The current global semi-conductor (computer chip) shortage has not significantly impacted operations at the BMW plant in Rosslyn, Pretoria, as production at the facility is being prioritised within the German car maker’s larger manufacturing network.
“At BMW we are managing quite well [with the shortage],” says BMW management board member for production Dr Milan Nedeljkovic.
“We have high flexibility in our production system. We are capable of rescheduling our whole production set-up six days in advance. So, six days in advance we can change our whole sequence of production and shuffle it around.”
This helps the premium car manufacturer when it becomes aware that certain components or accessories will not be delivered on time.
“We can then resequence the whole production line and avoid this component as far as possible,” explains Nedeljkovic.
“This has helped us significantly to maintain production irrespective of the semi-conductor shortage.
“Of course, we had to shut down some production, but we are manoeuvering around quite well.
“However, with South Africa, with its long supply chains, we don’t have this flexibility, so we are trying to secure production by just prioritising manufacturing in South Africa,” notes Nedeljkovic.
BMW Group South Africa produces the X3 for the local and exports markets.
Nedeljkovic explains that the global semi-conductor shortage has, in part, arisen from the continuous increase in demand from the automotive industry for components that require computer chips.
“We are putting more and more electronics into cars, especially through driving assistance systems. There are additional cameras, sensors and computers to calculate and analyse data.”
Nedeljkovic says the rise in the complexity of the single vehicle had already caused “a certain tension” in the supply chain before the advent of Covid-19.
Now there is the added tension of a "surprisingly quick recovery" from the pandemic, so much so that entire supply chains are struggling to keep up with demand.
“This recovery is challenging the semi-conductor industry significantly,” says Nedeljkovic.
“And, on top of this, we now have some countries with additional lockdowns.”
He says Covid-19-related lockdowns in Asia, in countries such as Malaysia and Vietnam, are hitting the automotive industry “very badly”, since the supply pipeline was “already quite empty”.
Yet another added complexity is that the ‘missing’ components within the supply chain may vary from week to week, depending on which country is facing a lockdown at that stage.
“It changes from week to week, month to month which component, which semi-conductor manufacturer, is affected. And, in the end, we need all the components to manufacture a car and that is the difficulty behind it.”