Shipping and Logistics Efforts Pertaining to Renewable Energy Power Sources
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MBA in Shipping & Logistics Class of 2011 Thomas Poulsen Shipping and Logistics Efforts Pertaining to Renewable Energy Power Sources A Plan for Wallenius Wilhelmsen Logistics to Grow the Company’s Presence in the Renewable Energy Vertical Market Segment With Focus On Wind Energy Integrated Strategy Project “How Government Driven Demand is Dramatically Impacting the Renewable Energy Supply Chain Management Landscape” Full Deliverable WWL new generation Mark V vessel Coaches: Prof. Dr. Robert Austin Asst. Prof., Dr. Niels G. M. Rytter Author: Thomas Poulsen (thpo10ab) Version: Final Version Date: July 22, 2011 1 MBA in Shipping & Logistics Class of 2011 Thomas Poulsen Table of Contents Table of Contents .................................................................................................................. 2 Preface ................................................................................................................................. 7 Introduction to the Integrated Strategy Project ...................................................................... 9 1 Problem Formulation, Deliverables, Structure, and Methodology ................................. 10 1.1 Purpose and Overall Objectives ............................................................................................ 10 1.2 Integrated Strategy Project Deliverables ............................................................................. 10 1.3 Integrated Strategy Project Structure ................................................................................... 11 1.4 Methodology Applied ............................................................................................................... 12 1.4.1 Referencing ....................................................................................................................... 12 1.4.2 Integrated Strategy Project Organizational Structure ................................................. 13 1.4.3 Interviews with Company Personnel (Meetings and Site Visits) ............................... 13 1.4.4 External Interviews ........................................................................................................... 14 1.4.5 Academic Learning Materials and Models ................................................................... 17 1.4.6 Scoping and Wind Market Modeling .............................................................................. 19 1.4.7 Methodology Summary.................................................................................................... 20 2 Industry Analysis and Critical Success Factors ............................................................ 21 2.1 Market Segments ..................................................................................................................... 21 2.2 Overall Energy Market ............................................................................................................ 21 2.3 The Renewable Energy Sub-Sector of the Overall Energy Sector .................................. 24 2.3.1 High Level Understanding of Renewable Energy Power Sources ........................... 24 2.3.2 Scoping of the Integrated Strategy Project Industry Analysis ................................... 25 2.4 The Wind Energy Market ........................................................................................................ 26 2.5 Wind Energy Logistics Market Sizing - Wind Scenario Model .......................................... 28 2.5.1 The Wind Market Development up to 2050 .................................................................. 29 2 MBA in Shipping & Logistics Class of 2011 Thomas Poulsen 2.5.2 Process Mapping Methodology to create Logistics Cost “Buckets” ......................... 35 2.6 The Flows ................................................................................................................................. 37 2.6.1 Inbound Assembly Flow (Nacelle) ................................................................................. 37 2.6.2 Outbound Turnkey Flow (Onshore) ............................................................................... 38 2.6.3 Outbound Turn-key Flow (Offshore) .............................................................................. 41 2.7 Different Logistics Cost “Buckets” in the Supply Chain ..................................................... 46 2.8 Technology Drivers and The Offshore Wind Opportunity ................................................. 49 2.9 Net Present Value of the Total Wind Logistics Market up to 2050 .................................. 57 2.10 Wind Industry Contracting Set-up Overview ..................................................................... 57 2.10.1 Role of Governments ..................................................................................................... 58 2.10.2 Role of the Operators .................................................................................................... 58 2.10.3 Role of the Utilities ......................................................................................................... 58 2.10.4 Role of the Engineering, Procurement and Construction companies .................... 59 2.10.5 Role of the Original Equipment Manufacturing companies ..................................... 59 2.10.6 Role of the Transport/Shipping/Logistics/Supply Chain companies ...................... 60 2.11 Logistics and Supply Chain “Eco-System” ........................................................................ 61 2.11.1 Freight Forwarders with Project Cargo focus ............................................................ 62 2.11.2 Ocean Shipping Transportation and Ocean Related Providers .............................. 62 2.11.3 Ports ................................................................................................................................. 63 2.11.4 Warehouse/Yard/Storage Area/Silo operators .......................................................... 63 2.11.5 Rail operators ................................................................................................................. 63 2.11.6 Specialty Truck companies ........................................................................................... 64 2.11.7 Land-based Crane operators ....................................................................................... 65 2.11.8 Utilities ............................................................................................................................. 65 2.11.9 Original Equipment Manufacturers .............................................................................. 65 3 MBA in Shipping & Logistics Class of 2011 Thomas Poulsen 2.11.10 Engineering, Procurement, and Construction companies ..................................... 65 2.12 Transport/Shipping/Logistics/Supply Chain Market Competition ................................... 66 2.12.1 Ocean Transportation capabilities ............................................................................... 67 2.12.2 Land Side capabilities.................................................................................................... 67 2.12.3 Value Added Services ................................................................................................... 68 2.12.4 End-to-End Supply Chain Management capabilities ................................................ 68 2.12.5 Project Cargo Forwarding/Management Turn-key capabilities ............................... 68 2.13 Critical Success Factors of Winning Companies .............................................................. 69 2.14 Industry Analysis Part Conclusion ...................................................................................... 71 3 Company Analysis including Gap Analysis ................................................................... 73 3.1 Ownership and Structure ........................................................................................................ 73 3.2 WWL Financials ....................................................................................................................... 74 3.3 WWL Strategy .......................................................................................................................... 80 3.4 WWL Business Model ............................................................................................................. 85 3.5 Resource Based View ............................................................................................................. 88 3.5.1 High Level Look at WWL’s Resources and Capabilities ............................................ 88 3.5.2 Information Technology Resources ............................................................................... 89 3.5.3 WWL’s Ability to create New Service Products and Teams ...................................... 90 3.5.4 Strategic Infusion of Resources and Capabilities via Acquisition ............................. 92 3.6 Related Parties via Respective WWL Owners .................................................................... 92 3.7 Wallenius Wilhelmsen Logistics Strategic Groups Competition Analysis ....................... 94 3.7.1 Wallenius Wilhelmsen Logistics’ Own Market Position .............................................. 95 3.7.2 Global Freight Forwarders with Project Cargo focus .................................................. 95 3.7.3 Companies Viewed by Wallenius Wilhelmsen Logistics as Main Competitors ...... 95 3.7.4 Regional Forwarders.......................................................................................................