Total Quality Management in BMW

Bayerische Motoren Werke (BM

Submitted To:
Mam Mahreen Fatima

Sargodha University,
Gujranwala Campus
Total Quality Management in BMW

BY
Hafiz Zia

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Rana Shoaib Aslam

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Umar Sharif

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Muhammad Ahsan

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Asif Iqbal

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Waheed Mustafa

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DEDICATION

Dedicated to
Faculty & Students
Sargodha 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 worlds 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.

CPE RMU O SP TDL O U Y MC E TE R D I N SE VSA TOI G ISL N V F , EA PMC R TE O IN O C T N E , S S

DC OE SN I TG INN ,U P O U U R S C IH M A P S R I NO GV E, MB E N C T H M A R K IN G , D E C IS IO N M A K I N G T O O L S
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 buyers 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 managements 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 Improvement

The BMW X5 is just one example of the companys 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 customers 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 Involvement

Employees 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 Partnership

Ergonomics 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.