BMW SA has recently undergone a R1-billion, three-year transformation to become a world class production facility, able to compete aggressively on the global market. SAP R/3, the world`s leading enterprise business software, was chosen to support the systems side of the project.
The local automotive industry has become extremely competitive, and manufacturers have had to look for new opportunities and ways of improving productivity. Recognising this, three years ago BMW SA began planning to become a major global exporter of its luxury vehicles.
"We had to start balancing imports with exports, and we needed to integrate our vehicle process chain, including sales, distribution, planning and logistics," comments Nigel Murison, BMW SA project manager on the SAP project. "We also had to become integrated with BMW`s production partners world-wide to ensure common specifications.
"We needed the ability to build cars to suit customer`s individual requirements, which meant a new logistics system. For any production line, there are literally millions of configurations and we needed a powerful system to handle this, as well as data generated by applications in Germany. We wanted to offer the best options and the greatest flexibility in the business."
The decision was made to go the SAP route, and BMW went live with SAP R/3 4.0 in January this year.
The company had implemented SAP R/3`s financial and asset management modules in January 1997. The recent project involved the implementation of the production and logistics modules of SAP R/3, and included a wall-to-wall upgrade to SAP R/3 release 4.0, announced by SAP during the implementation.
Although a smaller-scale model of BMW world-wide, there are a number of factors which make the local BMW operation even more complex. For example, explains Prof. Dr Richard Schuster, manager of the Integration Project/Process IT, sales and production are integrated in South Africa, whereas in the rest of the world they are separate entities.
"In addition, the production for both BMW and Land Rover takes place in one plant - the only set-up like this in the world. With BMW SA being located so remotely in Africa,
costs concerning parts imports have to be carefully monitored and controlled, and the production process made even more productive and efficient to compete effectively."
Globally, BMW utilises SAP R/3 within several operations, including the head office in Munich, Belgium, Austria, Mexico and two operations in the United States. The US Spartanburg production facility, which produces the Z3 roadster, runs wall-to-wall SAP. Internationally, BMW AG is assisting SAP AG in the development of SAP`s automotive industry solution
BMW SA`s plant restructure included a major refurbishment of its assembly line and body shop, including the introduction of welding robots, and the construction of a new water-based, environmentally friendly paint shop, the first in SA`s automotive industry.
"A highlight of the new plant is our excellent new vehicle tracking system, integrated to SAP R/3," says Prof Dr Schuster. "As vehicles are pulled through the line, the bar codes are read and transmitted using advanced technology. Consumption is done on-line at ten tracking points, making work in progress and stock reports far more accurate."
The new system also enables users to access on-line shipping information, thereby keeping costs down. BMW SA receives information about its shipments via satellite, which is then fed into the SAP system.
BMW SA, which concentrates on the new BMW 3-Series, now has the infrastructure to produce 40 000 cars per annum, the majority of which will be exported.
"We have achieved a world class plant that can compete with our sister plants around the world," says Prof Dr Schuster.
Managing the SAP project
Due to the complexity of BMW`s transformation project, the SAP project was managed in-house and a number of different external consultants were chosen to work as part of the team. The business goals were to improve the processes, shorten lead times, improve productivity, increase volumes, extend option capability and save costs.
"Intimate knowledge of SAP R/3 functionality wasn`t enough," says Prof Dr Schuster. "We needed team members with a thorough knowledge of our business. We put together an excellent team featuring a mix of cultures, BMW and SAP skills, and nationalities, including members from BMW AG, our head office."
The major initial task of the project team was to understand and analyse BMW SA`s existing processes and then define new processes that would achieve the company`s aims. The initial planning and design stage, which was extremely comprehensive and in-depth, included creating project methodologies, documentation and setting up quality standards.
"One of our biggest achievements on the project was our comprehensive documentation," says Murison, "as we modelled every business process within BMW, and for each process we created implementation papers and technical documentation.
"This living documentation is updated when anything changes. Staff can see exactly what`s happening, and can review all the work that went into each area.
"Not many sites in the world can boast the depth of documentation that we have. We believe it will assist us to be competitive and enable us to produce cars as cost effectively as possible."
Prof Dr Schuster attributes the success of the SAP R/3 implementation to the fact that BMW had clear business objectives, and the correct implementation strategy.
"We also set up our team correctly," he says. "You need the right procedures and a clear project methodology. You also need suitable consultants and the appropriate skills for the different phases of the project. The skills required at the beginning are different from those needed at the end of the project."
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