BMW makes customers wait for a repair due to logistic system

Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars, is struggling to deliver spare parts on time because of a new supply-management system, forcing customers to wait for repairs.

The delays, which started more than two months ago with the switch to the new logistics system, have caused damaging effects globally because orders for BMW’s 40 parts-distribution centers originate at the Dingolfing facility. The warehouse also directly supplies about 300 repair shops in Germany.

“We have to disappoint about 180 customers per month; that means 20% of our customers with major repair work,” said Burkhard Weller, owner of Osnabrueck-based Weller Gruppe, one of the two biggest BMW dealers in Germany. “The problem is present at all 16 of our locations. It is impossible to appease a customer who can’t use his car.”

The issue is especially important for BMW because of its high-end customers and premium reputation.

“The ongoing problems on the spare parts supply might tarnish BMW’s image,” Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany, said by phone for Bloomberg. “I don’t remember any comparable case that a problem like that is dragging on over months.”

The logistics project was named ATLAS for Advanced parTs Logistics in After Sales and was started in Dingolfing in 2009, with a target to complete the new system within three years, according to a joint press release at the time from International Business Machines Corp. and SAP AG. IBM, which was the main contractor and is still advertising the project on its website, is no longer involved in setting up the program, said Dagmar Domke, an IBM spokeswoman. No reasons were pointed out for the pull-off.

Employees in Dingolfing have been working extra shifts since the beginning of June to get the spare parts to the distribution centers as quickly as possible and are already clearing the backlogs there, according to Grunert. Workers will likely be putting in extra hours until the end of the year to alleviate the delays, Erwin Gegenfurter, head of the works council in Dingolfing, said in an interview.