Just Spent An Afternoon With A Car Dealer (BMW)...and...

[mat205125]

Welshbeef said:

someone_else said:

Once a car factory production line is running then it has to keep producing cars - it can't stop until a dealership salesman rings through another order. The parts cost of making a car is pretty low (about a third of the pre-tax list price) so it's cheaper to just keep churning cars out. The alternative is to stop production completely for days or weeks at a time and send all the employees home.

No - if the principles of Just in time manufacturing then the car only gets built if there is an order for it. If it doesnt adhere to just in time manufacturing then yes you'd keep churning them out - however that style of mass production/high vols is exceptionally old fashioned and given the fact so many options per car its not viable today.

I have no idea if what someone has said about BMW is true but if so its a company living in the dark ages.

Just in time is the ultimate in efficiency - you have a fully flexible workforce very few suppliers but exceptionally close links and long term contracts with them, very high quality parts, exceptionally low or nil stock holding (hence zero warehouse costs/storage costs).

What you have described is say the Austin Rover of the 70's & 80's which even then way a decade or two behind the Japanese.

The truth is somewhere in between, and all manufacturers will be producing a percentage of their cars going down their line without an end customer order. That applys even to manufacturers like porsche and ferrari, however to a greatly smaller percentage that the Ford Focus production line.

Walk into a dealer and ask for the lead time on a car with a very unusual and specific spec. Then when they enquire to HQ/factory and say that that 3 series spec (as an example) will take 10 weeks, ask them what kind of similar specced cars can be available before that as you "must have a car in less than x weeks". The sales bod will call these (common combos - silver, leather, satnav, cd etc) cars "customer cancellations", but we know what they really are - you should get a deal / discount on them.

A maufacturer spends a lot of time and effort studying its sales statistics and forecasting a master production schedule of bodystyles, colours and options etc.

Don't think that making cars is any different than making tins of beans with different labels for different markets. More complicated, with more options, and always with Lean and JIT as priorities for efficiency, but a mass manufacturer could not maintain a sensible lead time for delivery to the customer without making an element of their production "for stock".