Bmw Case Study Globalization Of Manufacturing Operations

1753 words - 7 pages

BMW CASE:
Globalizing Manufacturing Operations

INTRODUCTION

This case focus on the dilemma that the president of BMW Manufacturing Corp., Al Kinzer, faced in 1995 in relation to BMW's new plant at Spartanburg, South Carolina and a dramatically increased demand in the U.S. market for the Z3 model.

To study the BMW case, the background information and role of new plant at Spartanburg will be described at the beginning. Secondly, the 3 alternatives options will be analyzed and compared accordingly to determine a proper conclusion. Finally, the recommendation will be presented with various considerations.

BMW BACKGROUND

BMW was found in 1913 by Karl Rapp as an aircraft engine design shop. After WWI, it started building motorcycles and then expanded into motor vehicles industry during the 1930's. After WWII, the company suffered again but survived later when Herbert Quandt took over the control in 1959. The company rapidly grew considerably and reached a market value of nine billion U.S. dollars in 1979; however, it was still small compared to the big U.S. auto manufacturer. Profits continued to grow up quickly. By 1995, BMW had thirty-four wholly owned subsidiaries, fourteen in Germany and twenty around the world. They also discovered that U.S. market would be the largest and fastest growing market for BMW.

BMW soon realized that many threats impacted its market share in U.S. The Japanese auto manufacturers started building plants in the U.S. to deal with the increased U.S. demand at a lower cost than importing their cars. BMW's U.S. export situation was made even worse by the appreciation of German mark and additionally the higher German labor costs. As a result, the decision was made in 1991 to build a U.S. manufacturing plant to stay competitive.

ROLE OF SPARTANBURG PLANT

With the new plant in the US, BMW realized that it had to configure its global supplier network in order to take advantage of NAFTA's tariff exemption and lower down the costs. Moreover, instead of importing cars from Germany, local production could hedge the exchange rate fluctuation. Thus, Spartanburg would be BMW global supply chain manufacturing base. It should be agile in local supply chain management to enhance local and cost effective souring to keep a competitive price. It also should be adaptable for US market expanding and still aligns with the BMW's quality commitment. Additionally, it was responsible for initiating the BMW's production innovation such as designing new model for U.S. market and creating new culture in BMW organization.


ALTERNATIVES

The 3 options for BMW to choose from were expansion, focus, and stay. First, expansion is to gear up for higher production of Z3 and 3 series by expanding the plant's capacity requiring additional investment of $200 million. Secondly, focus is to send the 318 back to Germany's plant that had excess capacity for production at higher costs to allow Spartanburg to...

Find Another Essay On BMW Case Study - Globalization of Manufacturing Operations

A Study of the Operations Management at HOLLY FARM- an icecream manufacturing company. We were required to find the feasibility of expanding teh facilities and production processes

3659 words - 15 pages level still remain, the solution for these items will be discussed in section4.3.1.4.2 Capacity Constraints4.2.1 Production LineThe process line of ice cream in Holly Farm consists of batch processes, an industrial manufacturing method in which several separate serial and, or parallel operations are carried out to produce a product, in contrast to continuous process (Williams et al, 2001). Hence, the capacity of the line is limited by the one of

Manage Business Operations (Case Study- Improve the operation management of an online Grocery)

5201 words - 21 pages integrationVertical integration is a measure of how much of the supply chain is actually owned or operated by the manufacturing company (Reid, d. 2005, P. 112).Products or services provided by the manufacturer are insourced. Products or services not provided by the manufactured are outsourced. FreshNow's Board is also considering whether either the IT department or distribution warehouse operations, or both, should be outsourced or remain-in-house

Globalization: The Case of Dubai

2261 words - 10 pages more westernized rather than wearing local clothes. Fifth, the developed countries have utilized white-collar jobs, and globalization led to job insecurity to some nations. Case study: Dubai The change of globalization in the Middle East especially in the Gulf was clearly shown in the early 1990s. When it started, people were refusing the idea of globalization, because it holds western thoughts, which to them it was an invasion to their

A Fictional Case Study in Systems and Operations Management

3106 words - 12 pages Case Study in Systems and Operations ManagementAnalysis and evaluation of systems and operations managementBy applying the systems-level hierarchy and by the 4v's topology, one can evaluate and analyse systems and operation management system. An illustration is as follows. GOAL Sale of stationery and office supplies Criterion 1 Retail operations Criterion 2 Store management Criterion 3 Issues of operation Business customer Criterion 4

Is the rise of intermodal international logistics affecting the operations of manufacturing companies?

2000 words - 8 pages Intermodal transportation has a significant role in international logistics and has changed the way manufacturing companies operate and do business. The purpose of this paper is to demonstrate that intermodal international logistics affects the operations of manufacturing companies. In particular, the factors contributing to the rise of intermodal transport will be discussed, and also the changes in manufacturing operations that utilise the

The Study of Modernism and Globalization

1988 words - 8 pages Many authors have tried to understand the world as it is today, through the study of modernity and globalisation. Appadurai, an Indian sociologist, has defined globalisation as “a new industrial revolution driven by powerful information and communication technologies which has barely begun” (2006:35). Its effects are dramatically different depending on geopolitical situations, peoples and countries. For the wealthiest countries it is a source of

Case Study Of Yahoo

3367 words - 14 pages Case study of Yahoo's practicesIntroductionIn this day and age, with the alternatives in industrial environment and the increasing progress trend of global economy, the changing business structure and fierce competition have been brought to force organizations to modify the market positions, corporate culture, resources and capacities continuously in order to survival and own the desirable market shares. Owing to the advanced economic and social

Case Study of Dell

4056 words - 16 pages (business goal) and making sure his staff are equipped for implanting the changes (HR goal). He doesn't plan on becoming IBM or HP. Rather, he wants to focus on his strength as a super efficient manufacturer and distributor. That's why Dell continues to hone the efficiency of its operations. The company has won 550 business-process patents, for everything from a method of using wireless networks in factories to a configuration of manufacturing

Summary of Case study

723 words - 3 pages In the case study Chrysler and Gao Feng: Corporate Responsibility for Religious and Political Freedom in China by Michael Santoro, he states that multinational corporation doing business internationally faces complex ethical issues. The ethical dilemma Chrysler encounters is the corporate responsibility for religious freedom in China. In May 1994, Gao Feng a Christian was arrested in Beijing for planning a private worship service to remember the

Case Study of Hypertension

3470 words - 14 pages Case Study of Hypertension During my experience in volunteering, I chose a patient for the case study assignment. The subject I chose was identified as GKM. The patient’s chief complaint upon her visit to the clinic was for a follow-up on her hypertension and for more medication for this disease. GKM is a 56-year-old Caucasian female with the date of birth on 12-14-43. Her past medical and surgical history consisted of childhood

Logistics Distribution locating competitive benchmarking analysis, A case study in Furniture manufacturing in EU

2926 words - 12 pages Design and operation of Logistics System Heriot Watt universityLogiscitcs and Supply Chain Management SCHOOL OF MANAGEMENT AND LANGUAGE A case study in Vaskor Furniture manufacturing in EU ALAN mCKINNON Student No: 081448766 WORDS COUNT: 2583 3/3/2009 Contents3Introduction 3Aim of research work: 3Originality/value 4Assumption: 5Part one: analysis on benchmarking data 51.1 Furniture Market analysis 61. 2 Total cost analysis 81.3

Similar Essays

Bmw Case Study Motives

2599 words - 10 pages maximised as the joint companies together were worth more than the two companies separate added together.By merging with a British company, BMW gained access to cheaper labour and acquired a 20 per cent stake in Honda's British manufacturing arm. This helped reduce costs even further with the manufacturing plant in Longbridge Birmingham employing 14,000 workers.Honda supplies most of the engines, transmissions and designs for Rover's vehicles, and holds

Riordan Manufacturing Case Study

1414 words - 6 pages Riordan Manufacturing Financial State I. Background Riordan Manufacturing was founded by Dr. Riordan, a professor of chemistry who obtained several patents qualified to processing polymers into high tensile potency plastic substrates. Riordan Manufacturing is a worldwide plastics manufacturer. The company employs 550 people with probable earnings of $46 million. The company is completely owned by Riordan Industries, a Fortune 1000

Case Study The Globalization Of Starbucks

797 words - 4 pages , political. Recommendations are based on a general philosophy of improving the strategic development of the organization. Globalization has impacted almost every organization currently in operation. Even when organizations choose to limit their activities and operations to a specific geographical region, globalization becomes part of operations as new technologies bring international attention and customers to the company. The choice of places to

Rio Bravo Iv Operations Management Case Study

2156 words - 9 pages able to process the product from within that definitely speeds up the manufacturing process (and operations management). In addition, cellular layouts can significantly decrease the number of moves, shorten the distance, and due to efficient simple-routing the company can save (money, time, resources, etc...) (Strategos, n.d.b).Synopsis:Finally, fortunately for Packard Electric they realized the importance of JIT, TQM, and continuous improvement
Extensões de cabelo e peças | Emma Chase | Tvshows Ratings