Self Assessment of BMW Company - Case Study Example

Name Institution Title: Self Assessment of BMW Company Course Code Date Table of Contents Self Assessment of BMW Company 3 Introduction 3 Strengths of the Company 4 Areas of Improvement 6 Conclusion 11 Bibliography 13 Self Assessment of BMW Company Introduction Every organization has the dream of excelling in the business by becoming preeminent. The concept of achieving excellence has been supported by the European Foundation for Quality Management (EFQM) model and the RADAR Methodology for both self and external assessments. Use of the EFQM model is essential in helping an organization realize its strengths and to identify the areas that require improvement. Self assessment is done by people in the organization and it therefore provides a very important tool that improves communication at various levels of the organization, enhancing dialogue between staff and their managers and bringing out innovative thinking hence changing the culture of the organization. Use of the EFQM model in carrying out self assessment gives the organization an insight of its performance at levels and identifying improvement areas as well as presenting the corrective measures (Pipan & Sokovic, 2011). According to WU (2000), the RADAR tool is used in assessing the performance of an organization within the EFQM model for excellence. It usually presents a structured approach that is used to question the organization’s performance. Further, the scoring mechanism that is behind the European Excellence Award together with other assessment schemes is supported by the RADAR logic. Therefore, the process of self assessment uses the EFQM model as the reference point to ensure good practice in management and long term sustainability. BMW has been using this model since the early 90s. In 2012, they were honored by the EFQM and got the EFQM prize winner award. This paper will study how they use it to achieve excellence. It will also investigate what the company is doing so as to continue using the model and remain in front. Strengths of the Company One of the key objectives of the EFQM model is to develop a customer oriented approach that adds value to customers. It means customers are viewed as being important in the sustainability of the business. At BMW, they have adopted this approach of customer orientation. According to EFQM (2011), the year 2011 saw the number of people opting for BMWs in the world rise by 14 % from the number in 2010 to hit 1.46 million people. BMW customers are growing in numbers as well as growing in other ways. First, the group has identified that the number is growing internationally and by 2011, 50 % of their cars were being sold outside Europe, with a projected upward trend. BMW utilizes the customer based approach by investigating what factors motivate their customers so that they can design a car that would be suitable to them. For instance, they realized that typical Chinese businessmen like sitting comfortably at the back of their cars while being driven around by their chauffeurs as they do some work. This prompted them to produce the BMW 5 series which is a special version. It is produced in China and has registered a huge success in sales. They also used their knowledge on the present age generation that uses digital equipments and have now incorporated the internet in all their cars (The Economist Intelligence Unit (EIU) and KPMG International, 2000). All this is done considering the customer as the deciding factor in business. All customers look at products and service quality. BMW members believe that customers always get to choose their products but companies cannot choose their customers. This is their drive in the customer orientation approach. Most BMW products are tailor made and hence the voice of the customer plays a key role in production. At BMW, the task of customer orientation has not been left to the sales team alone. Each of the 95, 000 associates has to think and work bearing the customer in mind. Strategy and development are the starting points of customer orientation and it is given importance across the company. Sustainability also plays a key role in pushing the BMW group towards excellence. The group sees itself as a key part of the society and it therefore takes responsibility for economic, environmental and social issues. They have therefore embraced the concept of sustainability as it is projected to push them further in coming years. They even have the record of being the most sustainable producer of automotives in the world. The Dow Jones Sustainability index has ranked the BMW group at the top for the past six years. This is because they utilize their resources carefully. Their goal is to continue producing sustainable products while maintaining sustainable production. One of EFQM’s philosophies is exchanging ideas and getting to learn from others across various branches of the industry to enhance development. In 2011, the BMW group hosted the EFQM forum for the first time and this was a good platform for them to exchange their ideas and learn from other companies hence promoting sustainability (Kruger, 2011). Areas of Improvement One area that was recognized for improvement from the self assessment was process improvement. According to Volker and Bin (2001), organizations that seek to operate competitively in the current business setting need to have a business system that allows them to identify changes and the implications to the organization early enough, to develop appropriate business strategies and implement them via new products. This kind of system works in line with the benefits of using the EFQM model where areas of weakness are identified and provisions for improvement made. Through the model, the BMW Group was able to identify the need to improve on their processes as they were setting up a new plant and these findings were made from the former Rover Group that they took over. Some of the issues that were recognized included the re-engineering of all business processes where new initiatives are created. It also entailed identification of owners of processes and design teams. This required finding people who had the right collection of skills and experience. A project was then formed where evaluation of methodologies was one and then selection and rolling out of the right methodology and this was supposed to be in line with other processes as well as approaches used by the organization. Besides these, process analysis was also required. This required a clear understanding of the analysis’ scope along with the competence and technique of the analysis. One problem that was recognized was that most analyses were often too detailed or sometimes too narrow. This called for the need to carry out extensive mapping of the process. Additional issues such as evaluation of processes also surfaced. This called for a thorough evaluation of existing technologies and processes and the need for alternative solutions. Besides, process design was also identified as an area that needed improvement. It was discovered that the organization had been focusing on process elements that were familiar to the team and this brought about an imbalanced design remedy which could easily experience problems after implementation. It was further noted that the interfaces of the changed process were not looked at and therefore not designed. Process owners would resist adjusting their processes to enable functioning of the interfaces. The problem went to spread to personnel who were neither informed of the process design nor the re-engineering work and would therefore find a problem in understanding the applied methodology. Lastly, the effort to implement and roll out a project was often underestimated. The resulting roll out plans were therefore inadequate. The quality and volume of training given to design team and process users was found insufficient. In addition, subsequent coaching of processes was not well planned for and there was a shortage in the required structures. This meant that setting up of new structures that would operate the changed process would take a long time. All these issues were noted for improvement in the design of the new firm so as to avoid the problems associated with them. This was done with a lot of expectations from the new process design (Satanova and Lucia, 2011). Some of the expectations included the reduction and where possible elimination of the problems that arose from the above stated issues. The institutionalization of the process was expected to achieve greater competence as well as higher quality of design and reduction of time taken in design of a project. Questions arise on whether they were able to achieve these expectations. Yes, after implementation of the new design process, a lot of improvements were noted. First, the identification and quantification of newer processes was faster and more mature. Appropriate process owners would be identified and the design teams formed were better. Besides, there was a notable willingness of people to join the design team. In addition, the teams started following the templates for projects and concentrated more on detailed planning. Besides, the analysis of processes and design were aided by application of a holistic process model that ensured complete analysis plus design. Competence in process design led to faster phases of analysis and design together with smoother implementations. Finally, enrolment of experts from functions like IT and personnel became easier. The whole improvement and institutionalization of processes generally led to an increased agility and response to change by the BMW Group (EFQM, 2003). Robinson and Schroeder (2004) stated that in order to remain as the leading providers of premium product and services for individual mobility, the BMW Group has recognized that the business environment is competitive and that there are a lot of global challenges. They are therefore prepared to face all that by continual use of the customer approach and the drive towards sustainable mobility. They have deployed use of sustainable energy and this is evidenced by among others, their Welt Solar Roof. Most of their projects futuristic as reflected in their today for tomorrow in production scheme. They also work towards designing an ergonomic workplace based on the issues raised by workers from the strains suffered. An ergonomic workplace has been found to reduce strain by the following percentages relative to parts of the body: Trunk: 80 % Knee: 63 % Neck: 46 % The Group has continually looked at a policy where they consider the people, the planet, achieving profits, as well as developing a sustainability culture (Porter and Tanner, 2004). Table showing completed scoring templates: Approach Guidance Unable to Demonstrate Limited ability to demonstrate Able to demonstrate Fully able to demonstrate Recognized as global role model Sound Approaches have a clear rationale based on stakeholder needs X Integrated Approaches support strategy and are linked to other relevant approaches X Deployment X Implemented Approaches implemented in relevant areas X Structured Structured execution that enables flexibility and organizational agility X Assessment and refinement X Measurement Effectiveness and efficiency of the approaches and their deployment are measured appropriately X Learning and creativity Learning and creativity used to generate opportunities for improvement and innovation X Improvement and innovation Outputs from measurement, creativity and learning used to evaluate, prioritize and implement improvements and innovations X Scale 0 % 25 % 50 % 75 % 100 % Overall score 80 85 85 250 90 95 98 283 (Fisher, 2012). Conclusion The BMW Group Company has achieved a lot of greatness in term of excellence and competency by deploying the EFQM model. This has seen it receive a couple of awards, most recently the EFQM Prize Winner. It has also ranked highly in terms of innovation and is considered to be leading in this respect. It still has the urge to continue working towards setting and attaining high excellence standards. The company should therefore keep re-analyzing and re-assessing its processes and methods as it looks to continue giving high value and high quality products to its customers. Bibliography EFQM, 2011, Making Dreams Come True: What is Excellent Service at BMW Group Manufacturing? Brussels, Belgium. EFQM, 2003, Assessing Business Excellence, ISBN 90-5236-093-6, Brussels, Belgium. Fisher Matt, 2012, Introducing the EFQM Excellence Model 2013. Kruger Harald, 2011, People, Planet, Profit: Developing a Culture of Sustainability. Pipan K. Karmen and Sokovic Mirko, 2011, Encouragement of Continuous Improvement, Open Innovative Organizational Culture and Self-Assessment as the Basis for Quality and Business Excellence, Ljubljana, Slovenia. Porter, L. J. and Tanner, S. J., 2004, Assessing Business Excellence, Elsevier, Boston, USA. Robinson, A. and Schroeder, D.M. 2004, Ideas Are Free: How the Idea Revolution is Liberating People and Transforming Organizations, Berret – Koehler Publishers, Inc. San Francisco, USA. Satanova Anna and Krajcirova Lucia, 2011, Application of the Excellence Model EFQM in a wood processing company, Technical University in Zvolen. The Economist Intelligence Unit (EIU) and KPMG International, 2000, “The e-business value chain – Winning strategies in seven global industries (executive Briefing)”. Volker Looks and Bin Wu, 2001, Process Improvement/ Reengineering Integrated in an Organization’s Management Systems, North Warwickshire, UK. Vukovic et al, 2007, Basic Approaches to Total Quality Management and the Fundamental Concepts of Excellence, Engineering Review, Vol. 27, No. 2, Faculty of Engineering, University of Rijeka. Wu, B. 2000, Manufacturing and Supply Systems Management – A Unified Framework of Systems Design and Operation, Springer – Verlag, London. Read More