German luxury carmaker BMW has increased the level of localisation in its cars assembled at the Chennai plant by upto 50%. The Managing Director of BMW Plant Chennai Robert Frittrang explained Bhargav TS on the strategy and the challenges faced during the localisation program. Edited excerpts:
Robert Frittrang, Managing Director, BMW Plant Chennai
Q: Congratulations on achieving 50% localisation, so what is your next target?
Frittrang: Always in German we have a saying ‘After the game is always before the game’. We have now increased the local content by procuring it here in India and enhanced the flexibility in terms of the process, supplier pace to realise this 50% localisation. Going further, we have planned for right mix of marketing and sales team which should be in the right momentum. We have invested and looking forward to cater the industry in the best way possible and if demand rises we would be able to react quickly.
Q: Once you reach 14,000 units, what could be your next level of localisation and how long will it take you to reach a certain level?
Frittrang: Last year when we were in the process of localising the parts, it took us around 15 months to build up the factory, suppliers, to validate the parts and to secure the parts. In the next phase to further increase the local content, we have all the processes in place with a bright supplier pace so it could be done much quicker. We have setup to be as flexible as possible and this has become imperative as the market is inert and volumes are highly volatile. Therefore we have to be really flexible to keep up the pace with the market standards for further increase in localisation.
Q: Going forward which are all the possible components you plan to localise?
Frittrang: I would not be able to share the names of the components as those are confidential but the list of components that would be localised are in place and we are working with the suppliers.
Q: While localising the engines, what are all the challenges you faced during the vendor development?
Frittrang: Internal localisation what we have done in the plant was mainly to increase the number of models. We are now manufacturing 8 different models and the challenge here is, when we produce 7 series at one end and 1 series at the other end in the assembly line its a big bet to train the people with respect to contents and quality aspects. As the takt time for each car is 20 minutes, we have to produce 5 different models with different contents in each model and the man power has to be imparted training in all models. We are very proud to doing this on a regular basis.
Q: What are the challenges you faced with respect to building supplier chain?
Frittrang: In India we had a very big challenge. So we brought in 12 suppliers from abroad to support the ramp up and similar challenges we encountered in other countries during set-up. The major challenges are building a dedicated path to supply the quantity we look for and logistic chain and there ends the fiasco if everything with respect to logistics and supply pace are in-line with our efficiency standards.
Q: How component suppliers are supportive enough with regards to time management and delivery of a quality product?
Frittrang: We have a very good supplier base and we strategise everything with an inclusive approach. We name them as BMW family and were able to keep up the pace. If any sudden demand arises, we may even fly from our sister plants for the components to get delivered on par with the demand.
Q: Do you have any benchmarks set for hiring a vendor?
Frittrang: Of course yes. We value all our vendors and in turn expect them to imbibe our value system and efficiency of them should be congruent with our delivery and operating standards. We have weekly meetings with suppliers where they will be able to get trained with respect to BMW production.
Q: How different are the Indian suppliers when comparing to others markets?
Frittrang: I have worked in many countries and Indian suppliers are really premium and names of them are well known and they have been supporting BMW Group from their mother plants. In spite of that we really had hiccups in ramping up and that will be there wherever you go and it is the difficulty-overcome-management skills support you to mitigate conundrums. Quality is the indispensable attribute and corner stone so we could not compromise the same for launching phase
and price.
Q: How many Tier1 suppliers do you have now?
Frittrang: We have increased the supplier strength by 6 and now put together we have 8 Tier 1 suppliers supplying us the bigger modules like engine cooling systems, seating system and other critical parts.
Q: Is there any possibility to export components to any other BMW plants?
Frittrang: Export is not an issue. But for the current scenario this is not needed as we have streamlined the process. Too many cooks spoil the broth. Like wise too many tasks and pressing them with not doable roles will collapse the entire system. But we may consider this in future.
Q: Do you allow the suppliers to design the components?
Frittrang: Currently it is not happening in India, we do not allow the suppliers to design our components. We do not have R&D centre in India and we may plan the same in the coming years.
Q: Do you have any certain plans to establish a R&D centre in India?
Frittrang: Not able to promise on this. It totally depends on the market response and this is very small to do but something which could be considered only in the future.
Q: The 15 new models that you are going to launch this year are going to be new products or refreshments?
Frittrang: Majority are new models and to highlight we are in the process of launching M models X5M, X6M, M4, I models which are recently announced in Mumbai where I8 is getting launched in the near future. Also we are in the phase of launching hybrid cars. There are quite fascinating and performance cars lined-up in the list to obsess customers with the right deliveries.
Q: What is your view on FAME scheme which is launched recently by the Indian government?
Frittrang: I always support hybrid and electric vehicles which are considered to be eco friendly. FAME (Faster Adoption and manufacturing of Hybrid and electric vehicles) is a spectacular scheme passed on in the recent past. In BMW’s table we have range of hybrid vehicles and recently launched BMW i8 is the classic example for BMW’s engineering capability. To promote these kinds of vehicles in India we welcome the scheme and appreciate the government for taking the initiative. ACI
