Case Study | BMW AG
Standardizing logistics and finance processes to improve efficiency, transparency and performance
Fast facts
Each of BMW’s European plants had long used different logistics and finance
BearingPoint is helping BMW redesign and standardize the logistics and finance processes at its largest plants.
processes, and each relied on different, aging legacy systems. To improve efficiency, transparency and performance, BMW turned to BearingPoint for redesign and standardization of its supply chain processes. The collaboration included the implementation of the SAP R/3 automotive solution for BMW’s largest plants.
Case Study | Automotive
Fast facts Lack of standardization made it difficult for BMW to track material flow and consumption, as well as maintain other vital processes efficiently within the supply chain.
Responding to the need for change The BMW group is one of the world’s largest manufacturers of motorcycles and automobiles, with 2004 revenues of 44.3 billion euros. Even with its size and market strength, however, BMW faced a major operational challenge. Its largest and most complex plants, located in Germany and England, used different logistics and finance processes. Moreover, each plant used a different legacy system, and those systems were rapidly aging. The lack of standardization made it difficult for BMW to track material flow and consumption efficiently, as well as maintain production control, quality assurance and other vital processes within the supply chain. The lack of standardization also made key accounting procedures more difficult, especially determining the actual, real-time costs of parts and materials. Finally, the lack of standardization required complex interfaces, produced redundant data and slowed data flow, further decreasing efficiency. BMW engaged BearingPoint as a trusted advisor to redesign and standardize its logistics and finance processes because of our extensive knowledge of the automobile industry and our long history of providing supply chain management support to the world’s largest corporations. The assignment included helping BMW develop its strategy, process and governance, as well as implement the SAP R/3 automotive solution for its largest plants.
Designing processes in a complex supply chain BMW engaged BearingPoint to implement a two- stage plan, called STARD (standardization of logistics processes).
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In the first stage, from October 2002 through January 2004, BearingPoint helped BMW redesign and standardize logistics and finance processes in the company’s car manufacturing plants in Regensburg and Leipzig. In the second stage, BearingPoint drew on lessons learned in the first stage. We helped BMW redesign and standardize logistics and finance processes at Dingolfing, Germany, the largest and most complex car manufacturing plant within the BMW group, as well as at its plant in Oxford, England. Implementing the plan posed several major challenges. Implementations were taking place in the company’s largest, highest volume plants in Germany. The technical systems involved were diverse and complex, and they had to be connected in such a way that they would perform as a single system. These conditions made maintaining system performance and stability a special problem. In addition, more was required than simply improving logistics and finance processes within each plant. BMW’s central goal was to connect the systems within each plant to the company’s central accounting system, so that it could manage all of the plants almost as if they were a single plant. Finally, the plants involved are huge, employing tens of thousands of people. Introducing new processes to large numbers of people and winning support for the changes presented additional challenges. BearingPoint was well positioned to assist BMW in this ambitious effort. Starting in the late 1990s, we had helped the company modernize and standardize its logistics and finance processes in plants in Spartanburg, South Carolina, in China and in South Africa. We were able to apply the lessons learned in these collaborations to the much larger tasks in Germany.
Automotive | Case Study
Creating a homogeneous, integrated structure
Further, maintaining legacy systems had become increasingly expensive because companies that had built the systems
A BearingPoint team of more than 100 consultants and software developers is implementing a redesign and standardization of BMW supply chain processes at its key plants. The new framework (see Figure 1) includes:
had gone out of business, and BMW personnel who knew the systems were retiring. Introducing standardized SAP software is lowering IT costs and will make it easier for BMW to maintain and support software. In addition, the company now has centralized accounting tools that make it much easier to track all financial aspects of manufacturing and supply chain processes.
• Consistent processes for series parts, overhead cost parts and maintenance technology
Fast facts Standardizing logistics processes has cut the costs and increased the efficiency of material flow, production control, plant maintenance, quality assurance, material requirements planning and other aspects of supply chain management.
• Consistent integration of the finance processes in all l ogistics processes • Standardized ITsystems • Continuous, complete construction of the supply processes • Easy integration of external suppliers (SAP to SAP integration) • Integration of numerous separate SAP systems The key technology component supporting BMW’s redesign and standardization of its supply chain is the SAP for Automotive solution. In addition, our team worked flexibly and collaboratively to blend BMW’s program management tools with tools developed by BearingPoint for BMW, such as the Microsoft® Excel-based START COCKPIT. These tools continue to support change management and issue management within the STARD program.
Efficiency, transparency and performance BMW is already seeing the results of standardization. Standardized logistics processes have cut the costs and increased the efficiency of material flow, production control, plant maintenance, quality assurance, material requirements planning and other aspects of supply chain management.
Automotive | Case Study
Figure 1. Integration of a distributed system landscape Data distribution logic
Purchasing
Central SAP R/3 System
• Vendor master • Scheduling agreement • Purchase orders
MM
Central invoice verification and Central retrospective price changes • Finance, external accounting (FI) Central • Accounts payable, ... • Controlling, internal accounting (CO)
FI
Bill of materials CO
• Material master
Plant 6 SAP System 2 Plant 5 SAP System 2 Plant 4 SAP System 2 Plant 3 SAP System 2 Plant 2
Application link enabling Plant 1 SAP System 2
Material Management
MM
PP
FI
CO
• Disposition • Goods received • Accounts payable
Goods received (GR)
pay.
SAP System 2 MM
PP
FI
CO
• Disposition • Goods received • Accounts payable
Electronic Goods receipt received settlement (GR) (ERS)
Electronic receipt settlement (ERS)
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Helping our clients get sustainable, measurable results BearingPoint is an independent management and technology consultancy. Owned and operated by its Partners throughout Europe, BearingPoint provides its clients with the best possible value in terms of tangible, measurable results by leveraging business and technology expertise. The company currently employs 3.250 people in 14 European countries and serves commercial, financial and public services clients. BearingPoint offers its clients a seamless cross-border approach, strong focus on results, an entrepreneurial culture, profound industry and functional knowledge, as well as solutions customised to clients’ specific needs. The firm ranks high in client satisfaction, has longstanding relationships with reputable organisations and is seen as a trusted adviser. BearingPoint has European roots, but operates with a global reach. For more information, please visit: www.bearingpointconsulting.com
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