BUSINESS DEVELOPMENT
SUPPLY CHAIN PERFORMANCE The Supply Chain Workstream report identifies levers of cost reduction that are responsive to the performance of the supply chain as a whole. Other cost levers will be influenced only by technical innovation or by financial management.
These levers are:
• Increasing the number of participants from Europe & low cost sources
• Stimulating asset growth & economies of scale
• Discovering new ways of managing risks, even those classed now as ‘uncontrollable’
• Improving vertical co-operation • Improving horizontal co-operation • Developing contract forms
The workshop will explore each of these cost reduction levers to identify ways in which SMEs operating in the lower tiers can contribute to performance success.
PRE-REQUISITES FOR SUPPLY CHAIN PERFORMANCE SUCCESS Worth noting here are the pre-requisites to success which the report identifies because it is these factors that you need to investigate in the context of your own operation.
How can you help to make these pre- requisites become reality?
1 certainty that the Energy Market Reform (EMR) will be maintained
2 a smooth transition from Renewable Obligation Certificates (ROCs) to Contract for Differences (CfDs)
3 a quicker, more transparent planning process, and a less risk-averse attitude to consenting and to pre- consent spending
4 certainty over structure of transmission assets
• Sufficient and timely capacity of prototype testing sites More sites with greater accessibility must be made available for proving new designs, particularly of turbines and foundations.
• Better informed financial and investment communities Greater knowledge of the offshore wind market is necessary to ensure the right financial and insurance support is available, and that their risk management requirements are achievable. Visibility of investment opportunities below Tier 0 also needs to be improved so that the right level of investment is attracted.
• De-risking the pre-consent stage Greater transparency of information at this stage will enable the supply chain collaborators to achieve the most effective performance planning. Data relating to sea floor conditions and maintenance regimes are examples. Front End Engineering and Design (FEED) involvement of contractors will ensure that optimal use of early information is secured.
Some of them may seem remote, but they are shaping the actions of those at the demand end of the supply chain. It is their actions that define the requirements on each successive tier in the chain, and the requirements that will arrive at your ‘in- tray’. Anticipating what they mean to your operation will give you the competitive edge.
• Market Certainty and Volume Visibility The necessary investment in new capacity will not be made without the right level of confidence in the political support of the market, specifically:
• Common standards in practice Cost reduction depends on the non- proliferation of standards, and genuine sharing of best practice.
• Availability of appropriate levels of appropriate human capital The availability of the right skill sets at the right level at the right time is essential to maintain the development of the market at the right pace to achieve the available cost reductions.
You will be able to influence some of these, even if it is indirectly through the networks and alliances that you have in the market place. To earn your place in the supply chain you need to deliver the highest quality at a given cost that you can. But never forget -
the definition of quality belongs to the customer, not to the supplier.
WORKSHOP 1 – KNOW YOUR MARKET The workshop is an interactive session to resolve any uncertainties you have about the opportunity that lies before us and to explore the ways that you can contribute to the success of the offshore wind supply chain and to the continuing success of your own business.
BCG Bridgepoint and Renewables Network look forward to meeting you there, at the next Workshop 1.
John Britton BCG Bridgepoint
www.bcg-bridgepoint.co.uk Renewables Network
www.renewablesnetwork.co.uk
www.windenergynetwork.co.uk
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