Supply Chain Development For Renewable Energy Sector
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<p style="text-align: justify;"><span data-contrast="none">The renewable energy supply chain has to be at the forefront of sustainability and ESG compliance. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Focusing on sustainability matters, it is also worth mentioning several risks that can disrupt the business, such as increased manufacturing volumes, supplier disruptions, ethical risks, quality problems, geopolitical risks, capacity constraints, and so on.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">These risks lead to delays in customer orders, increased landed costs, reduced margins, missed customer orders and revenue, delays in new product introduction, organizational inefficiency, and demotivated staff. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">A risk management approach, together with stage-gate project management, is fundamental for keeping the supply chain on track and securing the desired outcome within the expected time, costs, and quality. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Three questions are the pillars for a solid preparation of the project:</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><ul style="text-align: justify;"><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="1" data-aria-level="1"><span data-contrast="none">What is the opportunity in the global supply chain?</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="2" data-aria-level="1"><span data-contrast="none">What is the risk?</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="3" data-aria-level="1"><span data-contrast="none">What is the objective of the project?</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li></ul><p style="text-align: justify;"> </p><p style="text-align: justify;"><span data-contrast="none">In order to answer properly to these questions, a leadership structure must be in place first</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><ul style="text-align: justify;"><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="4" data-aria-level="1"><span data-contrast="none">Define the current organizational</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="5" data-aria-level="1"><span data-contrast="none">Clarify roles and responsibilities</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="6" data-aria-level="1"><span data-contrast="none">Ensure adequate resources and establish primary communication channels.</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li></ul><p style="text-align: justify;"> </p><p style="text-align: justify;"><span data-contrast="none">By doing so, the project team is more resilient and can approach the most common processes in the whole supply chain management. </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="none">Typical processes that are managed with this model are: </span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></p><ul style="text-align: justify;"><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="7" data-aria-level="1"><span data-contrast="none">New suppliers introduction</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="8" data-aria-level="1"><span data-contrast="none">Cost-out programs</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="9" data-aria-level="1"><span data-contrast="none">Production planning</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="10" data-aria-level="1"><span data-contrast="none">Program and project management</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="11" data-aria-level="1"><span data-contrast="none">Cost-benefit analysis</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="12" data-aria-level="1"><span data-contrast="none">Value chain mapping and optimization</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="13" data-aria-level="1"><span data-contrast="none">Risk assessment</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="14" data-aria-level="1"><span data-contrast="none">Sourcing and purchasing</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li><li data-leveltext="" data-font="Symbol" data-listid="1" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="15" data-aria-level="1"><span data-contrast="none">Outsourcing and near sourcing</span><span data-ccp-props="{"134233117":false,"134233118":false,"201341983":0,"335551550":0,"335551620":0,"335559738":0,"335559739":0,"335559740":259}"> </span></li></ul><p style="text-align: justify;"><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p><p style="text-align: justify;"><span style="font-size: 10pt;"><span class="ui-provider bdb bdc c d e f g h i j k l m n o p q r s t bdd bde w x y z ab ac ae af ag ah ai aj ak" dir="ltr"><em>This article was contributed by our expert </em></span><a href="https://www.linkedin.com/in/paolo-ingarao-60b4ba8/" target="_blank" rel="noopener">Paolo Ingarao</a></span></p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p><h3 style="text-align: justify;"><span style="font-size: 18pt;"><span class="ui-provider bdb bdc c d e f g h i j k l m n o p q r s t bdd bde w x y z ab ac ae af ag ah ai aj ak" dir="ltr">Frequently Asked Questions Answered by </span>Paolo Ingarao</span></h3><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-contrast="auto">1. How do regional and global policies and regulations impact the development of supply chains for renewable energy, and what measures can be taken to navigate and adapt to these dynamics?</span></h2><p style="text-align: justify;"><span data-contrast="auto">They have a heavy impact on the supply chain development, and in most cases, local governments plan several hearings with developers to define the right level. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="auto">Managing good and technical communications with local representatives at all levels is very important. The most effective tool for supporting the local content requirements is the creation of clusters, which include developers, OEMs, local and central governments, universities, and industrial association representatives. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. How can companies effectively assess and mitigate risks associated with supply chain vulnerabilities in the renewable energy sector?</span></h2><p style="text-align: justify;"><span data-contrast="auto">Mapping the local and global capabilities of every commodity involved in Renewables is the most effective way to spot risks and find mitigations with the desired engagement level for every company. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-contrast="auto">3. </span><span style="font-size: 12pt;">How can companies ensure that their supply chain development aligns with ESG principles, particularly in the renewable energy sector?</span></h2><p style="text-align: justify;"><span data-contrast="auto">It starts all from investors, insurers, and lenders' requests in terms of ESG targets. By deploying their guidelines in a smooth and transparent way, it can lead to rapid execution of the projects and avoid financial disruptions. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-contrast="auto">4. </span><span style="font-size: 12pt;">How can the principles of a circular economy be integrated into the design and manufacturing processes of renewable energy technologies?</span></h2><p style="text-align: justify;"><span data-contrast="auto">It has to be aligned together with the local manufacturing footprint and ESG ambitions set forward by governments and local banks, especially when talking about carbon credits and greenhouse gases. This can lead to the creation of business opportunities, eventually subsidized by the government, for recycling materials and components. </span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span></p><p style="text-align: justify;"><span data-contrast="auto">Looking to the more executional aspect of circular economy creation, it is very important to create work groups consisting of engineering, procurement, operations, sales, suppliers and subject matters consultants for the architecture of the life cycles of the components during the initial design stage.</span><span data-ccp-props="{"201341983":0,"335559739":160,"335559740":259}"> </span></p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p><p style="text-align: justify;"> </p>
KR Expert - Paolo Ingarao
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