Country Manufacturing Value-Added (% of GDP): 23% (World Bank)
Munich is both a cultural hub, as the center of Oktoberfest, and the economic engine/high-tech center of Germany. The city boasts an advanced public transportation network and world-renowned infrastructure, which is partially credited for its supply chain capabilities. President Eisenhower observed the German transportation infrastructure as a General in World War II and used it as an inspiration for the Interstate Highway System program of the 1950s. Students had the opportunity to learn about the efficiency of the U-Bahn (subway) as a method of getting from place to place. We used the subway dozens of times to help us get from place to place.
1) Multinational Automobile and Supply Chain tours:
The City of Munich (2016) website states that “In terms of turnover and the number of employees, automotive engineering is the single most important branch of industry in the Munich Metropolitan Region”.
Germany is the leading country in the EU in automobile production and has been called the world’s automotive innovation hub (Germany Trade & Invest, 2016). Bavaria, the Southern region of Germany of which Munich is the largest city, claims 180 Tier 1-4 automobile suppliers. Factories for Mercedes-Benz, Volkswagen, Opel (GM), Audi, and BMW are located there. Bavaria boasts “modern solutions for sophisticated requirements in supply chain management of automobile manufacturers” (Invest in Bavaria, 2016). The City of Munich (2016) states that “400 automotive companies employ around 128,500 people” in the city and “The entire value chain is based in this region, including everything from research and development through production to the supply industry.” In fact, Munich University offers a popular bachelor’s degree in Automotive Engineering and Management.
BMW (Bavarian Motor Works) is a German automaker known for quality vehicles and value-added components. They have embraced responsibility to the environment through green manufacturing, which reduces landfill requirements paired with a water conservation initiative, saving 9.5M gallons of water each year across their global facilities. One of the many quality initiatives in place at BMW is the usage of methane gas to power factory turbines, which supplies 50% of total energy demands for the company. BMW was one of the first organizations in the automotive industry to earn the prestigious ISO: 14001 certification (BMW Manufacturing Co., 2017). BMW’s global supply chain includes 30 industrial sites in 14 countries on 4 continents and includes 13,000 suppliers in 70 countries (BMW Group, 2017).
We toured the BMW factory and observed the behind-the-scenes production of this world-renowned automobile from press works to assembly. The museum/showroom displayed many innovative products.
We weren’t allowed to take pictures inside the factory, although we learned quite a bit about their manufacturing process. This state-of-the-art facility gave us a close-up view of the Press Shop, Body Shop, Paint Shop, Engine Shop, Production of Interior Equipment and Seats, and Assembly. The factory produces 222,000 vehicles per year (of 2,367,600 vehicles worldwide, or 5th of their 14 worldwide plants) and encompasses 400,000 square meters, making it the second-largest BMW factory behind the factory located in South Carolina. Unlike in America, rail is the most common mode of transport of vehicles from the factory to vendors.
We had the opportunity to learn about and observe the following:
- 16 variations of vehicle body frames for the 2018 product lines
- differences in vehicles made for the Japanese, UK, and American markets
- the automation of 850 robots during the welding process
- the paint shop (environmentally friendly water-based paints) including BMW’s 16 official standardized colors
- production of their 3, 4, 8, and 12 cylinder engines (their 2,000-employee team produces 3,300 4 cylinder engines/day)
- air jet cleaning for a dust-free surface before painting
- automated Excel table recording production in real time (called automatiktabelle)
- brake inspection process after assembly
The factory is currently exploring a new production digitization process including 3D-printing capabilities and an innovative data matrix code to trace individual parts for defects.
2) Cultural Excursions and Immersions:
We partook of numerous activities. We had a chance to see the Royal Palace. First constructed in 1385, the Royal Palace is the largest city palace in Germany and was formerly home to Bavarian monarchs. It was reconstructed after being damaged during World War II, when 85% of the buildings in Munich were destroyed. Some German cities established commissions to determine how to rebuild after World War II, and while some such as Frankfurt chose to rebuild in a modern fashion, Munich chose to study old photographs and rebuild its old town area to replicate the original design, which includes the Royal Palace and other relics of the city’s historic center. The Munich Town Hall in Marienplatz, where the mayor and city council conducts business, also suffered damage during Allied air raids in 1944, was later rebuilt in the same style.
In February 2017, the NATO Security Conference was held in Munich at the grandiose Bayerischer Hof hotel in Munich. This meeting was especially important because Vice President Mike Pence delivered an important speech discussing the current administration’s policy on NATO, seemingly on the heels of comments by Donald Trump proclaiming NATO to be “obsolete” during the campaign season.
The Bayerischer Hof hotel in Munich was also host to frequent guest Michael Jackson, who could often be seen walking around the nearby shopping area somewhat undisturbed. In tribute to his love of Munich, the locals dedicated a monument outside the hotel to his memory. One stipulation of the monument was that it has to look kept-up, and the flowers need to be in bloom.
Bavarian cuisine, inspired by the Bavarian dukes of the Wittelsbach family, was originally intended to be for the refined and only for royalty and includes bratwursts, German potatoes, sauerkraut, warm red cabbage salad, veal, and German pretzels. These foods increased in availability over time as common people started making money. Today, these foods are especially popular during the Biergarten season, which starts in May and lasts until Oktoberfest. Of course, trying new foods is an important part of learning about new cultures.
The popular image of Germany (bratwurst, lederhosen, pretzels, etc.) comes from Oktoberfest. Oktoberfest originated in 1810, when King Ludwig I celebrated his wedding by inviting Munich’s citizens to eat and drink with the Royal Family. In this same spirit, we had dinner at the Hofbrauhaus, founded in 1589 by the Duke of Bavaria. The general public was admitted in 1828, and it formerly served as the royal brewery in the Kingdom of Bavaria. Today it is owned by the state of Bavaria.
Dachau Concentration camp was the first concentration camp in Germany and was a model for subsequent German camps as well as Joseph Stalin’s gulags. It was constructed for initial purposes of holding German and Austrian political dissidents after the prisons became overcrowded in March 1933. Many prominent politicians were sent there. It eventually took in Soviet prisoners and also served as a concentration camp for more than 10,000 Jewish men. More than 4,000 political dissidents were killed there, which was against the Geneva Convention. After it was liberated by the Americans, it was used by the Allies to hold SS guards awaiting trial and as a military base until 1960. Its official records totaled 206,206 prisoners.
Munich is home to many multinational industrial operations, and more than 90,000 students attend its Universities. Purdue University and the Munich University of Applied Science, the second largest Applied Science college in the country, are strategic partners with transfer agreements and a history of collaborations. We had the opportunity to take a tour of their campus and learn about how their system of education works. Public Universities are free for all citizens in Germany. We found that their bookstore also serves as a cafe, so that students can use textbooks and return them thereafter. We also learned that oftentimes, students freely drink beer in class.
The best experiences are often unplanned. During one of many student-led outings, the students met and hung out with a nice fellow, who happened to be CEO of an influential multinational supply chain consulting company based in Munich.
3) History of Capitalism/Trade:
Soaring over the city is the 290 meter high Olympic Tower at Olympia Park. This area witnessed much economic development after 1966 when the International Olympic Committee awarded the 1972 games to Munich. Olympia Park became a case study in how sporting events can be a catalyst for both urban development and private economic development. The announcement of the 1972 Olympics in Munich set a precedent that the Super Bowl committee adheres to today, as plans are solicited for gentrification and other urban economic development in advance and economic development initiatives are intended to coincide with the event. The ’72 Games included the infamous Munich massacre, in which eleven Israeli Olympians were taken hostage and killed.
“In 2012 Munich and its region was ranked at an exceptional second place in the European Regional Economic Growth Index (E-REGI) among nearly 326 competitors from 33 countries in Europe (Colliers International, 2016)”. Munich has the has the highest per capita income in Germany, and many attribute this affluence to the US influence in its economy during the Cold War. The German Patent and Trademark Office established its headquarters in Munich in 1959, and has spawned many successful multinational organizations originating in Munich. The building in the background of the picture below is that of Siemens AG, the largest manufacturing/electronics company in Europe, headquartered in Munich.
Of course, soccer is the most popular sport in Europe. FC Bayern Munchen, the local team, was ranked #4 on the Forbes list of most valuable soccer organizations, valued at $2.7 Billion. This value was enhanced after a 10-year deal with German-based Adidas as the official athletic apparel of the company. One subway exit we sought out was near the massive stadium. One student bought apparel, including the popular team scarf worn by fans across Europe.
