Being a supplier to the industry

The UK is the global leader for offshore wind energy.

The UK is a global leader in the offshore wind industry creating a wide range of new business opportunities for component and service providers. This section of the website provides some insight into becoming a supplier to the industry and being effective in the bidding process.

1. Wind farms are complex and involve a variety of different sourcing strategies

Typically, project developers will use following approaches to source their requirements.

Commodities and raw materials

Examples:

Sheet steel, steel plate, cable, fasteners, coatings, lubricants

 

Approach:

  • Available on a comparable and competitive basis from a number of sources to internationally recognised specifications
  • May be sourced globally
  • Likely to be sourced through tender, e-tender, frame agreement or spot market
  • Selection largely driven by price and availability with limited differentiation on technical performance
Catalogue

Examples:

Connectors, fittings, lighting

 

Approach:

  • Designer specified as a standard catalogue item
  • Sourced by competitive quotation, may be sourced as a group of similar items
  • Early input to design may secure an advantage
  • May be procured through agents or stockists
Subcontract ‘Make to Print’

Examples:

Machined components, castings, fabricated assemblies, sheet metal and composite moulded components

 

Approach:

  • Design developed by customer
  • Supplier manufactures to customer drawing and specification
  • Sourced on competitive quotation
  • Early involvement in developing the specification and design may secure an advantage
Design

Examples:

Gearbox, generator, converter, yaw and pitch drives, large bearings

 

Approach:

  • Design incorporates an item with specific embedded technology unique to the supplier
  • May or may not be single sourced and supplier may not offer the same item to other customers
  • High value or technology critical items will influence customer’s competitive position
Project Sourced

Examples:

Crane services, crew vessels, port services, accommodation, local support services

 

Approach:

  • Items sourced by project due to benefit local sourcing or availability
  • Procured through competitive quotation
Project Contract

Examples:

Foundation supply, array and export cables, offshore installation activities, offshore substation equipment

 

Approach:

  • Items or services required only for completion of a specific project
  • Items or services are critical to wind farm project financial viability and delivery
  • Major items sourced through competitive tender
  • Pre-qualification process determines suppliers invited to tender
Framework Agreements

Examples:

Larger components and services across the whole supply chain

 

Approach:

  • To ensure availability of critical services and products a long term agreement beyond single projects will be drawn up
  • Could be based on formal tendering or development of commercial relationship

2. What influences buyers to engage you in the process?

Buyer influences

            Source: University of Chichester

 

3. How customers can become aware of your existence?

These days there are many ways for customers to become aware of your business and your capability to provide what they need.

  • Contact and register your interest in becoming a supplier
  • Register on industry databases and directories
  • Website
  • Tendering
  • Customer Relationship Management (CRM)
  • Brochures
  • Email marketing
  • Conferences and exhibitions
  • Networking events
  • Social media
  • Webinars
  • Presentations, videos and animations

4. Some basic tips for doing business and tendering

The following tips may serve as a useful reminder for doing business and tendering with the offshore wind industry.

Build a trusting relationship

Firms are mostly looking to build relationships with companies who can support them into the future, so gaining their confidence early on is importance.

Have the right product

The product or service must be one which is clearly needed, at or near the time offered.

Understand your customer

Develop an awareness of (corporate or national) cultural differences between supplier and customer, to avoid these becoming an issue. Personal contact remains a crucial part of the process.

Prepare for competition

Developing an understanding of the customer’s requirements and what the decisive factors are, before getting involved in a formal procurement process.

Get it right first time

Second chances may not be given, so when issues arise, deal with them effectively. Set the right level of expectation and do not over promise or exaggerate your capability.

Pre-Qualification

Be reactive to this. It can be an important part of the tender process and it is crucial to provide the all the required information.

Financial capacity

Tenders will require information on the company’s health and viability, turnover and profit, risk and insurance coverage. This will evidence how your business can support a long-term relationship.

Quality and security at work

This needs to be appropriate to the service being provided but may include ISO 9001, 14001, 26000 and Health, Safety, Security, Environment (HSSE) certifications. A supplier not providing appropriate policies covering HSSE is unlikely to be considered.

Experience and capability

You may need to supply customer references, details of technical capacity and experience in the energy sector. Case studies of your products and services to demonstrate capability and to highlight company competencies; commercial and technical advantage; production capability; specific experience in the areas needed; and competitive edge can help.

Understanding the need

Analyse what is expected from the customer and demonstrate you understand the requirements in your response.

Human resources and delivery timescales

Make sure that you have sufficient and skilled human resources and can prove that you can deliver within the timescale.

Flexibility in case of failure or mistake

Are you able to intervene at different stages of the products and services you provide and be able to modify them if needed?

Overall price, price breakdown and calculation

Is the price you propose competitive? Be able to explain and show clearly how you calculated the price. Remember the price is binding.

Customer’ terms and conditions

Read carefully any terms and conditions to avoid surprises.

Get the basics right

Provide your tender document on time and complete with any required supporting documentation and evidence.

Take a positive view
  • Bidding is a necessary process for the client to select the most qualified and suitable supplier whilst providing best value for money
  • Pitching for work against the opposition allows you to showcase why you are the best choice
  • The client may accept another bid may well come back to you on another occasion
  • Analyse bid results, learn from the experience and constantly refresh and tailor your answers for every new client
Avoid being negative
  • Bidding is a waste of time as the client has already made their mind up who they want for the job
  • The client knows we are the best so why don't they just appoint us?
  • The client knows we are local so why don't they just appoint us?
  • Clients always take lowest price despite the quality score
  • We don't have time for this as we have actual work to do
  • It is all the same answers as before, just cut and paste our last bid

5. Buyer/Supplier Portals

Local supply chain opportunities arising e in connection with individual projects are often tendered for locally. However, companies may also choose to look more widely for their suppliers and use framework systems. For example, DONG Energy Wind Power has chosen to introduce a global qualification framework in cooperation with Achilles who operate a buyer/supplier portal for a number of different sectors including utilities. Further details of how to become a supplier to DONG Energy and the qualification process are available on the company's - click here

For further information about Achiles and to see the range of different utility companies who use the portal - click here

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