Cost of Quality - The Case of Suzlon's Blade Recall

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Case Details:

Case Code : OPER101
Case Length : 10 Pages
Period : 2007-2011
Organization : Suzlon Energy Limited
Pub Date : 2012
Teaching Note :Available
Countries : India, USA, Global
Industry : Wind Power, Engineering

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"Investing in quality today
Because tomorrow depends on it "

- Annual Report -2008-09 of Suzlon Energy Limited

Introduction

Suzlon Energy Limited (Suzlon), engaged in the manufacture and sale of wind turbine generators,¹ grew from a start-up in 1995 to the position of third largest global player at the end of 2009.² The company was able to exploit the opportunities in the market by filling the demand-supply gap in the global wind energy equipment market and offering cost-effective solutions. It followed an aggressive growth strategy, offering a wide range of products and developing a vertically integrated supply chain for components. From a strength of 22 people in 1995 the company expanded to 14,000 by 2011.³ Suzlon followed an aggressive strategy of acquisition to expand its technology base and product range.⁴

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In its quest for rapid growth, the company hit an obstacle in the form of defects in the wind turbine blades supplied to customers in the US. The issue received wide coverage in the industry circles and generated substantial negative publicity for the company. Though Suzlon was able to promptly address the issue and come out with a solution, the incident created a dent in its reputation and impacted the inflow of orders.

The Beginning and Growth of an Entrapreneurial Organization - Next Page>>

1] Wind turbine generators produce electricity using the kinetic energy from the wind. Wind energy is one of the major renewable energy sources. Wind turbine generators consist mainly of three parts: 1. Tower which supports the Nacelle and Rotor, 2. Nacelle that contains the key components of the wind turbine and 3. Rotor which converts kinetic energy into electrical energy.
2] www.suzlon.com
3] www.suzlon.com/about suzlon
4] Suzlon's major acquisitions included Hansen Transmissions International NV (Belgium) in 2006, which gave it access to technology for gearboxes for wind turbines, and Repower (Germany) in 2007, which gave it access to technology for high capacity wind turbine generators and off-shore wind power installations (Source: www.suzlon.com)

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