"WIND SERVICE COMING OF AGE. Case Study – Spare Parts Improvement Projects at Nordex" Axel Bühler presenatation at Spare Parts Business Platform 2013.
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Axel Bühler, Nordex presenatation at Spare Parts 2013
1. WIND SERVICE COMING OF AGE
Case Study – Spare Parts Improvement
Projects at Nordex
Stockholm
Feb 2013
2. CONTENT
1. The Spare Parts Landscape
2. Nordex and Nordex Service
3. Spare Parts Challenges 2010
4. Spare Parts Achievements 2012
5. Key Lessons in Brief
6. Making it Work 2013
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 2
3. SPARE PARTS MANAGEMENT THROUGH LIFETIME OF WTG
Cross-functional processes, interfaces & tools
Enable Plan
Sales Development Dismounting
Plan Spare Parts Management
Obsolescence Management, Major Components, Vital Parts, Performance Requirements
Plan Supply Chain
Forecast, Network, Assortment, Delivery
Identify Order Sell
Source Make Deliver
Replace
Return
Spare Parts Mgmt
Supply Chain
Production
Purchasing
Enable Spare Parts Management
Central Engineering
Service Engineering
Purchasing, PLM
BOM (as-built, as-running, spare parts), Material Master Data (0rder Process, Purchasing, Logistics)
Parts Classification, SAP Processes, Parts Identification Tool, Parts Support
PM Field Ops
Service Field Ops
Service After Sales
Return
Execute
Design
Assembly/
Erection
Service
Operations
Sales CE Purchasing Production
Supply
Chain
PLM PM Service
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 3
4. CONTENT
1. The Spare Parts Landscape
2. Nordex and Nordex Service
3. Spare Parts Challenges 2010
4. Spare Parts Achievements 2012
5. Key Lessons in Brief
6. Making it Work 2013
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 4
5. NORDEX IS CAPABLE TO COVER THE ENTIRE VALUE CHAIN
OF THE WINDPOWER BUSINESS
5
Core Business
Wind Farm
System
Planning
Production and
Technical
Implementation
Wind Farm
Operations
Service and
Maintenance
Project
Development
• Review
customer micro -
site planning
• Support
customers
(co-develop-ment)
receiving
approvals and
optimising park
layouts
• Assemble wind
turbines
• Produce selec-ted
components
• Install onsite
• Carry out initial
operation
• Around 2,700
turbines
currently under
Nordex service
• Full service
contract
offerings up to
12 years
• More than 10
years experience
in developing
wind farms in
France
Further project
development
activities started
in Poland,
Sweden and USA
• Offer additional
services:
increased
demand due to
new wind farm
investors (e.g.
insurance com-panies
like
Allianz group)
interested in
stable cash
flows
•
• Spare parts
supply
Focus of case study
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013
6. NORDEX GLOBAL FOOTPRINT: 8,180 MW WORLDWIDE
5,175 turbines installed, 2/3 in Nordex Service
America
5%
By
region
Germany
27%
Other
Europe
59%
Asia
9%
Nordex at a Glance
Global manufacturer of wind energy
systems with a particular focus on
turbines in the 2.5 MW class
Most extensive and consistent use of
platform technology in the industry;
turbines for different wind and climate
conditions
Worldwide presence with branch offices
and subsidiaries in 22 countries
Headquartered in Hamburg, Chicago
and Beijing
Key Figures as of 12/2011:
- Revenues: EUR 927 mn
- EBIT: EUR -30 mn
- Employees: 2,200
Total installed capacity as of 1/2013:
8,180 MW
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 6
7. NORDEX SERVICE
Nordex turbines have reached
98% Availability!
In the last twelve months our
customers with an extended or
premium service contract enjoyed
the highest availability ever.
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 7
8. A STRONG GLOBAL SERVICE NETWORK
We are close to our customers – so need to be our parts
Decentralized supply of spare parts and local presence for fast response times.
Headquarters/
Performance Management Center
Service Areas
• Germany/BeNeLux/Poland
• France
• UK Ireland
• Scandinavia Baltic
• Italy/Greece
• Iberica
• Turkey
Customer Service Offices
Service Points
Spare Parts Logistics:
Central Warehouse in Rostock,
Regional Warehouses in US and CN
Direct shipments to Service Points
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 8
9. SERVICE WILL DELIVER ABOVE AVERAGE GROWTH
Market driven by sophisticated customers
Market Trends
Global Service market for onshore WTGs (€bn)
+18%
27
2020
13
2015
5
2010
CAGR 2010-2020
RoW n.a.
42%
24%
19%
11%
2
South America
Asia-Pac.
North America
1
Europe
2000
2005
Total European Wind Turbine and Service market:
Turnover and share of profit in 2010 and 2020
Service
WTG Sales
Sales Profit share
100%
42%
58%
2020
100%
26%
74%
2010
Service
WTG sales
100%
75%
25%
2020
100%
26%
74%
2010
Long term fixed price full
service contracts (risk
transfer to OEM)
Focus on energy production;
shift towards direct electricity
sales to the market
(predictability reliability)
Growing importance of Health
and Safety
Increasing demand for
repairs, retrofits and
upgrades (aging fleet)
Customers increasingly select
component suppliers
(performance matters)
1) 2) Source: Oliver Wyman study: ‘Windenergie 2020: Boom-Markt Service’ ; Dec. 2010
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 9
10. CONTENT
1. The Spare Parts Landscape
2. Nordex and Nordex Service
3. Spare Parts Challenges 2010
4. Spare Parts Achievements 2012
5. Key Lessons in Brief
6. Making it Work 2013
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 10
11. UNMANAGED INTRANSPARENT PARTS OPERATIONS
Complex root causes across all functions and processes
BOM: Bill of material, MGMT: Management, SP: Service point, SPT: Spare part, CW: Central warehouse
High service
inventory
High logistics
costs
No logistics
promise to
customer
Productivity loss
for technicians
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 11
12. CONTENT
1. The Spare Parts Landscape
2. Nordex and Nordex Service
3. Spare Parts Challenges 2010
4. Spare Parts Achievements 2012
5. Key Lessons in Brief
6. Making it Work 2013
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 12
13. PARTSXCHANGE PROJECT SCOPE
Looking at the full process – identification, order, inventory, shipment
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 13
14. EARLY WIN - FROM EXPRESS TO CALENDAR SHIPMENTS
Simplified and streamlined logistics
Spain Portugal
Monday
Tuesday
Wednes-day
Thurs-day
Friday
Mo-Fr
Germany
Denmark
Norway
Italy
Shut- Sweden
down
France
UK
Turkey
Ireland
Material
Forecast
Planning
Ireland
Portugal
UK
Germany
Turkey
Italy
France
Spain
Norway
Sweden
Denmark
Short-term orders only,
daily express shipments
Majority of standard orders,
scheduled groupage shipments
Monday
Tuesday
Wednes-day
Thurs-day
Friday
BeNeLux
BeNeLux
Greece
Greece
Germany
Poland
Poland
Fault
Implementation of delivery schedule has reduced logistics costs by 20%
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 14
15. 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
CALENDAR SHIPMENTS (BUNDLING)
Early Win – 30% Productivity Gain
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Mrz. 10 Jun. 10 Sep. 10 Dez. 10 Mrz. 11 Jun. 11 Sep. 11 Dez. 11 Mrz. 12 Jun. 12 Sep. 12 Dez. 12
Historical - No Split Express Groupage Main Comp. Order Lines Shipped
Clearly visible
shift from
express to
groupage
negotiated
rates
Tendering and
go-live in May
2012
2012 cost still
below 2010,
with +30%
Service
turnover, # of
WTG, order
lines
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 15
16. NORDEX PARTS CATALOG: IMPROVED PARTS IDENTIFICATION
All Service-relevant SAP material data at your fingertips
Language
Selection
http://partscatalog/template/index.php “PartsCatalog“
Supplier
information
Relevant
Material Data
Service PM
Catalog with
Consumptions
WTG
Type/Platform
Catalog
As-planned
WTG Catalog
Intelligent
Search
Assembly Area
Favorites
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 16
17. MAJOR PROJECT - RE-DESIGNED SAP ORDER PROCESS
Parts availability is predictable for service operations
Efficiency
increase for
technicians
Efficiency
increase for
back-offices
Optimized parts
assortment
Optimized
transportation
costs
Transparency
SAP process
integration
SAP CS order incl. components checks local
material stock and orders fully automatically
material if necessary
SAP Safety stock levels and MRP areas for each
Service Point storage location ensures automatic
reordering if stock level falls below min. level
Order priorization ensures different handling
and logistics processes (1. Turbine shutdown,
2. Turbine fault, 3. Stock refill)
Order scheduling considers urgency needs
and cost optimized transports (1. 24 hours,
2. 1-3 days, 3. calendar delivery)
Automatic goods receipt booking simplifies
internal organization and guarantees quick stock
updates
1
2
3
4
5
CS: SAP Customer Service, MRP: Material Requirements Planning
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 17
18. MRP1 AREAS FOR SERVICE POINTS AND SAFETY STOCKS
Ensuring high availability of spare parts
• represents an organizational unit for which MRP is carried out independently in order to
ensure automatic material availability by considering current stock, future material demand
and supply for each Service Point
• in this MRP area are different MRP parameters defined, such as safety stock levels, lot
sizes and replenishment times for materials
•SAP orders automatically new materials if a stock of a specific material falls below a
defined re-order stock level or demand exceeds available inventory
MRP AREA = Service Point (SP) Autom. Reordering For A Defined Part of SP 8
SP1
SP6
SP2 SP9
SP8
SAP Service Plant,
e.g. 7000 (France)
SP4 SP5
SP7
MRP Area Definiton
1 MRP = Material requirements planning; 2 ATP = available to promise
40
Safety
stock =
reorder
level
Time
Stock
Lot size
Automatic
reorder
point
Replenishment time
0
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 18
19. ORDER SCHEDULING STANDARD DELIVERY TIMES
Nordex Central Warehouse Nordex Service Points
Order scheduling including picking times, delivery calendar and transport
delivery times; individually defined for each Service Point; e.g. 7 days for France
• Automatic loading date creation for CWH1 Rostock
• Reliable delivery schedule for Service Ops, if material is in stock at CWH2
• Delivery schedule enables priority settings of purchase and service orders
1 CWH = Central Warehouse Rostock; 2 Delivery times from suppliers to CWH cannot be considered in SAP yet
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 19
20. HOW URGENT IS IT?
Schedule your order priority in SAP!
Purchase and Service Orders can be related to 3 kind of priorities which will
result in different logistics handling and transports. For instance, a shut-down
is specially tracked by CWH1. It automatically creates a picking list on a
Turbine is not running anymore. Material must be delivered as soon
as possible.if not available in local stock. Target delivery time 24h –
48h!
Turbine is still running, but it has a serious damage which will result
in a shutdown. Material must be delivered within 3 days if part is not
available in stock.
Material is designated for maintenance, regular repair or stock
refills. Material can be delivered according to regular delivery
calendar (once a week).
Shut-down
Fault
Main-tenance,
Refill
dedicated shut-down printer in CWH.
1 CWH = Central Warehouse Rostock;
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 20
21. SPARE PARTS MANAGEMENT ORGANISATION
Knowledge Transfer Into Line Function: Parts Planning
Bundling Spare Parts Related SCM, PM and Service Functions
Warehouse
Operations
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013
Spare Parts
Management
PM Service
Tools
Parts
Logistics
Parts
Planning
Service Country Ops
PM Site Mgmt
• Regional Field
Operations
Parts Management
• Regional Order
Management
Monitoring
• 1st level support SAP
MM for Field Ops
• Monitor regional
inventory safety
stock
• Manage storage
locations
responsible staff
• PM Operational
Parts Management
• Placing parts orders
• Planning / Priority
• Storage Location
• 5s
• Monitor Inventory
• Booking quality
• Roll-out partsXchange
• Spare parts
definition,
classification, BOMs
• Spare parts catalog
• Spare parts strategy
and projects
• Inventory
management
• Master Data
Management
• SAP key user MM
service
• Additional Ressources
Configuration Spare
Parts Support in 2013
• Management order
book
• Work prep.
warehouse
• Shipment
• Customs preparation
• Management
bottleneck parts
• Ident / Order Parts
for PM
• Material booking
goods issue
• Major Components
planning logistics
(gbx, new 2012:
blades)
• Manage shipping
comp. / cost
controlling
• Parts order
clarification,
escalation, field
support
• Track and escalate
inbound material
orders
• Warehouse
operations
• HSE
• Goods picking,
packaging
• Goods
receiving,unpacking,
storage, booking
• Quarantine storage
• Provide, maintain,
refurbish certified PM
installation tools
• Provide maintain
commissioning tool
sets
• Provide, maintain,
refurbish certified
Service gbx exchange
tools
• Manage assets in SAP
• Provide and certify
PSE for
commissioning teams
*SAB = Rostock Central Warehouse; HH = Headquarter Hamburg
21
Claims
New in 2013
22. WHAT HAS BEEN DONE?
As-is analysis and potentials Strategy, concept implementation
2 3 4
Evaluation of
performance and cost
potentials
Definition of
action fields
1
Analyses of processes,
structures and
systems
Detailed concept and
implementation
4
Calendar Shipments
Spare Parts Catalog
Order Process Design (e.g. priorities, safety stocks, delivery calendar,
transparency etc.)
Order Process Implementation SAP (programming, customizing,
testing, debugging etc.)
Master Data Clean-Up Master Data Clean-Up Master Data Clean-Up
Country Roll-Outs Support (e.g. German/English documentation, SAP
live trainings etc.)
Communications (e.g. NIC reports, SAM/FOM/MasterTech
presentations, local information meetings etc.)
Organisational development – one Spare Parts Mgmt function, global
team
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 22
23. COUNTRY FEEDBACK – IT WORKS
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 23
24. EBIT POTENTIAL ACROSS THE BOARD
Payback period maximum 2 years
250%
200%
150%
100%
50%
0%
2011 2012 2013
PM savings spare parts
Stock depreciation red.
Transport cost reduction
Inventory reduction
Staff productivity
Total Cost
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 24
25. CONTENT
1. The Spare Parts Landscape
2. Nordex and Nordex Service
3. Spare Parts Challenges 2010
4. Spare Parts Achievements 2012
5. Key Lessons in Brief
6. Making it Work 2013
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 25
26. LESSONS LEARNED
Parts is a People Business, You Need to Win Them Over
Getting Master Data Right is Like Fighting The Living Dead
Change Management
Material management focus is
shifting from manually
operated tasks to planning
and controlling functions
European-wide roll-out of
improved order process and
inventory management within
decentralized organization
needs clear global and
regional management buy-in,
a lot of attention, training and
local support during
implementation phase
Material Master Data
Management
Service
Purchas-ing
Project Management SAP
Knowledge Transfer
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 26
Engi-neering
Pro-duction
SCM
Sales
HSE
Material
Master
Data
“Can we please switch off
the SAP MRP run?“
(Local Material Manager)
Master data management
becomes crucial for automatic
SAP managed inventory
Cross-functional by default
Tough internal sell, most un-sexy
topic on earth
It doesn‘ t go away
SAP projects are a tough call
and don’t come cheap
Doesn‘t work without PM
skills dedicated ressources
– project management 101,
anchoring in top management
are a must
Good dedicated SAP inhouse
consultants save money from
day 1
Starting with external know-how,
transferring to internal
PM and team; and finally –
with the same people -
establishing line function
proved to very successful
27. PARTSXCHANGE STAGING
Pilot 1 – Pilot 2 – Big Bang – Now covering all 17 European NX Countries
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 27
28. CHANGE MANAGEMENT IS KEY
Careful staging of clean-up, training, go-live, ramp-up, support
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
On-going
France,
Portugal,
Italy
GER, B,
NL, ESP,
NOR,
POL, GR
ROM,
EST,
DK, SWE
UK,
Ireland,
Turkey
2012 2013
Team Region 1 +
Customizing
Continuous inventory planning
Clean-up SAP
Training
live testing
Maintenance Planning in SAP
After Go-Live support + continuous order tracking
Go-live
Internal
SAP
testing
Prepare
SAP
Safety stocks
implemented
Re-locate
Stock planning
Clean-up SAP
Training
live testing
Prepare
SAP
Maintenance Planning in SAP
After Go-Live support + continuous order tracking
Go-live
Safety stocks
implemented
Stock planning Re-locate
Continuous
inventory planning
Com
Com
Delivery
schedule
Implemented
Delivery
schedule
Implemented,
POL, DK, SWE only
Implemented
Delivery
schedule
Internal SAP
test
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013
Stocktaking
SAP Customizing (plant split)
Re-work
tbd
Decision on
UK
Decision on
Turkey
Decide on
Turkey
Region 1 is fully
implemented
Region 2 is fully
implemented
Team
set-up
Team is
set-up
Com
Internal SAP
test
F+I
Test
Go-Live?
SC SC SC
Decide on
UK
28
SC SC
29. SPARE PARTS MANAGEMENT THROUGH LIFETIME OF WTG
Cross-functional processes, interfaces tools
Enable Plan
Sales Development Dismounting
Plan Spare Parts Management
Obsolescence Management, Major Components, Vital Parts, Performance Requirements
Plan Supply Chain
Forecast, Network, Assortment, Delivery
Identify Order Sell
Source Make Deliver
Replace
Return
Spare Parts Mgmt
Supply Chain
Production
Purchasing
Enable Spare Parts Management
Central Engineering
Service Engineering
Purchasing, PLM
BOM (as-built, as-running, spare parts), Material Master Data (0rder Process, Purchasing, Logistics)
Parts Classification, SAP Processes, Parts Identification Tool, Parts Support
PM Field Ops
Service Field Ops
Service After Sales
Return
Execute
Design
Assembly/
Erection
Service
Operations
Sales CE Purchasing Production
Supply
Chain
PLM PM Service
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 29
30. CONTENT
1. The Spare Parts Landscape
2. Nordex and Nordex Service
3. Spare Parts Challenges 2010
4. Spare Parts Achievements 2012
5. Key Lessons in Brief
6. Making it Work 2013
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 30
31. EXTERNAL BENCHMARKS
• OEMs carry on average 10% of
annual sales as spares
− Nordex 5 – 6 %
• Inventory turns one to two times
annually are common
− Nordex 0,5
• 23% of parts become obsolete
every year
− Nordex overall risk est 30% of current
inventory
• Provide real-time updates of parts
usage from service technician trunk
stock and include in scheduling
criteria
− NX: partsXchange ramp-up ongoing with SAP
and inventory planning tool - done
• Integrate parts forecasting,
procurement and logistics under
service oversight
− NX: Forecasting and logstics integrated; no
integration of procurement – painful
• Incentive field technicians and
regional service depots on timely
return/transfer of parts to repair
− Upwind return repair project well under
way (roll-out 2013)
„Winning in the Aftermarket“
Harvard Business Review 2006*
Recommendations for
Best in Class (Aberdeen, 2011)
* Source: Cohen et al, Winning in the Aftermarket, Harvard Business Review, May 2006
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 31
32. SPARE PARTS MANAGEMENT THROUGH LIFETIME OF WTG
Cross-functional processes, interfaces tools
Enable Plan
Sales Development Dismounting
Plan Spare Parts Management
Obsolescence Management, Major Components, Vital Parts, Performance Requirements
Plan Supply Chain
Forecast, Network, Assortment, Delivery
Identify Order Sell
Source Make Deliver
Replace
Return
Spare Parts Mgmt
Supply Chain
Production
Purchasing
Enable Spare Parts Management
Central Engineering
Service Engineering
Purchasing, PLM
BOM (as-built, as-running, spare parts), Material Master Data (0rder Process, Purchasing, Logistics)
Parts Classification, SAP Processes, Parts Identification Tool, Parts Support
PM Field Ops
Service Field Ops
Service After Sales
Return
Execute
Design
Assembly/
Erection
Service
Operations
Sales CE Purchasing Production
Supply
Chain
PLM PM Service
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 32
33. REVERSE LOGISTICS
Again from Unmanaged to Managed - Roll-out Q2 2013
33
Results HQ Quarantine Repair Decision Tree
Optimization
Focus on ‘high-value’ parts
Scrap everything else on site
Defined Process
HQ Quarantine Repair Decision Tree
Focus:
Selected ‘Minor’ parts
All ‘Major’ parts
Scalable
Using SAP standard order process
Easy On-Site Process
‘Master Return Guideline’
QA/Warranty/Tech
Analysis?
Obsolete?
Bottleneck?
New less than
€400?
Less than €10k a
year?
Repair cost less
than 50%?
SCRAP
REPAIR
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013
34. COUNTRIES ARE HELD ACCOUNTABLE
Inventory per WTG Benchmark Materials Responsibility
Inventory WTG under contract Inventory / WTG Benchmarks Inv per WTG
Sep 11 Aug 12 Sep 11 Aug 12 Sep 11 Aug 12
• internal benchmarking – inventory per WTG
− XX clear champion, decreasing inventory while increasing WTG in service
today at X000 €/WTG
− YY out of bounds by factor of 6 against XX, and increasing
− ZZ out of bounds by factor of 6 against XX, but improving
• Central Warehouse managed, maintaining stable inventory level while increasing
number of WTG
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013
% increase
YoY
% of best
Aug 12 (UK)
Added
StorLoc
% major
comp
UK 1.790.345 € 1.583.325 € 303 362 5.909 € 4 .374 € -26% 100%
Italy 975.118 € 1.141.134 € 180 198 5.417 € 5 .763 € 6% 132% 1
Germany 5.739.757 € 6.779.719 € 963 951 5.960 € 7 .129 € 20% 163%
Scandinavia 1 .109.558 € 1.362.530 € 170 187 6.527 € 7 .286 € 12% 167% 1
France 2.506.494 € 3.132.249 € 392 420 6.394 € 7 .458 € 17% 171%
Iberica 1.627.424 € 2.009.013 € 245 229 6.643 € 8 .773 € 32% 201%
USA 5.324.152 € 7.841.555 € 122 285 43.641 € 27.514 € -37% 629% 4 23%
Turkey 2.903.324 € 5.318.475 € 141 189 20.591 € 28.140 € 37% 643% 4 28%
Total in Service Pts 21.976.171 € 29.167.999 € 2516 2821 8.735 € 10.340 € 18% 236% 10
Central Warehouse 12.632.273 € 12.831.388 € 2516 2821 5.021 € 4 .549 € -9%
Blades/Gearboxes 8.829.570 € 8.584.736 € 2516 2821 3.509 € 3 .043 € -13%
China Service 1 .325.770 € 1.222.866 €
China Project 3 .552.020 € 3.171.041 €
US Project 104.895 € 270.022 €
Total Inventory 48.420.698 € 55.248.053 € 2516 2821 19.245 € 19.585 € 2%
% of Total in Srvc Pts 45% 53%
34
35. ATTACKING LEGACY SERVICE INVENTORY
Past Sins Show – Materials Taken Over From Production
Preliminary Analysis of Inventory Coverage
54,4
Years of inventory currently on stock (based on past 12 months consumption)
5,7
/ Non Movers
2,9 0,6 1,0
30,5
4,8
100,0
100
90
80
70
60
50
40
30
20
10
0
Total
Inventory
2 years 2 years 4 years 6 years 8 years 10 years Defective
% of Total Inventory
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 35
36. SERVICE LEVEL IMPROVEMENT SLOW – BUT “LESS LATE”
But overall performance improvement clearly felt in field
Service Level
% order line items fully shipped before customer delivery date
(Target 2012: 80%)
100%
90%
80%
70%
60%
50%
15
10
5
0
-5
-10
-15
days early / order line shipped
days late / order line shipped
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
jan 10 apr 10 jul 10 okt 10 jan 11 apr 11 jul 11 okt 11 jan 12 apr 12 jul 12 okt 12
Service level shows upward trend but currently hits ceiling at 70% - needs further
improvement. Kept stable although including installations spares
(early in lifecycle, most difficult)
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 36
37. PROCUREMENT - CLASH OF CULTURES
Production procurement falls short on unplanned urgent requests
Parameter
Manufacturing
Supply Chain
After-Sales Services
Supply Chain
Nature of demand Predictable, can be forecast Always unpredictable, sporadic
Required response Standard, can be scheduled ASAP (same day or next day)
Number of SKUs
Limited 15 to 20 times more
(unique SAP#)
Product portfolio Largely homogeneous Always heterogeneous
Delivery network
Depends on nature of product,
multiple networks necessary
Single network, capable of
delivering different service
products
Inventory
management aim
Maximize velocity of resources Pre-position resources
Reverse logistics Doesn‘t handle
Handles return, repair, and
disposal of failed components
Performance
metric
Fill rate Product availability (uptime)
Inventory turns Six to 50 a year One to four a year
* Source: Cohen et al, Winning in the Aftermarket, Harvard Business Review, May 2006
Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 37
38. SUPPLIER PERFORMANCE IS CRITICAL FOR SERVICE
Quality, 24/7 Global Express, Documentation, Obsolescence Mgmt
Performance
•Parts quality
hard KPI: failure
rates
•Delivery quality
global 24/7 express
delivery, on time,
complete, accurate;
local inventory;
flexible support
•Spare parts
documentation
continuously
updated electronic
spare parts BOM,
spec drawings,
catalog
•Obsolescence
management
active management
of parts ramp-down
and development of
follow-up parts
World Class Logistics
Spain Portugal
Benelux
Greece Germany
Scope of supply
Tuesday
Germany
•Technical support
24/7 remote and on
site support
•Training
troubleshooting and
repairs, certified
•Repairs
repair cycle incl.
upgrades
•Full service
agreements
risk sharing 5
years, active
support
•Delivery
commitment 20
years
active mgmt of 20
year obligation
Co-operation
•Channel to
market
Best-Price for
Nordex, preferred
channel to market,
exclusive premium
products
SAP
material
status
Design
original part
Design
Production Service
Production
Design Service Obsolete
Obsolesc
Obsolescent
Service
ent Obsolete
exchange
part
Dismounting
Obsolete
Denmark
Original part
exchange part life-cycle
Product
life-cycle
Start of
production
End of
production
End of
Service
Monday
Wednes-day
Thurs-day
Material
Forecast
Planning
Friday
24/7
Norway
Italy
Poland
Ireland
Shut- Sweden
down
France
UK
Turkey
Fault
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39. BILL OF MATERIAL CHALLENGE
Product Data Management All The Way Down to Service
Overview
Concept Correct, complete and current Bill of Material
through Enginneering, Production,
Installation, Service - parts classification –
understanding of „correct and complete“
changes through process, e.g. service parts
not relevant before hand over to service
Visualization
Concept relations
Data basis / back end for
spare parts catalogue,
inventory planning, failure
analysis, retrofit planning,
engineering change
management
As-constructed
Assembly 1
Part 1.1 S
Part 1.2
Part 1.3
Part 1.4
Part 1.5
Part 1.6 W
Assembly 2
Part 2.1
Part 2.2 S
Part 2.3 C
Part 2.4
Part 2.5
Part 2.6
WTG specific
parts and
components
Configuration
for specific wind
park
As-planned
Assembly 1
Part 1.1 S Part 1.1 S Part 1.1 S
Part 1.2
Part 1.3
Part 1.4
Part 1.5
Part 1.6 W
Assembly 2
Part 2.1
Part 2.2 S
Part 2.3 C
Part 2.4
Part 2.5
Part 2.6
Unplanned
changed of
parts or
components
Production and
erection
As-built
Assembly 1
Part 1.2
Part 1.3
Part 1.4
Part 1.5
Part 1.6 W
Assembly 2
Part 2.1
Part 2.2 S
Part 2.3 C
Part 2.4
Part 2.5
Part 2.6
Exchanges of
parts or
components,
retrofits
Operation /
repair /
maintenance
change
addition
As-running
Assembly 1
Part 1.2
Part 1.3
Part 1.4
Part 1.5
Part 1.6 W
Assembly 2
Part 2.1
Part 2.2 S
Part 2.3 C
Part 2.4
Part 2.5
Part 2.6
Retrofit 1
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40. SPARE PARTS MANAGEMENT THROUGH LIFETIME OF WTG
Cross-functional processes, interfaces tools
Enable Plan
Sales Development Dismounting
Plan Spare Parts Management
Obsolescence Management, Major Components, Vital Parts, Performance Requirements
Plan Supply Chain
Forecast, Network, Assortment, Delivery
Identify Order Sell
Source Make Deliver
Replace
Return
Spare Parts Mgmt
Supply Chain
Production
Purchasing
Enable Spare Parts Management
Central Engineering
Service Engineering
Purchasing, PLM
BOM (as-built, as-running, spare parts), Material Master Data (0rder Process, Purchasing, Logistics)
Parts Classification, SAP Processes, Parts Identification Tool, Parts Support
PM Field Ops
Service Field Ops
Service After Sales
Return
Execute
Design
Assembly/
Erection
Service
Operations
Sales CE Purchasing Production
Supply
Chain
PLM PM Service
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41. CREDITS
Michael Dorn
Project Manager (majority of slides)
Nordex SAP Inhouse Consulting
Nordex Trainee Team
Return Repair Project Team
4flow (Berlin)
External Consulting, Analysis
First Roll-Out
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42. MANY THANKS FOR YOUR ATTENTION.
Nordex SE
Langenhorner Chaussee 600, 22419 Hamburg, Germany
Telephone +49 (40) 30030 1000
Fax +49 (40) 30030 1101
E-Mail info@nordex-online.com
Axel Bühler
Spare Parts Management
abuehler@nordex-online.com, +49 (40) 30030-1611
Michael Dorn
Spare Parts Planning
mdorn@nordex-online.com, +49 (40) 30030-1472
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