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BMW: Numbers without counting

With the help of the inventory software Stasam from Stat Control, BMW will manage its inventories centrally in the future. Originally, the company used a self-developed program for this. The new solution should also master the so-called “bound estimation methods”.

 

For more efficiency, BMW switched to the inventory software STASAM.

For 25 years, BMW has used a self-developed software for inventory sampling. The search for a new software began with the group-wide conversion of the domestic locations and spare parts supply to SAP. The auditors demanded a solution that could also handle the so-called “bound estimation procedures”. “As a minimum requirement, the Group defined the so-called difference estimation”, states Stat Control managing director Jörg Ökonomou.

Instead of guessing: Estimate four times

This is one of four approved methods (free mean estimation, difference estimation, ratio estimation, regression estimation) with which the relative sampling error and the deviation of the total values can be determined. Inventory sampling according to these procedures is permitted by law (German Commercial Code § 241). After all, about 20 percent of the stock items are sufficient to represent 60 to 95 percent of the stock value.

However, auditors only recognize an inventory sampling if these values are within certain limits – it does not matter which of the four estimation methods is used to calculate the result.

 

This specification can lead to very different results: “For example, an inventory that was successful using the calculation method of difference estimation can fail according to the rules of mean value estimation,” explains Ökonomou. The informative value of the mean value method is thus below the expectations of many companies and auditors. The bound procedures work much more efficiently here, especially the ratio and regression estimation offer specific advantages.

In practice, this means that the more accurate the procedure for determining the relative sampling error and the deviation of the overall values is, the more likely it is that the inventory carried out will meet the auditors’ expectations. BMW decided to use the inventory systems Stasam and Staseq from Stat Control GmbH after tendering and evaluating various providers. These systems offer all permissible statistical methods for inventories.

About the company

Bayerische Motoren Werke Aktiengesellschaft (BMW AG) is a globally operating and listed automobile and motorcycle manufacturer based in Munich. Founded in 1913, BMW has made a name for itself as a premium manufacturer since the 1960s and is one of the 15 largest car manufacturers in the world.

Facts

  • BMW uses Stasam and Staseq
  • 25 years of use of own software
  • Conversion to SAP: new requirements of the auditors
  • Stasam and Staseq offer all permitted statistical methods for inventories