O ne of the primary reasons for BMWs quality issues was its strategy of using different tools andmaterials in the prototyping process when compared to the production runs.BMW supported such adual development process to provide flexibility to its prototyping craftsmen to make changes to thedesign quickly. For instance, the prototype shop was able to make new parts within a week of beingintimated of a design change. In contrast, the lead time for procuring pre-production tools fromsuppliers was 6 months. Providing such flexibility though had a flip side to it - something which workedin the prototyping phase may not work in the production phase. This meant that potential problems inthe design could be identified very late in the development process. People in pilot production spent alot of their time identifying and solving the big problems leaving them little or no time for minorproblems and fine tuning. Thus there were chances of minor issues creeping into actual productionresulting in customer complaints after sales.Another reason which contributed towards BMWs quality issues was its mixed-model ramp up strategy.In order to utilize the high fixed costs involved BMW adopted a mixed model ramp up strategy. Whilethis permitted better utilization of fixed assets, it caused greater confusion among the workers andmade the logistics more complex. This problem was compounded due to the fact that not all problemswere discovered or solved in the pilot production phase. This in turn affected the quality of the carsbeing produced. At the same time frequent changes to the production schedule resulted in escalation of costs as well.The above reasons might have played a significant role in BMW losing out to Japanese competitors inthe rankings on customer satisfaction and quality. Its market share in the US remained constant but theshare of Japanese manufacturers had increased by more than 10%. Its warranty expenses wereincreasing and increase in design issues identified at the end of development process would onlyincreases the chances of a delay in the launch.
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ne of the ways in which BMW can improve its launch quality is to minimize the gap between prototypeand production process in terms of tools and materials used. The closer the prototype is to the actualproduction output, the sooner in the development process can the design problems be identified. Thiswould require BMW to involve suppliers and use pre-production tools in the prototype phase itself. Theflip side to this strategy is that after every prototype cycle if there are any design changes, a new set of pre-production tools needs to be ordered. We need to consider the following in this context: