Siemens Digital Factory president: Is 2015 the year to update manufacturing infrastructure?

Aging infrastructure, maximized manufacturing capacity and new data opportunities could set the stage for some major investments in 2015, said Raj Batra, president of Digital Factory, Siemens USA, who spoke this morning at Siemens’annual state-of-the-industry presentation on trends and factors affecting the discrete and process manufacturing industries in 2015. As the world’s top automation supplier (http://www.controlglobal.com/assets/00_images/2014/12/CG1412-Top50AutoVendors.pdf), Siemens provides a unique perspective on what’s happening globally.

“The overall U.S. economic environment is quite positive,” said Batra. “Analysts are almost uniformly projecting manufacturing expansion will continue in the United States.” He noted that low energy costs, economic stability and a highly qualified workforce are big factors in the continued growth. “The mood about U.S. manufacturing is very positive. It’s born out by market research from the National Association of Manufacturers and optimism from consumers,” said Batra.

Because manufacturers find themselves strapped to add production, Batra sees 2015 as a possible breakout year for capital spending. “Companies are bumping up against running at capacity,” he explains. “Capital investments in industry are overdue, especially in the United States. It costs manufacturers billions annually in lost downtime and productivity.” Batra also cited the Morgan Stanley study on aging manufacturing infrastructure that reported it hasn’t been this old since 1968.

“A lot of companies, especially in the automotive and food and beverage sectors, are bumping up against the edge of productivity,” said Batra. “Eighty percent of manufacturing costs are predetermined in the design phase. The automotive industry is a trendsetter for other industries, but aerospace is catching up quickly. It doesn’t matter what product you’re making, the pace of demand is incredible.”

Digital Factory is one of nine Siemens divisions, part of the restructuring that was announced in 2014 by CEO Joe Kaeser. “We opened fiscal year 2015 last October with a new organization setup called Vision 2020 (http://www.siemens.com/annual/14/en/download/pdf/Siemens_AR2014_Vision2020.pdf),” said Batra.

Siemens’ Digital Factory division comprises PLM and MES, as well as automation, motion and industry control. “Our division includes solutions for any industry that would use the full discrete line of products,” explained Batra. “Automation and design software have begun to merge. We’re after creating a digital twin of what we do in the real world—virtual build, virtual test, virtual design. We feel very strongly this is a paradigm shift. We’re very serious about the entire value chain, since 80% of production costs are predetermined in the design phase. Companies are modeling and simulating. This is a very important trend.”

Siemens' Totally Integrated Automation (TIA) portal is one engineering framework that has an inherent capability to go up to the PLM enterprise, explained Batra. “IoT and big data are big drivers for industry today,” he said. “The manufacturing sector is an early and intensive user of data. In aerospace, the Boeing 737 generates as much data on a cross-country flight as what exists in the Library of Congress. IoT isn’t just for the Fortune 50. Modernizing and standardizing IoT strategies isn’t a question of if, but when.”