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Management Process On BMW Organization

The brand name (BMW) was established around the year 1913. During this period, the previous owner of a German aircraft company and a distinguished engineer, K. F. Rapp had established a business in order to manufacture aircraft engines (McDonald, 2005). He had started the company with the name of Rapp Motoren Werke in the city of Munich (originally, the company was based out of a suburban location. The primary reason behind setting up the company at this location was the presence of a major customer (Gustav Otto Aircraft Company) at a nearby location. Rapp quickly met success in his business of manufacturing aircrafts. However, he continued searching for new dimensions in order to keep his company growing. Keeping his efforts steady, he successfully secured a large order to build a huge amount of V12 engines on behalf of various companies which found themselves unable to cater to the continuously escalating demand for these engines (McDonald, 2005).


For diverse firms such as BMW, the field of operations management is extremely important. Following points stress the importance of operations management in BMW:

Team Management- Team management is an important aspect of Operations Management

as it outlines the working methodologies of an organization (McDonald, 2005). Further, this aspect gains even greater importance in context of multidimensional organizations like BMW as it largely supports cross functional teams in order to better solve problems (McDonald, 2005). BMW believes that just by looking at it, cross functional teams often look inefficient and messy but they are extremely efficient at solving problems that require diverse thinking. In accordance to the managements belief BMW suspended its classic hierarchy and switched to networks in order to improve efficiency also helped BMW in keeping ahead of its competitors. The management at BMW still turns to the typical hierarchical approach while defining strategic organizational goals but provides its workers the freedom to pick teams from various divisions and hence achieve operational goals in the best way possible. By making a shift to these kinds of human networks while managing its day to day operations BMW has made itself equally entrepreneurial as a new tech startup. The entire process of building and managing cross functional teams has helped BMW in speeding up innovation and change (McDonald, 2005).

Change Management- Change Management forms another important aspect of Operations

Management in an organization related to the automobile sector. This is in order to manage the lightening fast changes that are currently taking place in the auto industry. BMW predicts that currently, around 20 percent of a cars value is driven by electronics (this level is continuously raising. Thus, BMW has focused its operations management strategy in order to electronically drive 90 percent of the product innovations. Hence, an electronically driven trend has forced the

once slow moving auto companies (including BMW) to adapt to the current pace of change and innovation.

Strategic Management- This category of operations Management concerns itself with

various strategies that are formulated by an organization in operational context. The importance of this category in BMW lies in the effectiveness of strategy implementation and the efficiency with which various organizational processes work. For an organization to work efficiently, it is essential that it employs savvy workers that help optimize various processes. For these workers to optimize various processes, it is however important to have an operations management strategy that permits change. Thus having an effective operations management strategy is extremely important in order to implement change and optimize processes (McDonald, 2005).

Process Management- Process Management in an organization pertains to managing

various organizational processes (this includes manufacturing, production etc). The importance of process management in BMW lies in maintaining effectiveness and efficiency of the organization. BMW when dealing with the efficiency aspect concerns itself with optimum utilization of human, financial and other resources (this deployment is irrespective of the original purpose of bringing these sources into the organization). BMW through various activities makes sure that the primary objective of its establishment (i.e. maximization of shareholders worth and earning profits) is fulfilled. BMW ensures that the various tangible as well as intangible resources that have been deployed in the organization are not wasted. This reduces its cost of production. Thus, for BMW operations management is important in order to carry out the objectives of an increased labor productivity, yield and appropriate working capital utilization (McDonald, 2005).

Product Management- This category of Operations Management concerns itself with

managing a product (or service) right from the stages of idea generation to providing after sales services. Product Management is extremely important to BMW as it places great importance in its products and services. According to the management at BMW, there are various aspects to product or service management. The process of product management originates right from the time of idea generation for a new product and continues till providing ongoing support to customers of the new product. BMW with the help of an effective operations management utilizes its core competencies in various fields such as marketing, branding, manufacturing in order to gain a competitive advantage (Payne, 2005).


Marketing and Sales- BMW is characterized by an extremely strong brand image which is
extremely well known globally. Further, BMW stresses the values of technology, performance, quality, exclusiveness etc. BMW believes in the communication of these values through its end products. In addition to communicating these values BMW utilizes a variety of methods in order to promote variety of products under the umbrella of BMW. Thereby, the company faces the continuous challenge.

Procurement- This category concerns itself with the purchasing of raw materials and other
supplies. As mentioned above there are two major automotive clusters where the raw material purchases of BMW are concerned, this is a continuous challenge for the company. These are the Leipzig plant and the Ace Automotive clusters. Moreover, all of the twelve production plants (that are scattered around the world) are interdependent for the purchase of raw materials and other supplies.

Technological Development- BMW gets challenges regarding continuous technological

development and innovation while bringing new products into the market. BMW has been trying to continuously improved its products in terms of best technologies available in the market.

Human Resources- This category concerns itself with recruiting, hiring and providing
training to new employees. BMW has specialized scrutinizing processes through which only the best available brains in the market are picked.

Managerial systems should help organizational operations in the following ways:

Quality control systems- BMW has various quality control systems in place in order to
ensure quality of end products. The quality control systems help BMWs operations by continuously improving the current organizational processes in order to match customer tastes and preferences. It is because of the quality management systems that are in place at BMW that latest advancements in quality (such as reengineering of products, outsourcing, total quality management etc) have been made. It is through the implementation of these measures that BMW seeks market leadership (Webster, 2007).

Management Control Systems-

Management control systems that are currently implemented at BMW ensure that the companys goals are consistently being met in an efficient manner. These systems help operations by enabling the management to figure out the extent to which the company is following its pre determined goals.

This report takes BMW as a test case and analyses the importance of operations management for BMW. For this purpose, various aspects have been taken into consideration such as project management and control, quality management, facilitates management, inventory management etc. In addition various challenges that the company faces is being identified. Lastly, it is followed by certain recommendations (Deshpande, 2009).