http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/RSS.ashxVestas Win[d] PagesMon, 19 Mar 2007 13:08:21 +0100http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=1http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=1Wind Vestas No. 07 Year 04 20 March 2007 A visionary energy plan Sustainable energy in the political spotlight Unique experience assures high quality at Vestas foundries Dialogue for Development the tide has turned Safety First improved safety for all Chinese workers trained in Denmark Vestas Control Systems to expand Advanced risk management Customeroriented production WIND, OIL GAS Vestas Wind0704UK16OK. indd Sec41Vestas Wind0704UK16OK. indd Sec41180307 131346180307 1313462007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=2http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=2Turning the tide Almost two years ago, Vestas laid out an ambitious new agenda for its business with its simple vision of Wind, Oil and Gas which describes wind as a source of energy on a par with fossil fuels. Today, less than two years down the road, both scienti c results and political statements from all sides indicate that not only is our vision now accepted, but it is seen as a political and environmental necessity. The great interest and the new opportunities that are appearing for the wind power industry are naturally also synonymous with tougher competition and higher demands on Vestas. Therefore it is very pleasing to note and crucial to Vestas continued development that in 2006 we began to see the rst signi cant results of the fundamental alteration of business practices at Vestas that is laid down in our strategic action plan, The Will to Win. In other words, 2006 was the year when the tide was turned. The signi cantly improved results on the bottom line are, of course, the most evident and tangible proof of our progress. However, other tendencies are also pointing in the right direction rst and foremost in the context of relationships with our customers. Vestas highest priorities have included tackling the problems identi ed by our customers, and initiating open dialogue with a view to nding solutions. So I am very pleased that we have succeeded in halting the negative development, and that in a range of key areas we are now considered a better partner than we were a year ago. We still have a long way to go to reach our goal, but we can see that our input is paying off. Safety is another area in which we have made progress. In 2006, we cut the number of serious injuries by 22 per cent per working hour. Again, a good result, but by no means one that can be taken to indicate that we have already reached our ultimate goal far from it. We are still a long way from where we want to be, and we have no intention of relaxing and declaring ourselves satis ed. We must and shall develop, and we can use the numerous uplifting trends we have identi ed in 2006 as con rmation of the fact that the course we have set with The Will to Win is the right one. Ditlev Engel President and CEO Vestas Wind0704UK16OK. indd Sec42Vestas Wind0704UK16OK. indd Sec42180307 131347180307 1313472007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=3http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=3Content 4 The Danish vision The Danish Society of Engineers has prepared a plan that describes how, ultimately, Denmark could cover its energy requirements in full without involving fossil fuels. 12 Greater political focus on sustainable energy Vestas vision is gaining ground all over the world. 14 The winds of change are still blowing Progress has already been made towards the ambitious goals laid down in the strategy plan The Will to Win. Read the report on the status after the rst half. 18 Customer loyalty the downturn has stopped Vestas input for improved dialogue and collaboration with customers has begun to bear fruit but there is still a lot of work to be done. 20 Safety rst improved safety for all Vestas safety index the incidence of industrial injuries fell by 22 per cent in 2006. This means improved safety for all. 24 Cool overview in a redhot industry Hitech processes and unique expertise have put Vestas foundries in a position to keep up with the explosive rise in demand while maintaining optimal quality. 28 A new approach to production Simpler production processes are good news for Vestas customers. 32 Chinese workers trained in Denmark Vestas has implemented a new concept for knowledge transfer to new employees. The new model is called People before Megawatts. 38 The art of managing the unmanageable In a heavy and technologybased sector such as the wind industry, it will never be possible to eliminate risks completely. However, they can be structured and controlled. 44 Test everything but only once The operational reliability of wind turbines can be improved by testing the components thoroughly the rst time. 48 Vestas Control Systems to expand in Denmark Protection of copyright is the primary reason why expansion of this division is to be centred in Denmark. 52 Is 99 good enough With the introduction of the Six Sigma improvement tool, Vestas has not only saved a lot of time, but also reduced the number of errors in a wide range of processes. 3 Vestas Wind0704UK16OK. indd Sec43Vestas Wind0704UK16OK. indd Sec43180307 131349180307 1313492007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=4http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=4The Danish vision 4 Energy has carved out a place for itself at the very top of the political agenda, particularly in Europe where, at their summit meeting earlier this month, the 27 EU heads of state and government agreed on an ambitious plan that included binding targets for the use of sustainable sources of energy. At national level, too, the issue is the subject of passionate discussion and debate. For example, energy is a hot issue in Denmark, one of the absolute leaders on the global stage when it comes to big, visionary ideas for solving the energy and climaterelated problems facing the world today. One of the latest and most visionary initiatives Energy Plan 2030 was presented by the Danish Society of Engineers at a conference in Copenhagen last December. Vestas Wind0704UK16OK. indd Sec44Vestas Wind0704UK16OK. indd Sec44180307 131351180307 1313512007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=5http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=55 CO2 When the Danish Society of Engineers started work on Energy Plan 2030 in January 2006, the overriding ambition was to establish a clear vision for the future of energy in Denmark. For years, we have heard both politicians and experts talking about how we need to do something about CO2 emissions, while ensuring that Denmark will not become dependent on energy from politically unstable countries in the future, relates Søren Skibstrup Eriksen, Chairman of the Environment Commission of the Danish Society of Engineers, and formerly chairman of the steering committee behind the societys Energy Year 06. We of the Danish Society of Engineers decided to take up the challenge and make use of the comprehensive network and the broad and deep reservoir of competence we can access through our numerous professionally skilled companies, says Søren Skibstrup Eriksen before going on to stress that from the very start, the intention of the society was to set the bar at a realistic height to make sure that the policy decided was actually viable and practicable. So it is even more interesting when the results show that there are no technological or nancial obstacles preventing us from creating a sus tainable energy system in Denmark. Three ambitious goals From the start, the work on Energy Plan 2030 aimed at three primary goals CO2O2 O2CO 22 2 COCC 2 COCC2CC Vestas Wind0704UK16OK. indd Sec45Vestas Wind0704UK16OK. indd Sec45180307 131355180307 1313552007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=6http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=66 CO CO2 CO2CO2CC C COO22 CO2 CO2 CO CO2O CO2CC To reduce Danish emissions of CO2 in 2030 by 50 in relation to 1990 levels To assure Danish selfsuf ciency with regard to energy To quadruple Danish exports of energy technology from the current level of around DKK 30 billion to DKK 120 billion annually in 2030. When the report and its recommendations were presented to politicians and industry professionals at the conference in Copenhagen in December, Søren Skibstrup was pleased to be able to state that all three goals were fully achievable and then some. If the strategy recommended in Energy Plan 2030 were to be implemented in full, the Danish Society of Engineers calculates that the following bene ts would be achieved A reduction of CO2 emissions by 60 in relation to 1990 levels A signi cant reduction in fossil fuel consumption in the Danish energy mix Export potential for the energy sector of around DKK 160 billion per year Annual savings to society of DKK 15 billion. Mark on the political agenda According to Søren Skibstrup Eriksen, the political signals after the conference in December were remarkably positive from all segments of the political spectrum. There can be little doubt that many of the aspects of Energy Plan 2030 will have a major effect on the political process, he says, before going on to state that in this regard, many of the recommendations in the report seem to have left their mark on the negotiation proposal for a future energy strategy that the Danish govern ment presented on 19 January this year. This is the case, for example, regarding the proposal to earmark additional funds for intensifying research, development and demonstration initiatives for a range of sustainable energy technologies. Although he is naturally delighted with the positive political reception of Energy Plan 2030 in Denmark, Søren Skibstrup Eriksen makes no secret of his disappointment with the com mon energy package that the EU heads of state and government have recently adopted. It is a package of which the central aspect is a binding obligation on the member states to reduce their respective CO2 emissions by 20 in rela tion to 1990 levels by 2020. At international level, we need a more aggressive strategy in the environmental area of energy policy, and I would much rather have seen a requirement for a 30 reduction which was the level that the Danish government and others strove to have adopted at the summit, says Søren Skibstrup Eriksen. Major investment required Søren Skibstrup Eriksen says that in many areas, the ambitious plan from the Danish Society of Engineers breaks with conventional political thought. As a private, independent, professional organisation, we have no holy cows or political considerations to take into Vestas Wind0704UK16OK. indd Sec46Vestas Wind0704UK16OK. indd Sec46180307 131357180307 1313572007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=7http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=7account, so we have been free to set up our preconditions on a purely professional basis and work out a strategy aimed directly at the target, he says and highlights the fact that, for example, at its most fundamental level, Energy Plan 2030 requires politicians to start thinking in terms of energyrelated investments rather than as they have up to now focusing exclusively on how to cut the cost and improve the ef ciency of operations. Both aspects are quite simply essential if we are to reach our goal, and from the broader perspective, our calculations clearly show that there is much to be gained by stimulating investments, says Søren Skibstrup Eriksen, who stresses that politicians cannot simply place responsibility for the numerous and sizeable investments on the shoulders of the industry. Conversely, if the state leads the way and shows commitment to the cause, industrial players are sure to come running. 7 Expansion plan for wind power in Denmark, as proposed in Energy Plan 2030. 700700 600600 500500 400400 300300 200200 100100 0 MWOffshore Onshore 20042004 20052005 20062006 20072007 20082008 20092009 20102010 20112011 20122012 20132013 20142014 20152015 20162016 20172017 20182018 20192019 20202020 20212021 20222022 20232023 20242024 20252025 20262026 20272027 20282028 20292029 20302030 New wind power capacity installed annually Electricity consumption GWh Wind power production GWh Electricity covered by wind power GWh 40. 000 35. 000 30. 000 25. 000 20. 000 15. 000 10. 000 5. 000 0 80 70 60 50 40 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Electricity consumption and wind power coverage The combination of electricity savings and expansion of wind power will mean that, according to Energy Plan 2030, wind power could actually cover 5560 per cent of electricity consumption in Denmark in 2030. Vestas Wind0704UK16OK. indd Sec47Vestas Wind0704UK16OK. indd Sec47180307 131359180307 1313592007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=8http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=8CO2 CO2 CO2CO2CC CO2 COO22 2 CO2 CO2 CO2 CO2O CO2CC Focus on sustainable energy More than 1, 600 engineers and other sector professionals have contributed ideas and expertise to Energy Plan 2030. The work was actually carried out by seven team groups, each focusing on a speci c area. One of these groups worked with the issue of Wind, Sun and Wave Power. It was led by Hans Jørgen Brodersen, a graduate engineer in environ mental planning and chairman of one of the 41 professional technology companies under the Danish Society of Engineers The Company for Technology Evaluation and Analysis. Hans Jørgen Brodersen relates that each of the seven theme groups held three seminars during Energy Year 06. The work in the theme group focusing on sustainable sources of energy kicked off with a knowledge seminar, where researchers and independent consultants from the elds of solar heating, solar cells, wind power and wave power painted a coherent picture of where the different technologies were positioned at the starting point. During this phase, we looked at experience gained from offshore wind farms such as Horns Reef, says Hans Jørgen Brodersen. In the next phase, the theme group held a future seminar, where attention was turned to the future and with input from Vestas and other manufacturers of sustainable energy technologies set up scenarios for how far the respective technologies can realistically be expected to have developed in 2030. The last event was a roadmap seminar. The work here was speci cally to chart the course and nd the best possible way to bring to life the future scenarios we prepared during the process, he says. Installed wind capacity to be doubled One of the most concrete results from the work of this theme group is a plan for expanding wind power in Denmark. In this context, Energy Plan 2030 states that in 2030, 6, 000 MW are to have been installed in Denmark half on land and half in offshore plants. We suggest, for example, that over the next 15 years, 214 giant 6 MW turbines be installed off the west coats of Jutland, along with a further 180 offshore turbines of the same size in Danish coastal waters, explains Hans Jørgen Brodersen, who, on the basis of the input from Vestas and other wind turbine manufacturers, considers the expansion plan to be completely realistic. Of course, it demands acknowledgement by Danish politicians of the fact that Denmark can only maintain and expand its current position of world leader in the eld of sustainable energy technologies if we expand our domestic market and thus make it easier for research ers and industrial players to test their latest developments, says Hans Jørgen Brodersen. 5560 of electricity to stem from wind power One of the primary aims of Energy Plan 2030 is to keep Denmark selfsuf cient in energy. And as oil and gas reserves in the North Sea are expected to peak within the immediate future perhaps even as early as 2007 this ambition demands that sustainable sources of energy be given much higher priority. Looking at the total energy consumption of Denmark, i. e. energy used for heating, 8 Vestas Wind0704UK16OK. indd Sec48Vestas Wind0704UK16OK. indd Sec48180307 131400180307 1314002007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=9http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=9transport, industry and electricity, Hans Jørgen Brodersen points out that almost a third of consumption in the 2030 scenario would be covered by biomass, while around 16 per cent would be covered by sustainable sources of energy with wind power as the dominant resource. On the other hand, looking at electricity in isolation, wind power would account for as much as 5560 per cent of this consumption. This would mean tripling the current capacity in Denmark, where around 20 per cent of electricity consumption is covered by wind power a gure which, in itself, is impressive and is attracting favourable attention worldwide. As regards production, it is clear that wind and biomass will be the key parameters, and that wind in particular has an important role to play in relation to the objective of halving CO2 emissions in relation to 1990 levels, says Hans Jørgen Brodersen. He then stresses that Denmark, on account of its leading position in the eld of sustainable energy technologies, has every opportunity to assume a key role in the international work to tackle global climate issues. Eleven recommendations for the politicians A key feature of Energy Plan 2030 comprises the 11 tangible recommendations for a Danish energy strategy. For example, it is proposed that the state earmark DKK 1 billion annually for research, development and demonstration. This is a suggestion that aims in particular to lay the foundations for signi cant growth in export potential within the Danish energy sector. At the same time, the report recommends the establishment of innovation markets on which new technologies that are not yet fully competitive on existing market condi tions are given the opportunity to mature. In practice, this can be accomplished by offering production quotas at a xed sales price that takes into account the current stage of development of the separate technologies, says Hans Jørgen Brodersen. As examples, he mentions wave power, solar cells, fuel cells and second generation biofuel technologies. Of the 11 recommendations, the one that has attracted most attention in the Danish media is the proposal to establish a 100 per cent sustainable energy town. This urban area with approximately 25, 000 residents would function as a showcase for Danish energy technology and thus contribute to reaching the stated export target for the area DKK 160 billion per year in 2030. CO2 quotas at auction The muchdebated trade in CO2 quotas is also included in the recommendations from the Danish Society of Engineers. In this context, Energy Plan 2030 states that Denmark should work to replace the current system of free distribution of CO2 quotas with a system in which the quotas are sold at auction. This will, to a greater extent, place the burden on the big polluters, rather than giving fossil energy production an indirect injection of capital, as is the case at present. A question of balance Behind Energy Plan 2030 lies a comprehensive volume of work in the form of technical energy system analyses, socioeconomic consequence evaluations and the quanti cation of the commercial potential that plays an important role in the strategy. The numerous calculations and analyses were carried out by Professor Henrik Lund and Ph D student Brian Vad Mathiesen from Aalborg University. Henrik Lund states that perhaps the greatest challenge in an area as complex as that of sustainable energy systems has to do with optimising the longterm interplay between all the factors involved. Take as a concrete example the insulation of the houses of the future, he says and explains If we insulate well, we will need less heat from CHP stations. This means that they will also generate less electricity, so the shortfall will, to an extent, have to be replaced by coal red energy which pulls in the opposite direction as regards the objective of consuming fewer fossil fuels. Henrik Lund stresses that one of the initiatives whose implementation needs 9 Vestas Wind0704UK16OK. indd Sec49Ves2007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=10http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=10Henrik Lund Hans Jørgen Brodersen Søren Skibstrup Eriksen 10 CO2 CO2 CO2 CO2 CO2 CO2 CO2CCCOOO22 2 CO2 CO2 COO2 CO2 CO2CC political backing as soon as possible is raising the priority of implementing modern, high ef ciency heat pumps at decentralised CHP stations. This will make it easier to regulate and utilise more CHP heat and wind power, while simultaneously increasing fuel ef ciency within the system as a whole. Henrik Lund points out that the goals of Energy Plan 2030 demand a high level of political will and the courage to think outside the box in a range of areas. In this regard, he mentions that transport is a focus area of Energy Plan 2030. Over the past 25 years, Denmark has been the only country in the world to succeed in keeping the level of energy consumption unchanged despite the fact that the Danish economy has grown by 50 per cent during the same period, he says, and continues Thus far, we have achieved this remarkable feat without touching the transport sector, but the almost explosive growth that is currently underway in this area means that the time has now come to include private, public and commercial transport in our energy strategies. Otherwise, it will quite simply be impossible to achieve the ambitious aims we have set up as a society with regard to reducing CO2 emissions and to maintaining our current level of energy selfsuf ciency. Speci cally, Energy Plan 2030 recommends a range of signi cant amendments to the current Danish system of duties, as well as the introduction of dutybased incentives to choose ecofriendly and energyef cient vehicles. As regards the last of these recom mendations, the plan highlights modern elec tric cars which convert as much as 75 per cent of their energy into propulsion compared to the ef ciency of combustion engines, which lies at around 20 per cent. Imagine if the electricity for these cars were generated by wind turbines. The socioeconomic and environmental consequences would be very interesting indeed, says Henrik Lund. A prime ministerial vision Under Energy Plan 2030, 47 per cent of Danish energy consumption would be covered by biofuel and sustainable sources of energy, while the remaining 53 per cent would still be covered by oil, natural gas and coal. However, the Danish Society of Engineers has thought and calculated a little further towards the complete ful lment of the vision that Anders Fogh Rasmussen, the Danish Prime Minister, recently launched with regard to making Denmark a fossilfuelfree country. Taking our work to the next level has to do in particular with ensuring that the recom mendations we made with regard to achieving the 2030 objectives do not act as obstacles for more farreaching goals, explains Henrik Lund. On the basis of the extended calculations, he believes that an energy system based 100 per cent on sustainable sources of energy is a realistic option in 50 years or fewer, and that for such a scenario, Denmark would need up to 10, 000 MW of installed wind power i. e. more than three times the current level. At the same time, a 100 per cent sustainable energy solution would mean involving hydrogen as an important factor in the energy mix. However, it depends on how much biomass it would be appropriate to draw from Danish agriculture, concludes Professor Henrik Lund. The ultimate dream Energy Plan 2030 is one of several contribu tions to the superhot energy policy debate that is currently raging in Denmark. The ambitions are big, but in no way unrealistic, say the engineers and other professionals and ex perts who worked on the plan. Seen through Danish eyes, there is every reason to start dreaming of a sustainable future that involves no fossil fuels whatsoever. Vestas Wind0704UK16OK. indd Sec410Vestas Wind0704UK16OK. indd Sec410180307 131401180307 1314012007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=11http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=1121 Sustainable energy, TWh Million tons per year Total fuel consumption and sustainable energy 117. 4 terawatt hours TWh CO2 emissions 35, 2 16, 138, 1 19, 1 16, 8 18, 0 54 60, 8 5, 0 0, 4 4, 0 74, 1 15, 2 5, 2 2, 51, 42, 3 26, 018, 5 26, 0 27, 5 2, 715, 2 Wind power District heating loss, 29 Biofuel Households industry CHP, electricity and district heating stations, heat pumps Solar heating Total fuel consumption Heating and process consumption 44. 5 TWh Electricity consumption 30. 2 TWh Transport 29. 9 TWh Solar cells Wave power Fuel, TWh Hydrogen electrolysis Hydrogen Biomass 1990Ref. 2030 IDA 2030 15, 4 31, 4 5, 0 9, 5 20, 8 30, 2 The energy streams in the vision of 100 per cent sustainable energy in 2050 In addition to Energy Plan 2030, the Danish Society of Engineers has calculated a scenario in which all the energy used in Denmark stems from sustainable sources. As the gure shows, wind power, solar cells and wave power cover a third of the total energy consumption and 100 per cent of electricity consumption. O2 OO2 OO2 11 Vestas Wind0704UK16OK. indd Sec411Vestas Wind0704UK16OK. indd Sec411180307 131402180307 1314022007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=12http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=1212 Greater political focus on sustainable energy Take a look at the international political landscape, and it is clear that sustainable sources of energy have seriously made it onto the agenda over the past year. One of the reasons for this is that researchers are with increasing certainty stating that global warming is caused by the human race and, in particular, is inextricably linked to the CO2 emissions that stem from the increasing consumption of fossil fuels worldwide. Another reason for the ampli ed political focus is a growing recognition of the need to decrease dependency on oil and gas from politically unstable parts of the world. Vestas Wind0704UK16OK. indd Sec412Vestas Wind0704UK16OK. indd Sec412180307 131402180307 1314022007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=13http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=1313 At Vestas, there has been a measure of satisfaction in noting that politicians from a large number of countries are increasingly mentioning wind power as one of the serious solutions to the energyrelated challenges the world is facing. When we launched our new vision Wind, Oil Gas in 2005, I do not seriously think that there were many people outside Vestas that gave it any credence, says Ditlev Engel, President and CEO. He continues However, there can be no doubt that over the past year, we have seen the emergence of a much better understanding of how necessary it is to consider wind power a serious source of energy on a par with oil and gas and thus an indirect recognition of the validity of our vision. Ditlev Engel stresses that the political focus on sustainable energy was recently expressed in February with the publication of the rst subsidiary report on climate change from the UN Climate Panel. This report, which was prepared by a large number of experts and researchers from 130 countries, makes the central assertion that it is now 90 per cent certain that climate change is attributable to human activity, including the use of fossilfuel based energy. At the same time, the climate report stresses that steps must be taken now if the global community is to avoid even more drastic consequences of CO2 emissions, for example, in the years to come. Common energy policy in Europe Another political event of great signi cance to the promotion of sustainable sources of energy is the common environmental and energy package that the EU heads of state and government agreed to adopt at their summit in Brussels on 79 March. This package allocates a key role to sustainable energy through, for example, placing a binding obligation on the 27 EU member states to ensure that in 2020, at least 20 per cent of total EU energy requirements are to be covered by sustainable sources of energy such as wind power. See the article on page 4. National initiatives In a number of countries, sustainable energy has been high on the political agenda in recent months. For example, on 19 January, the Danish Government presented its proposal for a longterm energy strategy. Likewise, on 4 January, on the other side of the Atlantic, Nancy Pelosi, the new Leader of the House of Representatives in the United States, expressed her vision of a new America that declares our energy independence, promotes domestic sources of renewable energy, and combats climate change. Twenty days later, President Bush gave his annual State of the Union address, in which for the second year in a row he highlighted the need to make more room in the United States energy mix for sustainable sources of energy such as wind power. The fact that both politicians and major industries are now clearly beginning to realise that wind power offers bene ts that extend far beyond the obvious environmental aspects, is of the greatest signi cance to Vestas and to our sector as a whole, says Ditlev Engel, who believes that the coming months will produce even more political backing. Once the political foundations have been laid, a snowball effect will soon come into play, and, at the same time, it is important never to underestimate the ef fect of the climate and energy debate guring increasingly in the consciousness of the media and the general public. Things like this have a tendency to attract political attention. concludes Ditlev Engel. Vestas Wind0704UK16OK. indd Sec413Vestas Wind0704UK16OK. indd Sec413180307 131403180307 1314032007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=14http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=14The winds are still The winds of change are still blowing 14 A year ago, Vestas annual report included an article entitled The Winds of Change are Blowing over Vestas, which presented some of the large challenges the Group was facing challenges that had to do with aspects such as culture, communication, management structure and customer satisfaction. So how have things gone over the past 12 months We have taken a look at some of the aspects of the strategy plan The Will to Win. Vestas Wind0704UK16OK. indd Sec414Vestas Wind0704UK16OK. indd Sec414180307 131403180307 1314032007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=15http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=15When Ditlev Engel took over as President and CEO of Vestas in May 2005, he made no secret of the fact that he considered the disappointingly low level of customer satisfac tion to be one of the very greatest challenges facing the company. For this reason, many of the initiatives launched under the auspices of The Will to Win were speci cally intended to make customers more satis ed not only with the companys products, but also with the working relationship as a whole. So it was with great anticipation and excitement that Vestas recently received the results of the latest customer satisfaction survey. These results show, to the joy of everyone at Vestas, that the company has at last succeeded in putting a stop to the seemingly inexorable drop in customer satisfaction. In fact, the result is one point better than that of the previous year see page 18. However, the responses to the survey make it very clear that there is still a great deal of work to be done, and Ditlev Engel cannot hide the fact that he had hoped for an even better out come. However, as he himself puts it There is an old saying which states that things takes time, and this applies very much to this process. Ditlev Engel singles out the customer dialogue programme Dialogue for Develop ment as an example of a guiding light on the continuing journey to improved customer satisfaction. This programme has been signed by the entire Vestas Government because it is crucial that the management take a principle decision always to base its actions on customer wishes and requirements, he says, and con tinues Even though we would have liked to have seen better results as early as this year, I clearly sense that our customers have noted that we have put customer satisfaction high on the agenda a decision that stems from the senior management and has the backing of all parts of the organisation. A halftime lead does not mean we can relax To the question of how far the company has come with the implementation of the numerous initiatives and change processes, Ditlev Engel replies We are on track, and generally speaking, I would say that we are about halfway there. However, as I wrote to our staff at Christmas last year even though you may have played a good rst half and built up a 20 lead, noone on the team should be tempted to sit back and relax for the rest of the match. The fact that Vestas is on track in relation to The Will to Win was clearly demonstrated to the outside world on 22 November 2006, when, in connection with publication of the in terim report for the third quarter, Vestas chose to raise the bar for two of the three primary objectives in the period up to 2008. The new plan has Vestas aiming for pro ts before inter est and tax EBIT of at least 1012 per cent of turnover instead of 10 per cent, with net working capital of max. 20 per cent instead of 2025 per cent. The third goal of a market share of 35 per cent remains unchanged. According to Ditlev Engel, this adjustment is a clear signal internally and externally that Vestas believes in the future. Requirements increasing One of the reasons for these positive expect ations is that wind power is at last beginning to nd its feet on the international industrial stage as a source of energy that needs to be taken seriously not just in the context of some faroff future, but here and now. In this regard, Ditlev Engel refers to the fact that several of the stock exchange announcements published over the past year have had to do with orders from often very large industrial groups and energy utilities. On the other hand, the fact that wind power is becoming increasingly widespread makes major demands on us as we have to ensure that our capacities constantly match the everincreasing requirements from the market, he says. In other words, we have to make sure to raise both our employees and our partners to a new level of competence. Tenfold investment in employees The overriding responsibility for building up and maintaining t2007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=16http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=16ge are ge aare are The winds are st The wi The wi The Thewiwiwiwi The windsge are ge aregeageare are areare are still The wi The w The Thewiwiww Vestas rests with the unit called Vestas People Culture. This unit was formed when Ditlev Engel took over the reigns, as a clear indication of the companys focus on its staff. Roald Jakobsen, President of Vestas People Culture, explains that a range of initiatives have already been implemented which, separately and together, make clear that the company is fully committed to backing words with actions as regards the prioritisation of corporate culture and HR issues. Speci cally, we have increased our investments in the development of our employees tenfold so far, says Roald Jakobsen, who then highlights the management development programme, which involves around 600 corporate executives, from Presidents and Vice Presidents to Directors and all the Managers of all the units that make up the Group. This programme plays an important role in the work towards our objective of building up a performance oriented culture in which individual managers, on the basis of individual assessments, are given clearly de ned goals which, in turn, contribute to our ability as a company to achieve the goals in The Will to Win, says Roald Jakobsen. He then adds that as another example of the prioritisation of Performance Management, managers constantly have an external coach at their disposal to ensure that the process is kept rolling at all times. One complete, global corporate culture On numerous occasions, Ditlev Engel has stressed that rst and foremost, Vestas is about people. In this context, Roald Jakobsen places great emphasis on the importance of constantly having the capacity to eld a team made up of the best players in every position. We give the highest priority to the task of developing our existing workforce, he says and explains that, for example, a range of internal development programmes have been set up in the individual business units. Development programmes and plans are based on the annual employee interviews, at which employees and managers work together to prepare a plan for the coming years training and education on the basis of the assignments to be completed, says Roald Jakobsen and adds that employees can also use these interviews to discuss switching jobs at the company. Roald Jakobsen relates that work is also done to ensure that employees constantly have the best conditions possible for performing their work, through daily dialogue and information and by carrying out employee interviews and an annual loyalty survey of the workforce. In addition, we have set up talent programmes that make high demands on the capacities and exibility of the individual employees but which simultaneously provide individual participants with the opportunity to develop rapidly, both professionally and personally, he says. Roald Jakobsen emphasises that initiatives of this kind are crucial to retaining skilled employees and to creating an internal pipeline of future managers and specialists with the requisite professional skills and the capacity to act as culture ambassadors within the company. As regards this latter aspect, another of Vestas People Cultures key tasks is to continue development of the unique corporate culture that is to encourage all 12, 300 employees to consider themselves part of One Vestas. Safety still comes rst As another highly prioritised aspect of the work to develop the organisation, Roald Jakobsen highlights safety. Safety always comes rst at Vestas, and so we are very, very pleased to see that we have already signi cantly cut the number of industrial injuries, he says, and is quick to point to the performance in this area throughout the organisation as the most signi cant factor in this positive development. We have launched a range of new initiatives for 2007, including a global safety training programme for service technicians and managers. These initiatives are to help to2007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=17http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=17n estillblowingannn tillblitillbliare still blowinge still blowingstill blowing s of change till blowingindsofchanindsofchanewindsofchanewindsofchaninds of chaninds of chaninds of chaninds of chan tillblitillblis of change estillblowingestillblowingtillblitillbliillblilare still blowingare still blowinge still blowingstill blowinge still blowingstill blowinggtillblitillbliillbl lbliindsofchaindsofchaewindsofchaewindsofchainds of chainds of chainds of chainds of cha tillblitillbliii ensure that the positive trend continues in 2007, explains Roald Jakobsen and, in the same breath, makes it absolutely clear that Vestas is to be a safe workplace in all parts of the world. Battle for competence In parallel with the work to develop Vestas own employees, Vestas People Culture devotes appreciable resources to attracting new skilled staff to assure the level of com petence in step with the development of the company. In this context, Roald Jakobsen mentions Vestas new Graduate Programme. The objective of this programme is to recruit talent directly from higher learning institutions all over the world, he says. The rst 19 candidates began the 2year programme in September 2006, and in spring 2007 Vestas People Culture will start work on the process to select a further 40 candidates who are to make up the next team which will start in September 2007. Roald Jakobsen makes it clear that the task of attracting the most highly skilled people to Vestas is both large and challenging. For this same reason, Vestas People Culture is currently working on a major branding campaign targeted at potential employees. The objective of this campaign is to pro le Vestas as a good, challenging workplace. Naturally, attracting new people is not, in itself, a guarantee of success, explains Roald Jakobsen. The new colleagues are to be assimilated into the company and we then have to retain all our employees new and existing by offering them jobs with serious content jobs they will enjoy doing. Therefore, we at People Culture are investing heavily in measuring the human factors and striving to make adjustments in those places where there is room for improvement. Roald Jakobsen points to the employee satisfaction survey that Vestas carries out annually as an important direction nder in this area. The art of communicating Another factor that has a major in uence on the establishment of a shared corporate culture is communication. When Ditlev Engel joined the company, he stressed the importance of using communication in future as a key man agement tool for the development of Vestas, both internally and visvis the outside world. One of the most tangible examples of this philosophy can be seen or, more accurately, heard when Vestas presents its quarterly reports. First and foremost out of consider ation for the companys employees all over the world, these reports are presented live, with Ditlev Engels statement being simultaneously interpreted from English into no fewer than ve other languages Danish, German, Italian, Spanish and Chinese Mandarin. In relation to this crucial communication, Ditlev Engel comments that today, his is not the only face that Vestas presents to the outside world. Previously, the Group President and CEO made all the statements, but now the Presidents of the 12 business units all step up when there is something to relate from their respective units. Similarly, Peter Wenzel Kruse, Head of Communication IR, is the face of Vestas in the media on many occasions, says Ditlev Engel, who is of the opinion that the outside world now sees Vestas as a more open and accessible company than previously. The silos are gone According to Ditlev Engel, one of the reasons why communication at Vestas functions better today is the new structure that was introduced in 2005. At that time, we set ourselves the goal of breaking down the old organisational silos and replacing them with a versatile and dynamic company with fast lines of command and the best possible 2007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=18http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=18Customer loyalty the downturn 18 The downward spiral has been halted, but a satisfactory result is still a long way off. That is the conclusion drawn from the fresh results from Vestas latest survey of customer satisfaction. Vestas Wind0704UK16OK. indd Sec418Vestas Wind0704UK16OK. indd Sec418180307 131407180307 1314072007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=19http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=1919 has stopped FACTS ABOUT THE SURVEY The overall result of Vestas survey of customers is the loyalty index, which is a summary expression of customers assessment of Vestas as a partner and supplier, along with an evaluation of how attractive Vestas is in relation to other players on the market. The result from the latest survey was an index gure of 44, up slightly on the 2005 score of 43. In 2005, under the heading of Dialogue for Development, Vestas launched an ambitious change project intended to improve customer satisfaction, which had been falling for several years in a row. New responses from customers all over the world have just been analysed, and the results show a loyalty index of 44 a slight improvement on the previous years score of 43. Not an earthshattering result, but after years of steadily dropping customer satisfaction, Ditlev Engel, President and CEO of Vestas, neverthe less sees a range of positive trends. It is not a result to set champagne corks popping, but it is very important to note that we have put a stop to the downward spiral of the past 45 years, which re ected one of the most worrying trends at Vestas, says Ditlev Engel. More than 500 of Vestas customers have par ticipated in the Dialogue for Development sur vey. The project is built up under the headings of Listen, Re ect and Act. But when the results only show a slight improvement on last year, has Vestas acted at all on last years results With The Will to Win and on the basis of the comments our customers made last year, we have implemented a wide range of initiatives intended to sort out the problem areas. But it is a long, hard journey, and in many areas we should not expect to see results as early as in this latest survey, explains Ditlev Engel. From many perspectives, the results of the latest survey match our own predictions, which show that we are focusing on all the right places. As a result, we will remain fully com mitted to our strategy, he continues. As an example, Ditlev Engel highlights the focused input in Vestas development department Vestas Technology RD where improved quality and robustness are the key. One of our initiatives in this area is the test centre in Århus, Denmark, which will provide us with a host of new opportunities to test our turbines during the development process. This will increase the operational reliability of our turbines, he says, and continues This and all the other initiatives we have launched constitute a process we have to go through and a realignment that will take time and we cannot expect our customers to reward us for it just yet. Ditlev Engel makes no secret of the fact that he still takes the results of the survey very seriously indeed. It is not good enough, and we are well aware that we are still facing a major challenge. However, I would like to praise all the employees who made such great efforts in 2006. The positive results are sure to come. We will now analyse all the responses we received and provide feedback to all our customers to make sure that we are moving in the right direction the one that will ensure we are a trustworthy and attractive partner for all our customers. And with the dialogue we have established, we have the right foundations to build on, he says. For the same reason, Dialogue for Development will continue to be an important tool for Vestas, stresses Ditlev Engel. We are clear in our own minds that we must continue to improve so that we can deliver what our customers have told us is more important than anything else reliable turbines on time. Vestas Wind0704UK16OK. indd Sec419Vestas Wind0704UK16OK. indd Sec419180307 131409180307 1314092007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=20http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=20Safety First improved safety for all Vestas focus on improving safety through the project entitled Safety First has made a real impact. 20 The project has resulted in a signi cant drop in the number of industrial injuries, which means that today, Vestas is a much safer workplace for everyone. As such, 2006 will be remembered as the year when a new and much improved safety culture was introduced. Vestas point of focus in the area of safety the incidence of industrial injuries fell by 22 per cent in 2006, and the aim is no industrial injuries. The fall in the incidence of industrial injuries applies throughout the organisation, but the result for the sales business units was particularly impressive. Here, a signi cant drop in injuries was achieved, reversing the negative development of previous years. Jakob Larsen, Director, Safety Environment, expresses his satisfaction but stresses at the same time that Vestas is still facing a great challenge in the years to come. Our work in this area has paid off, the results are constantly improving, and the gures are looking better and better. But we are still not where we want to be, he says. Continued emphasis on management, processes and attitudes One of the main tools in the battle for top class safety at Vestas is unswerving focus on management, processes and attitudes. Whenever the Vestas Government which consists of the Board of Management and the Presidents of Vestas business units meets or Vestas Wind0704UK16OK. indd Sec420Vestas Wind0704UK16OK. indd Sec420180307 131409180307 1314092007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=21http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=21The incidence of industrial injuries rose moderately in 2004 and 2005, but the implementation of the Safety First project turned things around. The drop in the incidence of industrial injuries from 46. 7 in 2005 to 36. 5 in 2006 represents a reduction in industrial injuries of around 22 per cent. At Vestas, the incidence of industrial injuries is de ned as the number of injuries per million working hours. Only injuries that result in more than one days sick leave over and above the day of the injury are included in the statistics. 21 0 10 20 30 40 50 60 Number 1, 000, 000 working hours Incidence of injuries 53. 5 48. 5 39. 3 42. 5 46. 7 36. 5 number of injuries 262 275 208 319 472 525 262 275 208 319 472 525 2001 2002 2003 2004 2005 2006 Incidence of industrial injuries Group holds its weekly telephone conferences, safety is always the rst item on the agenda. The Government follows up on ongoing activities, reports and gures, and discusses the need for new initiatives. At Vestas, failure is not an option, says Ditlev Engel, President and CEO. This is Vestas mission, and it applies to all areas. In product development, safety has been assimilated as a keyword. In the continued development of the V90 turbine, new, clear processes for integrated product development have been introduced, such that developers can reap the bene t of experience and knowledge from all parts of the organisation. It is crucial to ensure that safety considerations are integrated into the design itself. This makes it possible to deal with any problems at their root rather than having to tackle them later when they appear in the production processes or out in the eld. Panorganisational collaboration likewise provides individual employees with knowledge about every phase of the life of a turbine, which, in turn, helps to improve and cement attitudes concerning safety, says Jakob Larsen. Here, Jakob Larsen has identi ed an important point processes alone are not enough. An improved safety culture demands new at titudes, and in this context, Vestas has already made a lot of progress through increased openness and responsibility among individual employees. Openness means communicating potential breaches of safety regulations, while respon sibility means employees shouldering their share of the responsibility for both their own safety and that of their colleagues. Our sales business units in particular have undergone a serious change of attitude, and we have succeeded in transforming an unfortunate development into a positive trend that is actually accelerating, says Jakob Larsen. Investment in education To ensure that the positive trend continues, Vestas is investing heavily in education. In 2007, the company will be investing millions of euros in a safety training course for service Vestas Wind0704UK16OK. indd Sec421Vestas Wind0704UK16OK. indd Sec421180307 131409180307 1314092007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=22http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=22No industrial injuries for 300 days in Spain Nocompromise focus on safety at the Vestas nacelle factory in Viviero, Galicia, Spain, has generated impressive results. During 2005 and 2006, the factory succeeded in manufacturing nacelles for V82 turbines for more than 300 days in a row without a single industrial injury. The factory management is sure that this success is attributable to careful planning of production, focus on education, and systematic analysis of all situations which had the potential to cause an industrial injury. Luis Bodenlle, Vice President of the nacelle factory in Viviero, explains that each and every subsidiary process in the nacelle assembly process is simulated and tested before actual production is commenced. During the test procedure, safety risks are identi ed, assessed and, if necessary, remedied. To a large extent, this helps prevent injuries occurring on account of the fact that the production process is unsafe from a technical perspective. In addition, each and every employee receives thorough training in basic safety before work is begun and is then sent on a refresher course every six months. Refresher courses keep the level of competence in the eld of safety very high. Moreover, new employees receive an introduction to our safety culture straight away, says Luis Bodenlle. All employees also complete a special theoretical and practical training course to give them the skills they need to carry out particularly risky work safely e. g. work involving heavy material or hazardous substances such as coolants. During the practical section of this course, new or less experienced employees receive teaching and guidance from more experienced colleagues. As the processing of near misses i. e. situations in which an injury was narrowly avoided is of crucial importance to safety, the factory in Viviero has focused clearly on precisely this aspect. As soon as a near miss is reported, the area of the factory where the incident occurred is closed down and the management is informed. The next step involves attempting to recreate the conditions that led to the safety breach, to determine how best to deal with the problem. By systematically processing all near misses, we can prevent a large number of potentially hazardous situations, and this is without a doubt the best way to ensure the highest possible level of safety, explains Luis Bodenlle. technicians and managers from the sales business units and for managers from Vestas Technology RD. All Vestas service technicians around the world will receive the same fundamental safety training before they start their jobs, says Tina Winther Schou, Engineer, Safety Environment. She stresses that the training courses will be taught in the local language, and that they will create a shared global platform for improving safety even further. The training is divided up into a range of practical and theoretical modules such as climbing, rappelling and rescue from turbines, re ghting and rst aid. Service technicians will also be introduced to Vestas safety culture and the safety manual, which lays down the fundamental safety regulations for work in the eld. Managers from the sales business units and from Vestas Technology RD will similarly complete a new global training course in the eld of safety. The purpose of holding the same training course for more than 400 managers is to assure deployment of a positive attitude to safety, and to put managers in a bet ter position to handle safety problems should they arise. The work continues Even though the situation is developing posi tively, there is still a long way to go. The work 22 Vestas Wind0704UK16OK. indd Sec422Vestas Wind0704UK16OK. indd Sec422180307 131411180307 1314112007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=23http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=23Incidence of industrial injuries halved in 2006 Paddy Weir, Vice President of Blades and Factory Manager at the Vestas blade factory on the Isle of Wight, Great Britain, is a modest man. He is not keen to boast of the excellent safety statistics at his factory perhaps because this factory has previously had problems in precisely this area. We still have a long way to go before our safety level is top class, he says. Nevertheless, the fact remains that in 2006, the factory cut the number of industrial injuries by 56 per cent in relation to 2005. We laid the foundations for a good safety culture back in 2004, and our initiative is now starting to pay off, says Paddy Weir. The mainstay of the success achieved at the factory is the effort made to intro duce a culture in which employees report all industrial injuries and, in particular, near misses. In this way, potential breaches of safety are contained, the fundamental causes are identi ed, and problems can be dealt with before they lead to actual accidents. Statistics indicate that for every 10, 000 minor injuries or near misses, there will be one fatal injury. So if we can keep the number of near misses down, we should be able to prevent serious injuries in the future, explains Paddy Weir. Paddy Weir believes that good safety at the factory additionally depends on three elements. Firstly, the physical working environment must be good, which means that factors as simple as cleanliness and neatness are vitally important. Secondly, the management must focus clearly on safety, which we do. For example, safety is always the rst item on the agenda at our management meetings. But the third and nal element is perhaps the most important, he says. It is essential to work constantly to in uence peoples attitudes, because there is a signi cant psychological aspect to safety culture. It is crucial that we continuously encourage employees to look at their own behaviour and make improvements, says Paddy Weir. As an element of the safety culture, the factory has enjoyed success through the introduction of courses and training that challenge the employees. We constantly strive to vary and improve the training course through the introduction of inter views and tests, for example. By shifting focus and implementing new methods, we can ensure that people become more interested in safety, which automatically generates the desire to make a greater effort, concludes Paddy Weir. to improve the safety culture continues, and here, a systematic approach to safety is quite simply crucial. Vestas has the stated aim of having all units certi ed according to OHSAS 18001 the international standard for occupa tional health and safety by 2008 at the latest. Jakob Larsen stresses that improving safety is a longterm project. It is clear that the great efforts across a broad front in 2006 have made a real difference. But there is no quick way to improve safety. It is a matter of continued focus, perseverance and systematic work, he says. Jakob Larsen makes it clear that the incidence of industrial injuries is to fall by a further 30 per cent in 2007. The goal for 2008 is an incidence of industrial injuries of just 15 or less i. e. a halving of the situation in 2006. This ambitious aim means that both manage ment and employees are expected to make even greater efforts to improve safety in the future. 23 Vestas Wind0704UK16OK. indd Sec423Vestas Wind0704UK16OK. indd Sec423180307 131411180307 1314112007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=24http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=24Cool overview in a redhot industry 24 Unique experience and hitech solutions have put Vestas foundries in a position to keep step with the development of the industry and to assure quality. Vestas Wind0704UK16OK. indd Sec424Vestas Wind0704UK16OK. indd Sec424180307 131412180307 1314122007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=25http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=25In the 1500s, the iron foundry at Guldsmeds hyttan in Sweden produced cannon for the Swedish army. Today, this foundry manufac tures less devastating products namely blade hubs and other components for Vestas wind turbines. This Swedish facility is currently one of the four foundries in the Vestas Group that make up Vestas Castings. Die casting is a specialist skill that has a much longer history than most other areas of the young wind power industry, and there is a world of difference between the original casting procedures and the hitech processes that assure advanced ef ciency and optimal quality today. Vestas Castings has been supplying cast components for wind turbines since the industry was in its infancy. As a result, we have built up a unique pool of expertise that is essential in living up to the stringent demands that are made today on components for the wind turbine industry, relates Svend Aage Kristensen, Senior Vice President of Vestas Components, the unit to which Vestas Castings belongs. Strength and exibility The four foundries in Kristiansand Norway, Magdeburg Germany and Lindkping and Guldsmedshyttan Sweden, were amalga mated under the title of Windcast Group until 2003, when Vestas acquired all four along with two decades of expertise. Vestas Castings has developed the Wind Cast technology that is unique to Vestas. This technology makes it possible to minimise the weight of the components while still maintaining the strength and exibility required. This means that we can reduce the consumption of raw materials while simultaneously making it easier to transport and install the turbine com ponents. This is very important, as turbines have become bigger and bigger, explains Torbjørn Skaland, Vice President and Technol ogy Manager at Vestas Castings. Today, the largest components weigh up to 15 tons and 25 Vestas Wind0704UK16OK. indd Sec425Vestas Wind0704UK16OK. indd Sec425180307 131416180307 1314162007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=26http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=26FACTS ABOUT VESTAS CASTINGS In 2003, Vestas purchased the Windcast Group, which consisted of four foundries. In 2005, the name of the group was changed to Vestas Castings Group. Vestas foundries manufacture components such as blade hubs, bearings and base frames for nacelles. The foundries cast components weighing between 100 kg and 15 tons. Vestas foundries are located in Magdeburg Germany, Kristiansand Norway, and Guldsmedshyttan and Lindkping Sweden. In addition, Vestas has working relationships with a range of external suppliers of cast goods. In all, around 500 people work for Vestas Castings, which is a part of Vestas Nacelles. have to merge seamlessly into complex wind power systems. However, the need for larger and stronger components is not the only challenge to have in uenced development. A sector undergoing explosive growth makes high demands on production capacity, and as Svend Aage Kristensen explains, Vestas Castings has felt the effects of this. In fact, production from the four foundries approximately doubled from 2003 through 2006. A good example of how this was actually possible comes from our foundry in Magdeburg. Here, the staff have been working for years to implement improvements and increase the ef ciency of the production process, and the involvement of the employees has really paid off. Drawing on the exceptional skills of the employees, the factory succeeded in increasing production to such an extent that in 2006, it manufactured almost three times as much as in 2003 with only limited growth in the size of the workforce, he relates. A series of investments in the production facilities has also contributed to increasing capacity. In Magdeburg, investment has provided a new system for removing the sand moulds in which the products are cast and for recycling the sand. This has not only im proved working conditions for the employees, but also increased capacity at the factory. Indepth analyses Torbjørn Skaland, Technology Manager, explains that despite the rapid acceleration in demand and production, quality remains a key concept that applies at every stage of the production process, from raw materials to nished product. Prior to production, the casting process is analysed through computer simulations to establish how the metals will behave during and after casting, and thus to optimise product quality. After casting, the components are cooled slowly a process that can last up to a week. All components are then subjected to a very thorough quality control. A chemical analysis is performed to ensure that the alloy contains the optimal mix of metals, and a metallurgic analysis is used to check the microstructures in the metal. Finally, the cast components are given magnetic and ultra sound scans before they leave the factories, he says. We apply very thorough quality control at every stage of the process. Our products will be subjected to very great loads and have to function for many years in extreme conditions. This makes high demands on all components even the biggest. 26 Vestas Wind0704UK16OK. indd Sec426Vestas Wind0704UK16OK. indd Sec426180307 131417180307 1314172007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=27http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=2727 Vestas Wind0704UK16OK. indd Sec427Vestas Wind0704UK16OK. indd Sec427180307 131419180307 1314192007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=28http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=2828 A new approach to production Vestas Wind0704UK16OK. indd Sec428Vestas Wind0704UK16OK. indd Sec428180307 131421180307 1314212007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=29http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=2929 Simplicity, uniformity and a focus on the needs of the customer are helping to change the way Vestas Control Systems runs its manufacturing plants. At the heart of the new system is a move towards a productionline philosophy. Assembly tasks will be standardised across the organisation, and broken down into smaller units than at present. Our priorities are to improve product quality and delivery performance, without comprom ising safety, says Thomas Rune Pedersen, vice president of Vestas Control Systems, responsible for production engineering. But, he explains, manufacturing costs will also fall when future new products are designed with the new production philosophy in mind. The survey phase of the project is almost complete, and rollout of the new production methods across Vestas Control Systems four factories will start within the next few months. The missing ingredient Vestas strategy The Will to Win has brought big changes to the Groups manufacturing operations, says Thomas Rune Pedersen. There is a new emphasis on worldwide pro duction. Sourcing of parts has expanded even more, so that Vestas is never dependent on a single supplier. New methods of testing are helping to improve reliability see p. 44, and integrated product development is helping to Lean, customeroriented production techniques are helping Vestas Control Systems stay ahead. Vestas Wind0704UK16OK. indd Sec429Vestas Wind0704UK16OK. indd Sec429180307 131422180307 1314222007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=30http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=30create wind turbines that are better than their predecessors in every way. But alongside these four key ingredients is a fth the actual production techniques. In Vestas Control Systems, this is the only part of our production strategy that remains to be put in place to support The Will to Win, says Thomas Rune Pedersen. When the recipe is complete, he says, the business unit will be using methods adapted from highvolume manufacture alongside the more craftbased skills Vestas currently relies on. As assembly jobs are standardised and broken down into simpler units, they will become easier to replicate between factories, and products will become more reliable. Our rst step was a mapping exercise to nd out which assembly processes we use at the moment, and in which factories, Thomas Rune Pedersen continues. Now we must decide which processes to combine, so that we can use as few different types of production line as possible. Reducing the number of production lines will make production more stable, and easier to move between sites as demand changes. Logistical challenges A typical modern turbine such as the V90 3. 0 MW contains up to ten large electrical switchboards, plus 100 or more smaller elec tronic modules, all supplied by Vestas Control Systems. Since we handle the largest number of components of any of the Vestas Groups business units, that creates a huge logistical challenge, says Thomas Rune Pedersen. Vestas Control Systems employs 750 people at four factories. Three of these are in Denmark the business units headquarters at Hammel, a large factory at Lem, and another at Århus and the fourth is in Olvega, Spain. Our future lies in a relatively small number of sites, Thomas Rune Pedersen says, so that makes it all the more important to make them ef cient and to gain economies of scale. There are two main product groups, ex plains project manager Lars Gosch electronic modules and switchboards. Electronic modules make up around 90 percent of the business units production in terms of numbers, though production quantities of each module tend to be relatively small because different models of turbine have different electronics. The manufacture of electronic modules involves a high degree of automation, espe cially in the early stages. First, printed circuit boards from specialist suppliers are populated with components, soldered, inspected and tested. Then the circuit boards are incorporated into modules, which requires a higher propor tion of manual work. Compared to consumer electronics, there is a lot of emphasis on making the modules reliable. This applies at all stages, from the 30 Vestas Wind0704UK16OK. indd Sec430Vestas Wind0704UK16OK. indd Sec430180307 131423180307 1314232007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=31http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=31initial design, through the choice of highgrade components, to manufacture, inspection and testing. Yet compared to suppliers of military electronics the gold standard for ruggedness and reliability Vestas must operate at lower costs and much higher production volumes, Thomas Rune Pedersen says. Switchboards, though produced in smaller numbers than the electronic modules, make up around 75 percent of production in terms of labour content. These large steel cabinets contain electronic modules, circuit breakers, bus bars and fuses to handle not only the control needs of the turbine but also the electric power it produces. The largest switchboards stand nearly three metres tall, and building them demands a more manual approach. Divide and conquer According to Lars Gosch, many of the tech niques Vestas Control Systems uses to build switchboards, such as the automated manufac ture of wiring harnesses, are quite advanced. Yet the management teams survey revealed undesirable variations in working practices. In one factory, for instance, a single electrician used to be responsible for assembling a complete switchboard. In another, it was more like a car production line, with several employees each carrying out a single smaller task, says Thomas Rune Pedersen. The issue, he says, is that assembling an entire switchboard is a very complex matter Traditional production makes you very dependent on the skills of individual workers. We need to break the work down into smaller chunks, with detailed instructions on what to mount and what to check, before sending it on to the next person. This is essential for the concept to work on a global scale, where we are dealing with people whose backgrounds can be very different. There is no doubt that a production line gives a better product than making individuals responsible for large and complicated pieces of work, says Thomas Rune Pedersen If you break the job into smaller parts, the error rate and also the variance in production hours go down dramatically. Weve proved this on a pilot ow line, and it agrees with experience in other companies too. A new approach to production The new working methods will draw heavily on the philosophy known as lean production and a development of this called Demand Flow Technology DFT. The core principles are to eliminate waste of materials, motion or time to pull production through the factory, so that work in progress and nished goods do not accumulate the justintime system and to strive for continuous improvement. All the tools we are using are wellknown, says Thomas Rune Pedersen, but we have given the process a new name customer oriented production. This means that rather than choosing a single management philosophy, were taking the best elements of many systems and adapting them to support our own production strategy. Now that the survey phase of the project is nearly complete, the next step is to roll out the new production methods across all four production sites. How long this will take is not yet xed, but the methods are clear and the implementation plan is under way. We already have activity on this in every factory, and we will try to keep them in step, says Thomas Rune Pedersen. We will make the changes using topdown and bottomup approaches at the same time. The topdown approach sets out the framework and provides the necessary standardisation. The bottomup part involves the whole organisation, so that we achieve the best working practices and every one takes ownership of the new methods. Safety, quality and delivery precision are the most important targets, he concludes. This is an important contribution to The Will to Win, and to our efforts to bring our customers the best value. 31 Vestas Wind0704UK16OK. indd Sec431Vestas Wind0704UK16OK. indd Sec431180307 131425180307 1314252007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=32http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=32Chinese workers trained in Denmark 32 Vestas opens second factory in China. Vestas Wind0704UK16OK. indd Sec432Vestas Wind0704UK16OK. indd Sec432180307 131425180307 1314252007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=33http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=33For the past six months, 43 Chinese workers have been training at the Vestas factory in Viborg in the west of Denmark. They received instruction in the assembly of nacelles while at the same time building up indepth knowledge of Vestas as a company, workplace and culture. They also took English lessons. The next step involves the Chinese workers taking their new knowledge back home to China, where they are to form the core of the production teams at the nacelle assembly factory that Vestas opened at the end of February 2007. Prior to the opening of the new factory, all the Chinese staff who are to take on the roles of managers, purchasers, logistics specialists, engineers, etc. at the new factory in China completed special training courses in Viborg. The new Chinese nacelle factory is located near the city of Tianjin, 130 km east of Beijing, the capital of China. People before Megawatts The training course for the Chinese workers in Viborg is an extension of the approach Vestas has applied to date in connection with technology transfer, and is fully in line with the companys principle of People before Megawatts. This involves Vestas taking on staff at all levels before their jobs actually exist. The intention is to ensure that the new staff complete comprehensive training programmes before they are released into the production or administration organisations. Even before now, Vestas has given new employees a thorough introduction, often involving training at different factories. However, the training programme has now been further systematised via People before Megawatts, explains Søren Husted, President of Vestas Nacelles. He adds that People before Megawatts is a natural extension of Vestas strategy The Will to Win, in which upgrading employee skills is one of the focus areas. A sound investment I am convinced that devoting extra resources to knowledge transfer is a sound investment. By providing training, we ensure, for example, that our new Chinese colleagues become fully familiar with the Vestas culture, feel integrated into the Group and build up solid contacts with their Danish colleagues. There will be much to gain from this in the future, stresses Søren Husted. He goes on to explain that the training courses will also assure improved quality because Vestas provides the new employees with indepth knowledge about how the various work processes are to be carried out, including administrative processes such as planning. This will help make sure that Vestas quality is always top class no matter where 33 Vestas Wind0704UK16OK. indd Sec433Vestas Wind0704UK16OK. indd Sec433180307 131428180307 1314282007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=34http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=34 in the world the turbines themselves may be manufactured. Positive experience Søren Husted stresses that the closely targeted transfer of knowledge is not only useful for the new Chinese colleagues, but also for the old hands at Vestas. The two groups learn from one another in both professional and cultural contexts, and as they spend several months working side by side, they have every opportunity to build up important networks within the company. During the 1015 years Vestas has been working with technology transfer, we have de mysti ed the concept, and we nd that Danish employees are keen to accommodate their overseas colleagues and happy to share their knowledge, says Søren Husted. The training of the Chinese workers in Vi borg is not the rst training course that Vestas has run for overseas colleagues at factories in Denmark, but it is the rst time that the training has been held so early in the process i. e. before the new factory was even completed. With the new People before Megawatts concept, Vestas will continue to improve its training courses so that new factories can be brought online as ef cient ly as possible. In the future, training courses will be run both in Denmark and abroad. 34 Vestas Wind0704UK16OK. indd Sec434Vestas Wind0704UK16OK. indd Sec434180307 131428180307 1314282007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=35http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=35 The training course for the Chinese workers in Denmark comprised three phases Firstly, the managers were trained. Then it was the turn of key employees such as purchasers and engineers. Finally, training was provided for the production employees. Chinese workers from all professional areas and at all levels have received training at the Vestas facility in Viborg to make them fully quali ed to work at the new Vestas factory in Tianjin, China. Every one of the 43 Chinese workers who received this training spent around three months in Denmark. First off, it was the management team for the nacelle factory in China that came to Viborg to watch their Danish colleagues in action and to learn about the attitudes, policies, work methods and everything else that distinguishes Vestas culture and operations. The rst team consisted of 11 Chinese employees with management experience from other internation al organisations. During the commissioning phase of the new nacelle factory, they will be working side by side with a European manage ment team that Vestas has sent to Tianjin. The European team consists of a Danish factory manager, a Danish production manager, a British logistics manager, and a Spanish quality manager. The Chinese management team is scheduled to take over the running of the factory after a couple of years. Specialists and hourlypaid workers The next team to arrive in West Denmark for training consisted of purchasers, planners, logistics staff, engineers and other key gures taken on in consultation with the Chinese management team. This group comprised around 20 people. The last Chinese team to visit Viborg was made up of hourlypaid workers, and the members of this team have just completed their training at the Danish nacelle factory. They followed an actual training course involving examinations and a graduation diploma, and worked alongside their Danish colleagues in the production department. Great emphasis was also placed on teambuilding and English lessons at Vestas for several hours each week. Back home in China, these workers will take on the role of process instructors, helping to train other operators at the new Tianjin facility. Training Chinese workers to teach others The Chinese production workers we chose to send to Denmark for training are primarily aged 2030 and could all speak at least some English. We have taken on other workers for the production department in China, but as they cannot speak any English, there was little point in sending them to Denmark. Instead, they will be trained at the nacelle factory in Tianjin by Chinese colleagues who have completed their training in Denmark, explains Bent Korsholm Madsen, Factory Manager at the new Chinese nacelle factory. Accommodation close to the factory While in Viborg, the Chinese workers lived together in groups in houses, apartments and col lege residences rented by Vestas. All had a very positive attitude to coming to Denmark for train ing, and all were highly committed to completing the knowledge transfer. Work means a great deal to Chinese people, and all our new Chinese colleagues were very keen to learn. It is my impression that they found it interesting to see how things are done the Danish way, relates Bent Korsholm Madsen. Danes to China Bent Korsholm Madsen is convinced that the thorough training and teambuilding that the Chinese workers received will support commit ment and camaraderie that will have a positive effect on the quality and ef ciency of the work, as well as minimising staff turnover so Vestas will retain its knowhow at the new factory in Tianjin. When the factory commenced production at the end of February, the Chinese workforce was still supported by Danish colleagues. A project coordinator and a number of process instruct ors accompanied the Chinese workers back to China to participate in the startup of Chinese nacelle production. 35 Knowledge transfer for both managers and hourlypaid staff Vestas Wind0704UK16OK. indd Sec435Vestas2007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=36http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=3636 Shang Lei, 27 Training in Denmark is exciting Jin Minglei, 26 Zhang Li, 26 Shao Yang, 24 Li Jun, 25 Photographer Ole Hartmann Schmidt Vestas new factory in China opened on 1 February 2007 close to the city of Tianjin, which is 130 km east of Beijing, the capital of China. The city has a population of around 10 million. Production, involving approximately 200 employees, started at the end of February. The factory is devoted to the assembly of nacelles, and the plan is for the facility to assemble 350 nacelles a year using a single shift. If additional production is required, twoshift operation will be introduced and more employees will be taken on. China is a strategic market The nacelle factory is located on an industrial plot measur ing almost 30 hectares, alongside a Vestas Blades facility that was of cially opened by HRH Prince Joachim of Denmark on 8 June last year. Ground was broken on the new nacelle factory on 8 August 2006 because 8 is a lucky number in China. The reason why Vestas chose to establish production in China is that Chinas energy requirements are set to expand rapidly in the immediate future. Vestas therefore considers China to have the potential to become a large and important market and if Vestas wants to sell wind turbines in China, the company must have factories in the country. This is because Chinese legislation requires that 70 per cent of the turbines sold in China must be manufactured there. The nacelle factory in China 200 employees to assemble 350 nacelles a year. Vestas Wind0704UK16OK. indd Sec436Vestas Wind0704UK16OK. indd Sec436180307 131431180307 1314312007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=37http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=37What do the Chinese production employees at the Vestas plant in Viborg think about their training and about Denmark And what expectations do they have with regard to working at the new Vestas factory in Tianjin 37 I am learning a lot about my profession here at the Vestas factory in Viborg, and I am also get ting better at speaking and understanding Eng lish which I think is great. I think it is exciting that I have found work in the energy sector, because this is a sector that is sure to expand rapidly in China in the years to come. I have also learned a lot personally from spending time here in Denmark for example, that Chinese and Danish people have the same goals and values. We all want a good job, a family, children, a nice home and rewarding leisure time activities. I was previously a university student, and I am not used to working with tools. So this job is very new to me and I am very tired at the end of the day. But I think it is really exciting. My Danish process instructor is a very good teacher so I am learning quickly and am sure that Ill be able to do my work myself when I start at the new factory in China. My free time is great, too. I am living in a student residence in Viborg with some of my colleagues from China, and we usually spend the evenings and weekends together watching English lms on DVD, talking, emailing our friends and family back home and going on bike rides. I also went to Copenhagen for a weekend. I think Denmark is a wonderful country, but I have been here for almost three months and I am looking forward to going home again. I really like it here. It is so satisfying to learn new skills. At the same time, it is great that everyone is so friendly my Danish colleagues and people on the street. Everyone is willing to help, too. I like Denmark and think that Viborg is a lovely city. I spend much of my free time walking around the lake in Viborg, and I have taken loads and loads of pictures. In my free time, I am usually with my Chinese colleagues, but I sometimes also visit my new Danish friends. This has helped me learn a lot about Danish culture, which I nd so exciting. To start with, it was hard to work at Vestas here in Viborg, and I was worried that I would not be able to learn everything. But I managed, because my Danish process instructor was very patient and an excellent teacher. Now I am really looking forward to starting my job at the new factory in China. However, I will miss Denmark, because I think it is a wonder ful country with a lovely, clean environment, open skies and plenty of fresh air. The only drawback is that the streets are empty in the evenings and on Sundays. Everything closes so early here in relation to China. Even though I am Chinese and therefore different from my Danish colleagues, I do not feel like an outsider at all. On the contrary, I feel that I am part of Vestas. The Danish employees here at the Vestas factory in Viborg all make an effort to talk to me, and if there is anything I have forgotten or cannot do, they are very helpful. One thing I have learned here is how important it is to be precise in my work to make sure that Vestas quality is always top class. I also enjoy staying in Viborg, because I think it is an attractive and clean city. But I must admit that I am looking forward to going home to China because I am getting married in a few months. Vestas Wind0704UK16OK. indd Sec437Vestas Wind0704UK16OK. indd Sec437180307 131432180307 1314322007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=38http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=3838 In the heavy industry and technologybased sector in which Vestas operates, every project sold will comprise a range of risks i. e. potential incidents which, to a greater or lesser extent, would in uence the nancial pro ts of the company should they occur. In step with the increase in both scope and complexity of the projects, Vestas has come to recognise a rising need to work in a structured and systematic manner with these risks and, at the end of the day, reach a point where it is possible to place the risk and value creation of a speci c project on separate scales and then see which way they tip. Vestas Wind0704UK16OK. indd Sec438Vestas Wind0704UK16OK. indd Sec438180307 131433180307 1314332007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=39http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=39Risk management The art of managing the unmanageable Shortly after Ditlev Engel, President and CEO, launched the strategy plan entitled The Will to Win in May 2005, Vestas employees were presented with what were known as 13 Con stitution Projects, of which all were deployed among the senior management team the Vestas Government and of which each was sponsored separately by one of the members of the Government. Together, the 13 projects form a crucial link between the strategy plan and the everyday work performed by the Groups 12, 300 employees. At the same time, they play a leading role in the development process which, via changes in culture and processes throughout the Group, is intended to produce ongoing improvements in performance and thus to reinforce customer loyalty. One of the Constitution Projects, no. 7, is entitled Introduction of valuebased risk management as a fundamental behaviour and practice. Behind this formulation lies an overriding objective of encouraging employees to think of how the value created for the company and customers is balanced against the risk being run. The project can thus be directly linked to the objectives of the strategy plan, which, for example, states that imple mentation of The Will to Win will generate value for Vestas most important stakeholders customers, employees and shareholders. Principle without losers As a fundamental principle of Vestas risk management system, risks are not automatically included in the calculations and thus the price of a wind turbine project. Torben Damsgaard, Project Director at Vestas Northern Europe, explains that this principle is rmly rooted in Vestas mission, which states that At Vestas, 39 Vestas Wind0704UK16OK. indd Sec439Vestas Wind0704UK16OK. indd Sec439180307 131435180307 1314352007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=40http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=40failure is not an option. Our mission would ring hollow in all kinds of ways if we took the nancial consequences of every imaginable fault or defect into account in our project calculations, he says, and goes on to add that instead, Vestas identi es the risks, takes a good hard look at them, and then tries to avoid them. In this way, we set up a balanced win win situation that provides the optimal result for both Vestas and the customer even if some of the risks identi ed and above all, accepted in advance should become a reality, explains Torben Damsgaard. Important differentiation A central aspect of the implementation of Constitution Project no. 7 has involved teaching sales staff and project managers at Vestas to differentiate clearly between the concepts of contingency and risk. And, perhaps more importantly, to do so on the basis of a shared background. Both concepts have to do with costs that fall outside the scope of those that are xed and known at the time the contract is signed. However, whereas contingency is de ned as a cost that is normal and certain to occur, but where the price andor quantity is uncertain, in Vestas world, the concept of risk is associated with incidents that are not expected to occur, but which will result in additional costs for or less pro t from the project should they arise. As an example of a contingency, Torben Damsgaard refers to the number of crane hours required during the construction of a wind farm. We know that we will have to rent a crane for the site, but there is often some uncertainty regarding how many hours it will actually have to operate. As such, this is a contingency, he says, before going on to provide an example of a risk Particularly in connection with offshore projects, we can be hit by extreme weather conditions that delay the work with all the costs this entails. However, we do not know in advance that this will happen, so weatherrelated delays are considered a risk in our calculations. Everything on the table The reason why differentiation between the two concepts is so crucial is that contingencies are included in the calculations for a project, while risks, as stated above, are not. In this way, sales staff and project managers are obliged to take a proactive approach to the risks linked to each and every stage of their projects, explains Torben Damsgaard. He continues As, at the same time, Vestas sales staff and projects are not permitted to include reserves in their calcu lations, there is no opportunity to cover actual uctuations in value creation under various buffers. Everything is put on the table to ensure the greatest possible transparency for both Vestas and the customer. The Vestas Risk Model It is the staff unit Group Finance Operations that has had responsibility for developing and implementing the operational method and the actual tool for Constitution Project no. 7. Allan Smed, the person responsible for the project, is manager of the Group Finance Analysis department. He relates that the work comprised two overriding objectives 1. To provide the sales and project manage ment teams at all the Group sales and service units with a tool for identifying and neutralising risks. 2. To make it possible to calculate the nan cial risk to Vestas entire order portfolio. Generally speaking, risk management is a complex area when it comes to the nancial evaluation of projects, and both the process and the model used are of crucial importance, says Allan Smed. He adds that one of the great challenges Vestas faced was and still is the fact that, in contrast to more mature sectors such as construction and insurance, the wind power industry has not yet built up a compre hensive statistical database that can be used as a platform for assessing individual risks. If you tell an insurance company your gender, age and post code, the company can tell you with almost alarming accuracy just how your life is likely to develop, says Allan Smed with a 40 Vestas Wind0704UK16OK. 2007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=41http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=41smile. He then points out that, for some time to come, Vestas and the wind power industry in general will still need the subjective experience of the sales staff and project managers when assessing the risk linked to a project. It will take several years for us to acquire the same volume of reliable information and statistics as the industries mentioned above possess. However, what is important is that the entire organisation now has the same platform and the same tools to work with. Speci c objectives for risk willingness Every risk consists of two factors 1. the likelihood of the incident in question occurring, and 2. the nancial effect should this happen. In the model Vestas has developed for risk management in the sales and service units, risk is quanti ed as the calculated consequence of each incident. This is done using the formula in Figure 1. 41 Consequence Effect x Likelihood Figure 1 Formula for calculating consequence. Vestas Wind0704UK16OK. indd Sec441Vestas Wind0704UK16OK. indd Sec441180307 131435180307 1314352007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=42http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=42Probality Impact on contribution margin 100 0 0 100 Minor consequence Acceptable consequence Unwanted consequence Unacceptable consequence Vestas Tolerance Matrix While many people have a tendency to focus on likelihood when assessing risk, Vestas has chosen instead to focus on the consequence. According to Allan Smed, this is very important as it obliges the project managers and sales staff to take into account potential events that may be very unlikely, but which, should they occur, would have a serious effect on the value creation of a project and could even result in a severe shortfall on the bottom line of the project. On the basis of our consequence formula, we have set up a tolerance matrix that states how willing we are to accept different levels of consequence, says Allan Smed, before going on to explain that At the same time, the xaxis shows that we have de ned an upper tolerance threshold for how great a nancial impact a single incident can have for the risk in question to be classed as accept able no matter how unlikely it may be. Risk assessment of all subsidiary processes The very core of the risk management tool developed by Group Finance Operations is a mathematical model which, on the basis of the risks entered and their consequences, prepares a likelihood matrix for the costs of each subsidiary process that makes up a wind turbine project nancing, transport, instal lation, SCADA and so on. Once risk pro les have been prepared for all the subsidiary processes, they are collated in a corresponding matrix to provide a picture for the wind turbine project as a whole. With the total risk pro le for the project com plete, the sales business unit and, subsequently, Vestas central Contract Review Board have an important tool for deciding whether to approve or reject the project in question or whether work should be done to attempt to improve the relationship between risk and earnings. In this way, risk management becomes a focused managerial process and not just an exercise in statistics, says Allan Smed. In all parts of the world If risk management is to have any effect, it must be practised locally in the individual sales and service units, i. e. out in the eld where experience from the separate markets is greatest, thus increasing the opportunity for identifying, evaluating and neutralising the risks in question. In order to implement Constitution Project no. 7 in all sales and service units, Group Finance Operations has travelled the globe to run seminars and training courses for Vestas sales staff and project managers. We brought more than 250 sales and project employees into the classroom in 2006, relates Allan Smed. As an important part of the practical work out at the sales and service units, local risk evaluation teams were subsequently set up. These teams are responsible for preparing the necessary risk pro les for each and every subsidiary process in each and every project. Risk management also involves compulsory documentation of the work of the team in the form of a special set of minutes the Risk Minutes of Meeting. 42 For each incident of risk, the consequence calculated as the product of probability x effect can be compared to the tolerance lines. Both the consequence and effect are measured in relation to their signi cance to the expected contribution margin of the project. Vestas Wind0704UK16OK. indd Sec442Vestas Wind0704UK16OK. indd Sec442180307 131437180307 1314372007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=43http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=43New initiatives on the way The introduction of the new methods and tools for valuebased risk management in the sales and service units has run to Vestas complete satisfaction and as such, Constitution Project no. 7 is now considered to have been fully imple mented. However, that does not mean the work is over. Looking to the future, work is already underway to develop corresponding methods for the everincreasing part of the business that has to do with entering into service contracts. In the same way, the production business units will shortly begin working in a structured and systematic manner with risk management. In this context, work is already well underway at Vestas to establish a Suppliers Review Board to evaluate a wide range of factors such as quality, quality assurance, delivery reliability, and environmental and social responsibility prior to the signing of contracts. In the rearview mirror There can be no doubt that the implementation of Constitution Project no. 7 marked an out standing paradigm shift for Vestas. As Torben Damsgaard puts it The way we handled risks previously could, to an extent, be compared to driving a car and looking only in the rearview mirror. Now we are watching the road instead and looking forward. 43 Vestas Wind0704UK16OK. indd Sec443Vestas Wind0704UK16OK. indd Sec443180307 131437180307 1314372007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=44http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=4444 A new strategy for testing wind turbine components during the manufacturing process is paying big dividends for Vestas Vestas Wind0704UK16OK. indd Sec444Vestas Wind0704UK16OK. indd Sec444180307 131440180307 1314402007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=45http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=4545 Test everything but onlyonce A project to rationalise and automate the testing of Vestas wind turbine components during the manufacturing process is cutting costs, increasing reliability and improving the design of new products. The direct savings have been even bigger than we expected, says Kurt Juul Jensen, a project engineer in the innovations and prototyping department at Vestas Nacelles, and there are other bene ts that are harder to quantify, but important just the same. The project is being run jointly by Vestas Control Systems, Vestas Nacelles, and the sales business units. Its aim is to spot issues that could lead to the eventual failure of turbine components, and x these before any component leaves the factory. Testing single electronic modules or control cabinets is simple, but it is easy to make mistakes when you are dealing with hundreds or thousands of different components sourced from many different factories, explains Thomas Rune Pedersen, Vice President, Production Engineering with Vestas Control Systems. For example, we found that we were testing some motor starters three times along the supply chain once in Control Systems, once in Nacelles, and again on site, says Kurt Juul Jensen. That costs money, but doesnt add quality. The new plan is to test everything once, and once only, as early in the supply chain as we can. That even extends to putting our own test equipment in our suppliers factories. Eliminating human error As well as removing gaps and overlaps from the testing schedule, the project is developing ways to eliminate the chance of human error Vestas Wind0704UK16OK. indd Sec445Vestas Wind0704UK16OK. indd Sec445180307 131444180307 1314442007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=46http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=46during the actual testing. Previously, many tests were carried out manually, and their results written down on paper. The new way of working makes much greater use of automated test equipment that records its results in a computer database. This is not only much faster but also more reliable, notes Kurt Juul Jensen. Bo Pedersen, Manager of Test Development for Vestas Control Systems, explains that automated testing is a familiar technique in the electronics industry. A module or circuit board is rst linked to a test station through a special connector or an array of springloaded pins. Next, the test station carries out a series of computercontrolled test operations, logs the outputs, and indicates whether the module has passed or failed the tests. The operation is quick, foolproof, and provides immediate information that can highlight problems in the production process. A typical turbine contains six or eight big switchboards, and the test procedure for these is very similar to the smaller modules, except that we use manuallyconnected cables instead of springloaded pins, says Bo Pedersen. First we test individual circuit boards, then the electronics modules, then the complete switchboards. We test the partiallyassembled nacelles at intervals during assembly, and nally we test the complete nacelles and hubs. Unlike manual testing, its not possible to make mistakes and if a test procedure changes, we can propagate the changes instantly to all the factories worldwide. The end result, he says, is that every component of every turbine produced by Vestas will have been tested thoroughly and consistently before it leaves the factory. An integrated strategy The project began in summer 2004 as part of a plan to rationalise the development of new turbines following Vestas combination with NEG Micon. It soon became obvious, says Thomas Rune Pedersen, that better testing could bring big bene ts to existing products as well. Since then, the new test methods have been introduced to varying degrees across Vestas production business units. Most electrical function testing is done within Vestas Control Systems and Vestas Nacelles, but Vestas Blades is also using the new test platform to test electronics installed in the turbine blades. Vestas has even installed its own test equipment at some strategic suppliers. The test strategy covers components including gearboxes, generators and bearings, but the emphasis is on the equipment supplied by Vestas Control Systems. It is a question of numbers of the thousands of parts making up every nacelle, Vestas Control Systems supplies several hundred, ranging in size from small elec tronic modules to cabinets three metres tall. 46 Vestas Wind0704UK16OK. indd Sec446Vestas Wind0704UK16OK. indd Sec446180307 131446180307 1314462007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=47http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=47Modern wind turbines are sophisticated, high technological machines, and many of their electrical and electronic components are complex both to build and to install. Vestas Control Systems is working hard to streamline its production techniques, including making assembly operations as errorproof as pos sible. But, says Thomas Rune Pedersen, even with worldclass processes and machines it can go wrong, so testing remains the ultimate guarantee of product quality. He adds Test ing also provides immediate feedback to our quality technicians, so if something starts to slip, they can bring the process back on track immediately. In a factory building nacelles for both the US and the European markets, says Kurt Juul Jensen, a typical error might involve confusion between the 50 Hz electricity supply used in Europe and the 60 Hz US standard. If a 50 Hz cooling fan is mistakenly labelled by the supplier as a 60 Hz unit and installed in a 60 Hz turbine without being tested, it will run too fast and the motor may be damaged. The new test strategy picks up this kind of hardtocatch error within the factory, where it can be xed quickly and cheaply. If the same problem is not detected until the turbine is installed on site, it could be a hundred times more costly to put right. Vestas will continue to run extensive com missioning tests on site to check that all new turbines perform as they should. Thanks to the new culture of thorough testing, however, commissioning engineers now have many fewer small problems to worry about, so commissioning will be quicker and cheaper. Bene ts for the future The new test systems are also providing valuable information to Vestas research and development engineers. One example is the hydraulic valves that control the pitch of the turbine blades, and bring them to a halt in an emergency. These valves must operate quickly, says Kurt Juul Jensen, but if they are too quick, there is a risk of damaging the turbine during an emergency shutdown. By looking at the variance in the test results, we have already discovered some useful information, he says. And Im sure the test data will also be relevant when we look at longterm reliability. Vestas Control Systems is based at Hammel in Denmark. The testing initiative has its own fulltime staff at a Competence Centre in Hammel, where all the production test equipment for Vestas is developed and pro duced. This ensures complete test coverage across different business units and suppliers, and provides a nucleus of people with the right skills in designing test hardware and software. Many of these skills were already available within Vestas Control Systems, which has been using automated testing on its own products for many years. What is new, say the experts, is the spread of this test philosophy to larger components and in both directions along the supply chain. We aim to be worldclass in our production testing, says Thomas Rune Pedersen. When we started this project, we quanti ed some of the expected bene ts but there were many others we didnt dare put money on, says Kurt Juul Jensen. After two years, we realise that even these side bene ts have been much bigger than we expected. But from the point of view of the Vestas mission, Failure is not an option, none of these bene ts is a luxury. This is simply what we have to do to make our vision and our mission a reality for Vestas and for our customers. 47 Vestas Wind0704UK16OK. indd Sec447Vestas Wind0704UK16OK. indd Sec447180307 131447180307 1314472007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=48http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=48Vestas Control Systems to expand in Denmark 48 An extended electronics factory will open its doors in 2008. It is located in Hammel, Denmark, for a number of very good reasons. Vestas Wind0704UK16OK. indd Sec448Vestas Wind0704UK16OK. indd Sec448180307 131447180307 1314472007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=49http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=49Vestas is growing and for Vestas Control Systems this means that the time has come to move its electronics factory from Århus, Denmark, where it is clear that the premises will soon be too small. So it was natural to give some consideration to where to place the new factory. It was decided to nd a location in Denmark, a choice largely attributable to considerations of copyright and patents for the most advanced wind turbine electronics in the world bar none. The control systems and electronics to be found in Vestas turbines are essential to the cohesion and function of the entire turbine. In this area, Vestas is far ahead of its competitors. The control systems in our turbines are very complex compared to those of our com petitors, so we naturally want to protect these systems, explains Bjarne Ravn Sørensen, President of Vestas Control Systems. Copyright issues were the main reason why, six months ago, it was decided that Vestas new electronics factory should be located in Hammel, Denmark. We are well aware that there are many countries in which it is very dif cult to protect copyright. So this is the principal reason why we are keeping our cards close to our chest and staying in Denmark just like other com panies, we are not interested in running that risk, stresses Bjarne Ravn Sørensen. Cheapest is not necessarily best Several other wind turbine manufacturers have chosen to have their control units produced in China or other countries in Asia but not Vestas. We have calculated that the savings we could make do not bear comparison with what we can achieve by designing the products with a view to creating more robust, solid and, above all, reliable turbines. And as Vestas customers give highest priority to total costs throughout the service life of the turbines, we have chosen to focus more on integrated product develop ment as regards design for optimal production, says Bjarne Ravn Sørensen. That is why Vestas Control Systems is going after the best possible competences not the cheapest. We have a very welleducated and stable workforce in Denmark, one that contributes to ensuring the reliability and quality of our products. We manufacture according to an international standard called IPC 610, standard class 3. This can be compared to the standard used for lifecritical equipment for the hospital sector and the aeronaut ical industry. So, clearly, we need highly educated staff to meet these standards. Companies who focus exclusively on cheap labour ignore this crucial point, in my opinion, says Bjarne Ravn Sørensen. Control systems assure turbine performance Mechanical components have traditionally played a leading role in the wind turbine industry, but today, wind turbines are hitech products in which electronic and control com ponents are crucial to ef cient wind turbine operation for the customer. In other words, electronic and control units have become a very signi cant competitive parameter. We at Vestas do not sell wind turbines but power plants, which use the wind as their fuel, and the electronic components help to ensure that the turbines run all the time and maintain the required uptime. If just a single electronic module fails, it will instantly affect turbine performance. Therefore the reliability and quality of the parts that Vestas Control Systems supplies are crucial to ensuring that customers receive ef cient power plants, on a par with the familiar oil and coal red plants, explains Bjarne Ravn Sørensen. 49 The control units are the brains in our wind turbines Vestas Wind0704UK16OK. indd Sec449Vestas Wind0704UK16OK. indd Sec449180307 131453180307 1314532007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=50http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=50Hitech solutions ensure ef cient utilisation of the wind Focus on hitech in The Will to Win One of the central themes of Vestas strategy The Will to Win is IT everywhere. so the area is very much in focus. A large part of our technological lead has to do with the way we control our turbines, and it is naturally our aim to maintain tight focus on Vestas position as a hitech market leader. Today, after all, wind turbine installations have to be run in the same way as oil and coal red power plants. This means that IT will come to play a more and more important role in Vestas energy solutions, too, stresses Bjarne Ravn Sørensen. He continues With The Will to Win, focus has been redirected so that today, we are concentrating on how we can stand out from our competitors in the areas of IT and electronics when we come up with new solutions. It has to do with making high performance and reliable solutions for our customers. You could say that it is a more progressive strategy targeted towards our customers interests and needs. 50 Today, the electronic components of a modern wind turbine are crucial to how ef ciently the turbine operates. Brie y put, it has to do with drawing as much energy as possible from the wind. Modern turbines have not just become bigger they also generate energy for longer periods than would have been possible for oldfashioned turbines. This translates into a much better deal for customers. In this context, the control system is quite simply decisive. Control systems today allow turbines to cope with much greater variation in wind speed, for example, without this having an effect on the ef ciency of the energy production. This is because we can control very accurately. At the same time, turbine performance is constantly optimised through the use of electronics. For example, it may be a matter of adjusting the angle of the blades in relation to the wind, or of regulating the entire cooling system of the turbine, explains Thomas Rune Pedersen, Vice President of Production Engineering at Vestas Control Systems. Electronic components also take care of converting the energy to suit the supply grid to which the turbine is linked. It is not only a ques tion of making sure that the turbine is connected ef ciently to the grid, but also of ensuring that it lives up to local authority regulations. For example, we have control systems which allow the turbine to continue operating temporarily in the event of a grid outage. This is a very important factor in preventing overload in a turbine which may well be generating 2 MW per hour. At the same time, it is important for consumers that the turbines carry on generating power and keep the grid running during the often short periods that grid outages last, relates Thomas Rune Pedersen. Vestas Control Systems also manufactures surveillance systems for complete wind power plants. This means that we create solutions that provide customers with a complete overview of all relevant data concerning turbine operation. For this reason, we make a complete control centre for the collation of all relevant data, explains Dan Østergaard, Vice President of QSE Quality, Safety Environment at Vestas Control Systems. Specially designed electronics What really makes Vestas stand out from its competitors is the fact that the Group has built up a unique working relationship in the eld of integrated product development. Vestas development department Vestas Technology RD develops the products to be manufac tured by Vestas Control Systems, but under the auspices of integrated product development, Vestas Wind0704UK16OK. indd Sec450Vestas Wind0704UK16OK. indd Sec450180307 131455180307 1314552007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=51http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=51Vestas Control Systems and Vestas Technology RD work together to ensure that the newly developed electronic components are not only robustly designed but also t in with Vestas fully automated production processes. Robustness is designed into our products from the very start of the development phase, and in this context, the close working relation ship between production and development is crucial to our ability to achieve the high levels of quality and reliability that are a must for us, explains Thomas Rune Pedersen. He continues Robustness is vital for the electronic components, because you have to take into account the extreme environments in which our turbines are often positioned. This means allowing for everything from the salt spray around offshore turbines to temperature uctuations of up to 90 degrees Celsius in the desert. So we have to be able to design to accommodate truly extreme conditions. And we can. 51 FACTS Where are electronic components to be found in a wind turbine In the nacelle Outside the nacelle in the form of wind meters In the hub, where they rotate Out in the blades At various locations in the tower New products In the eld of electronics, Vestas Control Systems launches 1020 new products every year. Many of these products are the result of more than 20, 000 hours of development. FACTS ABOUT VESTAS CONTROL SYSTEMS The head of ce of Vestas Control Systems is in Hammel, Denmark, and employs around 200 people. In addition, the unit has an electronics factory in Århus, Denmark, a factory in Lem, Denmark and a factory in lvega, Spain. Together these factories employ more than 550 people. The new electronics factory will be located next to the head of ce in Hammel, and will replace the exist ing facility in Århus. The new factory is scheduled to start during the rst six months of 2008. The facility will cover 14, 000 m2 and will also house an extension of the competence centre in Hammel. Vestas Control Systems operates in two distinct professional areas the control factory, which handles major components such as panels and remote monitoring systems linked with cables and the electronics factory, which manufactures electronic modules. Vestas Wind0704UK16OK. indd Sec451Vestas Wind0704UK16OK. indd Sec451180307 131456180307 1314562007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=52http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=526 Is 99 good enough 52 Imagine that the general quality level in the world around you was at 99 i. e. that the error rate was just one per cent. Impressive Then let us try to put that one per cent in context. With a general error rate of 0. 01, you would, for example, have no electricity for 87 hours a year. Also, every week, you would have to endure 100 minutes without a water supply. And these are just a few examples. So do you still think that 99 is good enough At Vestas, failure is not an option. That is the Vestas mission statement, which, in all its simplicity, expresses the guiding mindset in which errors are not accepted as incidents to be expected and calculated on. One of several initiatives intended to convert attitude into measurable action is the introduction of Six Sigma as a quality improvement method Vestas Wind0704UK16OK. indd Sec452Vestas Wind0704UK16OK. indd Sec452180307 131457180307 1314572007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=53http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=5353 in appropriate parts of the Vestas Group. The initiative is based on the fourth of the 13 Constitution Projects, which are all derived from the strategy plan entitled The Will to Win. Six Sigma is a concept which takes as its starting point standard deviation the statistical unit of measure for variation and aims to create uniform processes with a success rate of 99. 9996, or an error margin of just 3. 4 or less per million. Experience in India At Vestas Wind Technology India Private Limited, the staff have been working concertedly with Six Sigma for a couple of years. Here, the improvement method has been introduced as one of several initiatives drawn from the companys general efforts to improve quality Total Quality Management, and subsequent to the implementation of the ISO quality assurance system. Ravi Chandran, Factory Manager of the nacelles and hubs production units at Vestas Wind Technology India, explains that to help people become con dent in the use of Six Sigma, the work to implement the tool was divided into two phases. In Phase I, we concentrated on a single site, where we started by carrying out a Cross Functional Process Mapping programme to identify the improvement potential in the various subsidiary processes and, in particular, to map out the most signi cant problem areas. What is Six Sigma Six Sigma is a statistically based tool intended to minimise the number of faults and errors in all work processes, including production, assembly, administration, service and product design. Sigma is actually a letter of the Greek alphabet that is also used as the symbol for standard deviation i. e. variation in a process. Variation results in unwanted errors and inef cient work processes. The goal of Six Sigma is to reduce variation systematically so that there are no more than six standard deviations between the average value and the nearest threshold value. This means that there must not be more than 3. 4 errors per million possible. In practice, Six Sigma is therefore a tool used actively to achieve zero errors and to ensure high quality in the work processes. At the end of the day, the results are more satis ed customers and increased earnings. Source ASI Vestas Wind0704UK16OK. indd Sec453Vestas Wind0704UK16OK. indd Sec453180307 131515180307 1315152007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=54http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=5454 Ravi Chandran Subsequently, ten crossfunctional Six Sigma teams were set up, with 34 employees per team. All the teams were led by an employee with a green belt in Six Sigma the second highest certi cation, and they also had the support of a Six Sigma coach with a black belt the highest certi cation whom they could ask for advice during the process. 14 days saved per foundation section Using the Six Sigma method, each team was asked to come up with a solution to a speci c problem in the area of project management. Ravi Chandran himself and his colleague Mr. S. Subbian were part of a team working to reduce the time required to cast wind turbine foundations on site. Each foundation section took 28 days, so there was much to be gained if we could nd a way to optimise this process, says Ravi Chandran, and continues We conducted the necessary data collation and then per formed the mathematical and statistical calculations that form the core of Six Sigma. When we were nished, we had succeeded in halving the casting process, which means that we can now complete a foundation section in just 14 days. The results of this successful project were subsequently discussed with the staff at Vestas Technology RD in Denmark and obtained the necessary approval. Ravi Chandran relates that all ten projects in Phase I were completed in 2005 and that in addition to reducing the time required for the casting process, they produced a wide range of tangible results that are now being applied at other sites. In another project, for example, the team focused on the transfer time from project department to service department. In this case, the results of the project cut the time taken from 60 days to under 2 weeks. Phase II now underway When, towards the middle of 2006, Vestas Wind Technology India had collated the con clusions of the ten Phase I projects, the staff started work on the next phase. This phase involves all employees of the production and sales units receiving training in Six Sigma. We are training the employees in pools, and the rst 50 people have already completed the course, says Ravi Chandran, before going on to explain that the goal is to ensure that all 450 employees of Vestas Wind Technology India receive a Six Sigma belt before 2009. Of these, 23 employees are to be trained to black belt level, which is the highest level of certi cation and entitles holders to train new Six Sigma staff. Another 2022 employees are to be trained to green belt level, which indicates that the holder is a superuser of sorts, while the remaining employees should gain a yellow belt in the discipline. According to Ravi Chandran, all the staff of his own production business unit, Vestas Nacelles in Chennai, are to have completed the training course before the end of 2007. An ongoing process During Phase II, Vestas Wind Technology India is to spread Six Sigma to all parts of the organisation. In other words, the ambition is to achieve improvements in the areas of sales, logistics, assembly, transport, administration, HR, OM Operations and Maintenance, etc. A few months ago, in parallel with the Six Sigma work, the company started to introduce another improvement method in the Indian production units responsible for nacelles and Vestas Wind0704UK16OK. indd Sec454Vestas Wind0704UK16OK. indd Sec454180307 131532180307 1315322007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=55http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=5555 The three Six Sigma belts Black belt An employee with a Six Sigma black belt is thoroughly trained in all aspects of the tool and can act as a senior project manager in Six Sigma projects even across organisational boundaries. In addition, black belt employees are quali ed to train new candidates for yellow and green belts. Green belt Employees with a Six Sigma green belt can take on various roles in Six Sigma projects, including the overall management of minor projects. In order to qualify for a green belt, employees must be able to work with variation and the utilisation of data, and they must have fundamental know ledge of statistics. Yellow belt Employees with a Six Sigma yellow belt are quali ed to participate in Six Sigma projects. Employees with a yellow belt have a basic understanding of the seven tools that make up Six Sigma and can speak the language. assembly, namely the lean concept. While, as mentioned above, Six Sigma is designed to create uniform processes, lean is intended to streamline production by eliminating waste in all links of the value chain. At the same time, the intention behind lean is to create a ow that ensures that products are drawn through the various processes with a minimum of stops and transfers of responsibility between employees andor departments. Another of the goals of the lean approach is to make the production demandcontrolled, in that customer requirements are to de ne what is to be manufactured and when. On its successful implementation, the lean approach puts the company in a position to generate more value from fewer resources. Ravi Chandran has great expectations for the returns on both Six Sigma and lean. Six Sigma has already generated results that will bene t both Vestas and customers, says Ravi Chandran. However, he is quick to stress that it is an ongoing programme that requires all employees to give it their full backing and to be fundamentally willing to change their cultural mindset. If we want to succeed in the long term, we must all realise that 99 is simply not good enough, concludes Ravi Chandran. Vestas Wind0704UK16OK. indd Sec455Vestas Wind0704UK16OK. indd Sec455180307 131533180307 1315332007-03-19T13:08:21+01:00http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=56http://nozebra.ipapercms.dk/Vestas/VestasWind/UK/UK707/?Page=56Wind Vestas Contacts Vestas Northern Europe 45 97 30 00 00 Sales and service in the UK, Ireland, Scandinavia, Poland and the Baltic area. Vestas Central Europe 49 4841 9710 Sales and service in Germany, Austria, Benelux, Russia and Eastern Europe. Vestas Mediterranean 34 902 41 98 00 Sales and service in the countries of the Mediterranean region, the Middle East, Latin America, the Caribbean, and North and West Africa. Vestas Asia Paci c 65 6303 6500 Sales and service in Australia, New Zealand, China, Japan, India and the rest of Asia. Vestas Americas 1 503 327 2000 Sales and service in North America. Vestas Offshore 45 97 30 00 00 Sales and service, offshore. For more information about Vestas sales and service business units, go to www. vestas. com and click on Find your local Vestas of ce. Vestas Wind Systems AS Alsvej 21 DK8900 Randers Denmark Tel. 45 97 30 00 00 Fax 45 97 30 00 01 vestasvestas. com www. vestas. com EDITORS Ditlev Engel Editor in Chief, Peter Wenzel Kruse and Hanne Poder Sørensen. TEXT Charles Butcher, Klaus Bundgård, Claus Hetting, Peter Gisselmann Rasmussen, Kiri Kesby and Michael Klockmann Nielsen. UK WIND, OIL GAS Vestas Wind0704UK16OK. indd Sec256Vestas Wind0704UK16OK. indd Sec256180307 131342180307 1313422007-03-19T13:08:21+01:00