Indirect Purchasing at BMW: Competitive Tender for all Industrial Robots worldwide

46% was the figure Mr. Griem was searching for in the latest market analysis report received from the corporate sales department at the BMW headquarters in Munich, Germany. This percentage, which represented the vehicle sales growth in China in 2009, was indeed mind-boggling. While the Big Three in the US were struggling to survive the day, the auto sector in China was sizzling hot — seemingly untouched by the global recession. BMW, which operates through its joint venture with Chinese auto manufacturer Brilliance in the northern city of Shenyang, had recently experienced growth pains like those of most other OEMs in the country. In order to meet future demand, the JV company in Shenyang had decided in 2009 to double production capacity at the existing plant — meaning an increase in the annual production output from 35,000 cars to almost 100,000. Furthermore, in order to increase the level of localization, it had also recently been decided that the complete-knockdown (CKD) production mode would be abandoned in favor of a complete local transplant, meaning better opportunities to tap into the local supplier base as well as lower costs for parts imports. Despite the global recession, the corporate strategic planning team had come to the conclusion that markets outside of China would eventually thaw, triggering a worldwide need for upgrading and expansion of production equipment. As VP for purchasing of Production Equipment and Construction, Mr. Griem had been assigned the task of ensuring world-class standards at all of BMW’s production plants. Considering the unstable global consumer markets, volatile currencies, and tightened budgets, Mr. Griem already knew that this project would be a challenge.