1. Doug Bartow Vice President Paint BMW Manufacturing Corp. LLC Vice President Paint BMW Manufacturing Corp. LLC

2. BMW MC 17 May 2007 Page 2 Supply Chain Management in a Build To Order Environment The Vehicle Process at BMW Doug Bartow Vice President, Paint BMW Manufacturing Co.

3. BMW MC 17 May 2007 Page 3 Number of theoretically possible alternatives 19292003 1950 1970 1985 1940 Today: 10 32 combinations BMW Group. Increasing Complexity in the Product Range

4. BMW MC 17 May 2007 Page 4 Build-to-Order Build-to-Stock Sale from stock Customized vehicle BMW optimizes its Built-to-Order strategy Advantages of build-to-order compared to build-to-stock Strategy. Build-to-Order Instead of Built-to-Stock –higher level of customer satisfaction due to personalized equipment –better inventory management leading to less sales incentives –increased vehicle equipment contingency –reduction of capital commitment costs Customer StorageProduction Customer

5. BMW MC 17 May 2007 Page 5 Unpredictable Markets Preparing our processes, our people and our supply chain to be flexible

6. BMW MC 17 May 2007 Page 6 Production and Supply Chain Process Process Monitoring and Target Control Distribution Process and Hand-over Sales Processes and Online Ordering Production- and Supply- Processes Dealer Sales System Production System Sales System Dealer Planning Dealer orderPurchasingLogisticsProductionDistributionHand-over Ordering Delivery

7. BMW MC 17 May 2007 Page 7 Process Chain Parts Call-off Horizon Long term requirements go out as forecasts – sent weekly to Suppliers Short term requirements within 3 week window start to have specific orders assigned – sent weekly to Suppliers Sequence requirements are generally sent in daily packages, but can be sub-daily depending on Supplier based on trigger signals in the plant.

8. BMW MC 17 May 2007 Page 8 JIS Just in Sequence Call off: (SPAB) Delivery: several/day JIT Just in Time Call Off: (SPAB) Delivery: several/day DIMO (Direct Delivery Assembly Line) Call Off Delivery Cycle: Daily or every X days Direct Delivery = Stock Reception directly to the assembly stock, No warehouse booking necessary In the order of assembly Process Chain Parts Supply Methods to BMW Group Plants In-house: SEQ Bulk Warehouse/ Sequence WH Warehouse

9. BMW MC 17 May 2007 Page 9 - Manufacturing Adapting to change

10. BMW MC 17 May 2007 Page 10 Build-to-Order strategy has lead to: A high customer allocation ratio and minimization of capital commitment costs Production stability, customer delivery punctuality and reduction of through put times Reliable sequence delivery for the supplier Less vehicle and parts storage due to a more reliable parts supply Extended planning period and planning certainty Sequence suppliers not required to be in close proximity to the assembly plant The Benefits: Who gains from it? Benefit Effects in Production and Supply

11. BMW MC 17 May 2007 Page 11 Thank you for your attention