Every third day until Christmas, we will reveal three evaluation markers to improve your company’s odds for success in offshore wind. As a special Christmas reflection, each release will also contain a strategic observation from the global offshore wind scene.
The Christmas Calendar structure reflects the Green Ducklings framework that we use to map any company’s “Offshore Wind DNA” through our 24 DNA Markers.
Christmas Calendar
December 22-24, 2020
#22 STAKEHOLDERS
Stakeholders is a measure for a company’s awareness and ability to work with the many stakeholders in the offshore wind industry. Due to the scale of the industry and potential environmental and social impacts of wind farm developments, many stakeholders have the ability to become showstoppers, if not handled properly. Just mention a few, national government institutions, financiers, local communities, NGO’s, and national university professors are among the possibilities. Although suppliers are normally not directly exposed to these stakeholders, it is a benefit to understand the stakeholder picture of the clients, since the clients´ agendas and requirements will often be driven by these stakeholders. An understanding of the stakeholder picture can also be turned into a significant competitive advantage, since it allows the supplier to shape the value proposition in order to fulfil the clients’ ability to handle the stakeholders.
#23 INDUSTRIALIZATION
Industrialization is a measure for operational excellence in terms of driving the product costs down and production output up. To be successful in offshore wind, a company’s offering must be based on “serial production” thinking. Only in this way can the products live up to the quality required to be sent offshore in large numbers, while remaining competitive. There is a desire by the OEM’s and large contractors to standardize the components that are used from project to project. Therefore, frame agreements can be used in the offshore wInd supply chain to provide foreseeability and allow for timely deliveries. Companies that are lower in the supply chain hierarchy face more competition, and working actively with industrialization can move a company up the supply chain hierarchy as well as provide a key differentiator towards competition.
#24 R&D PROGRAM
R&D Program is a measure for a company’s ability to innovate and improve the offering by long term strategic planning of technology development and/or de-risking. The size of offshore wind turbines and foundations is constantly increasing, since project economy benefits from larger turbines – especially due to lower foundation costs. This means that the turbines of today’s development projects are at least one size bigger than the state-of-the-art turbines that are currently being installed in the industry. In other words, the developers are relying on technology innovations, that are not yet commercially available. Successful supply chain companies need to constantly ensure that their offering does not only fit with today’s state-of-the-art but will also be viable in the future. While delivering for today’s order backlog, companies need to push the envelope of their offering through R&D to secure their next order intake.
CHRISTMAS REFLECTIONS FROM THE MARKET
For most developed countries, 2020 will be left with mixed feelings. Economies are challenged due to the knock-on effects of Covid-19. What was hoped to become a sprint, turned out to be a marathon, and the context for doing business turned out to be very different than expected from when we entered this year. We have indeed been hit by a “Black Swan” – an event that was not foreseen and with the power to disrupt many established businesses. Luckily some societies have also observed the rise of a powerful “Green Swan” in the form of green transition action-taking.
Politicians raised the bar for offshore wind ambitions with more than 100% in an attempt to resolve the climate issue and job creation in one go. Consequently, a bottleneck in the global offshore wind supply chain seems apparent in the years to come. Valuation of companies with strong offshore wind ambitions and related action-taking is rising significantly along with investors redirecting their capital away from other investments and into offshore wind. As we enter 2021, our industry is in better shape than ever before, and a world of opportunities have opened for those who dare to take the next steps to “Improve their Odds for Success in Offshore Wind”.
Thank you for following our Christmas Calendar. We wish you all a Merry Christmas and look forward to supporting our clients and collaboration partners with their strategies and bids in 2021.
