BMW struggles with spare parts warehousing

Reports are emerging of problems in the spare parts logistics system at BMW. Last week, the Bloomberg new agency reported complaints by dealerships and workshops in Germany that the flow of spare parts had become increasingly erratic over the past two months. Some accounts suggest that 10% or even 20% of the product lines were unavailable at any one time and the dysfunction appears to have affected markets across the world.

In a statement to Transport Intelligence, BMW confirmed that there were “reports of problems” and said that these were caused by a “change in the central logistics programme” which “handles all spare parts orders worldwide, including incoming and outgoing articles”.

The issues appear to be linked to the ATLAS programme, which was designed to restructure BMW’s spare parts supply chain from the supplier through the warehouse and to the dealership. The system is designed around SAP IT architecture including SAP/R3 in the warehouse and associated processes.

In particular, the processes within the large warehouse at Dingolfing in Bavaria appear to be under stress. The IT failure has triggered extensive overtime as well as the use of airfreight to both pick parts and ship them to customers worldwide. Dingolfing acts as a hub and inventory location for the entire BMW spares network worldwide.

It is reported, but not confirmed by BMW, that IBM was the ‘prime contractor’ responsible for the implementation the IT system, however there are suggestions the company has withdrawn from the project.

The BMW statement issued to Ti on Friday stated that the “order backlog is now tackled in full.”

The ATLAS programme or ‘Advanced parTs Logistics in After Sales’ – has been under implementation for approximately five years in BMW. Its objectives are to increase response-time and accuracy in order fulfilment in aftermarket spares orders without an unsustainable increase in inventory and has included the creation of whole new tier of cross-docks in urban areas which are usually outsourced to logistics service providers.