Institut for Forretningsudvikling og Teknologi

Innovating the Supply Chain for Lower LCOE: - The Effect of Introducing System Suppliers

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Standard

Innovating the Supply Chain for Lower LCOE : - The Effect of Introducing System Suppliers . / de Haas, Henning; Nielsen, Chlinton A.

Proceedings from EWEA Offshore 2015. Rue d'Arlon 80, B-1040 Brussels, Belgium : European Wind Energy Association - EWEA, 2015.

Publikation: Bidrag til bog/antologi/rapport/proceedingKonferencebidrag i proceedingsForskning

Harvard

de Haas, H & Nielsen, CA 2015, Innovating the Supply Chain for Lower LCOE: - The Effect of Introducing System Suppliers . i Proceedings from EWEA Offshore 2015. European Wind Energy Association - EWEA, Rue d'Arlon 80, B-1040 Brussels, Belgium.

APA

de Haas, H., & Nielsen, C. A. (2015). Innovating the Supply Chain for Lower LCOE: - The Effect of Introducing System Suppliers . I Proceedings from EWEA Offshore 2015 European Wind Energy Association - EWEA.

CBE

de Haas H, Nielsen CA. 2015. Innovating the Supply Chain for Lower LCOE: - The Effect of Introducing System Suppliers . I Proceedings from EWEA Offshore 2015. Rue d'Arlon 80, B-1040 Brussels, Belgium: European Wind Energy Association - EWEA.

MLA

de Haas, Henning og Chlinton A. Nielsen "Innovating the Supply Chain for Lower LCOE: - The Effect of Introducing System Suppliers ". Proceedings from EWEA Offshore 2015. Rue d'Arlon 80, B-1040 Brussels, Belgium: European Wind Energy Association - EWEA. 2015.

Vancouver

de Haas H, Nielsen CA. Innovating the Supply Chain for Lower LCOE: - The Effect of Introducing System Suppliers . I Proceedings from EWEA Offshore 2015. Rue d'Arlon 80, B-1040 Brussels, Belgium: European Wind Energy Association - EWEA. 2015

Author

de Haas, Henning ; Nielsen, Chlinton A. / Innovating the Supply Chain for Lower LCOE : - The Effect of Introducing System Suppliers . Proceedings from EWEA Offshore 2015. Rue d'Arlon 80, B-1040 Brussels, Belgium : European Wind Energy Association - EWEA, 2015.

Bibtex

@inproceedings{0b57e91977fa4d43bd4b63769e7f7038,
title = "Innovating the Supply Chain for Lower LCOE: - The Effect of Introducing System Suppliers ",
abstract = "The wind industry experiences a significant end customer pressure for lowering LCOE (Levelized Cost of Energy).The gap between electricity produced by wind turbines and traditional fossil fuel based production is still too high for wind power to be a real competitive alternative energy source. This combined with an overcapacity in theindustry puts pressure on prices and shrink margins for WTG (Wind Turbine) manufactures. A downward pressure on prices and margin erosion puts pressure on cash flow (working capital). At the same time customer demand is project based and fluctuates based on project uncertainties. ApproachThe paper will base on theory and models of supply chain innovation and show a supply chain innovation case of the change from component supplier to system supplier and the effects for both the customer (WTG OEM) and the supplier taking on the new role of system provider.Main body of abstractProduct (turbine) variants are created for any condition including product designs with complex and expensive components, resulting in low volume on parts and long lead times. Innovation in supply chain seems to be the tool tomitigate the issues of increasing complexity and cost of operating the supply chain and securing lower LCOE. New innovative ways of designing the wind industry supply chain involves a change in supply chain architecture and roles for some of the members of the turbine supply chain. A change from component supplier to system supplier, being an integrator for parts for a turbine and creating real system supplies to the turbine OEMs (WTG OEM) assembly factories or to turbine site. This change in architecture of the supply chain is a response to the increasing complexity and makes it possible to concentrate the complexity in the supply chain where itcan be controlled and optimized.Effects for the WTG OEM are that fixed costs are converted to variable cost. Financial effects are improved cash flow, lower working capital level, logistics effects are supplies directly to the assembly line or to site.ConclusionThe system supplier gains a closer integration to the customer and a direct demand signal from the assembly line or site. Also the system supplier is handling the entire process throughout planning, contracting, purchasing, financing and delivery, giving the opportunity to optimize and lowering cost of operating the supply chain. Apart from the quantifiable improvements and gains, the role of a system supplier implies new demands on both the customer (WTG OEM), and the supplierLearning objectivesThe WTG OEM must accept less direct control of the upstream supply chain in return for dedicated system supplies. The system supplier must develop competencies and organization to handle a broader range of component suppliers and the sourcing and logistics of a variety of components potential requiring new competences and manufacturing processes.",
author = "{de Haas}, Henning and Nielsen, {Chlinton A.}",
year = "2015",
month = jun,
day = "1",
language = "English",
booktitle = "Proceedings from EWEA Offshore 2015",
publisher = " European Wind Energy Association - EWEA",

}

RIS

TY - GEN

T1 - Innovating the Supply Chain for Lower LCOE

T2 - - The Effect of Introducing System Suppliers

AU - de Haas, Henning

AU - Nielsen, Chlinton A.

PY - 2015/6/1

Y1 - 2015/6/1

N2 - The wind industry experiences a significant end customer pressure for lowering LCOE (Levelized Cost of Energy).The gap between electricity produced by wind turbines and traditional fossil fuel based production is still too high for wind power to be a real competitive alternative energy source. This combined with an overcapacity in theindustry puts pressure on prices and shrink margins for WTG (Wind Turbine) manufactures. A downward pressure on prices and margin erosion puts pressure on cash flow (working capital). At the same time customer demand is project based and fluctuates based on project uncertainties. ApproachThe paper will base on theory and models of supply chain innovation and show a supply chain innovation case of the change from component supplier to system supplier and the effects for both the customer (WTG OEM) and the supplier taking on the new role of system provider.Main body of abstractProduct (turbine) variants are created for any condition including product designs with complex and expensive components, resulting in low volume on parts and long lead times. Innovation in supply chain seems to be the tool tomitigate the issues of increasing complexity and cost of operating the supply chain and securing lower LCOE. New innovative ways of designing the wind industry supply chain involves a change in supply chain architecture and roles for some of the members of the turbine supply chain. A change from component supplier to system supplier, being an integrator for parts for a turbine and creating real system supplies to the turbine OEMs (WTG OEM) assembly factories or to turbine site. This change in architecture of the supply chain is a response to the increasing complexity and makes it possible to concentrate the complexity in the supply chain where itcan be controlled and optimized.Effects for the WTG OEM are that fixed costs are converted to variable cost. Financial effects are improved cash flow, lower working capital level, logistics effects are supplies directly to the assembly line or to site.ConclusionThe system supplier gains a closer integration to the customer and a direct demand signal from the assembly line or site. Also the system supplier is handling the entire process throughout planning, contracting, purchasing, financing and delivery, giving the opportunity to optimize and lowering cost of operating the supply chain. Apart from the quantifiable improvements and gains, the role of a system supplier implies new demands on both the customer (WTG OEM), and the supplierLearning objectivesThe WTG OEM must accept less direct control of the upstream supply chain in return for dedicated system supplies. The system supplier must develop competencies and organization to handle a broader range of component suppliers and the sourcing and logistics of a variety of components potential requiring new competences and manufacturing processes.

AB - The wind industry experiences a significant end customer pressure for lowering LCOE (Levelized Cost of Energy).The gap between electricity produced by wind turbines and traditional fossil fuel based production is still too high for wind power to be a real competitive alternative energy source. This combined with an overcapacity in theindustry puts pressure on prices and shrink margins for WTG (Wind Turbine) manufactures. A downward pressure on prices and margin erosion puts pressure on cash flow (working capital). At the same time customer demand is project based and fluctuates based on project uncertainties. ApproachThe paper will base on theory and models of supply chain innovation and show a supply chain innovation case of the change from component supplier to system supplier and the effects for both the customer (WTG OEM) and the supplier taking on the new role of system provider.Main body of abstractProduct (turbine) variants are created for any condition including product designs with complex and expensive components, resulting in low volume on parts and long lead times. Innovation in supply chain seems to be the tool tomitigate the issues of increasing complexity and cost of operating the supply chain and securing lower LCOE. New innovative ways of designing the wind industry supply chain involves a change in supply chain architecture and roles for some of the members of the turbine supply chain. A change from component supplier to system supplier, being an integrator for parts for a turbine and creating real system supplies to the turbine OEMs (WTG OEM) assembly factories or to turbine site. This change in architecture of the supply chain is a response to the increasing complexity and makes it possible to concentrate the complexity in the supply chain where itcan be controlled and optimized.Effects for the WTG OEM are that fixed costs are converted to variable cost. Financial effects are improved cash flow, lower working capital level, logistics effects are supplies directly to the assembly line or to site.ConclusionThe system supplier gains a closer integration to the customer and a direct demand signal from the assembly line or site. Also the system supplier is handling the entire process throughout planning, contracting, purchasing, financing and delivery, giving the opportunity to optimize and lowering cost of operating the supply chain. Apart from the quantifiable improvements and gains, the role of a system supplier implies new demands on both the customer (WTG OEM), and the supplierLearning objectivesThe WTG OEM must accept less direct control of the upstream supply chain in return for dedicated system supplies. The system supplier must develop competencies and organization to handle a broader range of component suppliers and the sourcing and logistics of a variety of components potential requiring new competences and manufacturing processes.

M3 - Article in proceedings

BT - Proceedings from EWEA Offshore 2015

PB - European Wind Energy Association - EWEA

CY - Rue d'Arlon 80, B-1040 Brussels, Belgium

ER -