Vestas: Quality and other theories

Résumé du document

For solving the problems raised, firstly we will start by defining what quality is in this case. This will be made through the quality continuum . Moving forward, in order to analyse the core of the problem comes from we will look at the ‘Game plan' and the Time-based strategies. Moreover, the concepts of Just-In-Time and Lean thinking will be discussed. In order to choose the level of integration of the supply chain we will use Segmenting the Buy model . We will also use the Arcs of integration and creating closer relationships.

Quality is a very complex element to define. It can be concentrated on the degree to which a product is conformed to its specifications – a description of what is required. . The crucial dimension for buyers would be quality components of a wind mill, generated electricity, installation and long term consumption without breakdowns. Moreover, quality can be used as a feature of excellence. Vestas product may be assessed in relation to the best that can be achieved through benchmarking with the main competitors. However, in strive for cutting cost the quality does not meet the necessary standards and fails the excellence of Vestas.

Extraits

[...] Looking upstream, Vestas's dependency on suppliers is very high due to the quality and day-to-day delivery service. Therefore, the company should have aimed for a broader arc of integration by going into partnerships with its suppliers. That would not only have cut off the costs by reducing monitoring, negotiations and drawing up of separate contracts expenses, but also would have increased the supply quality and productivity. In order to build long-lasting and value-adding partnerships Vestas should have had a knowledge sharing collaboration based on close and open dialogues by consulting each other all the way of the process. [...]

[...] It can be concentrated on the degree to which a product is conformed to its specifications a description of what is required.[9]. The crucial dimension for buyers would be quality components of a wind mill, generated electricity, installation and long term consumption without breakdowns. Moreover, quality can be used as a feature of excellence.[10] Vestas product may be assessed in relation to the best that can be achieved through benchmarking with the main competitors. However, in strive for cutting cost the quality does not meet the necessary standards and fails the excellence of Vestas. [...]

[...] Furthermore, Vestas should have switched their strategy form MTO to ATO which would have reduced the quality costs with no negative effect on the actual quality of the wind mills. Next, they should have focused on lean thinking concept. The company should have strived for perfection through minimizing muda and defects. Moreover, the level of integration of the supply chain should have been collaborative. A creation of partnership with fewer 1st tiers suppliers would have aided the goal of decreasing the costs and in the same time increase the quality. [...]

[...] However, Vestas was not prepared to meet the demand and had to spend a lot of resources and time on it. Overall, by striving to become cost efficient they affected the quality of a complex product such as theirs and in the end it led to a high increase in the expenses.[14] Furthermore, focusing on the delivery issue we can see that Vestas applies Make to Order (MTO) strategy.[15] On one hand it is essential to use it because it reduces the costs of inventories that the company possesses and minimizes the estimation of demand from the customers.[16]On the other hand, this creates other costs in terms of detecting quality mistakes and preventing them. [...]

[...] The intention must have been to reduce the quality costs but not the quality itself. It would have required holding more inventories but would have reduced the wasted time for making and detecting an error. The feedback from the customers would have been faster which would have led to less dissatisfaction as the process would have been handled and changed on time. Moving forward, another opportunity for Vestas to prevent the quality issues has been lean thinking.[20] The strategy should have taken into consideration the customers as a starting point and strive for Perfection by satisfying their need for high quality. [...]