Emerging from four years of geopolitical and market volatility, many OEMs and logistics companies have had to adapt or die. BMW has transformed by installing several strategies, including its Programme Commission which brings production, finance, sales, and purchasing, and supply chain and logistics under one umbrella.
Leading the charge for the programme is Dr Michael Nikolaides, senior vice-president of production network, supply chain management and logistics at BMW Group. At ALSC Europe 2024 he said that managing a supply chain with the scope of BMW’s is a challenge at the best of times, let alone during a volatile market environment – and he thinks volatility is here to stay.
“I assure you, volatility will stay and we should prepare together for volatile market demand, geopolitical tensions and everything which might come,” he said.
BMW installed the programme to manage the hostile economic environment. It is empowered to make strategic decisions across the carmaker’s different business areas.
“In the last few years, key profitability and inventory management were very important, especially in times of raising interest rates; it makes a huge difference,” he said. “To make that work, we increased the frequency and we are able to have ad-hoc meetings if something happens, and make decisions very fast. We also improved a lot on data transparency. Last but not least, we have every department involved.“
However, he warned that digitalisation is needed in tandem, as without it, global decisions can’t be taken at the right speed.
Alongside the programme, Nikolaides stressed the importance of choice. BMW is rolling out the Neue Klasse EV platform from 2026 onwards across its global network. The most important task for its logistics and supply chain management is how it does that in the most intelligent way, because it is difficult to predict demand for five or ten years down the line, according to Nikolaides.
The OEM said in its financial results, announced today, that it produced and sold 2.55m cars last year, out of that 375,000 units were purely electric globally, accounting for 15% of sales.
“And we did that in a very profitable way, hit our Ebit margin of 9.8% in auto,” added Nikolaides. “We also did all that compliant with CO2 regulation in Europe. Our emissions from our complete European fleet went down to 101.2 grams on average.
Of course, all of this is expensive, but Nikolaides said that sometimes the best solution isn’t the cheapest one, and collaboration and partnership can help with this too.
“The transformation of the automotive industry costs a lot of money, and you have to invest in research and development,” he said. “The automotive industry only works together [in partnership] and if we prepare and have the mindset of not being afraid of competitors coming to the market, be it from China or anywhere else in the world.“
ALSC Europe 2024 took place 19-21 March in Kameha Grand Bonn, Germany. For more interesting discussions, key points and takeaways from the event, as well as Red Sofa video interviews, visit our highlights page.
To find out more about ALSC Europe and register for next year, click here.
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