Wärtsilä Corporation Annual report 2014

Manufacturing review

Wärtsilä’s manufacturing is focused mainly on the assembly, test running, and finishing of products and key strategic components. Our business model, which is strongly connected to a broad network of suppliers, guarantees flexibility in capacity. Being close to the customer is important, as is our focus on quality and the continuous emphasis we place on technology leadership in our R&D activities.

The focus on gas, environmental solutions, and Smart Power Generation drives the development of our operations. We provide products and systems that are reliable, cost efficient, functional, environmentally compatible, technologically leading, and able to be integrated into solutions or delivered as stand-alone equipment.

Manufacturing footprint

Wärtsilä operates a global manufacturing footprint which is continuously optimized considering competence availability, customer presence and efficiency. As structural changes continue in our end markets, we remain focused on strengthening our presence in key markets, such as China. This enables us to better serve our customers locally and allows savings to be achieved in both production and transportation costs.

Wärtsilä currently has four joint ventures globally. In Korea, we manufacture dual-fuel engines for the LNG carrier markets in partnership with Hyundai Heavy Industries Co. In China, we produce engines for the local markets in two joint ventures. The Wärtsilä Qiyao Diesel Company Ltd joint venture manufactures medium-speed auxiliary engines, while the Wärtsilä Yuchai Engine Co., Ltd joint venture manufactures medium-speed auxiliary and main engines. The Wärtsilä CME Zhenjiang Propeller Co. Ltd. joint venture, also located in China, produces fixed pitch and controllable pitch propellers. We are currently in the process of setting up two joint ventures with China State Shipbuilding Corporation. One will focus on manufacturing medium-speed diesel and dual fuel engines and the other will assume responsibility for Wärtsilä’s low-speed engine business. In addition to these joint ventures we are constructing a fully owned manufacturing facility in Açu, Brazil to meet increasing market demand, particularly in the offshore segment.

Wärtsilä's global supplier network supports flexibility in manufacturing

Through close co-operation, excellent relations, and the sharing of information with our suppliers, the supply of components and market-conform lead times are secured. Wärtsilä has around 1,200 suppliers globally. Our sourcing strategy is to focus on carefully selected suppliers, with a strong emphasis on performance, innovation, and a presence close to our manufacturing units and joint ventures. Our aim is to continuously develop and strengthen our global supply chain with a strong emphasis on quality and cost competitiveness.

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