Johnson Gear: Case (A) The supply chain for wind turbine gearboxes + Cases (B / C / D) Managing supply chain risk

These cases are available at ECCH with reference no. 612-012-1, 612-013-1, 612-014-1 and 612-015-1.

These four cases are part of a case series. Johnson Gear's is a gearbox designer and manufacturer, with a major position in the wind turbine gearbox market. Its two main manufacturing facilities are located in Germany and Turkey. The wind power market is growing rapidly and customers are very demanding in terms of service level. On the other hand, the upstream supply chain is rather rigid, with long lead times and scarcity in the supply of some critical components. Moreover, events may happen in the supply chain - upstream, downstream or internally - that may disturb, or even disrupt, the chain. Depending on the severity of the supply chain disruption and on the time it takes to recover from it, the service levels may suffer and the lead times towards Johnson Gear's customers may rise.

Aware of the vulnerability of his supply chain, Johnson Gear's supply chain manager decides to estimate the potential impact of some of the supply chain risks he faces: a shutdown in the plant of a major supplier (Case B), a quality issue in the supply of a major component (Case C), and a change in demand from a major customer (Case D). Using analytical calculations as well as simulation results, he assesses the return on investment of a set of mitigation options. The obvious option is to increase safety stock levels; less obvious, but equally interesting, is the option to go from single to dual sourcing, or to shorten the throughput time for critical components, thus making the supply chain more flexible.

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