The current global semiconductor (computer chip) shortage has not significantly impacted on operations at the BMW plant in Rosslyn, Pretoria, as production at the facility is being prioritised within the German carmaker’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 setup 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 carmaker 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 semiconductor shortage.

Of course, we had to shut down some production, but we are manoeuvring 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 export markets.

Nedeljkovic explains that the global semiconductor 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 quick recovery from the pandemic, so much so that entire supply chains are struggling to keep up with demand.

“This recovery is challenging the semiconductor industry significantly,” saysNedeljkovic.

“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 complexity is that the ‘missing’ components within the supply chain may vary from week to week, depending on the country facing a lockdown at that stage.