Finland: The Switch Calls Renewable Energy Sector to Embrace Agile Positioning
In a statement released today, The Switch called for the renewable energy sector to embrace Agile Positioning, an industrial model that allows for greater flexibility and responsiveness to market changes.
“In the renewable energy industry, we can see enormous shifts during the past year from a mass-production, manufacturing focus to a more customer-centric approach. The huge development in the China renewable energy industry has reshaped the way of doing business. Technology has changed, global demand has shifted, and price cuts have left a permanent impact on the industry. Today, renewables are facing overcapacity for key components, which was completely the opposite only a few years ago. To help combat the unpredictable market fluctuations, The Switch is taking a stance at driving through a new business model based on Agile Positioning. It allows companies to go beyond vertical integration and embrace an asset-light, flexible business model based on financially sound principles to better respond to customer demand,” said Pertti Kurttila, Vice President of Supply chain at The Switch.
“Technology development is booming in all parts of the world. Adding to the pressure, delivery times for the new technology are getting ever shorter. The way forward demands a new type of flexibility and mobility never seen before in manufacturing-based businesses. It requires a rapid transfer of technology into new growth markets, which often demand local content from OEMs. This is the lean way to do business – and one with a true entrepreneurial spirit. Today’s businesses need to constantly build on uncertainty. They need to be ready and responsive to continual market changes. The customer and supplier need to create a tight-knit team, constantly taking steps in the same direction,” Kurttila explains.
“A traditional solution to react to such volatile market trends would be to build a production facility close to end customers or to rely more on local suppliers in a way to better compete. Until now, churning out more and more products to push to customers has been the way to sell more. The new way, based on agile positioning, adjusts the business based on the real needs of customers. Agile positioning is the combination of agile product innovation and agile business model innovation. The method engages the customer to promote discovery and innovation. It leads to agile positioning for both parties so they learn exactly where to take the products and business. Agile product innovation in the renewable energy industry means engineering next generation technology together. This leads to products that are tailored to specific operating conditions or breakthrough ideas for greater energy production,” he adds.
“Agile positioning makes vertical integration, the hallmark of the wind power industry in particular, even more obsolete,” Kurttila concludes.
Press release, June 12, 2013