Wartsila Supply Chain Management

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Project Report
Supply Chain Management

Project Report
Supply Chain Management

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Team Members
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Introduction

Wärtsilä is a Finnish company headquartered in Helsinki. A global leader and a provider of lifecycle power solutions in the energy and marine market. They began their operations in the year 1834 with the manufacturing of large combustion engines. As the company started progressing they diversified their portfolio by including power plants that range up to 500 MWs, oil and gas industry solutions and support services to better serve their customers. The company has spread their operations across 70 countries and has employed more than 18900 workers with annual revenue of € 4.72 billon.

Wärtsilä main aim is to improve the environmental and economic performance of its power plant by focusing on the latest technological innovation and incorporating them to attain efficiency in their operations. It wants to provide its customers with products that are highly efficient and are reliable for long-term usage. To manufacture products those are low on emission and suitable for grid stability and effective services. Its environmental solutions cover scrubber, selective catalytic reduction, oxidation catalyst, water treatment system and condition monitoring which proves that the company is eco-friendly.

They have now started to focus a lot on the services industry by building a service network of over 5000 professionals to improve the performance of their land based power plants and ship installations. It provides services, spare parts, maintenance, upgrade and fuel conversion solutions for medium and low speed gas and diesel engines.

Inventory Management

It is common knowledge in all organizations around the world that if you want to form a successful supply chain management networks then the companies should mainly focus on inventory and inventory control. Wärtsilä was facing a similar problem with regards to the inventory management so they were now focusing on reducing the logistic cost along with examining the supply chain techniques of their archrivals in the market. They emphasized a lot on the customer service, as they wanted to be differentiated from their competitors so they withheld inventory for two main reasons i.e. to reduce cost and improve customer service. Now the company had to balance the problem of having too much inventory that could lead to high cost v/s too little inventory which could lead to losing a current customer or sale.

The shared perception and experience of Wärtsilä’s upper management formulated a belief that the company was able to save a lot when they were able to manage their inventory efficiently. They had an effective transport system to support their goals of managing inventory and satisfying their end customers. The deregulations also lead to further reducing the inventory cost and transportation cost. The company also came up with a strategy were they tried to understand the nature of the product and supply chain capabilities to bring down their inventory cost. In addition they were also concerned with production scheduling and used flow management, which increases their responsiveness to changes and helps in reducing the inventory on hand. Flow Management helps in getting the inbound inventory associated with the changes in demand, supply and inventory policies. It manages the ever-changing inventory policies...
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