TRAVERSE CITY, MI – Lots of auto makers talk about build-to-order production systems, but at BMW AG, it is a tradition that goes back to the auto maker’s roots as a small niche producer at the beginning of the 20th century, says Richard Morris, vice president-assembly, BMW Manufacturing Co.

Dating back to the early 1990s, a customer-oriented sales/production process now has evolved to where BMW allows customers to individually specify their vehicle and change their minds up to five days before assembly.

The process “gives customers significant ability to change their orders, which generally means adding more individuality to their vehicle, increasing value and increasing customer satisfaction,” Morris tells attendees at the CAR Management Briefing Seminars here.

To do this, BMW does not assign a vehicle identification number to the vehicle until the body is painted. Most other auto makers assign a VIN when the body is being built, he says.

This is a critical difference, because it is common for customers to change their minds on exterior color. “In this case, we take the next painted body in the new color they prefer. Likewise our entire supply chain must be flexible, Morris says.

Customers may choose a new interior color or different leather. Therefore, major interior components such as seats, instrument-panels, center consoles, carpets and door panels come just-in-time and are not ordered until the vehicle starts assembly, Morris says.

The auto maker’s Spartanburg, SC, facility is cranking up its flexibility another notch as it prepares to become the global production site for the new X3 cross/utility vehicle – and it expects its suppliers to do the same.

“Our supply chain must also be flexible,” Morris says. “In our new assembly hall, 82% of X3 content by volume will be delivered just-in-time or just-in-sequence.”

Spartanburg already is the sole producer of the X5 and X6 CUVs. Its products are sold in 130 countries, which gives the auto maker the ability to shift production among global markets, according to demand. Currently, 70% of the plant’s output is exported.

“From a single location in Germany, we provided the latest innovations and a variety of personalized options to discerning customers around the world,” Morris says.

“Our production became flexible and demand-driven. The result was a true pull system still in operation today. Every car we build is specifically ordered by an individual or a dealer. If it is not ordered, we don’t build it.”

This separates BMW from other automobile manufacturers in North America, Morris says. “We believe that our production processes should have the flexibility to adapt to sudden changes in market demand and the efficiency of a world-class manufacturer.”

However, he acknowledges there is a limit to flexibility, and a cost.

“Our production system is a unique blend of BMW’s build-to-order philosophy and lean manufacturing. Our goal is to remain market-drive and cost competitive,” Morris says.

“To do this, we must create core processes, which are common to all models and flexibility processes that can manage the complexity of individual content or variants.

“This not only will allow us to run multiple products or derivatives down a single assembly line, it will also allow us to continue to change model mix to match market demand without instability in our assembly process.”

dwinter@wardsauto.com