Abstract
The study seeks to offer an attentive examination of the supply chain design in the auto-industry taking BMW as the case. In addition, this study will explore how supply chain design increases the competitive advantage to the firms within the auto-industry.
With the use of theoretical and empirical studies, the paper will further explore the supply chain design that is appropriate for firms such as BMW. The conclusion drawn in the study is that appropriate design for the firms supply and distribution processes increases its competitive advantage. The study recommends further plan for potential studies in this field.
Introduction: BMW
BMW is one of the largest automobile products manufactures around the globe. BMW claims larger market share in the automobile industry. Over the years, the company has managed to generate growth in profitability through establishing within the premium segment of the automotive market. To meet the needs of the market, the company has diversified its products.
Besides, the company has managed its supply chain to ensure its products take the least time to reach the customers. the company realized that proper management of its supply chain is one of the capabilities the company can utilize to remain competitive and increase its market share.
Despite the fluctuations that have occurred in the automobiles market, BMW has continued to register immense growth in production volumes as well as sales. In addition, to achieve growth and development, BMW has embraced the commercialization of sophisticated environmental expertise as well as reforming its organization to earn revenue.
Further, the company undertakes actions aimed at reinforcing its market share particularly on the fast developing economies. BMW have also focused on delivering inexpensive quality automobiles to its clients as well as offering products with low harmful discharges in the environment.
BMW recognizes the need for close cooperation with suppliers in the provision of its products. As a result, it has established worldwide connections with suppliers to accomplish its pledge of providing quality and superior automobile product presentation. In addition, the firm has cultivated trust with its business partners through sustaining equity in their relations by valuing the existing rules and guidelines.
Further, BMW recognizes that all its partners as well as its suppliers should be offered equal prospects in business transactions. Moreover, the firm has been able to work with other partners in coming with standard prices hence achieving synergies in their operations to increase its growth potential.
BMW’s customer services operations have achieved immense gains in the realization of the best services to its customers globally. The firm has achieved this by giving customer satisfaction a priority in its operations. Further, the firm has approved a strategy of providing affordable, reliable as well as developing the efficiency in the production.
The company also undertakes various measures aimed at creating an environment where customers are able to address issues concerning the fulfillments they receive from the services. Through these initiatives, BMW has been able to increase its customer base in many parts of the globe such as in India, China, Brazil, and Nigeria among other fast developing economies.
The purpose for the study
The current increased competitive environments in the market place have put a lot of pressure on the corporations to be innovative or be completely out of operations. Innovations reduce the time the products take in the market place and as a result reduce its life cycle (Pyke & Cohen, 2004).
Proper management of the product movement from the production point to the market place is highly needed in order to enhance its competitive advantage. With no appropriate management of the product lifecycle, the product returns will increase that subsequently leads to the increase in the cost of selling (Towill, 2006).
The increased cost of productions means additional requirement of resources for the development of products. These additional cost problems are caused by long runs in the production and distribution of the products.
Emphasizing on the planning of logistics is the only way through which companies can do away with the difficulties caused by enhanced competition in the market place and shorter merchandise time span (Pyke & Cohen, 2004).
Designing appropriate supply chain procedures and processes will create appropriate distribution channels for the firm efficient operations environment (Ishii et al., 2008). Besides increasing efficient distribution channels, the efficient supply chain design will reduce the time the product takes in the market as well as increasing the product competitiveness.
The purpose of this study is to offer an extensive examination of supply chain design processes within the automobile firms that would enable them satisfy the customer needs. Precisely, the study will explore various ways of coming up with appropriate supply chain design applicable to the firm in order to meet the market needs.
The process of supply chain design will trace the path from the supply of the components, through the production process to the distribution process. In addition, the study also explores the planning of the logistical processes involved in the creation of the multigenerational products within the automotive industry particularly in BMW.
Background
The study will be both empirical and theoretical. The empiricall study will determine the relationship between appropriate logistical plan and the increased competitive advantage of the products in the market.
In addition, the paper aims to determine empirically the relationship between the appropriate supply chain design and the product life cycle. The empirical studies will also determine the correlation between the supply chain plans and the increased productivity within the firm.
The theoretical objective of this study is to examine how the process of supply chain design has enabled the company increase its products presence in the market.
Moreover, the study aims to find different approaches in the supply chain design to ensure that the appropriate logistics is developed to help companies provide quality services to the customers. With the use of BMW as the case firm that have applied the appropriate supply chain design, the study will quantitatively explore how various firms have attained their supply chain processes.
The Scope of investigation
The study will be both qualitative and quantitative. The qualitative part will be based on the literature review while the quantitative will be based on data collected through a survey. The survey will consist of a questionnaire that will be administered to the sampled population consisting of logistics and supply chain managers within the automotive firms.
In this study, some of the information will be obtained through the literature review of the scholarly articles as well as the materials pertaining to the supply chain and logistics firms as well as relevant information from the automobile industry industry. Moreover, the study will be limited to BMW with reference to the supply chain and logistics industry.
However, empirical studies will be conducted and the studies will be limited to the managers as well as supply chain and logistics managers in various departments within the company. In the empirical study, survey questionnaires will be the most suitable method of data collection since it is the best method of reaching the respondents within the target group.
In the empirical study, all logistics and supply chain managers are deemed viable. However, only 60 participants will be the selected depending on the frequency with which they have been involved in the supply chain planning as well as their knowledge in the supply chain design.
During the empirical study, the data collection should be given the least time possibly two weeks. However, to ascertain the results of the study, the survey will be conducted two times and therefore the study will take two months. The survey will be conducted online since this is the only way to get the respondents within the time span.
The theoretical framework
For this research to meet its obligations, it will be an exploratory research. The reason for the choice of this methodology is due to its innovation of novel ideas that is required in the supply chain design.
Through exploratory, the research will come up with new and clear concepts explaining the dynamics and processes in supply chain design, set up main concerns, build up on operational explanations and improve on the final research design.
Literature review
A delivery chain is described as an incorporated procedure in which an amount of diverse production units such as sellers, producers, distributors and vendors function as a unit to obtain raw materials, change them into required manufactured goods, and to distribute the ready for consumption goods to the vendors (Wikner et al., 2011).
Conventionally, this chain is portrayed by onward flow of resources and backward stream of data. Practitioners and researchers have for years mainly examined different developments that are involved in the delivery sequence independently (Wikner et al., 2011). Nevertheless, in the recent times, there has been growing concern on the performance, blueprint, and the scrutiny of the entire delivery chain (Wikner et al., 2011).
A delivery chain consists of two fundamental incorporated processes at the top. These are the production planning and inventory control process, and the distribution and logistics process. These courses of action provide very essential foundation in the change and movement of raw material into finished goods (Newhart et al., 2009). The former comprises the manufacturing and storeroom sub-procedures.
More precisely, the manufacture scheduling explains the design as well as the supervision of the whole procedure in the assembly ranging from resource planning and purchase, assembling process plan and planning, to material management plan and direction (Tzafestas & Kapsiotis, 2004).
Stock control explains the plan and organizing the luggage compartment guiding principles together with processes for raw materials, work-in-process stock, as well as often-consumable goods.
The latter shows the way goods are recovered and transferred from the depot to the vendors either directly or through other intermediaries who then transport them to the sellers. In this plan, stock recovery management, transfer and supply of end consumable goods (Tzafestas & Kapsiotis, 2004).
An interrelation between these processes gives rise to an incorporated delivery chain. The plan together with running of these processes establish the degree to which the sequence of functions as a component to achieve the laid out performance objectives (Newhart et al., 2009).
For instance, BMW developed its supply chain that increases its competitiveness within the world market. In addition, the supply chain design enabled the company decreased most of its expenses within the distribution channel.
In order to optimize the upgrade conduit for its machinery and components from one point to another within the multiple product creation, the company designed a supply chain that reduced its development and production costs as well as component functionality necessities (see figure 1 in the appendix).
Supply chain design within the automotive industry and its importance
The supply chain design with the automobile industry delivery series comprises a three-sequence of supply as well as a stage organization. A stage organization includes a constituent supplier, a unit supplier as well as an assembly plant. For instance, in the BMW’s production system, the components are assembled in units, which are then delivered to an assembly point.
In daily operations, new experiences come up and therefore there is need to develop new designs (Kouvelis & Gutierrez, 2007). For instance, given the new developments by automobile producers in terms of alertness as well as sensitivity, the supply chain design is developed as an approach to remain relevant in the automobile industry.
Through delivery chain redesign, several benefits accrue to the firm. For instance, proximity of the assembly plant to the manufacturer enables efficient decisions on quality as well as reaction to program alterations. In addition, with the new design, the abortion of in-shipment stock to the manufacturer is feasible thereby reducing expenses.
Moreover, due to supply chain redesign, the expenses incurred in terms of labor are minimized since the manufacturer’ s plant is situated in an area closer to the laborers hence no need for transport (Kouvelis & Gutierrez, 2007).
Considerable decreases are achieved in the production costs due to the shortening of the gap between the different components and units to the manufacturing plant. Further, the new design is capable of meeting the demands of the consumers efficiently.
Methodology
The study design
In order to investigate the impact of quality in supply chain design in the firms’ production and distribution processes, this particular research study will utterly be a quantitative research. The requisite research data will be gathered across the study population through sampling strategy.
A research technique dubbed as survey method will essentially be drawn on while the process step levels will be applied to help analyze the obtained data. By employing these research methods, any ensuing unanticipated research hypothesis will possibly be suggested as well as formulated and the study will be much quicker and somewhat cheap (Cohen & Lee, 2008).
These research methods are sequentially considered to be amongst the best given that they rarely stand a chance of disqualifying any notable alternative explanations because they surmise to the event causations.
Sample and sampling procedure
In this particular study, all logistics and supply chain managers are deemed viable. However, only a small number of participants will be the selected depending on the frequency with which they have been involved in the supply chain planning as well as their knowledge in the supply chain design.
From the total number of supply chain managers that may be sampled, just one hundred supply chain managers will be selected via a technique dubbed as convenience simple online random sampling strategy and the research questionnaire will be administered to help in addressing the formulated research questions (Cohen & Lee, 2008).
Instrumentation
Data perceived to be containing the relevant research information for this study will be acquired from the primary as well as the secondary sources.
In fact, as a field survey and a study that involves self-administration of research questionnaires, the pertinent primary data that include the perceived quality information will have to be gathered. In essence, a comprehensive exploration instrument will be developed besides being satisfactorily tested prior to embarking on the actual quality services and organization’s success research study.
Data collection
As one of the most important studies in the industry, the information will be collected through administering properly designed research questionnaires, observations alongside conducting well-structured in-depth online interviews to the unbiased selected participants. The soundly designed research questionnaire will be administered to one hundred participants.
Conversely, secondary research data will be acquired from the relevant industry records and other documents, which contain the of supply chain design. For this particular case, the study intends to trace the supply chain history and various models that have been applied in the designing supply chain plans.
Data analysis techniques
To obtain the best correlation approximation values, the study quantitative data analysis will be carried out by utilizing the integrated Statistical Analysis Tool (WISAT). Further quantitative data analysis techniques including spearman’s correlation, percentages, frequency distribution and deviations will be used to determine the research respondents’ proportions that chose various responses.
The method will be applied for each group of items available in the questionnaire that ideally corresponds to the formulated research question and objectives. Line graphs, tables as well as statistical bar charts will be used to make sure that quantitative data analysis is simply comprehensible (Cohen & Lee, 2008).
Findings discussions and analysis
From the study of supply chain of BMW, quantitative performance parameters are very vital in the determination of delivery chain’s output. The direct expenses, gains, or the clients’ reception determines the quantitative measures that are used. Based on costs, emphasis is put on production and allocation outlays. The study show that the allocation costs mainly arise from outlays incurred in transport.
As a result, in a haul-based arrangement, there is a possibility of abandoning the inventory level in the delivery series because supply is independent of the arrangement vibrancy. However, a change of existing restrictions of the units as well as modules influenced the conception of the idea about redesigning the supply series. The modular assembly unit is to be situated in an area with proximity to the assembly plant.
This reduces expenses based on transport, warehouse as well as inventory levels. There is evident indicating that alternating the current supply chain through cutback in the process constraints and changing positions come with substantial gains. In other words, the achievement of the customer satisfaction depends on the delivery of units where the firm embraces proximity to its customers.
Another critical point to success is the collaboration of the component traders in reduction of costs. As a result, the transfer of the assembly plant near the clients leads to increased gains to the firm.
In addition, the new design is advantageous because the modular assembly covers all aspects of the firm and therefore it is able to offer direct answers to its customers. The firm is thus able to be a resource of innovative business concepts that are able to be beneficial to the to the entire automobile business fraternity.
The study limitation and anticipation
The research scope is limited to particular demographic group of supply chain managers and only one within the industry. The anticipation is that the outcome of the study will inform further research on the field.
Moreover, the outcome of the study should inform industry practitioners as well as those within the field on the appropriate supply chain design to be adopted by the corporations. Further, the study provides a historical and modeling framework that can be applied in the planning of appropriate supply chain.
Conclusion
Supply chain design is one of the most important processes in the production and distribution of commodities into the market. Appropriate supply chain design enables corporations attain the built-up expenditure reductions in their production and distribution processes.
In addition, it increases the effectiveness and efficiency in all the business processes, which in turn increases the firms’ competitiveness. Further, to attain cost efficiencies in multiple product creation, the company needs a supply chain design that reduces development and production costs as well as component functionality necessities.
References
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Kouvelis, P & Gutierrez, G 2007, “The newsvendor problem in a global market: optimal centralized control policies for a two-market stochastic inventory system,” Management Science, vol.43 no.5, pp.571-585.
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Pyke, DF & Cohen, MA, 2004, “Multi-product integrated production-distribution systems,” European Journal of Operational Research, vol.74 no.1, pp.18-49.
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Tzafestas, S & Kapsiotis, G 2004, “Coordinated control of manufacturing/supply chains using multi-level techniques,” Computer Integrated Manufacturing Systems, vol.7 no.3, pp.206-212.
Wikner, J, Towill, DR & Naim, M 2011, “Smoothing supply chain dynamics,” International Journal of Production Economics, vol.22 no.3, pp.231-248.
Appendix
BMW supply Chain Design
