Most of the suppliers for the new small car platform for BMW – including the new 1 Series – came from the current 3 Series.
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The BMW 1 Series is the first fruit of this collaboration, but it will be followed by derivatives of the 1 Series and the next generation 3 Series (the Mini is not involved because it is a front-drive platform).
By grouping the 1- and 3 Series and their derivatives like the X3 and Z4, BMW achieves an economy of scale for many parts that reduces costs.
“There are a lot of cars on this time schedule,” said Wilhelm Becker, BMW’s senior vice president for product development, small car platform. “The first car is the 1 Series, then a variant of the 1 Series, and maybe an X version of the 1 Series.”
The development team and the strategic suppliers in BMW’s Quality and Cost Council run by the purchasing department look for synergies in products and in process.
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By GlobalDataWhile there are some unique suppliers of features found only on one model, the big ones don’t change.
At the same time, the commonality can’t be allowed to blend the attributes of the different models in the eyes of customers.
“This car has to be quite different to the 3 Series,” Becker said. “The customer has to see it, has to feel that the car is a 1 Series and is not a 3 Series or a 5 Series or whatever.”
Some elements of the components can be shared, says Becker. “We say OK, design the component so it is different but the material is the same, so we can use the same process” he said.
Under the skin components can share more commonality. “There are standard components for the air conditioning, for example,” said Becker, so they can be used in the more upmarket automatic systems as well as the manually controlled version – “or seats. We do not develop seats for one car. We need different seats for different cars, but the functions of the seat, the main frame of the seat, is coming out of one process.”
Co-operative purchasing is key to the success of the new small car platform.
Becker, who was in charge of purchasing at BMW from 1987 until 2000, said BMW was looking for co-operation with its suppliers.
“Purchasing asks all of the suppliers for ideas on how we can realise synergies. Sometimes parts are designed so that we have a lot of scrap. So the supplier comes and says, ‘If you can eliminate this angle, I can reduce scrap by 20%.’ Or maybe that we just tell the suppliers, ‘I want to redesign so we can use the part in all the cars.”
Purchasing is international, said Becker, despite the fact that BMW has stuck with a lot of smaller, local and traditional suppliers for the new small car platform. “BMW is looking worldwide for suppliers and solutions. Those who are nearby can have a big advantage in logistics,” says Becker, but “a lot of our suppliers come to Germany to establish a facility.”
BMW understands suppliers as an integrated part of their development process and the delivery process during production, Becker says. “We understand suppliers not as somebody else, outside the company,” says Becker. “I think that is one of the reasons for the success in the good relationship to suppliers”.
He has promoted and supported the supplier network concept developed by BMW Head of Purchasing Gerhard Schuff. Suppliers often rate BMW as a favourite customer.
“They are an integrated part of all the things that we are doing,” said Becker. “They get the information they need. We have a very open communication atmosphere. If one day we say, ‘OK, that’s not what I expected,’ we come together looking for solutions.”
He stressed the importance of supplier ideas to BMW. “BMW is a company that is open for innovations, and many innovations come from suppliers. So we say, ‘OK, let’s try (this idea) together. We put money in, you put money in, we look together. It can be successful, and it can be a big reason for additional sales.”
“I was head of purchasing for a long time, and my philosophy was always that suppliers were so important for car manufacturers, that we could only be successful if we have the same target, the same philosophy and the same understanding. It’s not so easy for some car manufacturers. They only stretch them with volume and price pressures and so on. I think that’s a stupid way.”
Becker says he looks for improvement by co-operating with suppliers and not putting all the responsibility solely on the suppliers. “I get every price reduction by putting people together to think about possibilities and to find a solution together.”
SupplierBusiness.com
