BMW Quality Management Tools
Overview of the Company
BMW is a German company which manufactures automobiles. It was founded in 1916 and it was later contracted to manufacture plane engines during the World War I. The company has experienced massive growth since that time, and continues developing at present. Expansions were aimed at introducing mini automobiles and it has been a market leader in engineering, manufacturing, and supply chain management across the world. The company uses both quantitative and qualitative tools in the management of quality and recently it has modernized its operations to boost sales revenue.
As part of quality, the company has strived to deliver the best products and it is known for its luxurious, streamlined designs and high performance cars. It made records of being the first European company to join the US market and establish a manufacturing plant in South Carolina in 1994 where it produces the X5 and Z4 models for the US market and other markets in the world. Its success can be largely attributed to the quality management tools it applies in the course of designing, manufacturing and distributing cars to the market (Kochan, 2005).
The BMW Company has its representational offices in over 12 countries with over 22 factories for assembling. Its high investment in North America is greatly influenced by the growing market, hence the need for a higher volume production. The US market provided more professional labor and high skill level as compared to the cheap and undeveloped labor in the developing countries. It attracts massive investments in North America. The company has many regional distributions and its market penetration has been growing over the years. In 2014, the company sold more than 600,000 cars, 339,738 of which were new cars. The sales level experienced a 10% increase from the previous year (Chappell, 2015). The high sales volume is attributable to the quality management practices the company employs. Further, the company is aiming at opening new processing facilities at the ports to customize cars before they are sent to the dealers as part of a quality management. The main aim is to improve customer service through quality designs and faster processing of customer orders.
Quantitative Management Tools
The management tools rely on information that can be measured and expressed in the form of data. Such data could be expressed in mathematical forms and interpreted in the decision-making process. BMW utilizes the quantitative tools in the measurement of quality operations and products in its wide network across 12 countries. Such methods include:
- Sales Volume
BMW sales volume has been increasing over the years in many countries where the company has distributorship. For instance, China forms a big market for BMW cars with 114,000 vehicles sold annually. In the United States, approximately 339,738 cars were sold in 2014. With such figures, the company can determine the extent of its brand success in given countries. If the sales figures continue increasing, it will be attributable to quality cars being manufactured by the company.
It measures the extent to which revenues exceed the operating costs. Quality manufacturing processes reduce the operating costs, hence profits increase. It can be used as a decision-making tool in that it provides exact figures to gauge the company performance.
- Return on Investment
Current criterion measures the increase in shareholders’ value for their investment. The dividend payout ratio can be provided in quantitative terms and it shows the extent to which the company is effective in generating wealth for the shareholders.
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Qualitative Management Tools
The qualitative mechanisms rely on information which cannot be easily measured. It heavily depends on user judgment in the analysis and interpretation of results. As part of quality control, BMW utilizes various qualitative tools of management to determine the extent to which quality control is ensured in the company. Such tools include:
Present criterion cannot be expressed in numerical terms. The company gains reputation from its luxurious cars which are well-designed and have a high performance level. It is gained for satisfaction by the customers who make the brand grow to a worldwide recognition (Daniel, 2014).
- Brand Strength
The company’s brand is a strong feature in the success of its worldwide operations. However, it is a qualitative aspect which cannot be attached to any numeric values. Despite this, it is important in determining the extent of the company products’ success in meeting and exceeding the standards and expectations of the customers. The company’s quality products are responsible for the strong BMW brand.
How the Qualitative and Quantitative Tools Support Decision Making
When making decisions, the company has to rely on both qualitative and quantitative tools, since they supplement each other. For instance, customer feedback may not be easily expressed in numbers by a qualitative analysis, but can give a proper interpretation as to the extent to which customers are satisfied. The company can use quantitative data on the number of customers who buy its cars, the complaints received and the warranty claims from the company. It allows gauging the success of its products in the market. Statistical methods in such case provide efficient results on when to produce the quantity and where to sell.
The qualitative analysis at times may give ambiguous results, though it may contain additional information. For instance, it may indicate the feeling of the clients on the BMW cars together with the fact that customers would appreciate faster delivery of the cars. Such additional information is not available in the quantitative measures. The tools enable the company to predict sales growth, schedule production operations and capacity to produce. Further, the customer feedback in the qualitative measures gives the company valuable information to redesign their cars to meet the customers’ expectations. The combination of both measures helps in the process of appropriate decision-making (Mencl, 2012).
BMW Workflow to Enhance Continuous Improvement
As part of continuous improvement, BMW has established checks in the course of manufacturing to cater for quality products. In the manufacturing, processing and procurement functions, the company has organized the operations in a way that improvement is ensured in every step of production. In the course of engineering, cars are tailored to meet customer requirements. The company has embarked on establishing a wide coverage through its distributorships in the world to facilitate faster service delivery.
The workflow programs in the company provide BMW with a competitive edge through its growth prospects, profitability, shaping the future and the access to the new production and distribution technologies. Starting from the design of the cars, their quality is ensured till the car is delivered to the customer. The company aims at constant developing the workflow to give customers the ultimate experience with the BMW cars. The success factors in the workflow are the employees, shareholders and corporate management mechanisms. As a result, they work together to deliver the highest quality of products and services (Reeves, 1994). As part of the continuous improvement, BMW is working on a formula to increase the strength of the external networks together with communications with the relevant stakeholders groups. Through the production chain, the key challenge is the increasing fuel prices together with the fuel consumption and emission standards which vary in the countries of operation. It has placed a strong demand to have the engines modified to meet the regulatory policies of the countries in which the cars will be used.
Workflow Improvement Plan for BMW
The use of quality management tools presents critical approaches to designing systems for production optimization. As a part of the continuous improvement, the company has to use both qualitative and quantitative quality control mechanisms for excellent decision-making strategies. Further, monitoring of the tools efficiency is necessary to determine the best tool to use when making predictions. Having more tools in the quality control practice will lead to improvement in the company’s ability to deliver the customer expectations.
The flow of activities form one assembling section to the other has to be keenly monitored to allow all the inefficiencies to be detected and corrected in a timely manner. It can be made possible through locating all the sections for the automobile assembling at one site. It will allow quality to be easily determined and corrections made. In the improvement plan, each work group should pass quality to the next production team in the chain. It can help in determining the inefficiencies in the workflow program and corrective measures will be taken to improve the situation. In order to fully monitor the workflow program, BMW could consider having a quality management team, which is focused on delivering quality to the customers, and ensuring a cross-functional coordination of all the production sections. The key objective of the quality team is to ensure process optimization and reduce customer complaints by identifying mistakes in the production process and taking corrective actions (Xu, 2011).
The Effectiveness of the Analytical Tools in Improving Quality Management
The analytical tools used in improving quality in BMW play a key role in maintaining the company and giving it a competitive edge over its competitors. Quality and superior cars have made the company’s brand a worldwide servicing many clients in the car industry. Improvement plans in quality management are possible through customers’ feedbacks. It provides valuable information to the company to tailor its products based on customers’ expectations. Therefore, such feedback has to be critically analyzed in order to gauge the efficiency of the tools as part of continuous improvement. All feedbacks are beneficial in quality management.
The analysis of sales across all markets which are served by BMW is critical in determining the production rates and expansion capabilities. Without such measures it would be difficult for the company to meet sales targets of different regions due to underproduction.
The use of both statistical and non-statistical measures should provide a way to gauge the company’s profitability. The revenue forecasts should be met and any deviations analyzed for maximum outputs (Tennant, 2001). BMW key strategies in ensuing continuous improvement should be guided by a strong application of the quality control measures, both quantitative and qualitative. The advantage of such application will be a conducting of a multi-dimensional approach in managing quality of cars being produced through analyzing information in possession of all the stakeholders for maximum output and productivity.
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In conclusion, quality management in BMW Company is a key issue in the current global economics. Resources should be diverted towards quality management as it is a key to the company’s potential in the car industry. Additionally, the customers focus is an important factor in quality management cycle, as all efforts are directed towards them in terms of delivering cars and meeting their expectations.