One-to-One: Siemens Big Vision for PLM and MES (and ERP)

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?