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Change being the only constant in every part of life, has to occur every place and happens at any random time in all the sections as and when necessary. Big firms it may be manufacturing based or service industry, all have multiple processes which functions and goes through thousands of transactions and activities every day. Greater the functioning of any organisation the more it tends to change policies and practices of particular process depending on the invention of technology and its implementation in the process from time to time. Development, expansion and diversification of the organisation also have a great impact of change in it. Government laws, change in the method of production, servicing methods, outside environment etc changes the overall functioning of the company. Change is also necessary for the organisations to grow in future.
Hence the organisation in this perspective should make it a point that all the possible changes happening in the company are conveyed to all the candidates working for that particular part where the change has taken place.
BMW is one of the best company in the automobile industry and is also one of the best managed brands in the Europe. It has to maintain its brand name throughout the Globe which makes it a dream for many people to have a BMW car. As the time is passing BMW has made many changes with regards to its expansion, designs, manufacturing process, management process, diversification, etc. Looking into todays market, its is a clear view of competition, hence there are certain changes that should be implemented in accordance to my personal opinion. They may be as follows:-
1. The company needs to balance the mass production and the differentiation.
2. Manufacturing process should be improved at regular time intervals and increase efficiency to the most potential it bears.
3. Time taken for the manufacturing of a particular unit, order cycle should be quick i.e. in less time and also proper reduction in the order processing time.
4. Maintaining the relations with the suppliers and trying to improve it to the best which helps the raw material to be delivered in time and enhance the productivity and quality of the output.
5. BMW has a very good brand name and hence should be accessible at the easiest to the consumers by opening number of chain showrooms within a sector and also should have a option of online ordering system which makes the consumer buy the product without any hassles.
6. BMW can also implement a application so called as software as a service(SaaS) which are major business applications from which services and products can be delivered online as an internet rather than aa boxed software or any other custom systems which would be a great move for customers for getting booked for their car services etc. online itself, which reduces their effort
Role of manager in the implementation of change.
Managers should have done thorough analysis in the implementation of the organisational change and should also see that the change implemented is beneficial to both the companys performance, efficiency, profitability and customers should also be the key factor. Managers should also pay attention on the advantage the company will have in regards to the competitive market and also the impacts on the working of the organisation.BMW has mastered in producing the differential cars as compared to the competitors and hence should see that it continues to make such product which are unique in the market, so steps should be taken accordingly. Proper team should be set by the manager in order to handle new applications like SaaS which are implemented. Manager should focus on the cost of production while implementing the change and note that everything is under control and is not raising the cost of production which would be difficult for then selling the cars at a lower cost. In order to decrease the time for the order cycle the manager should keep in mind that the quality remains standard and is not affected by the quick production of the cars.
Strategic Approach of Ford and Volkswagen in comparison with the BMW and the resistance to BMW.
Ford and Volkswagen have common platform for many of its car. The car altogether are not different but jus the body and the interior of them are changed living the cars with the same mechanisms such as engine, power, etc. This does not enhance the technology but just the looks which make these cars being produced with low cost of production leaving it with a reasonable selling price in the market. This differentiates the cars made by BMW. It makes altogether a different car and does not have a same platform for any of them. All the BMW products are unique in some or the other sense. No mechanisms are common in any of the BMW cars while cars such as Volkswagen Polo, Golf and Ford Figo, etc. have almost the same platforms. This makes such cars cheaper for the consumers to buy. Because BMW follows such a uniqueness its cost of production in higher than compared to the cars of Ford and Volkswagen which becomes a drawback in the case of its pricing of which most of the consumers are not aware. Hence the consumer market in this automobile industry is resistant with the BMW cars.
2. It is said that the competitive advantage can be created in the choice process by helping buyers to resolve their dilemma in their buying decisions. In order to build their knowledge capital in this area, if BMW was to carry out an exercise in Knowledge Management, identify the important steps in such an exercise. What kind of practical issues would you expect in the implementation of such an exercise?
Loads of automobile companies are manufacturing cars with lots of options and design in the segment of sedan, hatchbacks, SUV, etc. this gives rise to a very high competition in this market. Various options and nearly same cost of the cars within the same segment makes the buyer confused as what to buy and what to neglect. This is because most of the buyers arent aware about the entire details of all the cars. BMW being the unique one for the entire car having different platforms for all is not known by the consumers. This knowledge has to be brought to them in order to make them take the right decision as why to opt for the BMW automobiles. This calls for a knowledge management exercise for the company which help the employees and buyers to gain the proper knowledge on the details for the automobiles which helps the consumers more to take a proper decision.
Ralf Caly, the head of CRM of the entire BMW group conveyed in the interview in 2005 that one of his close colleague said that If we are not customer-driven, our cars wont be, either.
The statement above shows that BMW company is customer driven and tries to pass all the information that a customer needs.
Knowledge capital is becoming important as market it getting competitive and reach the customers for the knowledge they need. Thus the factor forces the organisation to implement knowledge management exercises as knowledge is becoming the most important factor between many leading companies.
Knowledge Management refers to the set of business processes developed in an organisation to create, store, transfer and apply knowledge. Knowledge Management increases the ability of the company to learn from internal as well as outside environment and also to incorporate this into the business processes. The steps which BMW should exercise for the knowledge management are as follows:-
Knowledge Acquisition:- BMW needs to gain proper knowledge from the consumers and the market about what they think while buying the product and what is the reason being of they falling into dilemma when they want to purchase a automobiles. This information is collected by various knowledge management systems which can be majorly categorised as Enterprise wide knowledge management systems, knowledge work systems and intelligent techniques. This system collects information about the customer needs, feedbacks, product understanding. This can be got through the firms transaction processing systems while it requires systematic data about the sales, inventory, customer needs and preferences and other vital data. It also needs information from external sources such as news feeds, government statistics, scientific research and legal opinions. This helps the company to gain proper knowledge and help to focus on consumer which can make help them learn about the product details accurately.
Knowledge storage:- Once the proper information is received it has to be stored so that it can be used for the knowledge of employees and then can be conveyed to the consumers. Hence knowledge management enforces the knowledge to be stored and thus the system involves in creation database.
Knowledge Dissemination:- This is when the knowledge is distributed using many communication methods such as prints, e-mails, instant messaging, etc. Infact provision should be made by the company for FAQs by the consumers after the message is delivered to them and they are still in dilemma.
Knowledge Applications:- Despite of what knowledge management systemsare used if the knowledge is not applied properly that may not add any value to the firm, this may not change the minds of the customer and they may still be unclear about the product. Proper knowledge management application helps in enhanced business processes and even improves the customer relationship which BMW is more looking for to make their customers not to hesitate and buy the BMW car and also stating about the price factors explanation.
Requirements for knowledge management in BMW:-
Advance search capabilities
Easy to use
Web-based document management
Should be project oriented
( http://www.know-center.tugraz.at/previous/i-know01/pdf/fkappe.pdf )
Practical issues which may arise implementing the above knowledge management exercise.
Major problem implementing the knowledge management systems is the cost involved. Steps must be taken in such a way that the cost of production does not change. The final product may have a bit increase in the price. Another problem in the knowledge management is organising the data into meaningful categories so that it can be easily assessed which take as lot of time and involve a new labour work force for which new recruitment has to be carried out. Proper planning if not made before the implementation may arise a huge problem may be a company may suffer a heavy loss. Companies information stored may be leaked and can go lend in the hands of the competitors which is a threat for such a big brand name.
3. Analyze the important processes within the supply chain management of BMW. In your opinion, what could go wrong in the supply chain management of BMW and how can these be minimized? What kind of IS help BMW adjust to the changes in the demand forecasts?
A supply chain management is managing the network of organisations which are linked to suppliers, manufacturing plants, distribution centers, retail outlets and customer to supply goods and services from the source of production to the consumption.
Important processes within the supply chain management of BMW.
Integrate the communication infrastructure and proper networking between the company and the suppliers.
Have the right product in the right place, at the right time, at the right price and in the right condition.
Designed to improve organisational processes by optimizing the flow of information, goods and services between the consumers and the suppliers in the value chain.
Coordination of logistics for timely delivery of the automobiles.
Cooperation among the businesses and suppliers to make sure orders and inquiries are filled in correctly.
Limitations in the supply chain management of BMW.
Scarcity in the warehouse spaces which did not meet the high supply.
Huge cost may not encourage the company to integrate the communication infrastructure and proper networking between the company and the suppliers.
It may every time not be possible for the company to have the right product in the right place, at the right time, at the right price and in the right condition. There may cause natural harzards which may prevent this.
Improper dealing with the suppliers and also the customers for more choice and flexibility may lead disruption.
Since the company has less warehouse space it now does not order much before the production time which may lead to scarcity of the raw material when need urgently in case if a customer orders a car for a particular specification and immediate delivery is required.
Location of the suppliers may sometimes delay the supply time if the natural circumstances go worse such as imports via air cargos can be help because of volcano eruptions which is the current scenario in the Europe.
These limitations can be minimized by:-
The limitations in the supply chain of BMW can be minimised by the implementation of information systems in the supply chain management such as Warehouse Management System(WMS) and Transportation Management System(TMS) which can help BMW to:-
Decide when and what to produce, store and move.
Rapidly communicate orders
Track the status of the orders
Check the inventory availability and monitor inventory levels
Reduce inventory, transportation and warehousing costs
Track shipments for the raw materials supplied and delivered
Supply chain execution systems(software) manages the flow of materials between the warehouse, distribution centers and the manufacturing unit and ensures that the materials are delivered to the right location in the most efficient manner.
Information Systems which can help BMW adjust to the changes in the demand forecasts.
With the implementation of some supply management information systems as mentioned above, there are some software for the supply chain management which can help BMW to adjust widely with the changes in the demand forecasts.
Supply chain planning systems
Supply chain planning systems will help BMW to enable the model of its existing supply chain, even generate demand forecast for the cars. This helps the company to plan its optimal sourcing and manufacturing.
Most important function of the supply chain planning software is the demand planning which determines how much product a business needs to make to satisfy all of its customer demands.
4. Carefully consider all the major functional areas in BMW, where innovation is possible and critically evaluate the benefits that would result from innovation in these areas. What would be the role of a manager in BMW leading an innovation project?
BMW has been leading the chart in the innovations as well. BMW has made great innovation in regular intervals. Its uniqueness says it all. All the automobiles produced have different platforms and thus are different from each other which itself notifies how innovative the company is. BMW is known for its luxury cars though the price of it is less competitive but the quality is unbeatable and so its most liked by consumers but even other series are at its best when compared to its competitors in almost every factors. But there are limitations where this company does not reach the middleman with small segment hatchback cars with nominal/affordable price. Globally has exposed but not focused on all the sectors in every region in relation with the price and production. Hatchback cars today are in need much more as population as well as road traffic are growing. Need for small segment cars like hatchback and smart cars can capture the market. Innovations of new hatchback designs with high average performance and low cost should be innovated by the company taken into consideration the middle class market as well. For this the company need to plan and innovate almost every functions in the business such as technology, new design, low cost of production implementation, market research, quality control, research and development project innovation, etc.
Innovation research should be carried by the global technology scouting, virtual innovation agency, trend analysis and coverage of internal and external invention souces. Innovation management can be a important factor by innovation councils, evaluation and selection, resource allocation, monitoring and reporting and annual process. Then the actual implementation of the innovation i.e. the innovation transfer such as defining the vehicle to be made, identification of development ready for hatchback series development. Bringing in the latest technology of CNC machines which can boost the productivity of the company to a huge extent. Softwares related to the CNC machines like the CAM/CAD packages help reduce the work effort and avoid errors which gives a amazing impact on the accuracy.
Benefits of innovation
Widen the market
Meeting the consumer preferences
Low cost quality cars.
Enhancing the goodwill
Creating a good brand name for all the sections in the society
Cover more geographic dimensions
Focus on both developed and developing nations
Huge market exposure
More employment opportunities
Increase in sales and overall profitability of the company.
Increase in share price and capital.
Diverse range of products with different price range
Stronger cash flows
Unique hatchback cars to consumer at a cheaper rate
Role of a BMW manager in leading a innovation project.
A manager should properly research on the innovation planned
A manager should keep various innovative options open
A manager should select the best innovative projects out of many.
Manager should analyse the cost to be involved in the project
Manager should have a long term vision on the innovation project to be carried out.
Manager should clearly distinguish the benefits of the new project
Manager should see that the project is beneficial of the company as well as is customer oriented.
Manager should identify the obstacles before its implementation.
Proper team is recruited for the same
Scheduling for the project should be done well before time.
Proper information systems should be selected in order to increase it accuracy
Managers should see that the suppliers are informed well before the actual start of the production for acquiring the raw material in the project.
Most important is proper means of production should be selected in order to enhance work productivity, efficiency and effectiveness and also reducing the cost of production.
Manager should show proper regards in relation to the infrastructure where the production of car is going to take place.
Manager should also motivate employees during a implementation.
Manager should convey proper understanding about the innovation to the employees before the start of the production.
Manager should well in advance plan about the marketing and advertising strategy for the product.
Manager should have proper leadership quality of getting the word done in the right time.
Manager should know the in and out of the entire innovation project.
5. Critically evaluate what information requirements (or Information Systems) would help reduce the alarming competitive gap between the automobile industry in the Western countries and that of Japan?
The huge production methods that were invented and implemented in Western countries, the vehicle manufacturing industry in Japan, adopted the mass production techniques from the European systems and the systems used in United States were the last to join among all the developed nations, and finally landed up making an altogether a different system which did outcome both the systems adopted by them . The system developed by Japanese is called the Japanese production systems or the just-in-time manufacturing. . they further developed working on the existing systems which is known as the lean manufacturing, which was formed by the mixture of adaption of the automotive product development systems and supplier systems of keiretsu companies. Lean manufacturing and just-in-time are almost treated as the same in the Japanese production system. Toyota had brought the production system altogether on a different and a very high level but also the proctuction systems used by Nissan and Honda were not comparable with the technology used by the western countries. Thus Japanese production systems created a paradigm shift in the automobile industry throughout the world in the late 20th century.
The significance of the Japanese production system is its antithesis, which exposed the ill effects of mass production with high-volume manufacturing focusing only on economy of scale, rather than the elimination of wasted resources through streamlined production. How the Japanese production system came to overtake the prevailing Ford-style mass production system is described later in this book. The Japanese system, which began by committing to just-in-time production and synchronized manufacturing that manufactured what, when, and how much was necessary and eliminated wasteful processes and stock, brought a new paradigm. This ended the vicious cycle of stockpiles and forecast-based production characterized by the chain reactions of mass production and mass sales, and dissolved the rigidity of production where only existing products continued to be manufactured with existing technology. The Japanese production system also came to greatly influence parts manufacturers, trading systems, and even lean product development.
Thus this all shows how Japan is ahead of all the western countries in the automobile industry.
A transformed revolution is required in order to satisfy the increasing needs of the consumers by removing/eliminating the old traditional methods which are being used by the western countries as compared to Japan which are far more ahead in meeting the consumer demands and their needs. This lays a gap between the western countries and the Japanese method of working in this automobile industry. Removal of old methods towards the integration of the IS(Information Systems) across the whole supply chain. 3DayCar(3DC) is a complex project the technology, the relationships and the practices. This project involves many universities and independent research institutions which examines the role in the changes across the entire supply chain. This program is totally different and is unique as it encourages the participation of many bodies such as financial corporation, logistics, dealers, trade associations, consumer groups and the most important is the vehicle manufacturer. The ultimate goal of the 3DC is to create a framework in which a vehicle can be manufactured and delivered to the customer as specified within a lead-time, focus being a three-day order-to-delivery as the main objective.
The generic map of the present order fulfilment process states the problem to take the orders and then manufacture and make a delivery of that vehicle within a particular time frame, i.e. a short lead-time. It uses process mapping to record information and physical flows during the order to delivery process. This project application is the best to reduce the gap between the western countries and that of Japan.
( http://www.infosci-online.com/downloadPDF/pdf/ITJ2634_XgJ06O753G.pdf )
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