Flexibility Fuels BMW's Unique Manufacturing Model

Employees at BMW's Spartanburg, S.C., factory rotate jobs every two and a half hours, while suppliers deliver just-in-time parts to ensure that customers get exactly the BMW that they want.

Forget the debt crises here and in Europe. Forget political gridlock. Forget whispers of a double-dip. In these lean economic times, BMW can't build its X3 sports-activity vehicle fast enough to keep up with demand.

The X3 -- with a bare-bones starting price of $36,850 -- is flying off the assembly line at BMW's Spartanburg, S.C., factory.

Of course, with a takt time of 132 seconds - perhaps more than double the takt time for a mass-produced vehicle -- and a five-month lead time, "flying off the assembly line" might not be the best way to describe it.

Still, while the rest of the automakers continue to pull themselves up by their bootstraps in the wake of the recession, BMW seems to be operating in a parallel universe. Munich-based BMW, which reported a 20% jump in sales to $61.8 billion in 2010, makes a tidy living building pre-ordered premium vehicles exactly to customer spec -- deliberately, meticulously and, yes, slowly.

Customers don't seem to mind. The first generation of the X5 sports-activity vehicle -- also built in Spartanburg -- exceeded BMW's sales projections by 400,000 units over a seven-year period. Like the X3, there's at least a five-month backlog on X5 orders.

Doesn't Want to be Toyota

"We don't want to be Toyota. We don't want 19% to 20% of the automotive market," said Mark Fendley, continuous-improvement manager for BMW Manufacturing Co., during an IndustryWeek Excellence in Action tour of the Spartanburg facility earlier this month. "We want our percentage of the automotive market, which is essentially about 3%.

"Our customers want their individual BMW. So that's what we use as a competitive advantage -- that someone can order exactly the BMW they want, anywhere in the world."

Still, just because the production process is painstaking doesn't mean it's bogged down with fat. On the contrary: The 4.4 million-square-foot Spartanburg complex -- spread out over 1,140 acres -- is a model of just-in-time manufacturing, automation and flexibility.

When you consider BMW's business model, it almost has to be.

The number of possible combinations of paint colors, options and packages for BMW's entire product line is 1023, according to Fendley.

At a Glance: BMW Manufacturing Co.
Location: Spartanburg, S.C.
Plant size: 4.4 million square feet
Campus size: 1,140 acres
Employees: 7,700
Robots: 1,000
Opened: 1994
First car produced: 318i
Current models: X3, X5 and X6
Average daily output: 1,000 vehicles
Shops: Paint, body and assembly
Markets served: 140 -- about 70% of the plant's vehicles are exported
Fun fact: Methane gas from a nearby landfill provides 50% of the plant's energy.

"We can actually run this factory an entire year and not build the same car twice," he said.

Although the Spartanburg complex is the sole source of BMW's X3, X5 and X6 vehicles, it is capable of building anything in the automaker's product line. Consequently, flexibility is at the core of the plant's Value-Added Production System (BMW's version of the Toyota Production System).

The plant, which produced 159,234 vehicles in 2010, achieves that flexibility in a number of ways.

Most of the 7,000-plus employees rotate jobs every two and a half hours. If an employee hasn't worked a particular job in six weeks, the employee must be retrained on that job by a team leader, according to Fendley.

The added bonus of the plant's job-rotation practice, explained one tour guide, is that it keeps employees "from getting tired, bored and having as many repetitive-strain injuries."

"And for the customer it's a good deal," she said. "You don't have to worry about getting a 'Monday car' or a 'Friday car,' because everybody in here can do every job."

'Warehouse on Wheels'

The plant relies heavily on suppliers to deliver parts when and where they're needed (even with 4.4 million square feet of space, there isn't enough room to warehouse parts, and the plant doesn't manufacture any parts).

In most cases, the plant has enough parts on hand to operate for two to four hours. If one of the plant's more than 250 suppliers is late delivering a part, the supplier can be fined as much as $2,000 per minute.

In the new X3 assembly hall -- a splashy $750 million facility that opened in 2010 -- suppliers deliver parts to the point of use, via loading docks that are just a few feet from the assembly lines. The plant receives 80% of its parts via this "warehouse on wheels" system.

The design of the X3 plant, Fendley noted, "in essence was a lean transformation."

A side note about material handling: Parts and components make their way through the 1.2 million-square-foot X3 assembly plant on hydrogen-powered forklifts, tuggers and trains. In about three minutes, a driver can refill his or her hydrogen supply, providing eight to 10 hours of power.

"We probably have the largest material handling fleet powered by hydrogen in the U.S.," said one tour guide.

The plant also has a large contingent of robots -- approximately 1,000 of them.

On the X5/X6 line in the body shop, some 380 robots fashion each vehicle from 443 separate pieces of metal, performing 237 stud welds and more than 6,000 spot welds.

Spot welds are spaced about 1 to 11/2 inches apart on a BMW vehicle, compared with 3 to 5 inches apart on a mass-produced vehicle, the tour guide explained.

"The more spot welding you have, the safer your vehicle is," she added.

In the paint shop, 90 robots apply more than 4,000 gallons of paint over a 12-hour period -- with 97% accuracy, according to the plant.

While the body shop is nearly 100% automated, the six-hour process of building a car body still requires some 450 employees.

And real human beings are integral to the quality-control process, of course. The Spartanburg campus has a 2.4-mile track, where workers put new BMWs through their paces at speeds up to 105 mph. The track can simulate virtually any type of driving condition, and includes a cobblestone course and impact bumps.

In addition to the standard quality-control checks, two vehicles are randomly selected from the assembly line during every shift for further testing. Instead of proceeding to the test track, the two vehicles are sent to an audit booth, where workers spend up to eight hours conducting an additional 2,000-point quality check on the vehicles.

Said one enthusiastic tour guide: "That's part of the commitment to quality you get with every BMW."

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