Wind energy manufacturers' challengesfiles.vogel.de/vogelonline/vogelonline/files/2375.pdf · Content A. Crisis 2009 and beyond ˆOnly a short calm for the wind market Page 3 B Challenges

STR-81011-009-01-01_Wind-Challenges_v19.pptx

Hamburg, 2009

Using turbulent times to become fit for future

Wind energy manufacturers' challenges

Content

A. Crisis 2009 and beyond − Only a short calm for the wind market

Page 3

B Challenges ahead − Using turbulent times to become fit for future

2STR-81011-009-01-01_Wind-Challenges_v19.pptx

B. Challenges ahead Using turbulent times to become fit for future

Page 15

D. Way forward − How Roland Berger can support you

Page 30


A. CRISIS 2009 AND BEYOND− Only a short calm for the wind market

The crisis has brought a calm to the wind industry − Long-termgrowth trend still intact with 17% growth p.a. until 2012

Forecasts comparison – Pre-crisis vs. actualROOT CAUSES

Worldwide yearly added capacity[GW] Slowdown...

> Lack of financing, especially for large projects – Requiredequity share has increased typically in Europe from ~15%

+17% p.a.55

4STR-81011-009-01-01_Wind-Challenges_v19.pptxSource: BTM 2008 and 2009

to ~30% plus additional insurances> Reduced urgency to compensate high prices of electricity

from fossil sources (oil price evolution)> Uncertainty regarding general development of the

worldwide economy, financing and subsidies' volumeassociated to economic slowdown

... but growth trend still intact:> Economic stimulus packages strongly support renewable

energies, especially wind> Strong growth share in countries less dependant on

financial markets (China)> Ambitious government goals for renewable energy share in

core markets (e.g. USA, Europe, China, India...)> Cost penalties for fossil energies in Europe (ETS)

Forecast pre-crisis Actual forecasts

GROWTH SLOWDOWN

25

30

35

40

45

50

55

2008 2009 2010 2011 2012

While the industry is expected to grow healthily, margins ofmanufacturers will come under strong pressure

Medium and long-term investment and growth plans in key markets1Impacton Margin

O

Impacton Growth

+

Key market trends


Wind energy costs converge towards grid parity2Large scale entry of utilities is changing rules3Focus on global network of local supply chains4

5 New entrants pressure established players

Source: Roland Berger

–

–

+

–

+

+

+

OPositive+ O –Neutral Negativ

Governments are establishing ambitious investment andgrowth plans for wind energy all over the world

Worldwide actual and potential wind power capacity 2008-2020 [GW]

INVESTMENT AND GROWTH PLANS1

TOP GROWTH MARKETS

EU countries> Proposed target of 20% of renewable energy sources by 2020 – wind

contributing to 11-14% of electrical energy with 180 GW, including 35GW offshore1)

North America+141

202

Europe+136

6STR-81011-009-01-01_Wind-Challenges_v19.pptxSource: EER, EWEA, GWEC

GW offshore> Total investments between 2011-2020 accounting for EUR 120 bnUSA> Proposed target of 20% wind power by 2030> Economic stimulus bill including USD ~80 bn for renewable energy,

including extension of production tax credits and offering of invest-ment tax credits

> Investment plans include initiatives for the transmission system whichconstrains the wind energy growth today

CHINA> 3% target of non-hydro renewable electricity production by 2020 –

100 GW of wind power capacity by 2020> "10 GW Size Wind Base" program planning large scale deployment of

10 GW of wind power in four key regions until 2020India> Government plans for wind power capacity of 40 GW by 2022> Offshore wind, currently untapped in India, has significant potential –

India has 7,000 miles of coast line

28

169

Potential2020

Installed2008

+141

26

189

Potential2020

Installed2008

Asia/Pacific+163

66

Potential2020

Installed2008

16

1

Potential2020

Installed2008

RoW+15

1) EWEA reference scenario

"20-20-20" targets bind EU countries to produce 20% of their powerwith renewables – Wind best positioned to fill the supply gap

Impacts of the EU ETS on utilities – EU Climate and Energy Package, December 2008IMPACTS FOR UTILITIES

> Utilities are responsible for around ¾ of CO2emissions of all branches of industry

> Utilities will be allowed to emit only as much CO

Europe "20-20-20" targets 2020

INVESTMENT AND GROWTH PLANS1

7STR-81011-009-01-01_Wind-Challenges_v19.pptxSource: EU Council

> Utilities will be allowed to emit only as much CO2as they have emissions allowances (certificates)

> From 2013 on utilities will have to buy 100% oftheir certificates1) in auctions and may tradethem afterwards (EU ETS2))

> By 2020 the total number of available certificateswill be reduced by 21%

> A considerable number of coal-fired power plantswill have to be substituted – wind is the mostmature renewable source to fill the supply gapand to reach the national quotas of renewableenergy

1) Utilities in East European countries are exempted and will get 70% of their required certificates for free after 2013 until 20202) Emissions Trading Scheme

20% renewables… share of energy mix by 2020

-20% CO2 emissions… of 1990 levels by 2020

-20% energy used… of 2020 projected levels

Wind energy costs still need to decrease to reach full parity withbulk power costs – Main driver is the price for wind turbines

Historic and forecasted energy cost development in Europe 1985-2030 [EUR/MWh]

GRID PARITY2

REMARKS

> Energy costs account for:– Capital costs– O&M costsSolar PV

150


– O&M costs– Fuel costs (not for renewables)– CO2 emission costs (25-30 EUR/t)

> Increase of wind energy costsbetween 2005 and 2010 due toincreased capital costs because ofhigh wind turbine prices

> Capacity constraints and high pricefor wind turbines assumed tocontinue until 2010

Source: EWEA, IEA, RISO, Roland Berger

Grid Bulk Power

Grid Fossil

6875

81

3943

53

0

50

100

2030

Wind – max

Wind – min

1985 1995 2005 201020001990 2015

Wind turbines' cost is the main lever to decrease wind energyprices – strong price reductions expected

Typical life cycle costs of a 2-MW onshore wind turbine [%]

24% 100% > Wind turbine acquisition costs is the main lever forutilities to reduce overall wind energy costs

> Wind turbine suppliers have to plan with strong priceand profit margins reduction in the next years

REMARKS

GRID PARITY2

"Turbine costs will decline by 20% inthe next 3 years" [Acciona Energia]

9STR-81011-009-01-01_Wind-Challenges_v19.pptxSource: EWEA, DEWI, Eon, RWE, Roland Berger

5%7%

57%

Turbine(ex works)

7%

Gridconnec-

tion

Found-dation

Otherup-front

costs

76%

Total capex O&M Total

and profit margins reduction in the next years> For offshore, the wind turbine accounts for 45%-50%

of the total life cycle costs, varying strongly with waterdepth and distance to coast – deployment and O&Mmuch higher than for offshore

> Other up-front costs include:– Land up-front costs– Electric installation– Consultancy– Financial costs– Road construction– Control systems

> O&M account for:– Service & spare parts 26%– Administration 21%– Land rent 18%– Miscellaneous 17%– Insurance 13%– Power from the grid 5%

Six key factors are driving the utilities to increase wind in theirportfolio, broadening their energy mix

> Oil and gas prices and supply uncertaintyincreases the need for utilities to reduce theirexposure

> Wind broadens the energy mix cost-effectively

OIL AND GAS RISK

Utilities' growthin wind energy

> Global energy demand grows by 10-20%each year

> Building a standard wind park takes only3-5 years, a much shorter lead time than thatof a conventional plant

SHORT LEAD TIME OF WIND

ENTRY OF UTILITIES3

10STR-81011-009-01-01_Wind-Challenges_v19.pptxSource: Roland Berger

> Utilities are forced to auction 100% of requiredCO2 certificates after 2013

> Operation with CO2-intensive energies(e.g. coal) will become more expensive

gymarket

> Problems for small and medium wind playersto access financing

> Acquisition of locations, equipment and know-howat low prices relying on strong cash flow fromoperations

CRISIS "WINDOW OF OPPORTUNITY"

EU "20-20-20" TARGETS FOR 2020

> General public increases awareness onenvironmental issues

> Utilities need to promote a green imageopposed to the traditional "polluter" one

PROMOTE GREEN IMAGE

> Support by political initiatives making windenergy production more attractive(e.g. tax incentives, feed-in tariffs)

POLITICAL INCENTIVES

> Strong focus onreliability and yield

> Global supply ofwind turbines

> Own projectmanagement andO&M organizations

Wind turbine manufacturers loose negotiation power – Currentfavorable delivery and price conditions expected to decrease

From a sellers' to a buyers' market

> Fewer but larger orders– Larger project sizes, both for new

parks and repowering activities

> Intense competition for market sharein growth markets and for key clients– Dominance of top 6 wind turbine

manufacturers constantly decrea-sing (market share from 85% in

ENTRY OF UTILITIES3


parks and repowering activities– Global framework agreements

> Global reach of main utilities– Main utilities operate internationally

in key growth markets – global keyaccounts

> Strong pressure to reduce renewableenergy costs– Grid parity is one of the key levers

to achieve established renewableenergy targets

sing (market share from 85% in2005 to 69% in 2008)

– Competition from local players ingrowth markets and specialistsintensifies

> Increased capacities and ability todeliver– Major investments are alleviating

supply shortages in critical areas

Loss ofnegotiationPower

Bigger wind park projects and framework agreements are intensi-fying the competition among WTM for fewer but larger orders

Bigger wind park projects and framework agreements

ENTRY OF UTILITIES3

TOWARDS BIGGER WIND PARK PROJECTS TOWARDS FRAMEWORK AGREEMENTS

35

40

70

80

90

Number of farmsAverage number of turbines

Competitors haveentered into major dealswith utilities


FEWERBUT

LARGERORDERS

> Average wind farm size increased by 20% in the lastfour years – larger projects over 50 MW are expectedin the next years, specially offshore

> Wind park size is a key factor for theindustrialization of wind energy

> Utilities are allocating large orders andestablishing framework agreements withselected suppliers – partnerships focusing todevelop joint growth approaches

> Number of suppliers to the major utilities isreduced

> Hardercompetitionamong WTMs

> Crucial importanceof partnershipsand key accountmanagement

0

5

10

15

20

25

30

0

10

20

30

40

50

60

70

2001 2002 2003 2004 2009 2010 2011 201220082006 20072005

> Siemens agreementwith Dong Energy for1800MW

> REpower willmanufacture for RWEwind turbinesamounting 1900 MW

Supply chain focus is changing from the ability to deliver to theglobal development of local supply networks

LOCAL SUPPLY CHAINS4

FOCUS TODAY FOCUS TOMORROW

Focus today vs. tomorrow


> Ability to deliver – Secure supply of key components> Ways to overcome constraints of oligopolistic markets

for gearboxes and bearings

> Develop clusters with local supply networks in keymarkets on a global level

> Importance of "Buy Local" to participate in governmentaleconomic stimulus programs

FALComponents Manufacturing

Dominance by top six players is decreasing strongly –Intense battle for market share expected the next two years

Overview market shares 2005-08 [% MW delivered]

MANUFACTURERS LANDSCAPE5

REMARKS

6%

9%16%

6%2%

AccionaSinovelOthers

4%4%

3%1%> Market dominated by Vestas, GE, Gamesa, Enercon,

Suzlon, and Siemens, accounting for 69% of delivered MW> Competition for market share intensifies – tougher

85%

100% 100%

14STR-81011-009-01-01_Wind-Challenges_v19.pptxSource: BTM, EER, Companies, Roland Berger

28%18%

18%

17%

13%

11%

14%

9%

6%

8%6%

Vestas

GE Energy

GamesaEnerconSuzlonSiemensNordexGoldwind

2008

3%4%4%

2005Top 6 Rest

p gconditions expected in 2009-2010– Market share of top 6 suppliers decreased from 85% to

69% in 2008– More than 10 other turbine vendors fighting for market

share in regional markets- Offshore specialists: REpower, Multibrid- Local players: Clipper, Dongfang- Others: Mitsubishi, Windflow, Fuhrländer, Windey,

Ecotecnia, Dewind, Unison, Hyosung, Doosan> Strong growth Chinese and American markets strengthen

local suppliers – further market share gains expected– USA: GE from 15% in 2007 to 17% in 2008 – other

suppliers as Clipper emerging (2% in 2008)– China: Sinovel and Goldwind from 7% to 8% together –

other suppliers as Dongfang emerging (3% in 2008)

69%


B. CHALLENGES AHEAD− Using turbulent times to become fit for future

To protect the market position and margins, wind turbinemanufacturers need to address four challenges

1 CAPTUREMARKET

2 LEVERAGETECHNOLOGY

3 ENHANCESUPPLY CHAIN

4 RESTRUCTUREOPERATIONS

Challenges wind turbine manufacturers


> Benefit from govern-ment incentiveprograms

> Secure access toprofitable key marketsand clients

> Drive standardization,modularization anddevelopment ofplatforms

> Manage complextechnology trade-offsbeyond pure perfor-mance criteria, focu-sing on life cycle costs

> Manage risk of supplierbase

> Eliminate supplyconstraints

> Establish and managelocal supply chains ona global scale

> Manage liquidity shor-tages and adjust ca-pacities in the shortterm

> Further industrializeoperations

> Build up globaloperations footprint

USE CURRENT SLOW DOWN TO PUSH AHEAD INITIATIVES!

The three top markets – Europe, USA and China – haveextensive incentive programs for renewable energy on place

Overview main country markets incentive programs> "20-20-20" targets

proposing a contribution ofwind energy of 11-14% toEuropean electricalconsumption (~180GW)

EUROPE

> Energy production: Different schemes are operating, mainly feed-in-tariffs, fixed premiums, green certificatesand tendering procedures

> Project development: Depending on national and regional governments but basically tax incentives, soft loans,contribution programs and environmental taxes /carbon certificates (indirect benefit for wind energy)

> Equipment manufacturing: No specific programs apart from national and regional schemes fostering industrialgrowth typically based on job creation R&D incentive programs on national and EU level

1 MARKET


growth, typically based on job creation. R&D incentive programs on national and EU level.

> Proposed target of 20% ofelectricity supplied by windenergy in 2030USA

> Energy production: Different schemes on federal and state level, but basically based on a production-tax-credit(PTC). Possible introduction of a national renewable portfolio standard scheme

> Project development: Investment-tax-credits and loan guarantees on a federal level and different schemes onstate level (e.g. tax incentives, land acquisition, grants, loans...). Indirect support through specific incentives forinvestment on the transmission network and a proposed cap-and-trade scheme penalizing carbon emissions

> Equipment manufacturing: Programs mostly on state level, typically based on job creation and including taxincentives, soft-loans and low costs for land and infrastructure. R&D funding programs.

> Ambitious targets fixed inthe Wind Base Program,aiming for more than 100GWs until 2020

> Strong willingness topromote domestic manu-facturing of equipment

CHINA

> Energy production: project specific fixed tariffs based on wind resources, transmission and production costs(only for non-concession projects) and a tariff premium pro MW

> Project Development: tendering for national concession projects and low interest loans> Equipment manufacturing:

– Higher taxes for importing wind turbines and key components– Specific incentives (cash subsidies pro MW) for the manufacturing of turbines for domestic brands (>51%

chinese)– National and regional specific subsidies, tax incentives and low interest loans for the establishment of new

companies

Source: GWEC, EWEA, Roland Berger

Each of the top markets require a different strategy andpositioning approach

1 MARKET

Key success factors for WTMs in top markets

USA CHINA> Partnering with > Partnering with


EUROPA

glocal and Europeanutilities/IPPsleading capacitybuild-up

> Build up owndomestic capacityand supplier network� Reduce logisticcosts and currencyrisks

> Partner with major utilities, with afocus on offshore, repowering andmarkets in growth phase (e.g. France)

> Reduction of wind turbine costs drivenby industrialization and efficiency

domestic manufac-turers and suppliers� Subsidies for manu-

facturing of turbines onlyfor domestic brands(>51% chinese)

> Build up local manu-facturing capacity tosupply the market� Reduce costs,

including high importtaxes for wind turbinecomponents


Main challenge is to secure top line growth in the next years –Focused and orchestrated market approach essential

1 MARKET

MARKETMAPPING &ANALYSIS

> Identify and select growth markets to target> Collect information and build market profiles

(structure, volumes, legislation, renewableprograms …)

Overview market approach

Orchestrated marketapproach to:> Secure participation


CUSTOMERPORTRAIT &COMPETITORPROFILES

> Identify and map customers and competitors> Collect customer & competitor intelligence,

building-up an in-depth understanding of thetarget markets

ACTIVATIONSTRATEGY

> Define targets> Identify levers and barriers to action> Establish market/client specific actions

strategies and action plans

> Secure participationin the growth of keymarkets (USA,China, Europe)including govern-ment renewable in-vestment programs

> Establish global fra-mework agreementsand gain majorcontracts with keyutilities

Modularization and platform strategy can reap significantbenefits in investment and variable costs

Platform strategy/modularization – Project example

> Standardized torque area for gearboxes> Significant decrease in number of designs and parts> F iti l i t li bl d l

PROJECT RESULTS

2 TECHNOLOGY


> Fewer critical variants, more reliable modules> Increased flexibility for more focused product

differentiation


Unique designs Part numbers Investment [hours]

> Engineering> Manufacturing

– Productionfacilities

– Tools

Variable costs [EUR '000/unit]

> Material cost> Manufacturing

cost> Warranty &

goodwill> Logistics2

6

TargetActual

-67%

3590

-61%

Actual Target

-40%

Target

150

Actual

2503.95.0

-22%

TargetActual

Complex technology trade-offs require holistic evaluations ofperformance, supply chain and life cycle costs requirements

COMPLEX TECHNOLOGY TRADE-OFFS

> Performance and technical challenges– Development of design solutions using CFRP low weight and high stiffness,

e.g. longer blades enabling more efficient energy harvesting– Operating life constraints and environmental damage, e.g., lightning strike

Supply chain> Components and

materials availabilityand capacity

Performance> Design solutions> Yield/costs trade-

offsD i f

2 TECHNOLOGY

EXAMPLE CASE: COMPOSITES

21STR-81011-009-01-01_Wind-Challenges_v19.pptx1) Based on the assumption of 3% CFRP application for blades; aircraft programs A380, A350 and B787

– Design for manufacturing – complex manufacturing processes andtolerances

> Supply chain– Suppliers landscape – three companies, Toray, Tohotenax and Mitsubishi

Rayon, account for >75% of the market– Most of the capacity today focused on high margins industries as

aerospace – secondary players focus on wing (e.g. Zoltek)– In 2015, material requirements for wind turbines would account for 25,000

tons, ~2,5 times the volume of material required for new aircraft programs1)

> Life cycle costs– Material costs – high costs of CFRP, ~350 USD/kg for aerospace high-

grade materials. Lower-grade materials still far from 12 USD/kg target forwing industry

– Manufacturing costs – expensive and complex processes– Maintenance – new methods and processes for inspection and repairs

a d capac tyrequirements

> Supplier landscape> etc.

Life cycle costs> Materials and components

manufacturing costs> Assembly costs> Deployment costs> Operation and maintenance> etc.

> Design formanufacturing

> etc.

Additional regvired future focusMain focus today

Many challenging technology trade-offs expected in the nearfuture – Increasing focus on reliability, costs and yield

2

DRIVE TRAIN AND GENERATOR> Focus

– Reliability and efficiency (e.g. gearbox accounts for ~40%of wind turbine failures)

– Operational lifetime– Service and maintenance

BLADES AND ROTOR> Focus

– Larger sizes for more efficient energy harvesting– Capability to sustain higher loads– Quality (e.g. cracks, delamination, …)– Costs for transport and handling

TECHNOLOGY

Overview key technical challenges - Focus on reliability, costs and yield


– Service and maintenance– Installation costs

> Challenges– Lighter and more compact housings (e.g. integration of

drive train and generator)– Simplification and new design solutions for drive trains

(e.g. reduction of bearings and roller parts)– Integration of new generator technologies (e.g.

superconductor generators)

– Costs for transport and handling– Manufacturing costs– Operational lifetime– Low weight and high stiffness of structures

> Challenges– Introduction of new materials (e.g. CFRP)– Manufacturing constraints– Endurance to environmental damage (e.g. weather,

lighting)

GRID CONNECTION & INTEGRATION> Focus

– Adaptation to grid requirements (e.g. stability, voltagefluctuations)

– Integration costs (e.g. due to intermittency)> Challenges

– Industrial customization and modularization of windturbines

– New integration technologies

TOWER AND FOUNDATION> Focus

– Lighter and leaner structures– Material, handling and installation costs– Installation and costs of foundations, specially offshore

> Challenges– New foundations design, construction techniques and

materials, specially for Offshore


In the light of the current economic crisis it is key to assessand manage the risk along the supply chain

3 SUPPLY CHAIN

PRIORITIZATIONOF PRODUCTS ANDSUPPLIERS

IDENTIFICATION OF RISKYSUPPLIERS

SELECTION OF LEVERS &DEFINITION OF EMERGENCYPLANS

A B C


Long-list of suppliers Short-list of risky suppliers Fact sheets, levers &emergency plans for riskysuppliers

Symptoms Causes

Bottlenecks on lower-tier levels are characteristic for thedynamically growing wind turbine industry

CONTEXT CHALLENGESKey questions to be addressed in order to build a comprehen-sive supply chain capacity model to identify hidden bottlenecksare:

> How to structure the supply chain?

> Dynamically growingindustry with CAGR > 20%

> Increasingly qualityproblems of components(quantity over quality)

3 SUPPLY CHAIN

Context and challenges of bottlenecks on lower tier levels of the supply chain


> How to structure the supply chain?> How to get suitable data (availability and quality)?> How to challenge tier-1 suppliers (verify what tier-1 suppliers state

about tier-2 suppliers)?

OEM Tier-1 Tier-2

Main challenge for OEMSupply chain ramp-up (quantity and quality) in times of

difficult prediction of own market share

– Traditionally only communication tier-by-tier– Challenge for OEM to understand tier-2 suppliers

> Lack of predictability ofsales plan

> Lack of commitment

> Lack of communicationregarding requirementsand volumes (reactiverather than pro-active)

(quantity over quality)

> "Blame game" betweendifferent parties involved

Bottle-necks in

lowertiers of

thesupplychain

A Supply chain capacity model brings supply and demand to-gether on each tier level allowing for flexible scenario analysis

SUPPLY DEMAND

> In-depth desk research> Extensive interviews with

Bottom-up approach

> Based on market studies> Validated through desk

Top-down approach

SUPPLY CHAIN CAPACITY MODEL

Scenariodashboard

Supply /demand

> Conversion ofinputs into onecommon unit(pieces ship-sets

3 SUPPLY CHAIN

Illustration supply chain capacity model


> Extensive interviews withinternal/external partners

> Prioritize components on alltier level

1st tier

2nd tier

3rd tier

> Validated through deskresearch and interviews

> Leverage own internal/external expertise

> Prioritize components on alltier levels

1st tier

2nd tier

3rd tier

Supply Demand

(pieces, ship-sets,MW, etc.)

> Allowing scenarioanalysis throughdash-board in Excel

DELIVERABLES

> Condensed representation using traffic-lightlogic

> Stand-alone and aggregated view on totalsupply chain including "hit list" of bottlenecks

SUPPLY DEMAND

A major challenge is the further industrialization and build up ofglobal operational excellence

4 OPERATIONS

BUILD UP GLOBALIII


> Perform diligent liquidity analysis> Work on all levels to improve

cash position: Working capital,investments, financialrestructuring

MANAGE LIQUIDITY SHORT-AGES AND ADJUST CAPACITIES

> Continue establishing solid andefficient industrial processesalong the whole value chain forwind turbine assembly andcomponents manufacturing

> Elaborate comprehensivedevelopment scenarios and workon operational improvementlevers across all of them

FURTHER INDUSTRIALIZEOPERATIONS

> Build up footprint in targetmarkets involving local suppliers– global network of manufactu-ring clusters

OPERATIONS FOOTPRINT


I

II

Short-term liquidity is ensured via three main levers: Workingcapital reduction, CAPEX reduction and financial restructuring

4 OPERATIONS

WORKING CAPITALREDUCTION

CAPEX REDUCTION FINANCIAL RESTRUCTURING

1 Inventory management 4 Overall reduction of capitalexpenditures

7 Freeze of dividends

I

Main levers to ensure liquidity


2 Modification of payment terms(with suppliers and clients)

3 Factoring

expenditures

5 Disposal of non-core assets

6 Sale and lease back of ownassets

8 Equity cure

9 New money restructuring

10 Debt buyback

11 Covenant reset

12 Debt to equity swap

13 Debt to hybrid swap


A robust industrialization of operations is key to face pressureon profit margins

> Design to life-cycle-costs> Design to Manufacture &

ProductDevelopment

FactoriesFlow & Layout

Organization Equipment Supply Chain

Key levers for a robust industrialization

4

> Planning and scheduling> Internal industrial footprint

> Management of performanceindicators

> Flexibility of machines andtools

> Procurement planning &scheduling

OPERATIONSII


gAssembly

> Modularization & complexitymanagement

> Integrated developmentteams

> Standardization of com-ponents and manufacturingprocesses

> Quality and testing programs> Requirements based

development

Focus product develop-ment on life-cycle-costs

pand layouts

> Storage and intralogistics> Balancing flow & production

line design – Pull flow> Batch size and bottleneck

management> Leadtime reduction> Rework management> Production and flow

monitoring

> Organization structure> Team management> Continuous improvement

management> 5S implementation> Quality of manufacturing

support services> Wage policy> Training and skills

management

> Efficiency of test benches> Machine & equipment output

monitoring> Equipment reliability and

maintenance> Work for higher OEEs> Tools spares management> Equipment capacity increase

& new equipmentintroduction

> Procurement management> Supply chain administration> Operational monitoring of

supplier performance> Supplier structure> Lean logistics

Implement excellentindustrial processes

Work for peopleeffectiveness

Optimize overall equip-ment availability & output

Establish a robust andefficient supply chain


The development of global operations footprint is a must toaccess key markets and keep costs low

> Development on a global level of localclusters for the final assembly and

KEY CHALLENGES TO BE ADDRESSED

Overview development of global operations footprint

4 OPERATIONSIII


clusters for the final assembly andcomponents manufacturing in key markets

> Development of own domestic infrastructurein target markets establishing solidproduction clusters partnering with localsuppliers

> Secure access to market growth andgovernment incentive programs bypartnering and establishing frameworkagreements with key utilities anddevelopers

FALComponents Manufacturing


Documents

Wind energy manufacturers' challengesfiles.vogel.de/vogelonline/vogelonline/files/2375.pdf · Content A. Crisis 2009 and beyond ˆOnly a short calm for the wind market Page 3 B Challenges