Operation Management

Actually the Carl`s first concern is the current design was far from frozen, which means the current design is much differences as the final edition. For this situation, my suggestion is like: * To do some research at 2 aspects that both the current owners of 7-series and the potential customers. Collected information and then to depends on the feedbacks from current owners of 7-series which can ensure that which parts are need to re-design and how to re-design. (E.g. changed skin surface of dashboard.) For those potential customers, to do some surveys are going to help BMW to know that what is the real demand of customer, what is they really want?

Or what kinds of changes from the current design are they expected? After BMW get the answer, then they can point the key areas to fill up customers` satisfaction. (E.g. what kinds of design is customers` favorite that including colors, materials, multi-function buttons, etc.) But the relatively is if change the design, BMW should to pay at least 7 million dollars & 6 month lead time, which means BMW should circumspect for any minor change of the current design.

As we know that some of Japanese companies such as Lexus, Acura and Infiniti use the pre-production tools for some parts of standard prototype that is a useful method to reduce the lead time. But Einstein`s theory already proved that there are always 2 sides to everything with all countless times. So as I found, now there are 3 problems showed to Carl: how broadly of early tooling should applied, how many parts and which one.

* Here are the advantages of using pre-production tooling. To use pre-production tools can save time and costs for the company because the company can find and solve the problems before normal production. It’s a useful method that only to observe the performance of prototypes and don’t need to recall huge amount of products after bulk delivery. Another aspect is the outsourcing benefits that BMW outsourcing some products, components and services to its vendors because they are more experience and skills.

To some extent, this method also can save times to achieve the purpose of costs reduction. At the same time, it also can make relationships between BMW and its vendors more cooperative and friendly. Personally I think Volkswagen is a successful example in this field, I mean, competitive with Japanese brands. Volkswagen choose the different method that it design its products with the familiar appearance such as the Polo, Golf, Passat, even the luxury model Phaeton. Actually Volkswagen`s design looks like general similar from the apprearance but a little bit differences for each one so that it can only pre-production tooling the standard components.

This means that Volkswagen can produce a large quantity of standard components while it can reduce labor, time and machine fixed costs. But if BMW use this strategy for use on itself, lets us assume that maybe BMW`s 3-series, 5-series and 7-series will be looks like same. And definitely it is easy to out-date because it must get rid of the stale and bring forth the fresh maybe 2 years so that shortened the product life cycle, which means BMW must invested more into the innovation department to attract more customers.