Most liked posts in thread: Parts Shortages? BMW has Supply Chain Breakdown

BMW has made significant changes in the software used for the parts distribution process. Reports are that it has not been going well, hence the parts shortages.

 

This got more print in Automotive News today

BMW owners vent anger at months-long wait for spare parts

MUNICH (Bloomberg) -- South African Neels Kilian was as proud as any BMW owner could be when he got his new 3 series in May. After getting into an accident a few weeks later and still waiting today for repairs, he's reconsidering that sentiment.

The resident of Gauteng, South Africa, needs a rear fender replaced before the car is driveable again. In the meantime, he's still making a monthly payment of 8,000 rand ($770) and has to bear additional costs for work travel because he hasn't been offered a loaner.

"This is shocking!" Kilian wrote in an e-mail. "It is impossible to repair my vehicle; why is BMW unable to issue a warning to customers when buying this brand?"

Kilian is among customers across the globe angered by BMW's failure to promptly deliver spare parts to fix their vehicles.

BMW has struggled since the beginning of June to ship components on time because of a new supply-management system being introduced in its central warehouse in Germany. The delays have caused ripple effects globally because orders for BMW's 40 parts-distribution centers originate at the main facility in Dingolfing. The warehouse also directly supplies about 300 repair shops in Germany.

Raimund Nestler, who lives in Ingolstadt, Germany, has been waiting six weeks for a new part that controls engine speed. "I have always been a die-hard BMW driver and am currently driving my seventh BMW, but will consider which brand I'll buy the next time," he said. "For a premium carmaker like BMW, this is particularly disappointing."

About 10 percent of parts are not immediately available in Dingolfing because of the logistics changeover, Manfred Grunert, a spokesman for the automaker, said on Tuesday. BMW has workers on extra shifts to help shorten the wait, and aims to have the new system working properly by early September. "We deeply regret any inconveniences caused to our customers," Grunert said.

Image tarnished

The logistics troubles come as BMW is under pressure to maintain the global luxury sales crown with both Audi and Mercedes-Benz vowing to take the top spot by the end of the decade. The longer the delays drag on, the more BMW's image as a high-end automaker is tarnished.

"The logistics problem is comprehensible, but three months is too long," said Juergen Pieper, a Bankhaus Metzler analyst in Frankfurt. "Damage has certainly occurred. I see a hit to their reputation and a financial burden of tens of millions."

The logistics project -- named ATLAS for Advanced parTs Logistics in After Sales -- was started in Dingolfing in 2009, according to a joint press release at the time from International Business Machines Corp. and SAP AG. IBM, which was the main contractor, said last week that it's no longer involved in setting up the program. SAP is supplying the software for the warehouse management system, the German company said. BMW declined to comment on its suppliers.

Australia woes

Australian Eric Gibson said repairs on his BMW motorcycle have been dragging on for three months.

"I can now ride the bike, but I'm still waiting for one more part, a driving light," Gibson said.

Fellow Australian Lisa Stephenson, who lives in Coolamon, a farming community 480 kilometers (298 miles) northeast of Melbourne, isn't as fortunate. Her mechanic has advised her not to use her BMW, which she needs to get around in her rural area, because the part that needs replacing could cause a fire.

"I've been waiting for five weeks for a fuel elbow," Stephenson said. "My mechanic informed me this week that the part won't arrive until sometime in October. This is extremely frustrating. Shame on BMW. I am one very unhappy customer."

BMW is sending components via airfreight to speed up delivery times and is trying to provide replacement vehicles for waiting customers, Grunert said.

Stephenson and Kilian both said they haven't been offered a loaner.

"BMW is unable to inform me when to expect this part in South Africa or when my vehicle would be repaired," Kilian said. "It could be another four months or so."


Read more: http://www.autonews.com/article/20130828/COPY01/308289961/bmw-owners-vent-anger-at-months-long-wait-for-spare-parts#ixzz2dIXnYkda

 

BMW will fix supply-chain delays by month's end, execs say

FRANKFURT (Bloomberg) -- BMW will resolve the supply chain problem that has delayed the delivery of spare parts around the world by the end of this month, top executives said.

"We regret this and will resolve the problem in September for sure," CEO Norbert Reithofer said at a press briefing at the Frankfurt auto show.

"By the end of September," the spare parts supply will function again as usual, Peter Schwarzenbauer, head of after sales and parts, said in an interview at the show.

Thousands of customers have suffered long waits for BMW components because of a changeover to a new logistic management system in the central warehouse in Dingolfing, Germany, at the beginning of June. The delays have caused ripple effects globally because orders for BMW's 40 parts-distribution centers originate at the main facility in Dingolfing.

Customers from Australia, South Africa, Belgium, Romania, Canada and the U.S. have cited waiting times of as long as three months for components to fix their vehicles.

In Germany, where some dealers are supplied directly by Dingolfing, about 3,000 BMW customers had to wait an unusually long time to get their cars repaired because of missing parts, Schwarzenbauer said. In the rest of the world, a smaller proportion of customers was affected because BMW had filled up its 40 global distribution centers before the system change.

Six-day shifts

A couple of managers traveled from Munich to Dingolfing on a Saturday in July voluntarily to help employees fill the central warehouse, Schwarzenbauer said. Workers there have worked in three shifts six days a week since June to get parts to the distribution center and repair shops as quickly as possible, he said.

"This was the biggest data change-over at BMW in the last 20 years," Reithofer said.

About 10 percent of parts aren't immediately available in Dingolfing because of the logistics changeover, Schwarzenbauer said. "Parts logistics is among the most complex topics I know," he said. "Looking back, we should have completed this two to three weeks earlier."

The logistics project -- named ATLAS for Advanced parTs Logistics in After Sales -- was started in Dingolfing in 2009, according to a joint press release at the time from International Business Machines Corp. and SAP AG.

IBM, which was the main contractor, said last month that it's no longer involved in setting up the program. SAP is supplying the software for the warehouse management system, the German company said.

BMW declined to comment on its suppliers.

Read more: http://www.autonews.com/article/20130911/COPY01/309119960/bmw-will-fix-supply-chain-delays-by-months-end-execs-say#ixzz2ecZxrNmz