2014 Manufacturing Outlook from Siemens CEO

January 272014
2014 Manufacturing Outlook from Siemens CEO

By Bill Lydon, Editor

On January 17, 2014, Helmuth Ludwig, CEO of Siemens Industry Sector USA, provided his views on the 2014 manufacturing outlook and other industry topics. Ludwig believes economic indicators for the United States are positive, and the economic recovery will continue in 2014. He cited a Goldman Sachs study that indicated a 9% increase in 2014 capital spending. The Purchasing Managers' Indexes (PMI) have been stable in the last six months at around 55, indicating an expansion mode. The Manufacturers Alliance for Productivity and Innovation (MAPI) index is 67, the highest since September of 2011. Ludwig emphasized the new order index is particularly strong at 86. Ludwig said, “Industrial production is at a ten year high at this time.”

Automotive Industry and the 100th Anniversary of the Assembly Line

Ludwig attended the 2014 North American International Auto Show (NAIAS) in Detroit where Ford, Comau, and Siemens staged an assembly line demonstration of the latest software and hardware technology used in automotive manufacturing production. The demonstration was located within the Ford Motor Company exhibit. Ludwig commented that this was the first time visitors could view an assembly line at the Auto Show. The assembly line was staged to celebrate its 100th anniversary. Siemens has a strong presence within the automotive industry with products used in 14 of the 15 world’s automakers and in more than 80% of automotive plants worldwide.

Assembly line at Ford display at the North American International Auto Show

Modern Assembly Line at the North American International Auto Show

The first assembly line was developed for the Ford Model T and began operation on December 1, 1913. Needless to say, it had a great impact and influence on world manufacturing.

Ford 1913 Highland Park Moving Assembly Line

Ford 1913 Highland Park Moving Assembly Line

Ludwig described that with modern manufacturing software and hardware, the entire production process can be planned in virtual software environments, debugged, and then physically realized. He discussed a major customer that runs a virtual simulation of machines called “digital twin,” along with the physical machine. This virtual simulation allows them to determine and plan the best way to accomplish changeovers before making the physical change.

Ludwig noted the importance of software, citing an example of software controlling robots at a major manufacturer and achieving a 24% energy savings while maintaining the same production capacity.

The automotive industry has always been a leader in innovations in manufacturing. Other industries then follow their lead in efforts to improve productivity and quality.

Other Industries

Helmuth Ludwig discussed positive improvement opportunities in other industries, including oil & gas, metals, and chemical. These opportunities are supported by lower energy costs, higher wages in other countries, and increased efficiency and productivity. These improvements continue to be supported with strong corporate cash reserves and balance sheets not seen since the 1960s.

United States Innovation

Ludwig believes the United States has a deep software culture and the strongest position in software, with 65% of top software companies headquartered in the United States. This he believes is a key factor for the United States’ strong and sustainable manufacturing resurgence. Software supports the leveraging of big data and advanced computing to improve operations using remote monitoring and services. Ludwig summarized his outlook by stating that Siemens is inspired by the manufacturing revival, advances in digital manufacturing, and renewed interest by young people in manufacturing.