Setting up cross-platform cost management excellence

Client Challenge

The client is one of the globally leading manufacturers of wind turbines for on- and off-shore installation. To drive competitiveness against Asian competitors, challenging cost reduction targets have been set across all platforms. To ensure future progress in cost-value engineering, a new cost management organization shall be implemented.

H&Z Approach

H&Z combined its rich expertise in purchasing, cost management, organizational development, and technology to draft, implement, and supercharge an efficient and powerful cost management organization for the client.

Building on the insights of a two-week analysis phase, the following three work streams were set up and executed:

1. Competitor profiling and analysis of product specifications (incl. bills of material) to identify main cost drivers for effective cost optimization
2. Cross-functional expert workshop series (more than 40 workshops across the three most relevant turbine platforms from 2.5 MW (on-shore, geared) to 7 MW (off-shore, direct drive) to identify and evaluate cross-platform cost-out measures
3. Development of a new cost management organization, definition of a client specific cost-out process, and elaboration of a training + reporting tool-kit

Results

During the course of nine months and at three locations in the global engineering and production network of the client, the H&Z team delivered measurable improvements:

• Financially effective cost-savings implemented on wind turbine level delivering cost reductions between 5 and 23 % (initial targets 7 to 25 %)
• Savings pipeline for further cost reduction decided and initiated with a maturity-weighted potential of another 7 to 9 %
• New cost management organization introduced and process and tools established - key employees and trainers trained in cost-out methodology
• Clear responsibilities and cost-out community for knowledge transfer between platforms and business units established

Based on these results, the client team is capable to independently drive cost competitiveness across platforms and locations to deliver industry-leading performance at competitive cost per mega watt.