German Motor companies such as Bavarian Motor Works (BMW) are known for their perfection and flawless engineering. In 2001 BMW decided to manufacture a new model of “sport activity vehicle”, X3, and for this there was a need for a lot of research and development in this field. The whole procedure called for a lot of investment in order to get things done in a right way.
BMW, in order to cut down the research cost, turned to an outsider, Magna Styer, manufacturer of power trains and automotive systems for most of the engineering research and all of production.
In 2004, Magna Styer constructed a plant in Graz, Austria and started supplying more than 300 BMW X3s a day.
In this whole supply chain integration the point to be noted was that ‘Engineering Research’ was apparently a core part of BMW research wing. This was supposed to a very confidential matter for them. But still in order to get the things done with a seamless integration they agreed on the fact to share the data with their trusted supply chain partners. In the case of BMW X3, almost 40-70% work was done by Magna Styer under the brand supervision of Bavarian Motor Works (BMW).
As a result, BMW X3 was a huge success. The partnership was a BIG PLUS for the Magna Styer as this research also enriched their potentials and core competencies.
Just like many other successful Supply Chain Integration, BWM and Magna Styer is an example one of the most successful Supply Chain Integration where techniques and technology from a parent company was used by its supply chain partner.