Supply Chain Management Report: An Analysis of BMW's Operations

This report offers a comprehensive analysis of BMW's supply chain management, delving into the four key flows: product, financial, information, and reverse. It explores BMW's production processes, including the Enterprise 2.0 system, and examines supply forecasting from both qualitative and quantitative perspectives. The report identifies areas for improvement and provides recommendations to enhance efficiency, customer satisfaction, and overall supply chain performance. It also discusses the importance of financial flow, information flow, and reverse logistics, highlighting how BMW utilizes these elements. The analysis includes strategic planning models, production planning, and the application of modern techniques to improve the efficiency of the production planning process. The report also emphasizes the importance of customer satisfaction and the need for transparent and flexible production processes. The report concludes with recommendations for BMW to optimize its supply chain and enhance its competitive advantage in the automotive industry.

SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN MANAGEMENT 2
Executive summary
The report concerns the supply chain management of the company BMW. The company
is one of the costliest and trusted brands of the customers in the automobile industry. In this
report, the supply chain of the company is mentioned which includes the four flow of supply
chain comprising of the product, finance, information and reverse flow of the supply chain of
the company. The report concerns about the supply chain management of the BMW
organisation. BMW has more than 12000 suppliers globally around the world. The supply
chain for such big companies becomes the issue to manage, alone by the manager.

SUPPLY CHAIN MANAGEMENT 3
Contents
Introduction................................................................................................................................4
The key flows in the Supply Chain............................................................................................5
Product flow...........................................................................................................................5
Financial flow.........................................................................................................................5
Information flow....................................................................................................................6
Reverse flow...............................................................................................................................6
The production process of BMW...............................................................................................7
Recommendations..................................................................................................................8
The supply forecasting of the BMW in qualitative and quantitative aspects-...........................9
Quantitative aspect.................................................................................................................9
Qualitative aspect...................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

SUPPLY CHAIN MANAGEMENT 4
Introduction
The concept of supply chain management refers to the management of the flow of
goods from the process of raw material to the transformation of the finished goods. The
activities focus onto the enhancement of the customer satisfaction and gaining the
competitive advantage. In this report, we have chosen BMW organisation, the report
discusses the supply chain management of the company mainly focusing on the four flows of
supply chain management, and to analyse the systems of supply chain management used by
BMW and the functioning of the same. The purpose of this report is to analyse the supply
chain management of BMW, in order to recognize the significance of the same.
BMW is a German multinational company manufacturing the automobiles and
motorcycles. BMW was founded in 1916, the company at initial years use to manufacture the
aircraft engines. Harald Kruger is the CEO of the company. The car brand has huge demand
in the global market around the world, as the company has high brand value and the target is
the high-class society around the world. The company aims to provide its clients the best
product and the service in exchange of the price charged by the company from its clients.
Customer satisfaction is of utmost importance to the company. (BMW, 2019) The SCM
(supply chain management) of the company focuses to provide the best quality product and
service to its customers. Company has its own supply chain operating networks named as the
Enterprise 2.0 system, which has its own self-learning algorithm that filters the unstructured
data from various websites and clears the unrequired data. The SCM of the company use the
Enterprise 2.0 system to get immediate and actionable intelligence to facilitate rapid or quick
decision making in the organisation and to avoid risk factors playing active roles in the
market. The Enterprise 2.0 also provides the Geo-tagging facilities regarding the location of

SUPPLY CHAIN MANAGEMENT 5
the suppliers and the manufacturing facilities that are available with the tagged locations of
the company with the optimum surveillance (Tate, Bals, &Ellram, 2018).
The key flows in the Supply Chain
There are four key flows of the SCM, which affects the working of the supply chain of the
companies. These four key flows are the main components of the SCM.
Product flow
The product flow of the BMW ensures the product quality as the slogans says ‘The
ultimate driving machine’. The company strict quality measures to ensure the best quality and
sustainability of the brand in the market. The logistics of the company aims to provide the
regular supply of the parts for the continuous manufacturing of the product. The proper
supply of the manufacturing parts of the product ensures the regular availability of the
product in the global markets. The company use the Enterprise 2.0 supply chain operating
networks, which is formulated only for the use of company brand. The logistics department
focuses to provide the best product to its customers and the manufacturing of the cars is
executed according to the planned scheduled without any delays to serve the customers with
place and the time utilities for the maximum satisfaction of the customers (Hugos, 2018).
Financial flow
Finance is the blood of any business firm, to ensure the proper functioning of any
business firm. The team of the supply chain continuously strives to develop the logistics in a
way to ensure the effective supply of the goods from the process of raw material to the
finished products. Company’s SCM focuses onto provide the best logistics services in the
minimum amount cost incurred as the parts and procedures of manufacturing BMW is quite
expensive(Fernie& Sparks, 2018). To maintain the availability of finance for the functions of
the supply chain activities the company focuses to avail the effectiveness and the efficiency

SUPPLY CHAIN MANAGEMENT 6
in the SCM of the company. The company is considered as a recognised brand in the markets,
to maintain the competitive advantage the company focuses on implementing the strategies
for the minimum costs and maximum efficiency in terms of productivity of the company
(Habek, &Villahoz, 2018).
Information flow
The information flow here refers to the flow of information through effective
communication. As mentioned earlier BMW’s SCM have designed their social media system
named as Enterprise 2.0. The system manages the whole communication of the social media
marketing and networks (Niemann, et al, 2019). The SCM functions are executed with the
help of this information system, which communicates the requirement of the logistics to the
managers and manages the tasks related to the SCM system. The flow of communication is
very is important for successful achievement of the goals and targets. Without effective flow
of communication in the organisation, it is not possible for the managers of the organisation
to execute all the function effectively and efficiently in the organisation (Kalaitzi,
Matopoulus, & Clegg, 2019).
Reverse flow
The reverse flow of SCM refers to the reuse of the materials by the process of
recycling, in this type of flow the materials goes recycling which is beyond the end
step of the ultimate consumers to the vendors. The reverse logistics encompass the
flow of recycling of the finished goods through the transfer of goods from ultimate
users to the vendors. BMW is competitive reverse supply chain network where the
recycling components of the materials are effectively utilised. There is a system used
by the firm named as the close loop wherein any of the leftover parts of the
manufacturing are used for the production of the same product by the company. The

SUPPLY CHAIN MANAGEMENT 7
post industry loop whole mechanism is applied for the recycling of the scrap left after
the manufacturing of the products.
Recommendations
The four flows of the supply chain help to increase the efficiency of the business organisation
as these are part of the supply chain, the proper analysis of these flows can play a significant
role in enhancing the customer base and goodwill of the organisation in the market.
The production process of BMW
A strategic planning model is designed to modify the best allocating system of various
products offered by BMW brand across the globe over a 12-year planning horizon. The
strategic planning model includes the supply of the materials and finished products to the
customers in the global market served by the company. The system determines the
requirement of the investments in the 3-department division model. The 3-department model
comprises of the body assembly, paint shop and final assembly (Saenz, Revilla, & Acero,
2018). The transparency and flexibility of the company has improved with the company’s
strategic planning process.
While making the investment decisions the brand focuses to invest more the body
assembly department than the other two departments of paint shop and the final assembly.
The investment is made in the other two departments also but up to lesser extent than that of
the body assembly department (Salamai, et al., 2019). The additional of the firm includes the
investment in the building, expansion in equipment and the need for the additional space. The
production planning in the automobile industry is very complex in order to satisfy the
demands and needs of the customers (Aslam, et al, 2018). The traditional methods of
production planning are no more helpful as the methods have become obsolete and are no

SUPPLY CHAIN MANAGEMENT 8
more in use, the use of the modern techniques have become the necessary of the industry for
the effective production planning of the business. A dynamic approach system is used by
BMW for the production planning and controlling in the organisation. A developed
simulation tool is used now for the production planning of the company. There are various
things to look upon while planning the production process. The company’s ultimate goal is to
promote the satisfaction of the customers to the maximum level (Schiavullo, 2018). The
production department aims to make the optimum utilisation of the resources and minimise
the wastage of resources. The automobile industry requires due diligence care for the
production process of the same. The company serves the customers globally, which
eventually becomes difficult when it comes to managing all the tasks. The company aims at
providing availability of the products of the company as per the needs of the company by
proper planning and controlling the production process (Christopher, Mena, & Van Hoek,
2018). Considering the corporate policies restrictions, the company focuses to make the
production process more transparent and flexible according to the needs of the company and
clients. The model assists in improving the decision aspects of the production, with the up
gradation of the technology the company is planning to implement the new MIP systems of
the production planning process to better functioning and growth of the company in both
ways monetary and non-monetary(Sovacool, et al, 2019. The new model will help the help
less experienced planners to improve on the decision-making aspects of the production
department of the company (Press, 2019).
Recommendations
The company should focus on providing the best delivery services to the customers to
ensure their satisfaction with the product. BMW needs to make changes in the lead-time of
the delivery of the products to the customers in order to maintain the customer loyalty with
brand and the product offered to the clients of the company.

SUPPLY CHAIN MANAGEMENT 9
The supply forecasting of the BMW in qualitative and quantitative aspects-
Quantitative aspect
The quantitative supply forecasting of BMW focuses on to minimising the costs of the
while managing the customer satisfaction and the risk evaluation regarding the investment in
the new areas of the development. The various decisions the reduction in costs relates to the
new synergies and integration for maintaining the effective cost approach of the company.
Optimising the operating point of the company for the optimum cost management of the
company. The investment decisions require reconsideration for analyse the cost-effective
feature of the investment (Howard, Hopkinson, Miemczyk, 2018). The quantitative measure
of supply chain also focuses on enhancing the profits of the organisation by increasing
effective measures of the company and increasing the customer satisfaction to ensure the
brand loyalty from the side of the customers. The company’s supply chain and logistics
system pour down huge efforts for the fulfilment of the production process as per
requirements and the demands of the customers. The lead-time of delivery of goods to the
customers also reflects the quantitative measure. Demand and supply forecasting of the
company is also a quantitative aspect of the SCM, as based on the same the production
department will be able to carry out the further process of the SCM (Prajogo, et al, 2018).
Qualitative aspect
The qualitative forecasting of the SCM includes the service quality and product quality to
be maintained by the supply chain managers of the company. The major qualitative measures
of supply chain include the customer satisfaction, goodwill in the market, competitive
advantage over other firms of the market. These are few of the quantitative measures, which
are part of the supply chain forecasting. The production department of the SCM system of
BMW continuously strives to provide the best quality services to its customers. BMW aims
to create the utilities regarding the product services by providing right product at the right

SUPPLY CHAIN MANAGEMENT 10
time and the right place to fulfil the client’s needs optimally (Wichmann, et al., 2018). The
optimum utilisation of resources is one of the major aspects of the supply chain forecasting
system of the company. The company has various processes for the avoiding the wastage of
resources. The new systems installed the technological department of the company works in
order to provide the best production system to the company for proper management of the
resources of the company (Chavez, et al., 2018). Forecasting of the qualitative measures of
the supply chain helps to plan the further procedures according to the future needs and
demands of the customers.
Recommendations
The quantitative and qualitative aspects of forecasting help in anticipating the future aspects
of the growth and development. BMW can use these forecasting measures for future growth
analysis and development prospects. The forecasting measures should be used for the
analysis of the future development and should not rely or depend on the future prospects as
they are a part of the anticipation process.
Conclusion
The study concludes that, BMW has the optimum structure of the SCM as the company
has designed its own supply chain networking system named as the Enterprise 2.0, which
filters the unstructured data and helps in the working of the supply chain functions of the
company. The system is modified through the web 2.0 technology collaboration with the
other networking technologies to build a structured and strong network of the SCM of the
company. The analysis of the production planning process and the quantitative and the
qualitative aspects of the company are done based on the supply chain forecasting systems.

SUPPLY CHAIN MANAGEMENT 11
Ultimately, the supply chain forecasting systems help the company to make the future
planning decisions for the development of the strategies to be implemented in the future. The
analysis of the production planning systems discusses the working of the production with
new system installed with the help of the updated technological advances used by the
company. The four key flows are also described to evaluate the efficiency of the working of
the supply chain of BMW.
References
Aslam, H., Blome, C., Roscoe, S., &Azhar, T. M. (2018). Dynamic supply chain
capabilities. International Journal of Operations & Production Management.
BMW. (2019, August 2). BMW GROUP. Retrieved from BMW:
https://www.bmw.in/en/topics/Fascination-BMW/bmw-group.html
Christopher, M., Mena, C., & van Hoek, R. (2018). Leading procurement strategy: driving
value through the supply chain. Kogan Page Publishers.
Fernie, J., & Sparks, L. (Eds.). (2018). Logistics and retail management: emerging issues and
new challenges in the retail supply chain. Kogan page publishers.

SUPPLY CHAIN MANAGEMENT 12
Hąbek, P., &Villahoz, J. J. L. (2018). Analysis of Sustainable Production Practices
Implemented by Car Manufacturers. Multidisciplinary Aspects of Production
Engineering, 1(1), 837-843.
Howard, M., Hopkinson, P., &Miemczyk, J. (2018). The regenerative supply chain: a
framework for developing circular economy indicators. International Journal of
Production Research, 1-19.
Hugos, M. H. (2018). Essentials of supply chain management. John Wiley & Sons.
Kalaitzi, D., Matopoulos, A., & Clegg, B. (2019). Managing resource dependencies in
electric vehicle supply chains: a multi-tier case study. Supply Chain Management: An
International Journal, 24(2), 256-270.
Niemann, J., Breschan, D., Schlegel, A., & Putz, M. (2019, March). Method for Optimizing
Supply Chain Flexibility in the Production of Electrified Powertrains. In 2019 8th
International Conference on Industrial Technology and Management (ICITM) (pp.
32-36). IEEE.
Prajogo, D., Toy, J., Bhattacharya, A., Oke, A., & Cheng, T. C. E. (2018). The relationships
between information management, process management and operational performance:
Internal and external contexts. International Journal of Production Economics, 199,
95-103.
Press, P. (2019). Lean Supply Chain: Collected Practices & Cases. Productivity Press.
Tate, W., Bals, L., &Ellram, L. (Eds.). (2018). Supply Chain Finance: Risk Management,
Resilience and Supplier Management. Kogan Page Publishers.

SUPPLY CHAIN MANAGEMENT 13
Sáenz, M. J., Revilla, E., & Acero, B. (2018). Aligning supply chain design for boosting
resilience. Business Horizons, 61(3), 443-452.
Salamai, A., Hussain, O. K., Saberi, M., Chang, E., & Hussain, F. K. (2019). Highlighting the
importance of considering the impacts of both external and internal risk factors on
operational parameters to improve Supply Chain Risk Management. IEEE Access, 7,
49297-49315.
Wichmann, P., Brintrup, A., Baker, S., Woodall, P., & McFarlane, D. (2018). Towards
automatically generating supply chain maps from natural language text. IFAC-
PapersOnLine, 51(11), 1726-1731.
Yu, W., Chavez, R., Jacobs, M. A., & Feng, M. (2018). Data-driven supply chain capabilities
and performance: A resource-based view. Transportation Research Part E: logistics
and transportation review, 114, 371-385.