Despite intense pricing pressure applied from abroad, global OEMs serving the U.S. wind energy market see value in local supply and are seeking ways to utilize domestic suppliers in the manufacture of component parts for domestic wind turbines, according to several OEM representatives who attended GLWN's 2011 WIND Summit "Making It Here."

"The fact remains that European supply chains are much more mature, as those markets have had a healthy head start," noted Matthew Carr, Strategic Procurement Manager for Mitsubishi Power Systems Americas. But that shouldn't stop manufacturers in the U.S. from pursuing competitive advantage at home.

According to Carr, OEMs see a host of benefits to using localized supply chains, including lead-time reduction (bringing products to market faster), avoiding currency risks, reduced transportation costs, stronger control over supply chain partners, and a general reduction of "soft costs" such as inventory carrying costs and opportunity costs.

In the meantime, US suppliers are hustling to maintain share in a very tough market. ÒPurchasing decisions are now being driven by price more than ever before, Òsays Sam DiRenzo of bearing manufacturer SKF USA. ÒFor our US operations, cost-effective engineered solutions are one answer, and adopting ways to improve the efficiency of our customersÕ supply chain is another.Ó

ÒWeÕre doing everything we can to collaborate with our suppliers to improve their competitiveness,Ó stated David Buley of Northern Power. ÒBy adopting best practices that will reduce their actual costs of manufacture, our suppliers become more globally competitive on a full landed cost basis, and that helps us become more cost efficient.Ó

Dennis McKinley of ABB Inc. emphasized that proximity to a good transportation structure is vital, and his company is looking for qualified suppliers in North America to make projects happen. "OEMs are looking for 75% to 90% local sources," said McKinley. "Being in the same time zone is important. OEMs don't want to rely on far-away suppliers and support. They want quick response and quick support."

"Safety, quality, cost, delivery, responsiveness, technology," is how Anuj Malhatra, Delivery Assurance Supply Chain Manager at Clipper Windpower summed up his list of supplier expectations.

"We're trying to make smart sourcing decisions," said Carr. That means making project-based purchases, executing non-binding purchase agreements, looking for suppliers that use successful LEAN manufacturing models, seeking suppliers that offer innovation and new product offerings, and demanding open-book, transparent pricing.

Carr said that other general considerations for manufacturers include demonstrated quality performance and shorter lead times, along with a steady business plan that shows a long term commitment to the industry.

That makes sense to Joe Simko, VP of Business Development for Hodge & Elyria Foundries, who added, ÒYouÕre not going to ÔdabbleÕ in wind. YouÕre either going to fully commit the resources, or youÕre not going to do it at all.Ó