Great user support around the globe

Siemens in the U.S. This has been, and always will be, a fascinating story. How a formerly arch-German industrial colossus can make it in the most dynamic and most innovative market. Lately, the news from America is not just good – it’s excellent. The U.S. revenues as well as its earnings are definitely on the up and up. And both definitely figure as major contributors to its worldwide performance.

Not only that: with sales of $75bn in 1999, the 153-year-old company has positioned itself as the third largest supplier of engineering and electronics goods and services in the world. It comes in right after GE and IBM, and well ahead of Hitachi, Matsushita Electric, Sony, Toshiba, Fujitsu, Hewlett Packard, NEC and many, many others.

Some key results illustrate this favorable, if hard fought for position. In 1999, as of October of last year, new orders rose to $69bn (+14%), net sales reached $68bn (also +14%), and earnings before taxes (EBIT) stood at $3bn (+82%). These growth trends have further accelerated in the first half of 2000, especially in the U.S. where orders rose by 21% to $8.8bn. U.S. sales reached $7.9bn. Strongest contributors among its numerous operating companies to the Siemens U.S. performance, as might be expected, are Infineon with a plus of 132%, ElectroCom up with 13%, and Westinghouse (acquired in 1998) with +51%. Westinghouse’s power-plant manufacturing capacity is virtually sold out for the next three years. About 25% of all Siemens sales are now generated in the Americas (North and South), compared to Germany with 27%.

Within Siemens’ industry products segment, Siemens Energy & Automation, which is under the umbrella of the Production and Logistics Systems (PL) group, figures first placein this regard: with sales in 1999 of $2.4bn. The trend to ever more complex industrial manufacturing systems and time-critical supply chains forces Siemens to intensely focus on integrative customer solutions, beginning with field and enterprise resource planning, e-logistics and life-cycle solutions for their customers’ assets and plants. Cross-group service and maintenance teams (more than 1000 are already in place worldwide) are part of this strategy. As Edward Krubasik, a member of the central management board explains, “With our base of distribution and service organizations in more than 190 countries, we hold a top position among our competitors.”

Richard Buzun, executive VP at Energy & Automation, further evolves this point: “We support our customers with an economic utilization of their plant resources, including life-cycle solutions worldwide, around the clock.” This radical shift in customer care andorientation is transforming software and information technology into a defining factor of innovation. “Already today,” Krubasik states, “we employ 27,000 software designers – more than Microsoft has.” Of all of Siemens’ product offerings, 60% are software. By 2010, software’s share will grow to 80%. The base competency for this emphasis on comprehensive customer so-lutions, Krubasik underlines, “is standardized platforms.” The platform concept has helped Siemens push downdesign and engineering costs by 50% over the last few years.

No wonder then – and also to benefit the overall favorable image of the century-old industrial giant – that Siemens wants to become a “dotcom” company, too. In the coming years, 25% of all sales shall be transacted in an e-business environment. An extremely valuable customer and – for that matter – also a valuable technology partner is the mobile-phone maker Nokia of Finland. Nokia has been able to exert considerable influence on the path of innovation in the SMT process for high-volume appliances, says Patrick Trippel, head of Electronic Assembly Equipment business. As such, he is in the center of the storm of the extremely competitive component placement technologies.

The Siplace HS50, Trippel readily admits, is the result of his key customer’s influence – with faster placement rates and greater component accommodation to challenge the competition. Another factor for success in placement is Siscope, Siemens’ software system for round-the-clock, “follow-the-sun” support of more than 1500 customers and 8,000 machines worldwide. This support and maintenance network is simultaneously directed from Atlanta, Singapore and Munich. Based on placement speed, the cost-performance ratio of the Siplace series has been cut in half between 1996 and 1997, and by another half between 1998 and 1999, Pat Trippel resumes. This applies to all kinds of components, even advanced packages. Equally impressive, he claims, are the floor space improvements that Siplace has pioneered in the placement industry. (Werner Schulz)