BMW Brilliance comes out top in a crisis
Joint venture automaker swung into action to keep supply chain moving during pandemic peak
“If you want to go fast, go alone; if you want to go far, go together,” says an African proverb. BMW Brilliance Automotive has proved this wisdom with its suppliers in China during the novel coronavirus pandemic.
“Purchasing (parts) is more sophisticated than only finding the lower price. It is also about reliability and the experience we have with our suppliers,” said Johann Wieland, president and CEO of the Sino-German joint venture.
“The experience we had in February and March has an impact. It really builds a relationship that we can rely on,” Wieland said.
One thing that BMW Brilliance’s suppliers value most is that the carmaker treats them as partners.
Kelly Ke, Garrett Motion’s Wuhan plant manager, was emotional when she recalled the workdays when the city was put under lockdown from January to April.
“It warmed us that BMW Brilliance’s quality staff always asked how my colleagues and I were doing when holding online meetings. It made us feel that we had to do our best to produce more turbochargers for them,” Ke said.
Garrett Motion is not alone. The US turbocharger maker is one of 394 suppliers BMW Brilliance has in China, according to the carmaker.
“The supplier network itself is like a transmission system where a lot of gears fit into each other. If one gear is broken, the whole transmission system does not work any more,” said Martin Schlicker, vice-president of purchasing and quality management at BMW Brilliance.
By the end of July, through close collaboration and frequent communication with its suppliers in 47 countries, BMW Brilliance ensured their supplies and its own smooth production.
Benteler Automotive, headquartered in Germany, provides chassis axles for the carmaker, with up to 400 kinds of components from around 100 lower-level suppliers.
Benteler has a plant just 3 kilometers away from one of BMW Brilliance’s plants in Shenyang, Liaoning province. Their joint efforts throughout the coronavirus pandemic have brought them even closer.
“The supply chain is merciless, but the people are incredibly committed,” said Tony Shi, executive vicepresident of Benteler Asia-Pacific, late last month in Shenyang.
He said the company started its contingency plan when sporadic cases emerged in Wuhan. It moved out local suppliers’ inventory with the help of BMW Brilliance before the city was put into lockdown.
The effort enabled Benteler and BMW Brilliance to resume production on the same day after the Spring Festival holiday.
But as the pandemic was gradually curbed in China, it worsened in some countries where Benteler’s suppliers are located. This included the United States, India and Italy, and transportation became a problem.
Shi said it was BMW Brilliance that leveraged its global resources to arrange different methods of transportation in those countries. This helped the delivery of products from Benteler’s suppliers.
Lingyun Industrial is a Chinese automotive supplier located in Hebei province. It produces the lower battery housing for BMW Brilliance’s iX3 electric SUV at its subsidiary in Shenyang.
Zhang Wenxuan, president of Shenyang Lingyun, said the carmaker’s staff worked through the pandemic with Lingyun engineers to ensure the scheduled production of the model, which will be made in China but sold globally.
Statistics from BMW Brilliance show that, on average, more than 250 engineers at BMW Brilliance worked in conjunction with the company’s suppliers.
Some of its quality and purchasing staff worked more than 15 hours a day when the pandemic was at its peak in February and March to ensure supplies.
What moved Zhang was that the carmaker asked many companies, including his, if they needed financial help during this period.
Back then, Zhang said, BMW Brilliance itself was affected financially because people were staying away from showrooms. China’s overall vehicle sales slumped more than 80 percent in February, according to the China Association of Automobile Manufacturers.
Wieland did not think the gesture of goodwill was a big deal. “Around 28,000 parts go into a car. If you miss one part, you cannot finish the car. So supply chain sustainability is extremely valuable for us,” he said.
Thanks to the efforts of its suppliers and itself, BMW Brilliance was the first to resume production among carmakers in the country.
Statistics show that sales of BMWbranded vehicles totaled 539,264 in the first three quarters of this year in China. This is up 7.3 percent from the same period last year, despite the novel coronavirus pandemic.
The record sales are not the only thing the carmaker has achieved out of the crisis. Li Ming, manager of Lear Automotive’s Wuhan plant, said: “We went through the pandemic and we have become a band of brothers.”