SUPPLY CHAIN MANAGEMENT OF BMW:

BMW is an automobile manufacturer company founded in 1916 and headquartered in Germany. BMW’s
supply chain consists of:

Suppliers: BMW follow strict guidelines while choosing their suppliers. Suppliers needs to be well
reputed brands and should have a good experience in their field ,so that consumers can get assurance of
the quality. Also there is an agreement with suppliers for quality standards and if suppliers fails to meet
the expected standards it may lead to termination of the contract. Some of the suppliers of BMW are:
Harman Kardon for audio system, Bridgestone for tires, Delphi for batteries, Elringklinger for exhaust
system etc.

Production Process: Coming to the production process , mostly the cars are produces when their
demand arises. First the suppliers deliver the required material for manufacturing and then the
production process initiates with the press shop followed by body shop, paint shop to assembling areas.
BMW have manufacturing plants in – 1)Germany: Munich, Dingolfing, Regensburg and Leipzig 2) Austria:
Graz. 3)United States: Spartanburg 4)Mexico: San Luis Potosí etc.

Middlemen (Wholesalers and Retailers): After completion of production process distribution start. BMW
has a diverse distribution channel. It can sell directly to the customers or through wholesalers and
retailers. This diverse channel helps in decreasing the bargaining power of distributers. However with
these distribution channels company get lot of benefits too, since many retailers have storage facility
which save the company’s costs and also retailers provide financing facility to customers which help
company to get more customers.

Consumers: The company is more of consumer oriented and end consumer play very important role in
supply chain management of BMW. The production depends upon the customer’s demand. BMW take
care of the desire of its customers and that is the reason why they started making hybrid cars since
customers were conscious about whether the organization is taking care environment or not.

Therefore, more the company will take care of their customers ,the more will be the profit.
Our worldwide supply chain contributes significantly to value creation, quality, and innovation, and
hence to the BMW Group's success. As a result, suppliers have a substantial effect on our sustainability
performance and society's long-term growth.

They have around 12,000 suppliers in 70 countries with whom they collaborate. As a result, it is critical
that our partners meet the same environmental and ethical standards that they do. This is based on the
BMW Group Supplier Sustainability Standard, which mandates adherence to internationally recognized
human rights, as well as labor and social norms.

Emissions of CO2 in the supply chain

With the rise of e-mobility, a greater focus on upstream added value will be required to decrease CO2
emissions — for example, by looking at the energy-intensive manufacture of high-voltage batteries.
Because, if no action is taken, the rising number of electric cars would result in more than a third rise in
CO2 emissions per car from the BMW Group supply chain by 2030.

Not only does the corporation seek to prevent this rise, but it also aims to reduce CO2 emissions per car
by 20% from 2019 levels. One method the BMW Group does this is by using the carbon footprint of a
supplier as a selection consideration in its contract award procedures. As the first automotive
manufacturer to set concrete CO2 objectives for its supply chain, which includes about 12,000 tier 1
partners globally that supply car material and components, as well as other suppliers that provide
production equipment or tools, the firm is leading the way. The BMW Group spends more than 60
billion euros per year on purchases, with direct vehicles accounting for almost two-thirds of that total.

In the supply chain, there are environmental and social criteria:

They focus on two primary areas to establish a holistic approach to sustainability throughout our
supplier network and to assure ongoing progress.

First, they identify and analyze possible sustainability risks throughout the supply chain in a risk
management process to manage and minimize risk. We've been requesting vendors to evaluate their
sustainability management and associated activities since 2009. Independent audits are conducted on
supplier manufacturing facilities that are at high risk of violating sustainability criteria, as well as those
that are suspected of doing so.

Second, they seize opportunities and collaborate with our suppliers to maximize potential, such as in
resource efficiency, through educating and empowering our workers and suppliers, as well as active
participation in projects and with stakeholders.
Their the strategy focuses on guaranteeing the widespread implementation of sustainability standards
through thorough risk management – i.e., at all of our direct suppliers – on the one hand, and in-depth
study of specific raw materials or supplies along the whole value chain, on the other.

With the BMW Supplier Innovation Award, the BMW Group honors exceptional supplier inventions and
development accomplishments.

BMW is focused on the premium segments of the international automobile markets and it aims to be
the world's leading provider of the premium products and a premium services for the individuals
Mobility. Also produces a range of the luxury cars, which are included BMW, Mini and the Rolls Royce.
The company's strategies is aimed to provided the end consumer's with s unique experienced. To
achieved this objective, the company is more focused on a culture of excellence and a uncompromising
quality through out it's production networks.

A supply Chain management is the integrated process oriented planning and control of the flow of
goods, information and the money across the entire values and supply chain from the customer's to the
raw materials supplier.

The business environment is continually changed and growing with more complex each passing day. As a
result, the international companies are continually faced issues such as a Globalisation, Economic
uncertainty, New technologies and increased the consumer's demand. BMW is the global company and
is not immune from these problems. In order addressed these problems and remained competitive and
more profitable, they have to adopt a various supply chain strategies to helping them in achieving their
goals and objective. These are examined under the categories of ordering a process, production,
supplier, distribution and a quality standards. Their globally supplier network makes a major
contribution to the value creation, quality and the innovation and hence to the success of BMW groups.
Suppliers therefore have a significant impact on their sustainability performance and the sustainable
development of the society.

They worked with around the 12000 suppliers in 70 countries. It's therefore essential that their partners
fulfilled the same environmental and a social standard they set for Theirselves. The BMW group supplier
sustainable standard, which required the compliance with the internally recognized human rights, as
well the labour's and social standards, forms the basis for this, BMW group employees talking to their
supplier.
Their collaboration with their supplier is based on the mutual understanding of the product and
production quality, security of the supplies, competitive prices and the innovation, as well as continuous
integration of their sustainability Requirements. Faced with a complex global supply chain involved a
large number of the supplier and sub supplier, these goals presented a considerable challenges, but also
a great opportunities.

BMW is focused on the premium segments of the international automobile markets and it aims to be
the world's leading provider of the premium products and a premium services for the individuals
Mobility. Also produces a range of the luxury cars, which are included BMW, Mini and the Rolls Royce.
The company's strategies is aimed to provided the end consumer's with s unique experienced. To
achieved this objective, the company is more focused on a culture of excellence and a uncompromising
quality through out it's production networks.

A supply Chain management is the integrated process oriented planning and control of the flow of
goods, information and the money across the entire values and supply chain from the customer's to the
raw materials supplier.

The business environment is continually changed and growing with more complex each passing day. As a
result, the international companies are continually faced issues such as a Globalisation, Economic
uncertainty, New technologies and increased the consumer's demand. BMW is the global company and
is not immune from these problems. In order addressed these problems and remained competitive and
more profitable, they have to adopt a various supply chain strategies to helping them in achieving their
goals and objective. These are examined under the categories of ordering a process, production,
supplier, distribution and a quality standards. Their globally supplier network makes a major
contribution to the value creation, quality and the innovation and hence to the success of BMW groups.
Suppliers therefore have a significant impact on their sustainability performance and the sustainable
development of the society.

They worked with around the 12000 suppliers in 70 countries. It's therefore essential that their partners
fulfilled the same environmental and a social standard they set for Theirselves. The BMW group supplier
sustainable standard, which required the compliance with the internally recognized human rights, as
well the labour's and social standards, forms the basis for this, BMW group employees talking to their
supplier.
Their collaboration with their supplier is based on the mutual understanding of the product and
production quality, security of the supplies, competitive prices and the innovation, as well as continuous
integration of their sustainability Requirements. Faced with a complex global supply chain involved a
large number of the supplier and sub supplier, these goals presented a considerable challenges, but also
a great opportunities.

We are looking into BMW Z3 model, let us the see the different value chain activities:

1. Inbound Logistics : The BMW Z3 was made in South Carolina, infact the first car outside of Germany.
Being the first car outside german they had most of the parts and raw materials locally like steel from
Spartanburg to reduce cost, still had to import some parts.

2. Production operations: BMW had set up a huge factory in south Carolina, it had state of art of
facilities with fully automatic and semi automatic machines. This made production faster and better.

3. Outbound Logistics : The car was made with a target of Americans in mind hence the choose
Spartanburg, hence they directly sold, some were sold through dealers. BMW had well connected
network for their outbound logistics such as rails were used to transport vehicles from their
manufacturing units

4. Marketing : The BMW Z3 was different from the stock American cars that were present at that time. It
was positioned well between high end Porche cars and low end cars. It was a symbol of style and status.
For making the car popular it was given for Golden Eye movie for free where James Bond used it. It was
well positioned among the hearts of people.
5. Service : It was something they were real cautious about and gave the best they could. But the spare
parts were costly which did make customer's unhappy. Still services were available throughout.

Five forces model of BMW Z3:

1. Competition: Automobile industry has always been a glamorous industry which had lot of
competition, BMW Z3 was placed with big players such as Porche boxster or Mercedes SLK, Subaru
Impreza

2. New entrants : There is always something new coming in the automobile market, where new models
of Audi A6, Bentley Continental GTC 6, Maybach 57, was coming into market with much fluidic designs.
Also hybrids were also threatening the stock segment vehicles.

3. Power of suppliers : BMW Z3 was manufactured in Spartanburg which had resources to steel hence
they had cheap suppliers of steel. There was other technical companies surrounding which supplied
other parts for the car

4. Power Customers: BMW Z3 was already a symbol of style and status among the people of America as
the car was used by James Bond in Golden Eye. It was up in many other movies and shows which
increased the popularity of the vehicle, which made customer love the vehicle, which in turn brought
profits to the company.

5. Threat due to substitute : Global issues were the main reason of threat, people had a shift of choice to
more renewable sources of fuel such as electric cars or hybrid cars. Also the rising prices and lower
availability of crude oil was also a great threat to BMW Z3 type of cars.

RUSSIA

pest of russia

Russia/ Federation of Russia is the country which is located in North of Europe and Russia and
considered as the bridge between these two continents. Russias capital is Moscow and its currency is
Rubel.Russia is one of the countires which are really rich in terms of natural resources. Russia is
extremely dependent on exporting natural resources and specially on natural gas and oil. of winter
besides it does not snow all over the year. Even Russia is big country, population wise it stands at 9th
rank in the world.
The price of Russia's natural resources are falling. Russia's population is declined at 5% since 1993 and
although it is slowing there are no signsof reversing as alcoholism, drug addiction and AIDS are rising
constantly in Russia.

Russia's inflation is high at 12% and unemployment is also rising from 6% and up.

Political:

Russia has an open foreign relationship strategy. Until 2009, they have official relationship with 191
countries and 144 embassies. It is a good opportunity for trade and ecconomy of the country. In fact,
Russia is playing very important role in maintaining peace and safety of the world.

Another advantage of Russia is they implemented the technology and the military forces from the USSR.
Russia has the biggest store of nuclear weapon with the military which includes navy, ground force and
air force as well. Russia is one of the countries with well developed and home grown arms industry.
Russia is at 1st rank in producing and exporting weapons, they not only produce weapons for themself
but also sell to 80 different countries around the world.

With the strong and peaceful relationship with other countires, it is push factor for Russia to expand
their economy and as well as to attract more investors from around the world. The political side takes
the main role in order to run the business of the country.

Russia's current president is Mr. Dimitriy Medvedev and prime minister is Mr. Vladimir Putin. Russia is a
federation but there is still involvement between the government and region.

Economic:

Russia is the largest country in the world. It has an upper-middle income and one of the world's richest
countries in terms of ra material aand accounts for 20% of the world's production of oil and natural gas.
Between the period 1998-2007 the Russian GDP expanded by an estimation of 69%. At the end of 2007,
Russia's FDI ccounted to $103 billion.
In few years Russia became one of the largest recipient of FDI. As far as economical faactor is concerned,
Russia grew by 8.1% in 2007and 7% average growth rate per year. The Russian economy risked going
into recession from early 2014, mainly due to falling oil prices, sanctions and the subsequent capital
fight. The economic development of the country has been uneven geographically with the Moscow
region contributing a very large share of country's GDP.

The Russin motor vehicle market grew by 57% in 2007. Russia is the 3rd largest car seller in Europe and
6th largest in the world..

Social:

Social factor plays a significant role and have a great influence on the business in Russia. This factor
should be considered before entering into Russian market. But it depends on type of business
companies performing.

After the economic recession in 1990, the society converted from democratic structure of aristocratic
structure and it created difference between rich and poor.

In Europe continent, Russia is one of the counties that being affected strongly by HIV and alcohol
poisoning.

Even there is no obvious classification structure in society, the stratification is judged by wealth. The
most obvious evident if capitalism in the whole society is that people have started to spend on
expensive cars, clothing and outfits which normal people can not afford. Russians love music, ballet
dance with coposrs, artists and literature is common in Russian society.

Technology:

Russia is the rich country in science tradition. Since early 18th century Russia's technology sector started
to emerge and still continues to develop. Russia is the leading country in space science and technology
and it sent first man in space. Russia has paid more attention on advanced techonology like
Nanotechnology.
Russia has made good progress and contributions in fields like Aerospace engineering, Mathematics,
Chemistry and earth science. Russia is one of the biggest supplier of army weapons and materials and
still they maintain peace and security in the world.

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