I had the chance to talk with Siemens executive Ralf-Michael Franke this week about Siemens' vision for PLM and MES, known as the "Digital Factory" and consisting of "totally integrated manufacturing."

What do they Do?
What don't they do? Siemens offers products for a broad range of industries, just a part of which includes software. Major segments are Industry, Energy, Healthcare, and Consumer Products. For some that don't know Siemens, compare GE's tagline of "we bring good things to life" to Siemens' self-description of "a global powerhouse in electronics and electrical engineering." Both are so broad they can cover a lot of territory, and they do. With 400,000 employees and 72.4 Billion Euros in revenue in 2007, Siemens has to cover a lot of territory.

The group that Mr. Franke leads is known as "Industry Automation" and includes 5 sectors. One of these is "PL" which covers PLM and is (for the most part) the former UGS. It also includes Simatic IT, their MES (manufacturing execution systems) products to manage the shop floor in addition to controls and other factory automation. When Siemens acquired UGS two things were clear to me:

• Siemens had the opportunity to develop a set of solutions that surpasses any in regards to integration of product design through product execution.
• That same opportunity could lead them down a path where their vision was so confusing and far ahead of the current state of the market that they could simply confound everybody into inaction, to effectively message themselves as rocket scientists to people who still need to invent fire, the lever, and the wheel.

A Grand Vision. Too Much Vision?
The vision is in fact grand. Anything including "totally integrated" is asking for a lot, particularly when they are discussing not only software integration but also physical integration in the factory. In fact, they are talking about being integrated and synchronized between the physical plant and the digital model, where the digital plant model and the physical plant model (including the products produced in it) are synchronized. Pretty amazing idea, and they have a lot of assets and know-how to bring to the table. But let's be realistic for a moment. PLM itself is a concpet that is too big to fit in most peoples' heads. The broad vision of integrated PLM brings together product management, engineering, sourcing, and manufacturing processes in ways that are beyond the majority of companies today. What I have learned by spending more time with analysts covering manufacturing (including Matt Littlefield and Mehul Shah at Aberdeen who are now a part of our bigger "Product Innovation, Engineering, and Manufacturing" team) is that MES is likewise a big concept, and yet to fully mature and be adopted. Both are relatively old markets, and consolidating in some ways, but the adoption of the technology is still maturing. And so are the products themselves. So the combination of the two is a huge leap for many.

Even within PLM, the concept of Digital Manufacturing (which extends design to manufacturing processes and equipment in conjunction with product design) is a relatively emerging practice and solution set. If the new integrated Siemens team decided to go to market saying "you need to integrate all of this" they would experience a lot of blank stares, shaking heads, and maybe even a couple of people having a stress episode of some sort.

Dosing out the Vision
On the other hand, their are a small subset of companies that would be happy to see that someone is listening. And that the people that are listening have the knowledge and tools to pull it off. Oh, and don't forget the money to invest. What's maybe most important is that Mr. Franke also communicated the will to achieve the vision, the patience to see it through, and the willingness to listen to their customers to let them guide the way. This post is getting very long, but perhaps some of this is overdue discussion. I will close with what has finally comforted me that Siemens recognizes their position and is not actively over-visioning the market.

• They are selling the "Digital Factory" vision in a metered fashion to different industries. Automotive, according to Mr. Franke, is pulling them in this direction. Other industries are not as ready.
• They are continuing to evangelize the PLM and MES messages independently, as well as the broader vision
• They are developing different offerings for different markets with the industry in mind. It's worth a whole separate post, but I met with the combined Siemens - UGS team for "hybrid industries" or consumer packaged goods (CPG). They are combining assets for specification management (formerly Compex) with UGS solutions for product development and collaboration (Teamcenter) first, and again letting customers lead. They can paint a picture of integrating Simatic IT (a lot of history in process MES) as well, but they aren't overdoing it.
• Siemens is also considering how ERP (primarily SAP) fits into the mix, to help manufacturers understand the full picture and not just the pieces coming from Siemens.

So that's what I hear from Mr. Franke and his team at Siemens, I hope you found it useful. What do you think? What else should I have asked them?