Interview Siemens Plans to Put Focus on Platforms
On 1 October, Siemens started for the first time with their own division for the process industry–Germany's biggest industrial group has restructured. "Yet again?", critics asked. But this time the group came up with concrete action in keeping with their Vision 2020 and formed their own "Process Industries and Drives" division. Division head Peter Herweck speaks in the PROCESS interview about his strategies, aims and opportunities in the new structure.
? Mr. Herweck, large corporations have a tendency to spend a lot of time on themselves and on restructuring. This is often an expression of dissatisfaction with their own market position or with poor results. Was this also the trigger for the new restructuring at Siemens?
Herweck: Yes and no. With our Vision 2020, we want to take a decisive step forwards and to focus on three topics in particular: electrification, automation and digitalisation. Here, of course, we are organising ourselves so that the customer is at the centre of our activities. And, naturally, we also want to see it generating growth.
? Why was the old structure obsolete? Were you not also responsible for strategy under the previous corporation head Löscher?
Herweck: There your research is not quite correct. I did not start in strategy until the previous subdividing of the sectors had been completed. In my task as strategy leader, my work had much more to do with the topic of the new regional organisation, but I was also involved in the streamlining of our portfolio. My most recent work was on our current programme for the process industry, which finally led to Vision 2020.
? Siemens needed a lot of time for this step. How difficult is it to bring the different Siemens worlds together as an effective formation under one process industry roof?
Herweck: Well, you know, sometimes it's like at home. There are parents who still do not want their children to leave the family home at the age of 14 or 15, but wait a little longer before letting their children stand on their own feet. That is how it is in our case. Now the time is right for our own process industry division and, when we report our key financial parameters for the first time, you will see that this is a very, very solid business and is capable of matching all global competitors.
? In an internal interview for Siemens, you emphasised how important the new independent division "Process Industries and Drives" is in meeting the needs of this target group better. Does the process industry really tick so completely differently from manufacturing industry?
Herweck: Yes, manufacturing and process sectors are extremely different regarding their activity and control cycles. They are as different as driving a car and flying an aircraft.
? Other automation specialists tend to see the industries as growing together. Why are you going in precisely the opposite direction?
Herweck: A highly complex Conti facility cannot be compared with discrete manufacture in which, under certain circumstances, a user presses the "emergency off" button before going for his lunch break. These are two completely different worlds.
But this does not mean, on the technological side, that certain platforms cannot be used in the other industry and vice-versa, and there are, of course, many hybrid applications. This is precisely where Siemens does indeed have an absolute strength, because we combine automation technology and Conti facility on one platform.
? What advantages does the new structure give the customer that were not previously available from Siemens?
Herweck: First of all, it is a question of our holistic and clearly focused support for a customer, from products to solutions or covering the entire life cycle. There we certainly did not previously have the tightness that one might have wished for. For different topics, customers had to approach the most varied Siemens areas. With the new structure, this is reduced to a minimum — but always within the framework of the available competences, of course.
Our new formation means that we will be even better in speaking the language of the customer. The second big advantage will become visible when we offer our platform technologies with sector or product-specific characteristics. This leads to considerable advantages for the customer.
? How long will you need for the new division to develop its effectiveness?
Herweck: We are "ready on day one". Let us compare it to a gearbox which runs from the first day onwards. Once we have made two or three wrong gear changes, the rough edges are rubbed off and it runs with the right lubrication. The whole thing is, of course a process. But we have an experienced team and we have already achieved our first positive effects internally among our staff, who had already anticipated this new structure.
? How has the new structure been received by Siemens staff?
Herweck: Very well. I have seldom received so many unsolicited, positive comments from our team — from the most various levels, all the way up to people who have been involved in project management for 30 years now.
? On the question of drives, you are better positioned in manufacturing industry than in the process industry. Are moves underway to optimise the portfolio?
Herweck: If that is how you perceive it, perhaps we have been doing a bad sales job on this point, for the opposite is the case. As a manufacturer of drives for the process sectors mining, cement, paper or oil and gas, we are in a very, very strong position, perhaps even being the strongest provider of all.
? As an automation specialist in a conservative process industry, do you suffer from the fact that innovations often need a very long time before they are implemented here?
Herweck: We are of course aware that the process industry has different cycle times. As a rule, investments in this field are several times higher. But this does not mean that our customers in the process industry are not open for technology change. For here, too, substantial competitive pressure is noticeable. During my visit to the Offshore Nordic Sea Fair (ONS) in Stavanger recently, customers from the oil and gas industry clearly said to me: "We have to transform ourselves to adapt to the new challenges."
? In which direction?
Herweck: We will have to work out the technological implications of this in detail with each customer. But this never means that the topic of safety will be left out — absolutely on the contrary. Safety always has the highest priority in the process industry, exactly like availability.
But topics such as standardisation, which are very much more characteristic of the automobile industry, now appear increasingly often during discussions with customers in the process industry, whether in engineering or documentation. There are many points where one can achieve simplifications which provide added value to the customer.
? What kind of USPs will be left for you as an equipment supplier if standardisation makes further progress?
Herweck: I have no worries there. Developments and technological progress are always moving forwards, and standards, too, do not last 100 years. On the contrary, we support standardisation — alone because of the interests of our customers. New ideas also mean new innovations. This supplies new stimulus for competition and, because of user standards, they are made accessible for broad application. That is good for competition and good for the end-user.
? We have heard that a large chemicals corporation apparently uses Profibus in Germany, but Fieldbus Foundation in its plants abroad. How does that happen?
Herweck: One of our favourite or cult questions. In the chemicals sector, fieldbus systems are of course not so strongly present at all. Many classical plants are continuing to rely on four to 200 mA. Historically, Fieldbus Foundation has always been particularly strong in the oil and gas sector and also in petrochemical applications.
Alone due to the large number of American players in petrochemicals, Fieldbus has created a broadly installed base which was then taken over, due to acquisitions and merger activities, by other European and German producers.
On the other hand, German chemicals firms have in the meantime also set up Profibus-PA plants in North America. Perhaps not yet absolutely in the dimensions which we had anticipated, but with gratifying growth. We are firmly convinced that we can improve the position of Profibus worldwide, and with it Profinet, for, in the final analysis, it offers many advantages.
? Do you believe there is still much potential for a new Fieldbus applications?
Herweck: Without question.
? In your view, could process control systems come under pressure from de-centralised intelligence or modularisation?
Herweck: That always depends on the relevant application situation. Our control technology or DCS systems do of course generally meet all these fundamental challenges. With Comos and PCS 7, we are getting ready for modularisation and thus want to offer ultimately, via a web client, an integrated engineering approach based on modules and partial installations. The benefit here is that, having done the standardisation once, the engineering work is reduced in modularisation. In a hardwired arrangement, you have to do it all again every time.
? On what technologies will your primary focus be in the future?
Herweck: As previously mentioned, our primary focus will be on the platform technologies already named. In automation, with our Simatic PCS 7 control system, we have presented no less than 70 new developments in a current version update.
Here, our developers have provided more efficient engineering, operator-friendly working and enhanced performance – all points that our customers are looking for. We will naturally also push ahead with the topic of digitalisation. The third of our primary topics is the integrated drive train, where we have now also decided to make major investments.
? You worked in China and Korea for many years. Where do you see the differences comparing Asian end-customers with European or other users around the globe?
Herweck: There are of course differences. But I would not like to put these into stereotype categories. The differences are mainly more regional. An example: While a Chinese from the south may have his eye mainly on the costs, a Shanghai Chinese may focus more on the quality, and one from the north-east more on the personal relationship.
But, to make it clear, there are of course differences in mentality not only in China or Asia, but also worldwide, in all countries and regions. We at Siemens take care of each customer locally and completely individually.
? Don’t Asians have a greater affinity for the use of innovative technologies?
Herweck: No, but they are more ready to try out something new, are more inquisitive. The transformation cycle in China simply has a higher cycle frequency than in Europe – in the process industries too.
? Let us look into the future: How far would you like to be with the new division in three years?
Herweck: By then, we will have set up our business successfully and will be the trusted partner of our customers. In order to achieve this, we have put a unique offer together. We know that our customers are looking for a trustworthy partner for their investments, one with whom they can work in the long term. And that is precisely what we stand for.
Mr. Herweck, many thanks for talking to us.