Acquisitions, Innovation Driving Siemens’ Global Growth

July 21, 2008
Ralf-Michael Franke Discussed the Impact of Product Life-Cycle Management (PLM) Integrated with Industrial Automation

The U.S. figures prominently in Siemens’ global strategies for automation. Ralf-Michael Franke, CEO of Industrial Automation Systems at Siemens, discussed the vital role of the U.S. in the company’s growth plans during his keynote presentation at the 2008 Siemens Automation Summit in Chicago.

“Innovation is not an issue for a week or a month,” said Franke. “You have to be patient. It sometimes takes years.” Siemens’ large investment in research and development, combined with its acquisitions of integral companies, is the stuff that will allow the global technology organization to follow the lead of its largest sector—industry—which accounts for 51% of its business, explained Franke.

“Engineers have to learn they can improve productivity and manufacturability before the first spade is dug into the ground.” Ralf-Michael Franke, CEO, Industrial Automation Systems, at Siemens, discussed the game-changing impact of product life-cycle management (PLM) integrated with industrial automation.
“We at Siemens know that we have to react faster to the market,” he said. “That is why we reorganized the company.”

Within the industry sector that Franke manages are six divisions, including industry automation, drive technologies, industry solutions, building technologies, mobility and Osram/Sylvania. Siemens expects a 10% increase in its U.S. business from 2007 to 2010, with market growth predicted to rise from €100 billion to €110 billion over the three-year period. The organization anticipates a 14% up-tick worldwide over the same period, bubbling from €420 billion to €480 billion by 2010.

“The U.S. is a very important part of our growth strategy,” said Franke. Acquisitions of UGS, Morgan Construction, Robicon and US Filter are a big part of that plan to expand Siemens’ share of the U.S. market. “Our strategy is totally integrated automation,” he explained. “We think we can generate benefit. We feel ourselves responsible for the complete production workflow and production life cycle in all industries—discrete, process and hybrid.”

“Complexity will rise in the future because we all want an individually built product,” warned Franke. “At the end of the day, the product should be differentiated, so industry is forced more and more to offer something for each and every niche in the future. We cannot avoid complexity. We have to manage it.”

The automotive industry is at the leading edge of this niche complexity, said Franke. “The one who is able to react to changes in the market first will be the one able to earn money on these changing demands,” he said.

The UGS acquisition, which gives Siemens its product life-cycle management (PLM) capabilities, also allows the German industrial supplier to get in the game earlier. “From product design to product build, we have to do more and more in the digital world,” explained Franke. “Engineers have to learn they can improve productivity and manufacturability before the first spade is dug into the ground.”

Acquiring UGS also give Siemens a stronger foothold in the feedback loop, which includes requirements, modeling, analysis, validation and change management.

“Integrating our product portfolio with our PLM portfolio is the next big step toward the digital factory, the integration of the product and production life cycle,” said Franke.