IDEAS home Printed from https://ideas.repec.org/a/inm/orinte/v36y2006i3p194-208.html
   My bibliography  Save this article

Strategic Planning of BMW’s Global Production Network

Author

Listed:
  • Bernhard Fleischmann

    (Department of Production and Logistics, University of Augsburg, Universitätsstraße 16, D-86135 Augsburg, Germany)

  • Sonja Ferber

    (BMW AG, D-80788 München, Germany)

  • Peter Henrich

    (BMW AG, D-80788 München, Germany)

Abstract

We developed a strategic-planning model to optimize BMW’s allocation of various products to global production sites over a 12-year planning horizon. It includes the supply of materials as well as the distribution of finished cars to the global markets. It determines the investments needed in the three production departments, body assembly, paint shop, and final assembly, for every site and the financial impact on cash flows. The model has improved the transparency and flexibility of BMW’s strategic-planning process.

Suggested Citation

  • Bernhard Fleischmann & Sonja Ferber & Peter Henrich, 2006. "Strategic Planning of BMW’s Global Production Network," Interfaces, INFORMS, vol. 36(3), pages 194-208, June.
    • Handle: RePEc:inm:orinte:v:36:y:2006:i:3:p:194-208
    DOI: 10.1287/inte.1050.0187
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/inte.1050.0187
    Download Restriction: no
    File URL: https://libkey.io/10.1287/inte.1050.0187?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Arthur M. Geoffrion & Richard F. Powers, 1995. "Twenty Years of Strategic Distribution System Design: An Evolutionary Perspective," Interfaces, INFORMS, vol. 25(5), pages 105-127, October.
    2. Fleischmann, B. & Meyr, H., 2003. "Planning Hierarchy, Modeling and Advanced Planning Systems," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 36714, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    3. Mark Goetschalckx & Bernhard Fleischmann, 2005. "Strategic Network Planning," Springer Books, in: Hartmut Stadtler & Christoph Kilger (ed.), Supply Chain Management and Advanced Planning, edition 0, chapter 6, pages 117-137, Springer.
    4. William C. Jordan & Stephen C. Graves, 1995. "Principles on the Benefits of Manufacturing Process Flexibility," Management Science, INFORMS, vol. 41(4), pages 577-594, April.
    5. Herbert Meyr & Jens Rohde & Michael Wagner & Ulrich Wetterauer, 2005. "Architecture of Selected APS," Springer Books, in: Hartmut Stadtler & Christoph Kilger (ed.), Supply Chain Management and Advanced Planning, edition 0, chapter 18, pages 341-353, Springer.
    6. Cohen, Morris A. & Moon, Sangwon, 1991. "An integrated plant loading model with economies of scale and scope," European Journal of Operational Research, Elsevier, vol. 50(3), pages 266-279, February.
    7. Arnd Huchzermeier & Morris A. Cohen, 1996. "Valuing Operational Flexibility Under Exchange Rate Risk," Operations Research, INFORMS, vol. 44(1), pages 100-113, February.
    8. Stephen C. Graves & Brian T. Tomlin, 2003. "Process Flexibility in Supply Chains," Management Science, INFORMS, vol. 49(7), pages 907-919, July.
    9. Shanling Li & Devanath Tirupati, 1994. "Dynamic Capacity Expansion Problem with Multiple Products: Technology Selection and Timing of Capacity Additions," Operations Research, INFORMS, vol. 42(5), pages 958-976, October.
    10. Bruce C. Arntzen & Gerald G. Brown & Terry P. Harrison & Linda L. Trafton, 1995. "Global Supply Chain Management at Digital Equipment Corporation," Interfaces, INFORMS, vol. 25(1), pages 69-93, February.
    11. Meyr, H., 2004. "Supply chain planning in the German automotive industry," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 36062, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jesús F. Lampón & Pablo Cabanelas & Javier González Benito, 2015. "The impact of implementation of a modular platform strategy in automobile manufacturing networks," Working Papers. Collection B: Regional and sectoral economics 1502, Universidade de Vigo, GEN - Governance and Economics research Network.
    2. Jesús Lampón & Pablo Cabanelas & Vincent Frigant, 2017. "The new automobile modular platforms: from the product architecture to the manufacturing network approach?," Post-Print hal-03187886, HAL.
    3. Annika Becker & Raik Stolletz & Thomas Stäblein, 2017. "Strategic ramp-up planning in automotive production networks," International Journal of Production Research, Taylor & Francis Journals, vol. 55(1), pages 59-78, January.
    4. De Giovanni, Domenico & Massabò, Ivar, 2018. "Capacity investment under uncertainty: The effect of volume flexibility," International Journal of Production Economics, Elsevier, vol. 198(C), pages 165-176.
    5. Sabet, Ehsan & Yazdani, Baback & Kian, Ramez & Galanakis, Kostas, 2020. "A strategic and global manufacturing capacity management optimisation model: A Scenario-based multi-stage stochastic programming approach," Omega, Elsevier, vol. 93(C).
    6. Wang, Mengyue & Huang, Hongxuan, 2019. "The design of a flexible capital-constrained global supply chain by integrating operational and financial strategies," Omega, Elsevier, vol. 88(C), pages 40-62.
    7. Christian Weckenborg & Karsten Kieckhäfer & Thomas S. Spengler & Patricia Bernstein, 2020. "The Volkswagen Pre-Production Center Applies Operations Research to Optimize Capacity Scheduling," Interfaces, INFORMS, vol. 50(2), pages 119-136, March.
    8. Sanjay Dominik Jena & Jean-François Cordeau & Bernard Gendron, 2017. "Lagrangian Heuristics for Large-Scale Dynamic Facility Location with Generalized Modular Capacities," INFORMS Journal on Computing, INFORMS, vol. 29(3), pages 388-404, August.
    9. Jakubovskis, Aldis, 2017. "Flexible production resources and capacity utilization rates: A robust optimization perspective," International Journal of Production Economics, Elsevier, vol. 189(C), pages 77-85.
    10. Anandasivam Gopal & Manu Goyal & Serguei Netessine & Matthew Reindorp, 2013. "The Impact of New Product Introduction on Plant Productivity in the North American Automotive Industry," Management Science, INFORMS, vol. 59(10), pages 2217-2236, October.
    11. Moritz Julius Ziegler & Kilian Seifried & Philipp Kuske & Moritz Fleischmann, 2019. "TRUMPF Uses a Mixed Integer Model as Decision Support for Strategic Production Network Design," Interfaces, INFORMS, vol. 49(3), pages 213-226, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tanrisever, Fehmi & Morrice, Douglas & Morton, David, 2012. "Managing capacity flexibility in make-to-order production environments," European Journal of Operational Research, Elsevier, vol. 216(2), pages 334-345.
    2. Goetschalckx, Marc & Vidal, Carlos J. & Dogan, Koray, 2002. "Modeling and design of global logistics systems: A review of integrated strategic and tactical models and design algorithms," European Journal of Operational Research, Elsevier, vol. 143(1), pages 1-18, November.
    3. Lauren Xiaoyuan Lu & Jan A. Van Mieghem, 2009. "Multimarket Facility Network Design with Offshoring Applications," Manufacturing & Service Operations Management, INFORMS, vol. 11(1), pages 90-108, October.
    4. Brian Tomlin & Yimin Wang, 2005. "On the Value of Mix Flexibility and Dual Sourcing in Unreliable Newsvendor Networks," Manufacturing & Service Operations Management, INFORMS, vol. 7(1), pages 37-57, June.
    5. Häntsch, Marius & Huchzermeier, Arnd, 2016. "Correct accounting for duty drawbacks with outward and inward processing in global production networks," Omega, Elsevier, vol. 58(C), pages 111-127.
    6. Brian Tomlin & Yimin Wang, 2008. "Pricing and Operational Recourse in Coproduction Systems," Management Science, INFORMS, vol. 54(3), pages 522-537, March.
    7. Schneeweiss, Christoph & Zimmer, Kirstin, 2004. "Hierarchical coordination mechanisms within the supply chain," European Journal of Operational Research, Elsevier, vol. 153(3), pages 687-703, March.
    8. C A Poojari & C Lucas & G Mitra, 2008. "Robust solutions and risk measures for a supply chain planning problem under uncertainty," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(1), pages 2-12, January.
    9. Marius Häntsch & Arnd Huchzermeier, 2013. "Identifying, analyzing, and assessing risk in the strategic planning of a production network: the practical view of a German car manufacturer," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 24(2), pages 125-158, July.
    10. Tang, Christopher & Tomlin, Brian, 2008. "The power of flexibility for mitigating supply chain risks," International Journal of Production Economics, Elsevier, vol. 116(1), pages 12-27, November.
    11. Jan A. Van Mieghem, 2003. "Commissioned Paper: Capacity Management, Investment, and Hedging: Review and Recent Developments," Manufacturing & Service Operations Management, INFORMS, vol. 5(4), pages 269-302, July.
    12. Dipankar Bose & A. K. Chatterjee & Samir Barman, 2016. "Towards dominant flexibility configurations in strategic capacity planning under demand uncertainty," OPSEARCH, Springer;Operational Research Society of India, vol. 53(3), pages 604-619, September.
    13. Vila, Didier & Martel, Alain & Beauregard, Robert, 2006. "Designing logistics networks in divergent process industries: A methodology and its application to the lumber industry," International Journal of Production Economics, Elsevier, vol. 102(2), pages 358-378, August.
    14. Jan A. Van Mieghem, 2007. "Risk Mitigation in Newsvendor Networks: Resource Diversification, Flexibility, Sharing, and Hedging," Management Science, INFORMS, vol. 53(8), pages 1269-1288, August.
    15. Kristianto, Yohanes & Gunasekaran, Angappa & Helo, Petri, 2017. "Building the “Triple R” in global manufacturing," International Journal of Production Economics, Elsevier, vol. 183(PC), pages 607-619.
    16. Dasci, Abdullah & Verter, Vedat, 2001. "A continuous model for production-distribution system design," European Journal of Operational Research, Elsevier, vol. 129(2), pages 287-298, March.
    17. Yangyang Peng & Xiaolin Xu & Xue Liang & Weili Xue, 2020. "Mismatch risk allocation in a coproduct supply chain," Annals of Operations Research, Springer, vol. 291(1), pages 707-730, August.
    18. Vidal, Carlos J. & Goetschalckx, Marc, 1997. "Strategic production-distribution models: A critical review with emphasis on global supply chain models," European Journal of Operational Research, Elsevier, vol. 98(1), pages 1-18, April.
    19. Hammami, Ramzi & Frein, Yannick & Hadj-Alouane, Atidel B., 2008. "Supply chain design in the delocalization context: Relevant features and new modeling tendencies," International Journal of Production Economics, Elsevier, vol. 113(2), pages 641-656, June.
    20. Volling, Thomas & Matzke, Andreas & Grunewald, Martin & Spengler, Thomas S., 2013. "Planning of capacities and orders in build-to-order automobile production: A review," European Journal of Operational Research, Elsevier, vol. 224(2), pages 240-260.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orinte:v:36:y:2006:i:3:p:194-208. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.