BMW 2005 Annual Report Download - page 35

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and involving suppliers more closely in the series de-
velopment process, the aim is to ensure that ambi-
tious costing, timing and quality targets for vehicle
projects are secured and achieved at an early stage.
The tasks necessary to achieve this aim involve
the following three areas:
– reaching consensus across departmental lines
to select the best possible suppliers. Equal im-
portance is attached to cost, field and supply
quality, product functionality and security of sup-
ply factors.
– assessing risks consistently at all stages and
monitoring costs during the product creation and
series process
– ensuring supplier competence at an early stage
with the aid of targeted measures.
Improved processes are integrated directly into
vehicle development projects. This project is there-
fore contributing greatly towards improving the
BMW Group’s competitive position.
High ecological and social standards at
BMW Group’s suppliers
The BMW Group is aware that it is responsible for
ensuring that its suppliers also adhere to social
and ecological standards. As well as dealing with
quality targets and cost aspects, the BMW Group’s
national and international purchasing guidelines
also stipulate social and ecological standards. The
BMW Group maintains close contact to its suppliers,
working with them in a spirit of partnership. In this
way, BMW Group specialists make enquiries during
the year and use the annual pricing negotiations
to assess how suppliers implement environmental
measures for products and production and how they
comply with social standards.
At the beginning of 2005, the BMW Group for-
malised the process of obtaining information about
its suppliers’ approach to sustainability. With the aid
of a database, the BMW Group can, before making
its selection, obtain information from all potential
suppliers as to how they apply the principles of sus-
tainability. Existing suppliers can update their data
in the system once a year, thus providing the BMW
Group with a precise overview of how well its inter-
national suppliers are dealing with social and eco-
logical matters.
Web-based Supplier Relationship Management
(SRM) integrated into organisational structure
Using the e-Business SRM programme, web-based
processes were developed between 2002 and
2005 to improve coordination with suppliers; these
were completed in 2005 and fully integrated into the
group’s organisational structure. The BMW Group’s
Partner Portal serves as the central platform for
linking up with suppliers. More than 25,500 external
users from 4,200 companies/company locations
have access and some 35,000 internal users access
the portal on a day-to-day basis. Various methods,
including data encryption, are used to meet security
requirements.
Process optimisation and data management
techniques have improved the purchasing process
and significantly widened access to information
about the supply markets. Purchase orders, financial
information and specific supply requests for series
and test components are sent electronically via EDI
(Electronic Data Interchange) or the Internet. The
use of interactive e-Business tools, such as elec-
tronic enquiries or auctions, enables components
and materials to be bought in more quickly, trans-
parently and cheaply.
Integrating suppliers in the product creation
process has been further optimised with the intro-
duction of electronic processes. This includes, in
particular, file-sharing and online-conferencing serv-
ices. With these tools, the BMW Group’s develop-
ment partners can access all relevant data directly
and communicate with BMW staff. As an example,
Group Management Report 8
A Review of the Financial Year 8
The General Economic Environment 11
Review of operations 15
BMW Stock in 2005 38
Financial Analysis 41
--Internal Management System 41
--Earnings performance 42
--Financial position 45
--Net assets position 46
--Subsequent events report 49
--Value added statement 49
--Key performance figures 51
--Comments on BMW AG 52
Risk Management 56
Outlook 60