Transcript Industry Expectations of Suppliers

AMT's Global Forecasting & Marketing Conference
Miami, October 20, 2010
Gene Cuenot
Vestas Nacelles
Supply Chain Management – The Americas
Importance of Location
The overall sourcing and
manufacturing strategy:
In the region for the region.
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Importance of Location
Location of Suppliers and Competitors
Supplier Information
Existing
Suppliers
Modeled
Location
Foundry
Machining
Gears
Generators
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Turbine Manufacturers
GE
Gamesa
Suzlon
Siemens
Mitsubishi
State Ranking for
Potential Suppliers
Top Quartile
2nd Quartile
Chicago Nacelles - Overview
Chicago Location
 Centrally located
 Available talent
 Response time to market
 Closeness to supply base
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Establishing Nacelles’ Supply Chain
 Category Sourcing
 Lean, Six Sigma, APQP, PPAP and ISO certifications desired
 Established sourcing milestones and detailed timelines
 Experienced staff selected from auto and off-highway
industries
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Baseline
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Historic Industry growth
Economic Down-turn
Critical components sourcing
Commodities level sourcing
Credit Conditions – tight but monies are available
Demand for High Quality and Delivery
Competition will be fierce
N. America Sourcing but for global suppliers
Industry driven ISO9000-like baseline work practices
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Nacelles - Overview
Supply opportunities
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Bearings
Hydraulics, pumps
Lubrications systems
Plastics
Wires and Cables
Transformers
Castings
Weldings
Fasteners
Machined components
Sheet metal work
Lifts
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V82/2MW
V90/3MW
The Sourcing Experience
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North America Suppliers
Strengths
Improvements
 Ability & Flexibility to Invest
 Grow knowledge of wind industry
 Transferrable skills
 Drive continuous improvements in
quality & delivery
 Quality systems
 Knowledge in APQP and PPAP
 State and Government support
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 Achieve one-piece flow
 Appropriate investment planning
Emphasis on Safety and Quality
Our Number 1 Priority
Safety and Quality
Industry specific standard to achieve quality fundamentals
Wind suppliers MUST master basic quality management tools
High quality = satisfied customer
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Importance of Quality
One “small” supplier defect = Rework up tower
Rework up tower =
• Down Turbine
• Crane Cost
• Technician Cost
• Shipping Cost
Down Turbine =
• Loss of Production
• Loss of customer satisfaction
Loss of Production = Lower business case certainty
Raises perception of high risk investment
High Risk Investment = Lower investments made
Lower investment = No growth for any OEM and fewer jobs.
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Current Supplier Quality Performance
Typical Industry Root Causes:
• Product received does not meet form, fit & function requirements
• Un-validated product/process changes
• Critical Process not in statistical Control
• Poor inspection and test coverage
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Market and Customer Expectations
Suppliers must drive to improve the basics of Quality
Management.
• Implement Culture of Quality: OWN your product quality
• Improve controls and test coverage
• Improve responsiveness & take ownership of problem resolution
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The Supply Impact
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Industry Impact on Suppliers
Extreme growth –
• Fastest growing of the renewables sectors for quality suppliers
• Renewables industry expansion drives need for uniform supply
standard.
• Industry growth driving:
- manufacturing, installations and employment
- supplier process optimization
• Need for continuous improvement
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Industry Expectations of Suppliers
• Innovativeness
• Increased co-operation
• Increased reliability
• Multiple sourcing
• Partnering and long term agreements
• Production readiness
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Expected Tools
• APQP – advance product quality planning
• PPAP – production part approval process
• FFF – form, fit and function
• CTQ – critical to quality
• Record retention
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Industry Outlook
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The following slides have been removed from Gene Cuenot’s presentation –
contact emerging energy research to learn how to obtain this information
http://www.emerging-energy.com/
North America Wind Energy Market Forecast: 2010–2025
US Wind Cumulative Capacity GW by Region: Base-Case Scenario
US Regional Growth: Base-Case
North American GW Added by Country: Base-Case
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