Wind group Vestas' cost-cutting strategy is on the right track

Transporting components by rail rather than road will generate huge savings

Transporting components by rail rather than road will generate huge savings

The component-focused cost-reduction strategy brought in after Vestas suffered "above-target" development costs on its V112 and 2MW turbine platforms has boosted earnings by more than €30m ($38.4m) in the first year.

The Danish turbine maker’s “cost out” approach aims to staunch revenue leakage from lost production factors (LPF) in areas ranging from product engineering design through component fabrication to operations and maintenance.

Early indications are good. The company has managed to shave a reported LPF of 4.5% in 2010 from a monitored fleet of 22,000 turbines around the world down to 2%, meaning they are up and running 98% of the time.

“Cost out is part of our normal day-to-day activities,” says engineering solutions senior vice-president Jorge Magalhaes, who joined Vestas at the end Log in to read complete article.

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