Is Industry 4.0 Realistic? Face to Face with Siemens CEO Tony Hemmelgarn
…Sales Development is Tony Hemmelgarn’s Wheelhouse
Negotiating with customers is Tony Hemmelgarn’s wheelhouse. Before he took the positions of CEO and president, he was responsible for Siemens PLM’s global sales. He’s also been an account manager, and for a while he had sales leadership in Europe. How will his extensive sales experiences affect Siemens PLM?
Hemmelgarn noteded. “Our customers are extremely important to us.” Not only in their capacity as buyers of Siemens software, but also as technology drivers.
Hemmelgarn continued,“We have customers that are very advanced in using the tools we’ve had for years and truly creating that digital twin. Where we are advancing is looking at what do you do with software, what do you do with the systems approach, at multiphysics problems where we talk about the complexity of products with the rise of software with mechanical and electrical all coming together. And the customers follow and push us in this. The ideas we are getting from speaking with our customers and seeing what they are seeing pushes us as well.”
“Sometimes the challenge with a customer is that it’s not so easy just to cut over to the new thing. You’ve got legacy systems to deal with, so usually what holds us back is not the desire to go. It’s just that they’ve got existing processes we have to work around. Sometimes you have startup companies; with new companies it’s easier since they don’t have legacy systems, and that makes a big difference. It allows them to run fast. Large, established companies can create special teams to go and do this. But at the end of the day, they’ve still got existing processes and you still need to integrate into that,” Hemmelgarn said.
IS MENTOR WORTH 4.5 BILLION? “Absolutely,” said Tony Hemmelgarn. It’s about much more than just IC and PCB design. “For instance, this idea of bringing together electrical, software and mechanical, whether it’s in integrated circuits (IC) or in printed circuit boards (PCB).”
But there are other parts of Mentor that are interesting, as well. “We do a lot of work today in systems engineering; how we manage the requirements, whether they are functional, physical or whatever it is to drive the product definition.”
Is Mentor Graphics Worth the $4.5 Billion Dollars Siemens Paid?
One thing that strikes me while speaking with Tony Hemmelgarn is his emphasis on the big picture. The world of product development and manufacturing is getting more and more complex. Industry 4.0, digitized factory concepts, IoT, digital twins and virtual reality – there’s a lot going on. Plus, the landscape of disruptive IT solutions is growing to an extent where it is getting hard to grasp the whole.
Some would say this makes for a stormy, almost chaotic, development climate. Others refer to it as “the perfect storm.” Siemens PLM’s new CEO belongs to the latter group, and sees very few limits to what can be done.
Siemens isn’t buying Polarion simply to get hold of a software applications tool. They are acquiring it to become a part of the Teamcenter platform and extend their general ability to handle the entire product realization process. The same goes for LMS, CD-adapco and most certainly for Mentor Graphics.
“We’re talking about how everything can come together,” said Hemmelgarn.
Is Mentor worth the $4.5 billion Siemens paid? “You can always debate the price,” Hemmelgarn continued, explaining that it boils down to the question of what can be done with it, and how Mentor fits into Teamcenter’s platform structure.
“I think we really have something unique here. We’re the first company that brought together the idea of mechanical / electrical / software in one environment. When you think about what Mentor brings to the table, this idea of bringing together electrical, software and mechanical, whether it’s in integrated circuits (IC) or in printed circuit boards (PCB), there are other parts of Mentor that are really interesting as well. For example, we do a lot of work today in systems engineering; how we manage the requirements, whether they are functional, physical or whatever it is to drive the product definition,” Hemmelgarn said.
But there’s more. Embedded systems and software, for example – what does that mean?
“We think about IoT and sensors; what does it mean to manage the sensors? The relationships of those sensors back to the software, the electronics and everything driving the product development process – how do you integrate all that together? So, it’s not just IC, it’s not just PCB; it’s the systems approach.”
In this context, he points out an interesting parallel. When Siemens bought digital manufacturing platform Tecnomatix ten years ago, the same question was asked at that time: “Is it worth what you’re paying for it?”
Others asked, “What does it mean to integrate things together?”
According to Hemmelgarn, “You had the silos then, too. You designed your product, threw it over the wall and then you manufactured it. Where our customers are today, they talk about ‘process driven product design.’ In other words, you’re making changes in consideration of the processes that were used to manufacture the part. You don’t make a foolish change to a design that looks like a minor change but costs you a fortune in the plant because you did something not in line with the plan. People don’t question that today.”
“Now you can make decisions in the context of the whole product. The value we can bring with Mentor is about crossing those silos.” Hemmelgarn concluded.
Aiming to Provide Best in Class Tools
The secret is to understand what is going on and equip yourself with the right tools.
“The best in class tools,” clarified Hemmelgarn, pointing to Siemens’ high-end CAD solution, NX, as one such tool. In the generally slow-growing CAD market, Siemens had an amazing breakthrough when Daimler decided to swap out Dassault’s CATIA V5 in favor of NX a couple years ago. 6,500 new licenses in one deal is a unique event.
“We’ve done very well with NX,” Hemmelgarn commented. “Our implementation at Daimler has gone extremely well, and ahead of schedule. So we always look for opportunities with the other automotive companies. As a large company with an extensive production of vehicles, it’s not an easy process to make a switch. So, you look for those opportunities where there’s an inflection point. But I think you make a key statement in this, and that is the use of Teamcenter.”
“Teamcenter is used heavily in most of the automotive OEM’s and Tier 1s today. But it’s not just Teamcenter; the Tecnomatix’ solution, our digital manufacturing capabilities, are used very heavily and if you look at what we’re doing with LMS, model-based simulation, design, test and measurement capabilities for both the virtual design and physical test process, you can see that we have a very good presence with those companies as well. The same goes for our recent acquisition of CD-adapco, and also for Polarion, our ALM solution that we acquired not that long ago. We are seeing a growing uptake for this solution too.”
My Take: If Any Player Can Realize the Dream of Industry 4.0, Siemens is Closest
Siemens’ strategy hasn’t changed. The company is still looking at emerging trends to make sure that they have them covered in their platforms and processes. The long-term challenge is to make sure they’re integrated, and to get them through the entire work stream that they see in Industry 4.0.
However, Tony Hemmelgarn is clear that there’s still a long way to go before that dream and vision of Industry 4.0 becomes an everyday reality. If you’re going to do that effectively, you’ve got to do the whole process. This is a foundation in Siemens PLM that the new PLM leader wants to see:
“You can’t say: ‘Well, I’m going to do R&D, and I might do a feedback loop from the service group, but I won’t do anything in manufacturing. That seems foolish to me,” Hemmelgarn said.
The short-term challenge is keeping pace with the technology that’s there today. IoT is one where there’s still some work to do – although the Mindsphere solution is a great start.
As with anything offered as platform-as-a-service, however, the key with IoT is not to duplicate what you can get from the marketplace today.
“If you look at Amazon today, they have a very strong offering for a baseline of IoT. Why would we want to duplicate that? On the contrary, we’ll leverage that, take advantage of that. The key is the domain knowledge and the analytics that you can apply. For instance, our Mindsphere solution can grab that type of information, whether it’s essentials from the factory floor, from products or whatever. You will a lot more from us on Mindsphere and what we’re doing there during the coming 18 months.”
Angela Merkel Was Impressed
When German chancellor Angela Merkel visited Siemens electronic factory in Amberg back in 2015, she was impressed. The facility is among the most modern and advanced in the world, and stands as a good example of Industry 4.0 and the concept of a digital factory.
Furthermore, it represents exactly what German industrialists in general believe to be the best way to compete with the emerging Eastern countries and the low cost profile that attracted Western industrial production owners to establish plants there instead of in their home countries. This concept, translated into a practical platform, can make that stream more efficient than building trade walls.
With the Teamcenter Suite and its connection to Siemens’ manufacturing hardware and software solutions represented by Siemens Simatic, the TIA Portal and other automation solutions, Hemmelgarn holds a strong hand, which is regarded as the strongest in the market by many observers with deep industrial insights.
If anyone can produce an Industry 4.0 type of platform, it’s Siemens PLM and the Digital Factory division. Together, they are big enough in terms of resources and competence; in-house they have one of the most–if not the most–advanced PLM and MOM (Manufacturing Operations Management) software, systems and services. And with over 15 million licensed seats and more than 140,000 customers worldwide, they can reach exactly the kind of customers that would be interested in these kinds of ventures.