High RPM in Material Supply

Chassis components and transmissions run through the assembly line at the component plant of the BMW Group in Dingolfing, Germany. Front- and rear-wheel transmissions are built at the highest level of technology and then delivered to vehicle production. Every employee knows that the more precise the construction and assembly are, the more smoothly and convincing the dynamics of driving will be. Precision also plays an important role in IT within BMW. Just as finely engineered gears and bearings mesh in a transmission, production processes run seamlessly when they are aligned with each other. To reach this goal, the automobile manufacturer, with the help of consultants from axentiv, implemented SAP Warehouse Management for the production and warehousing of transmission components.

SAP WM – a high-tech transmission for IT

BMW used to handle material supply in its Dingolfing production plant with in-house solutions. When the spare-parts warehouse for the components of rear-wheel drive transmissions began to use SAP Warehouse Management software in 2004, it revised its warehouse processes. The plant sought improved manageability, inventory reductions, and speedier processes, all of which were to contribute to the development of a “thin plant.” The use of SAP Warehouse Management for material flow and planning processes to supply spare parts also represented another milestone along the road to standardized processes and a homogenous IT landscape. The conversion to the SAP Logistics Execution System (LES) and its warehouse management functions promised complete transparency in inventory management and lower storage costs because it automated processes and prevented high-cost transmission errors with the use of electronic data transfer.

No compromises

One of the foremost goals of BMW was a more efficient and transparent design of the assembly of rear-wheel transmissions by processing deliveries to and from the warehouse, movements within the component plant, and delivery to the assembly line faster and more clearly. To capture all movements without documents in the future, the automobile manufacturer implemented radio data transmission with WLAN technology. One important point in the requirements of the component plant dealt with the consistent use of standard software. Because the variety of interfaces meant high maintenance costs for IT, BMW wanted to lower the costs by using an integrated solution. Ultimately, the solution was also to make the most of IT investments.
BMW first investigated the ability of SAP Warehouse Management to map the required processes and functions. The project team, consisting of consultants from axentiv and process specialists from BMW, worked out the to-be processes starting in November 2004 and then tuned them to the standard functions of the SAP Warehouse Management. “We were able to remain with the standard software from SAP completely and did not lower our sights at all when fulfilling the requirements for processes and functions. We were also able to integrate additional functional options, like the analysis of stock and movements for customers,” says Gerhard Schamberger, the logistics team manager at axentiv. “The tremendous advantages of radio data transmission were also crystallized in the design phase.”
“Warehouse employees in the plant should be able to look at the small screen of their RF handhelds and see the information they need at a glance,” emphasizes Schamberger. That’s why the consultants worked with specialists from BMW to develop role-specific screen templates that now display the required fields that employees need for their work. Radio data transmission was also installed at the same time. Handhelds were linked to the SAP Warehouse Management over a WLAN-SAP console and the requirements were configured accordingly. “We had to make sure that the entire system worked. Working with specialists from BMW, we were able to set up the connection with WLAN and the configuration of the handhelds quickly and without any problems,” says Schamberger. “SAP offers numerous options. The task of the consulting firm is to find the right path for a customer – without departing from the standards.”

Everything under control

The project ran from November 2004 to July 2005. The solution went live in three phases. This phased approach offered the advantage of minimizing risks to operating requirements and potential risks to material movements. It also familiarized BMW employees with the new system step-by-step. Integration tests played an important role, given the complex system environment that included handhelds, printers, scanners, and neighboring SAP solutions for production (materials management and production planning software). All processes and the interplay of software and hardware were tested under real-world conditions. “Everything had to be controlled: the scanning of barcodes in the hall, the processing of information in neighboring solutions, and the printing of forms,” says Flory Kolkhuis, the project director at axentiv. Ultimately, it was the precise planning of BMW that resulted in a successful go-live.

Tight processes thanks to comprehensive IT support

Today, complex processes in warehouse management and material supply run much more tightly. Once a part leaves the assembly line, a goods issue is posted on a bill of material and a goods receipt posted in the decoupling buffer. In other words, the production process and the assembly process are decoupled from each other in intermediate storage. That’s where the posting to inventory occurs, the need for transportation is calculated, and a goods issue slip is printed. As soon as the container with the parts enters the warehouse, the fork-lift driver uses a mobile data entry device to scan the goods issue slip on the part being delivered.
The mobile data entry device is a portable RF handheld with a barcode scanner and is connected to the SAP software over a WLAN. The fork-lift driver scans all material containers at each movement in the warehouse. The movement or location data is then transmitted by RF via a real-time interface to SAP Warehouse Management. Individual parts can be located or traced with this approach. The RF terminals also avoid media breaks, help accelerate processes, and reduce the number of input errors. All authorized users always have a current view of inventory and orders. SAP Warehouse Management uses the first-in, first-out principle to make sure that the parts first stored in the warehouse are also the first to leave it.

More satisfaction with supply in the future

SAP Warehouse Management offers complete support for confirmation from production, decoupling in the warehouse, and delivery of parts to the assembly line. The quality of work in the warehouse has improved because fewer sources of errors exist and numerous searches are avoided. Because of the RF terminals, data is never lost. All BMW employees involved in a process can call up their specific requirements in the system at any time. “We noted a clear reduction in the number of errors, and processes have gained a significant amount of transparency and speed,” concludes Markus Altrichter, project director at BMW.
Overall, the integration of SAP Warehouse Management into the BMW system landscape occurred seamlessly. All warehouse processes can now be captured quickly, reliably, and exactly. BMW is now in a position to design the production of rear-wheel transmissions more efficiently. The investment in SAP Warehouse Management was worth it at the component plant in Dingolfing. Now that it has optimized warehouse management, the automobile manufacturer has increased its production efficiency and transparency and set the stage for growth.

Frank Braun
Frank Braun