BMW Having Trouble Getting Parts

bmw-logoBMW, the world’s biggest maker of luxury cars, is struggling to deliver spare parts on time because of a new supply-management system, forcing customers to wait for repairs.

About 10 percent of the parts are not immediately available in the central warehouse in Dingolfing, Germany, due to the changeover, Manfred Grunert, a spokesman for the Munich-based company, said in an e-mail. BMW has workers on extra shifts to help shorten the wait, and aims to have the new system working properly by early September.

The delays, which started more than two months ago with the switch to the new logistics system, have caused ripple effects globally because orders for BMW’s 40 parts-distribution centers originate at the Dingolfing facility. The warehouse also directly supplies about 300 repair shops in Germany.

The issue is especially sensitive for BMW because of its high-end customers and premium reputation.

“The ongoing problems on the spare parts supply might tarnish BMW’s image,” Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany, said by phone. “I don’t remember any comparable case that a problem like that is dragging on over months.”

The after-sales business is important for carmakers because it contributes substantially to their profitability, ties customers to their brand and has a high influence on customer satisfaction, according to the Nuertingen, Germany-based Institute for Automobile Industry, a state-funded think tank.

“BMW has always been among the best companies regarding the supply of spare parts,” said BMW distributor Weller, who is also a dealer for other brands, including Lexus, Toyota and Audi. “At the moment, they’re bringing up the rear.”

The logistics project — named ATLAS for Advanced parTs Logistics in After Sales — was started in Dingolfing in 2009, with a target to complete the new system within three years, according to a joint press release at the time from International Business Machines Corp. and SAP AG.

IBM, which was the main contractor and is still advertising the project on its website, is no longer involved in setting up the program, said Dagmar Domke, an IBM spokeswoman. She declined to say when or why IBM pulled out. SAP is supplying the software for the warehouse management system, said Marcus Winkler, a spokesman for the Walldorf, Germany-based company.

“The originally envisioned time frame for completion of the project had been somewhat postponed a while back as some parameters had changed,” Winkler said, without providing additional details. BMW declined to comment on its suppliers.

BMW delays in the U.S. are mostly with special order parts, said Kenn Sparks, a spokesman for the carmaker in the U.S. In China, some dealers are facing the same issue as well, among them China Zhengtong Auto Services Holdings Ltd.

BMW’s distribution centers all increased their inventory before the system changeover, allowing for normal delivery of most orders, Grunert said. “A very high percentage of our dealers worldwide don’t have any spare parts problem.”

Employees in Dingolfing have been working extra shifts since the beginning of June to get the spare parts to the distribution centers as quickly as possible and are already clearing the backlogs there, according to Grunert. Workers will likely be putting in extra hours until the end of the year to alleviate the delays.


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