobile car
models are developed and manufactured with advanced electronics, which would
further helps towards the design of sporty and luxurious cars.
5.2 How Operations Management Can Help Resolve Issues
5.2.1 The Impact of Supply Chain Management (SCM)
The impact of supply chain management can be considered as crucial for the
success towards the organization. The company primarily needs SCM based on making
important decisions in order to devise a new capacity of their products. The impact of
SCM within the business would also improve the sector of logistics as they would mainly
deal with perspectives of development. The SCM brings in the involvement of
sophisticated form of IT and also involvement of IT within their services and business
management.
5.2.2 The Impact of Operations Chain Management
The facility of operation management could be helpful in the resolving of various
kind of issues that would in relation to size of their manufacturing plants. The primary
aim of operation management principles is based on the involvement of objectives for
the better use of raw materials for ensuring minimal waste occurrence (Howell, van
Beers and Doorn 2018). The impact of operational management also helps towards the
understanding of domestic and international trends based on the major customer
demands.
6. Company’s Process Map

11APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
(Figure 1: The Process Map for BMW)
(Source: Created by author)
7. Conclusion
The report discussed the various aspects in relation to the operations
management in relation to BMW. The automobile company is firmly positioned in the
motorcycle field and the financial service sector. The BMW Company primarily targets
towards the generation of higher profits thus by focusing towards the premium
segments that are present in the global based automobile market. In the recent times,
the company majorly exports 50,000 cars on a yearly basis at each of their outlets from
all over the world.
The report highlighted the important features that needs to be incorporated within
the organization based on improving the operations performed within the company.
There is also a major form of focus over the involvement of information technology for
improving the standards of the company. This report also highlights the major issues
that are being faced by the company and also recommends the best practices that
could be implemented by the organization to mitigate them.

12APPLICATION OF OPERATIONS MANAGEMENT CONCEPTS TO BMW
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