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"WIND SERVICE COMING OF AGE. Case Study – Spare Parts Improvement Projects at Nordex" Axel Bühler presenatation at Spare Parts Business Platform 2013. Find out more http://www.sparepartseurope.com/
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WIND SERVICE COMING OF AGE Case Study – Spare Parts Improvement Projects at Nordex Stockholm Feb 2013
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Page 1: Axel Bühler, Nordex presenatation at Spare Parts 2013

WIND SERVICE COMING OF AGE Case Study – Spare Parts Improvement Projects at Nordex

Stockholm

Feb 2013

Page 2: Axel Bühler, Nordex presenatation at Spare Parts 2013

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

CONTENT

2Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 3: Axel Bühler, Nordex presenatation at Spare Parts 2013

Enable

Plan

SPARE PARTS MANAGEMENT THROUGH LIFETIME OF WTGCross-functional processes, interfaces & tools

Source Make Deliver

Replace

Return

SellIdentify Order

Plan Supply ChainForecast, Network, Assortment, Delivery

Plan Spare Parts ManagementObsolescence Management, Major Components, Vital Parts, Performance Requirements

Enable Spare Parts ManagementBOM (as-built, as-running, spare parts), Material Master Data (0rder Process, Purchasing, Logistics)

Parts Classification, SAP Processes, Parts Identification Tool, Parts Support

Spare Parts MgmtSupply ChainProductionPurchasing

PM Field OpsService Field OpsService After Sales

ReturnExecute

Design

Central EngineeringService EngineeringPurchasing, PLM

Assembly/ Erection

Service Operations

DismountingDevelopmentSales

CESales Purchasing ProductionSupplyChain

PM ServicePLM

3Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 4: Axel Bühler, Nordex presenatation at Spare Parts 2013

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

CONTENT

4Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 5: Axel Bühler, Nordex presenatation at Spare Parts 2013

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 windturbines

• 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

Page 6: Axel Bühler, Nordex presenatation at Spare Parts 2013

NORDEX GLOBAL FOOTPRINT: 8,180 MW WORLDWIDE

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 6

5,175 turbines installed, 2/3 in Nordex Service

By region

Germany27%

Other Europe59%

Asia9%

America5%

� 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 at a Glance

Page 7: Axel Bühler, Nordex presenatation at Spare Parts 2013

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.

7Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 8: Axel Bühler, Nordex presenatation at Spare Parts 2013

A STRONG GLOBAL SERVICE NETWORKWe 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 CNDirect shipments to Service Points

8Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 9: Axel Bühler, Nordex presenatation at Spare Parts 2013

SERVICE WILL DELIVER ABOVE AVERAGE GROWTHMarket driven by sophisticated customers

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 9

Market Trends

+18%

2020

27

2015

13

2010

5

2

2000

1

2005

Europe

North America

Asia-Pac.

South America

RoW n.a.

24%

19%

11%

42%

WTG Sales

Service

2020

100%

58%

42%

2010

100%

74%

26%

WTG sales

Service

2020

100%

25%

75%

2010

100%

74%

26%

Total European Wind Turbine and Service market:Turnover and share of profit in 2010 and 2020

Global Service market for onshore WTGs (€bn)

CAGR 2010-2020

1) & 2) Source: Oliver Wyman study: ‘Windenergie 2020: Boom-Markt Service’ ; Dec. 2010

Sales Profit share

� 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)

Page 10: Axel Bühler, Nordex presenatation at Spare Parts 2013

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

CONTENT

10Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 11: Axel Bühler, Nordex presenatation at Spare Parts 2013

UNMANAGED & INTRANSPARENT PARTS OPERATIONSComplex root causes across all functions and processes

BOM: Bill of material, MGMT: Management, SP: Service point, SPT: Spare part, CW: Central warehouse

11Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

High service inventory

High logistics costs

No logistics promise to customer

Productivity loss for technicians

Page 12: Axel Bühler, Nordex presenatation at Spare Parts 2013

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

CONTENT

12Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 13: Axel Bühler, Nordex presenatation at Spare Parts 2013

PARTSXCHANGE PROJECT SCOPELooking at the full process – identification, order, inventory, shipment

13Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 14: Axel Bühler, Nordex presenatation at Spare Parts 2013

EARLY WIN - FROM EXPRESS TO CALENDAR SHIPMENTSSimplified and streamlined logistics

Monday

Tuesday

Wednes-day

Thurs-day

Friday

Mo-Fr

Germany

France

UK

Turkey

SwedenShut-down

PortugalSpain

Ireland

Norway

Denmark

Italy

Material Forecast

& Planning

UK

Turkey

Ireland

Italy

Germany

France

Portugal

Spain

Sweden

Norway

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

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 14

Implementation of delivery schedule has reduced logistics costs by 20%

Page 15: Axel Bühler, Nordex presenatation at Spare Parts 2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

CALENDAR SHIPMENTS (BUNDLING)Early Win – 30% Productivity Gain

� 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

Page 16: Axel Bühler, Nordex presenatation at Spare Parts 2013

NORDEX PARTS CATALOG: IMPROVED PARTS IDENTIFICATIONAll Service-relevant SAP material data at your fingertips

Language Selection

Relevant Material Data

Supplierinformation

Service & PM Catalog withConsumptions

WTG Type/Platform

Catalog

As-plannedWTG Catalog

Intelligent Search

http://partscatalog/template/index.php “PartsCatalog“

Assembly AreaFavorites

16Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 17: Axel Bühler, Nordex presenatation at Spare Parts 2013

� Efficiency increase fortechnicians

� Efficiency increase forback-offices

� Optimized partsassortment

� Optimizedtransportationcosts

� Transparency

� SAP process integration

MAJOR PROJECT - RE-DESIGNED SAP ORDER PROCESSParts availability is predictable for service operations

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 simplifiesinternal organization and guarantees quick stock updates

1

CS: SAP Customer Service, MRP: Material Requirements Planning

2

3

4

5

17Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 18: Axel Bühler, Nordex presenatation at Spare Parts 2013

MRP1 AREAS FOR SERVICE POINTS AND SAFETY STOCKSEnsuring high availability of spare parts

SP1

SP2 SP9

SP8

SP7

SP6

SP5SP4

SAP Service Plant, e.g. 7000 (France)

1 MRP = Material requirements planning; 2 ATP = available to promise

MRP Area Definiton

• 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

Safetystock = reorderlevel

Time

Stock

Automatic reorder

point

Replenishment time

Lot size

0

40

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 18

Page 19: Axel Bühler, Nordex presenatation at Spare Parts 2013

Order scheduling including picking times, delivery calendar and transport

delivery times; individually defined for each Service Point; e.g. 7 days for France

ORDER SCHEDULING & STANDARD DELIVERY TIMES

Nordex Central Warehouse Nordex Service Points

1 CWH = Central Warehouse Rostock; 2 Delivery times from suppliers to CWH cannot be considered in SAP yet

• 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

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 19

Page 20: Axel Bühler, Nordex presenatation at Spare Parts 2013

HOW URGENT IS IT?Schedule your order priority in SAP!

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

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 dedicated shut-down printer in CWH.

1 CWH = Central Warehouse Rostock;

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 20

Page 21: Axel Bühler, Nordex presenatation at Spare Parts 2013

SPARE PARTS MANAGEMENT ORGANISATIONKnowledge Transfer Into Line Function: Parts PlanningBundling Spare Parts Related SCM, PM and Service Functions

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Warehouse Operations

Spare Parts Management PM & Service

ToolsParts

LogisticsParts

PlanningService 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

ClaimsNew in 2013

Page 22: Axel Bühler, Nordex presenatation at Spare Parts 2013

�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/MasterTechpresentations, local information meetings etc.)

�Organisational development – one Spare Parts Mgmt function, global team

WHAT HAS BEEN DONE?

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 22

As-is analysis and potentials Strategy, concept & implementation

Evaluation of

performance and cost

potentials

Definition of

action fields

2 3 4

Analyses of processes,

structures and

systems

1

Detailed concept and

implementation

4

Page 23: Axel Bühler, Nordex presenatation at Spare Parts 2013

COUNTRY FEEDBACK – IT WORKS

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 23

Page 24: Axel Bühler, Nordex presenatation at Spare Parts 2013

EBIT POTENTIAL ACROSS THE BOARDPayback period maximum 2 years

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 24

0%

50%

100%

150%

200%

250%

2011 2012 2013

PM savings spare parts

Stock depreciation red.

Transport cost reduction

Inventory reduction

Staff productivity

Total Cost

Page 25: Axel Bühler, Nordex presenatation at Spare Parts 2013

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

CONTENT

25Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 26: Axel Bühler, Nordex presenatation at Spare Parts 2013

� 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

LESSONS LEARNEDParts is a People Business, You Need to Win Them OverGetting Master Data Right is Like Fighting The Living Dead

26Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Change Management

Service

Engi-neering

Pro-duction

SCM

Sales

Purchas-ing

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

Material Master Data Management

� 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

Project Management & SAPKnowledge Transfer

Page 27: Axel Bühler, Nordex presenatation at Spare Parts 2013

PARTSXCHANGE STAGINGPilot 1 – Pilot 2 – Big Bang – Now covering all 17 European NX Countries

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 27

Page 28: Axel Bühler, Nordex presenatation at Spare Parts 2013

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan FebOn-

going

France,

Portugal,

Italy

GER, B,

NL, ESP,

NOR,

POL, GR

ROM,

EST,

DK, SWE

UK,

Ireland,

Turkey

CHANGE MANAGEMENT IS KEYCareful staging of clean-up, training, go-live, ramp-up, support

2012 2013

Continuous inventory planning

Go-live

Training & live testing

Internal SAP testing

Prepare SAP

Safety stocks implemented

Re-locate

Stock planning

After Go-Live support + continuous order tracking

Maintenance Planning in SAP

Clean-up SAP

Go-live

Prepare SAP

Safety stocks implemented

Re-locateStock planning

Maintenance Planning in SAP

Continuous inventory planning

After Go-Live support + continuous order tracking

Com

Com

Delivery schedule

Delivery schedule

Delivery schedule

Implemented

Implemented, POL, DK, SWE only

Implemented

Clean-up SAP

Internal SAPtest

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Stocktaking

SAP Customizing (plant split)Re-

work

Training & live testing

tbd

Decision on UK

Decide on Turkey

Decision on Turkey

Region 1 is fully implemented

Region 2 is fully implemented

Teamset-up

Team is set-up

Com

Internal SAPtest

Team Region 1 + Customizing

F+I Test

Go-Live?

SCSC SC

Decide on UK

28

SC SC

Page 29: Axel Bühler, Nordex presenatation at Spare Parts 2013

Enable

Plan

SPARE PARTS MANAGEMENT THROUGH LIFETIME OF WTGCross-functional processes, interfaces & tools

Source Make Deliver

Replace

Return

SellIdentify Order

Plan Supply ChainForecast, Network, Assortment, Delivery

Plan Spare Parts ManagementObsolescence Management, Major Components, Vital Parts, Performance Requirements

Enable Spare Parts ManagementBOM (as-built, as-running, spare parts), Material Master Data (0rder Process, Purchasing, Logistics)

Parts Classification, SAP Processes, Parts Identification Tool, Parts Support

Spare Parts MgmtSupply ChainProductionPurchasing

PM Field OpsService Field OpsService After Sales

ReturnExecute

Design

Central EngineeringService EngineeringPurchasing, PLM

Assembly/ Erection

Service Operations

DismountingDevelopmentSales

CESales Purchasing ProductionSupplyChain

PM ServicePLM

29Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

������������

����

��������

Page 30: Axel Bühler, Nordex presenatation at Spare Parts 2013

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

CONTENT

30Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 31: Axel Bühler, Nordex presenatation at Spare Parts 2013

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)

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 31

* Source: Cohen et al, Winning in the Aftermarket, Harvard Business Review, May 2006

Page 32: Axel Bühler, Nordex presenatation at Spare Parts 2013

Enable

Plan

SPARE PARTS MANAGEMENT THROUGH LIFETIME OF WTGCross-functional processes, interfaces & tools

Source Make Deliver

Replace

Return

SellIdentify Order

Plan Supply ChainForecast, Network, Assortment, Delivery

Plan Spare Parts ManagementObsolescence Management, Major Components, Vital Parts, Performance Requirements

Enable Spare Parts ManagementBOM (as-built, as-running, spare parts), Material Master Data (0rder Process, Purchasing, Logistics)

Parts Classification, SAP Processes, Parts Identification Tool, Parts Support

Spare Parts MgmtSupply ChainProductionPurchasing

PM Field OpsService Field OpsService After Sales

ReturnExecute

Design

Central EngineeringService EngineeringPurchasing, PLM

Assembly/ Erection

Service Operations

DismountingDevelopmentSales

CESales Purchasing ProductionSupplyChain

PM ServicePLM

32Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 33: Axel Bühler, Nordex presenatation at Spare Parts 2013

REVERSE LOGISTICSAgain from Unmanaged to Managed - Roll-out Q2 2013

33

�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’

Results HQ Quarantine Repair Decision Tree

QA/Warranty/Tech Analysis?

Obsolete?

Bottleneck?

New less than €400?

Less than €10k a year?

Repair cost less than 50%?

SC

RA

P

RE

PA

IR

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 34: Axel Bühler, Nordex presenatation at Spare Parts 2013

• internal benchmarking – inventory per WTG

− XX clear champion, decreasing inventory while increasing WTG in servicetoday 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

COUNTRIES ARE HELD ACCOUNTABLEInventory per WTG Benchmark & Materials Responsibility

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Inventory WTG under contract Inventory / WTG Benchmarks Inv per WTG

Sep 11 Aug 12 Sep 11 Aug 12 Sep 11 Aug 12

% 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

Page 35: Axel Bühler, Nordex presenatation at Spare Parts 2013

ATTACKING LEGACY SERVICE INVENTORY Past Sins Show – Materials Taken Over From Production

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 35

54,4

5,72,9 0,6 1,0

30,54,8

100,0

0

10

20

30

40

50

60

70

80

90

100

TotalInventory

< 2 years > 2 years > 4 years > 6 years > 8 years > 10 years Defective

% of Total Inventory

Preliminary Analysis of Inventory Coverage

/ Non Movers

Years of inventory currently on stock (based on past 12 months consumption)

Page 36: Axel Bühler, Nordex presenatation at Spare Parts 2013

SERVICE LEVEL IMPROVEMENT SLOW – BUT “LESS LATE”But overall performance improvement clearly felt in field

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 36

50%

60%

70%

80%

90%

100%

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% order line items fully shipped before customer delivery date

(Target 2012: 80%)

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)

-15

-10

-5

0

5

10

15

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

days early / order line shipped

days late / order line shipped

Page 37: Axel Bühler, Nordex presenatation at Spare Parts 2013

ParameterManufacturingSupply 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 (unique SAP#)

Limited 15 to 20 times more

Product portfolio Largely homogeneous Always heterogeneous

Delivery networkDepends 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 handleHandles 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

PROCUREMENT - CLASH OF CULTURESProduction procurement falls short on unplanned & urgent requests

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 37

* Source: Cohen et al, Winning in the Aftermarket, Harvard Business Review, May 2006

Page 38: Axel Bühler, Nordex presenatation at Spare Parts 2013

Performance

•Parts qualityhard KPI: failure rates

•Delivery qualityglobal 24/7 express delivery, on time, complete, accurate; local inventory; flexible support

•Spare parts documentationcontinuously updated electronic spare parts BOM, spec & drawings, catalog

•Obsolescence managementactive management of parts ramp-down and development of follow-up parts

Scope of supply

•Technical support24/7 remote and on site support

•Trainingtroubleshooting and repairs, certified

•Repairsrepair cycle incl. upgrades

•Full service agreementsrisk sharing > 5 years, active support

•Delivery commitment 20 yearsactive mgmt of 20 year obligation

Co-operation

•Channel to marketBest-Price for Nordex, preferred channel to market, exclusive premium products

SUPPLIER PERFORMANCE IS CRITICAL FOR SERVICEQuality, 24/7 Global Express, Documentation, Obsolescence Mgmt

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 38

SAP material status

Design

Design

Production

Service

Dismounting

Obsolete

Obsolescent

Production ServiceObsolesc

ent Obsolete

Design Service Obsolete

Product

life-cycle

Original part

& exchange part life-cycle

exchange part

original part

Start of production

End of production

End of Service

Monday

Tuesday

Wednes-day

Thurs-day

Friday

24/7

Germany

France

UK

Turkey

SwedenShut-down

PortugalSpain

Ireland

Norway

Denmark

ItalyMaterial Forecast & Planning

World Class Logistics

Benelux

Greece Germany

Poland

Fault

Page 39: Axel Bühler, Nordex presenatation at Spare Parts 2013

BILL OF MATERIAL CHALLENGEProduct Data Management All The Way Down to Service

Nordex | Spare Parts Business Platform | Stockholm | Feb 2013 39

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 forspare parts catalogue, inventory planning, failure analysis, retrofit planning, engineering change management

Overview

As-constructed

Assembly 1

Part 1.2

Part 1.3

Part 1.4

Part 1.5

Part 1.6 W

Part 1.1 S

Assembly 2

Part 2.2 S

Part 2.3 C

Part 2.4

Part 2.5

Part 2.6

Part 2.1

Config

uratio

nforspecific

wind

park

WTG specificparts and

components

As-planned

Assembly 1

Part 1.2

Part 1.3

Part 1.4

Part 1.5

Part 1.6 W

Assembly 2

Part 2.4

Part 2.5

Part 2.6

Part 2.1

Productio

nand

erectio

n

Unplannedchanged of

parts orcomponents

As-built

Assembly 1

Part 1.2

Part 1.3

Part 1.4

Part 1.5

Part 1.6 W

Assembly 2

Part 2.2 S

Part 2.3 C

Part 2.4

Part 2.5

Part 2.6

Part 2.1

Operatio

n /

repair/

maintenance

Exchanges ofparts or

components, retrofits

As-running

Assembly 1

Part 1.2

Part 1.3

Part 1.4

Part 1.5

Part 1.6 W

Assembly 2

Part 2.2 S

Part 2.3 C

Part 2.4

Part 2.5

Part 2.6

Part 2.1

Retrofit 1

change

addition

Part 2.2 S

Part 2.3 C

Part 1.1 S Part 1.1 S Part 1.1 S

Page 40: Axel Bühler, Nordex presenatation at Spare Parts 2013

Enable

Plan

SPARE PARTS MANAGEMENT THROUGH LIFETIME OF WTGCross-functional processes, interfaces & tools

Source Make Deliver

Replace

Return

SellIdentify Order

Plan Supply ChainForecast, Network, Assortment, Delivery

Plan Spare Parts ManagementObsolescence Management, Major Components, Vital Parts, Performance Requirements

Enable Spare Parts ManagementBOM (as-built, as-running, spare parts), Material Master Data (0rder Process, Purchasing, Logistics)

Parts Classification, SAP Processes, Parts Identification Tool, Parts Support

Spare Parts MgmtSupply ChainProductionPurchasing

PM Field OpsService Field OpsService After Sales

ReturnExecute

Design

Central EngineeringService EngineeringPurchasing, PLM

Assembly/ Erection

Service Operations

DismountingDevelopmentSales

CESales Purchasing ProductionSupplyChain

PM ServicePLM

40Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 41: Axel Bühler, Nordex presenatation at Spare Parts 2013

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

41Nordex | Spare Parts Business Platform | Stockholm | Feb 2013

Page 42: Axel Bühler, Nordex presenatation at Spare Parts 2013

MANY THANKS FOR YOUR ATTENTION.

Nordex SELangenhorner Chaussee 600, 22419 Hamburg, Germany

Telephone +49 (40) 30030 1000

Fax +49 (40) 30030 1101

E-Mail [email protected]

Axel Bühler

Spare Parts Management

[email protected], +49 (40) 30030-1611

Michael Dorn

Spare Parts Planning

[email protected], +49 (40) 30030-1472

42Nordex | Spare Parts Business Platform | Stockholm | Feb 2013


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