BMW production boss points to importance of flexibility
Company can reorganize its processes just days before operations begin
Semiconductors are tiny computer chips that are part of nearly everything electronic: washing machines, game consoles, TVs and, of course, cars. Since the beginning of the COVID-19 pandemic, there have been wide-ranging shortages of these chips. First, there were cancelled orders over virus fears. Then there were buying surges resulting from much of the world staying home. Combined with natural disasters and fires, and you have a supply issue that’s been ongoing and will likely continue for years.
Some estimates put the damage to the auto industry at more than $200 billion worldwide, cutting production by more than seven million units across the globe. Some automakers seem less affected, and one of those is BMW. We spoke with BMW member of the board of management for production, Milan Nedeljkovic , to find out why, how this shortage may reshape vehicle design, and how long it might last.
“It’s always a different chip which at the end of the day is missing,” said Nedeljkovic . “Now we are try- ing to somehow gain time and manoeuvre through these different shortages.”
“One big advantage at BMW,” he said, “is that we are set up on a very high flexibility level. Our target was always to produce the car the customer wants, in as short (of a) term as is possible. We are able to change our production program, the sequence of products we produce on our line, six days before production starts.” This extends to the company’s whole supply chain, he said.
This tight timeline gives the brand serious flexibility.
“With this flexibility, if we realize there will be a shortage in one or two weeks, we can rearrange the whole production sector and just avoid the one component. If possible, to avoid the one component which is missing.”
When that component comes back into stock?
“Then we change again to a different sequence,” said Nedeljkovic .
Electric vehicles have much simpler drivelines in terms of moving parts and external components. They do not, however, use fewer chips, he said.
“It’s not the electronic drive which creates the need for more chips,” said Nedeljkovic . “In general the cars are more connected. More driving assistants, with all the cameras, the sensors. All this needs semiconductors somewhere in the program, so each part has a chip on it itself.”
The result?
“The amount of sensors is significantly increasing per car, and that’s a trend in the automotive industry.” Nedeljkovic says this is actually making the chip problem worse.
He expects that automakers and chip suppliers will reduce the number of different microchips needed.
“The effect I can think of is that the amount of different chips will be reduced. Today we have, for each particular component, a very specific chip. I think that there will be some tendency to try to bundle them and to have more standardized components in place. The second thing, of course, will be that we want to get better transparency of the whole supply chain.”