Abstract

For years BMW had a reputation for cars that combined great styling with exceptional performance. However, since the 1990s, the company has also gained recognition for its customization program, which allowed buyers to design their own cars from a set of available options. The cars were then delivered within 12 days of the order being placed. Industry analysts have termed this process ‘mass customization’, implying that it combined the features and advantages of both mass production and customization. This case discusses the process and elements of mass customization at BMW. It traces the process from the time an order is placed till the final delivery of the cars. It talks about the supply chain and logistics practices that BMW followed. It also discusses the benefits of mass customization to the company and customers, and the challenges in the implementing the process. The case concludes with a note on the future of mass customization.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the concept of mass customization and how it differs from mass production and customization
• Competitive advantages accruing to a major car maker employing mass customization
• The role of suppliers in implementing manufacturing changes and lowering inventory.

Keywords

BMW Group, Karl Friedrich Rapp, Mercedes-Benz, MG Rover, Land Rover, Range Rover, Ford Motor Company, Rolls Royce, Mass Customization, General Motors Corporation, Enterprise Resource Planning, Toyota Motor Corp., Volkswagen AG, DaimlerChrysler AG, Mass production