Bmw Case
Executive Summary
BMW has embarked on a mission to cut its notoriously long product development time in half utilizing a newly developed system code named "Digital Car". Senior management has decided to utilize the new process on the 7-series platform. In order to accomplish this goal, BMW is preparing to take advantage of the latest computer technology in car development. At the forefront of the new plan is a debate over the use of computer-aided-styling (CAS). We recommend that BMW implement the Computer Aided Styling system and processes into their production development program.
Key Areas of Concern
The main business problem that BMW is facing is reducing its long product development time. BMW's current design process began in the early 1990s and utilizes a 60 month design cycle. Senior management set a goal of reducing product development time by 50%. This number is extremely aggressive, but necessary. All of its competitors were attempting to shorten development times as well. A main decision that BMW is facing is whether to adopt CAS in place of its traditional "handcrafted" design techniques.
The need for a shorter design cycle is being driven by customer demand and the extremely competitive automobile market. Customer tastes are ever changing and are demanding more choices. With the long development times, certain features of the car could be out of style by the time the car makes it to market. If BMW doesn't meet the customer demands, their competitors will.
Analysis
BMW sells many low volume vehicle models, as compared to its competitors. To be profitable, they rely on longer production runs, to spread their high fixed costs over a greater time period. The trade-off is a lessened ability to react to changing market demand. To achieve this, they must reduce their product development lead-time. BMW's strategy for value creation lies in its meticulous engineering, including design and styling. BMW designers pride themselves in
BMW has embarked on a mission to cut its notoriously long product development time in half utilizing a newly developed system code named "Digital Car". Senior management has decided to utilize the new process on the 7-series platform. In order to accomplish this goal, BMW is preparing to take advantage of the latest computer technology in car development. At the forefront of the new plan is a debate over the use of computer-aided-styling (CAS). We recommend that BMW implement the Computer Aided Styling system and processes into their production development program.
Key Areas of Concern
The main business problem that BMW is facing is reducing its long product development time. BMW's current design process began in the early 1990s and utilizes a 60 month design cycle. Senior management set a goal of reducing product development time by 50%. This number is extremely aggressive, but necessary. All of its competitors were attempting to shorten development times as well. A main decision that BMW is facing is whether to adopt CAS in place of its traditional "handcrafted" design techniques.
The need for a shorter design cycle is being driven by customer demand and the extremely competitive automobile market. Customer tastes are ever changing and are demanding more choices. With the long development times, certain features of the car could be out of style by the time the car makes it to market. If BMW doesn't meet the customer demands, their competitors will.
Analysis
BMW sells many low volume vehicle models, as compared to its competitors. To be profitable, they rely on longer production runs, to spread their high fixed costs over a greater time period. The trade-off is a lessened ability to react to changing market demand. To achieve this, they must reduce their product development lead-time. BMW's strategy for value creation lies in its meticulous engineering, including design and styling. BMW designers pride themselves in