Bayerische Motoren Werke (BMW)

Total Quality Management in BMW

Submitted To :

Mam Mahreen Fatima

Sargodha University,Gujranwala Campus

Total Quality Management in BMW

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DEDICATION

Dedicated to

Faculty & StudentsSargodha UNIVERSITY,

Gujranwala Campus

COMPANY OVERVIEW

Bavarian Motor Works (BMW)

Bayerische Motoren Werke (BMW)

Founder - Matthew Eben Ruark

Founded - 1916

With its brands BMW, MINI and Rolls-Royce, the BMW Group concentrates exclusively on the

premium segments of the international automobile and motorcycle markets, with an outcome that

others in the industry are striving for. From development, through production to the marketing of

its products, the BMW Group displays an uncompromising commitment to the premium claim.

The company is now the world’s leading premium manufacturer in the automotive industry. In

addition to the development, production and marketing of automobiles and motorcycles, the

BMW Group offers its private and business customers a comprehensive range of financial

services.

Under the BMW brand – one of the most prestigious automobile brands in the world – the

company currently offers eight model series, all of which embody the proverbial “ultimate

driving machine”. With MINI, the BMW Group has also been extremely successful in

positioning its product at the premium end of the small car segment. Rolls-Royce automobiles,

on the other hand, have been synonymous with timeless, everlasting perfection for more than 100

years. In the motorcycle industry as well, the BMW Group has for years played a leading role in

all the segments in which it has an interest. In respect of technology, safety and environmental

protection, BMW motorcycles are among the best on the market.

The Financial Services business also makes an important contribution to the success of the

company.

Producing continuous, lasting value in all areas of its business, the BMW Group is successful

and profitable. Their success is based on the extensive products and market initiatives taken up

by BMW Group.

 

It has a presence with its own sales subsidiaries in 41 countries around the world, and maintains

an extensive network of independent dealers. Approximately 100 other markets are looked after

by importers. The efficiency of the international BMW Group production network forms the

basis for the continued growth of the company. With 23 production sites, the BMW Group is

active in 12 countries – including Chennai in India, where the company opened its latest plant in

2007.

To detect trends at an early stage and put forward appropriate solutions, the BMW Group also

runs a worldwide research and development network.

All the activities of the BMW Group are designed to increase the value of the company

continuously and over the long term. In the view of the Group, long-term growth is generated by

thinking long-term and acting in a sustainable manner. The central factors for success are

concentrating on the premium segment, the skill and dedication of our employees, the maximum

focus on what the customer wants, plus an ability to innovate, which is firmly rooted in the

corporate culture.

TOTAL QUALITY MANAGEMENT

Total quality management (TQM) is best thought of as a philosophy of how to approach the

organization of quality improvement. This philosophy, above everything else, stresses the “total”

of TQM. It is an approach that puts quality at the heart of everything this is done by an operation

and including all activities within an operation. This totality can be summarized by the way

TQM lays particular stress on the following (Slack, Chambers & Johnston, 2004):-

Meeting the needs and expectations of customers

Covering all parts of the organization

Including every person in the organization

Examining all costs that are related to quality, especially failure cost

Getting things “right first time”

Developing the systems and procedures which support quality and improvements

Developing a continuous process of improvement

As defined by ISO, "TQM is a management approach of an organization, centered on quality,

based on the participation of all its members and aiming at long-term success through customer

satisfaction, and benefits to all members of the organization and to society."

TQM requires that the company maintain this quality standard in all aspects of its business. This

requires ensuring that things are done right the first time and that defects and waste are

eliminated from operations.

The main objective of TQM is to ultimately satisfy the customer needs. The TQM wheel shown

below helps us to understand the process of total quality management in a better way.

The Total Quality Management Wheel

The wheel shows customer satisfaction as the chief target. In order to achieve this, the employee

must be involved in continuous improvement (the inner circle) to reach quality in the following

areas (represented in the outer circle):

PRODUCT/SERVICE DESIGN: Design changes often require changes in methods,

materials, or specifications in order to decrease the rate of defective items. Change

invariably increases the risk of making mistakes, therefore stable product and service

designs can help reduce internal quality problems. The need to make design changes in

order to have a competitive edge, BMW tries to carefully test their models and redesigns

them with a focus on simplicity and uniqueness. The manufacturers are very concerned

about the quality of each and every component that is being used to assemble a multi-

functional automobile which is durable, reliable and fuel-efficient.

PROCESS DESIGN: The design of the process is a key factor affecting the quality of

the products or services. One of the keys to obtaining high quality is concurrent

engineering, in which operations managers and designers work closely together in the

initial phases of product or service design to ensure that production requirements and

process capabilities are synchronized.

PURCHASING CONSIDERATIONS: Most businesses depend on outside suppliers for

materials, services or certain equipments. Large companies like BMW and Toyota have

thousands of suppliers from all parts of the world, some of which supply the same type of

parts. Purchased parts of poor quality can have devastating effects on the quality. For

example the Ford Motor Company lost about 2000 cars each day and had to halt their

production in four cities in the United States of their models named Tempo and Topaz

due to faulty engine parts purchased from outside suppliers. Therefore it is evident that

both the buyer’s approach and specification management are key factors to controlling

supplier quality.

BENCHMARKING: This is a continuous, systematic process that measures products,

services and practices against those of industry leaders. Companies use this to understand

where they stand in the industry and how to improve their own operations or reach a

certain target. Typical benchmarking tools are: cost per unit, process time per unit,

revenue per unit, return on investment, customer retention rates, etc. Companies like

BMW that are involved in continuous improvement rely on benchmarking to formulate

goals and targets for performance. The four basic steps of benchmarking are:

1. Planning – the collection of data, identifying the process and the firm to be used

for comparison, determining the measures of process performance, etc.

2. Analysis – determining the gap between current process and the benchmark,

identifying the significant causes, etc.

3. Integration – establishing goals, obtaining resources and skilled managers for

accomplishing the goals.

4. Action – developing action plans, teamwork, monitoring progress, developing

cross-functional teams, making improvements.

DECISION MAKING TOOLS: The first step in improving the quality of an operation

is data collection. There are seven tools for organizing and presenting data:

1. CHECKLISTS

2. HISTOGRAMS

3. PARETO CHARTS

4. SCTATTER DIAGRAMS

5. CAUSE-AND-EFFECT DIAGRAMS

6. GRAPHS

7. DATA SNOOPING

Management must develop the proper tools to manage quality – not only machine or hand tools,

but also statistical methods to control process or incoming materials and to help identify the

sources of quality problems. W. Edwards Deming believed that statistical methods are the

backbone of management’s arsenal of tools for managing quality. He created a list of 14 points

that summarizes his philosophy for achieving better quality (Deming, 1981-1982). Some of his

fundamental ideas include – adopting a new philosophy, cease dependence on mass inspection,

drive out fear, institute modern methods of training and many more.

1. Leadership

In a global marketplace a major characteristic that will distinguish those organizations that are

successful will be the quality of leadership, management, employees, work processes, product,

and service. This means that products must not only meet customer and community needs for

value, they must be provided in a continuously improving, timely, cost-effective, innovative, and

productive manner.

In 2000, after the Insurance Institute for Highway Safety--a vehicle safety testing organization--

tested BMW's X5, Institute President Brian O'Neil hailed its performance as outstanding. "BMW

has set the standard for all other manufacturers to aspire to," O'Neil claimed. The BMW X5 had

not only outperformed all of the other SUVs tested, it earned the highest rating the institute had

ever given a vehicle of any type or price range.

"This achievement speaks not only to BMW's worldwide and craftsmanship of the X5," boasts

Helmut Leube, president of BMW Manufacturing Corp. In addition to two electronic safeguards,

hill descent control and dynamic stability control, Leube explains that the X5 also boasts BMW's

hallmark security package called FIRST, for Fully Integrated Road Safety Technology.

Better known for their looks, which aspire to reach the aesthetic levels of museum-quality

sculpture, as well as their precision mechanical superiority, BMW vehicles are manufactured to

exacting tolerances. But attaining such an astonishing safety rating is evidence that, for the X5,

BMW raised the standard even higher. "It goes without saying that quality and safety are

interrelated," affirms Eduard Walek, BMW's X5 project leader. "If you can't guarantee that each

vehicle which comes off the production lines was produced in accordance with a high quality

standard, you can't ensure a high standard of safety either. But there's more to it than that. Safety

must be designed, simulated, tested and, finally, produced. During all of these stages, high

quality standards must be met as far as computation, construction, testing and production are

concerned."

2. Customers Satisfaction

Driving pleasure, premium quality and reliability guarantee the latest models from the BMW and

MINI brands the highest acclaim in international automobile markets. That has been confirmed

yet again in a recent study conducted by international market research firm J.D. Power. In its

latest customer survey – the Automotive Performance and Layout Study (APEAL) – assessing

satisfaction levels among North American new car buyers, the BMW 5 Series range, BMW X3,

BMW Z4 and MINI Countryman emerged as winners of their respective vehicle segments. In

addition, four more models from the BMW Group finished in the top three of their category. This

tally means the BMW Group boasts the highest number of segment winners of all manufacturers

in the latest APEAL survey.

 

Such excellent individual scores also boosted the overall rankings of the BMW and MINI

brands, with BMW coming third in the latest survey. As well as the class-winners – the BMW 5

Series range, BMW X3 and BMW Z4 – the outstanding results of the BMW 7 Series range also

contributed to this outcome. The luxury saloon not only came second in its segment but also

claimed the second-highest individual score of all the vehicles involved in the APEAL survey,

making it the top European model in the entire competition. The BMW 3 Series range and the

BMW X6 also finished as runners-up in their respective segments.

3. Continuous ImprovementThe BMW X5 is just one example of the company’s relentless pursuit for quality. Since its

inception BMW has focused on producing quality automobile, even if that meant producing less.

Often cited as the “Ultimate driving machine”, BMW strives to give its customers the quality

they gave comes to expect from BMW. Quality begins right from the source. Highly skilled

craftsmen and high-tech facilities cooperate hand-in-hand in the Assembly Shop, where the

painted car bodies are completed according to the customer‘s specific order.

Despite the most advanced and sophisticated plant technology, the assembly of an engine calls

for a high standard of craftsmanship and a wide range of skills and knowledge on the part of all

associates involved. The associates working on the line move along with the cars on their own

conveyor belts for several job processes one after the other. They work together in small groups

with a high standard of personal responsibility.

4. Employee InvolvementEmployees are the strength of an organization. They are the prime contributors to its success

In manufacturing plants all over the world, both managers and workers have discovered that

when employees are involved in workplace decision-making, productivity rises.

IBM also involve employee in Quality improvement program. For this purpose they conduct

seminars, employee meetings etc.

5. Supplier Selection and PartnershipErgonomics on the job is particularly important point in the assembly process. Heavy

components such as seats or pre-assembled doors no longer have to be lifted up by the associates

themselves, but are rather moved and placed in position by means of easy-to-handle carrier

systems. Swivel units, in turn, maneuver and move the cars around on the assembly line, helping

to avoid tiring and strenuous jobs and operations which otherwise would have to be performed

above head level.

Flexible and efficient assembly is guaranteed by sophisticated logistics for a smooth flow of

materials and efficient production without friction. All parts and components must arrive at the

assembly line just-in-time or even just-in-sequence in the interest of maximum efficiency – and

this is only possible if the suppliers are fully integrated in the production network.

Efficient logistics ensures precise delivery of the parts required exactly on time, with a smooth and

efficient flow of parts from BMW Group component plants or supplier companies. Parts and modules

arrive at the plants either by train or by truck. Many of the parts and components supplied in this process

are then put together in pre-assembly to form complete modules. These structural groups such as the

doors and bumpers as well as the cockpit and seats are subsequently delivered straight to the assembly

line, again in exactly the right sequence.

NEW DELHI: BMW India is looking to increase the use of locally made components, a strategy

that would help keep the price of its luxury cars more competitive here as the company targets

double-digit sales growth in 2015 after posting a drop last year. The car-maker's strategy is to

have at least half the components sourced from the Indian market.

BMW has partnered with seven local suppliers for sourcing components for production of cars at

its Chennai plant. These are Force Motors BSE 1.44 %, ZF Hero Chassis, Draexlmaier India,

Tenneco Automotive India, Valeo India, Mahle Behr and Lear India. 

6. Performance Measures

The highlight in assembly is the so-called “marriage”, where the drive train made up of the

engine, transmission and chassis is bolted on to the body Functional and visual inspection,

finally, ensures that all cars come off the assembly line with the high standard of premium

quality so characteristic of a BMW Group product.