Technology giant Siemens re-organises to excel in African industry sector

CEO of Siemens’ global Industry Sector explains company’s plans to stay ahead of the competition.

Mitglied des Vorstands der Siemens AG
Member of the Managing Board of Siemens AG

German conglomerate Siemens focuses on three main areas; industry, energy, and healthcare. In each of these areas, technology is at the core of all its operations. Professor Siegfried Russwurm is the Chairman of the Board for Siemens, as well as the Managing Board Member responsible for Africa, and the CEO of Siemens’ global Industry Sector.

As from 1 October 2011, Siemens’ Industry Sector is to be re-organised in order to help enhance the industrial productivity and energy efficiency of key industries on the continent. Russwurm explains more.

“As globalisation increases, our world is becoming more interconnected, not only from a technological perspective, but also in economical and logistical terms,” he states.

For companies operating on the African continent – and indeed players in all of Africa’s key industries – this trend towards globalisation means they must streamline their production processes in order to hold their own against global competition. “It’s about ensuring the efficiency and affordability of production processes while increasing the speed at which high quality products are manufactured,” Russwurm believes.

African industries are confronted with the same challenges as those in other regions around the world. Development cycles in the manufacturing industry are becoming shorter, while the complexity of products and associated volumes of data during the product life cycle are becoming shorter.

Added to this, energy is becoming a significant cost factor while resources are becoming scarcer. Moreover, the environmental requirements are becoming increasingly stringent. Customers expect comprehensive solutions from a single source and service activities are demanded over the entire lifecycle of the product.

“Because Siemens has a presence across 190 countries worldwide, we have the relevant expertise to address the challenges on the continent. We have a wealth of global knowledge and experience. In addition Siemens has the capacity to provide tailor-made products, solutions and services across key markets in Africa, such as the mining, water and waste water, automotive and petrochemical industries, as well as all areas of factory and process automation,” Russwurm reveals.

He points out that it is only with a thorough understanding of the processes and requirements that are unique to the African market, whilst partnering with clients on the ground, that companies operating in the African environment can provide the relevant services to their clients.

“It’s also important to bear in mind that innovation cycles have become shorter which puts the industry under additional pressure when competing in global business arenas. For all of these reasons, Siemens has taken a global decision to reorganise its Industry Sector,” Russwurm informs.

“The Siemens Industry Sector will now comprise the Industry Automation Division (IA) and Drive Technologies (DT), incorporating Industry Solutions. Customer Services will form a separate division and address the technology based services for industrial customers,” he continues.

But what will the reorganisation mean for the service arena? “Siemens will continue to forge ahead with its service and retrofitting business, since this market offers high growth potential. This is true for the more product-orientated service activities: the product and lifecycle services (LS) as well as IA and DT. However, it also applies to value added services (VS) which include consulting, remote condition monitoring, condition based maintenance and energy efficiency programs,” Russwurm explains.

The re-organisation of the Industry Sector also answers the call of the market for an end-to-end offering from a single source. “We will be able to offer vertical market customers individual products and specific partial solutions to complete our services and system integration,” he adds. In this way, Siemens will have the agility to adapt its offering to create the ideal fit for each customers’ individual strategy – without the need for cross divisional co-ordination processes.

The benefits of the process operate on two levels. “From a Siemens perspective, co-ordination efforts will be greatly reduced. In addition, customers will profit from fewer interfaces, creating added value to Siemens’ offering and increased customer loyalty,” Russwurm maintains. “It’s an end-to-end approach, which outlines clear responsibilities for supporting customers. Individual products or services or complete systems originate from a single source.”

Russwurm believes that in a climate where rising energy costs and stricter environmental regulations are a reality, energy efficiency is the deciding factor when it comes to economic efficiency and growth.

Siemens’ commitment to the environment and sustainability is evidenced in its Environmental Portfolio, a range of products and services aimed at energy efficiency. “We have created innovative technologies and solutions that reduce energy requirements over a product’s lifecycle while reducing energy costs and ensuring a rapid return on investment,” Russwurm reveals.

He believes that productivity and energy efficiency work hand in hand to ensure a significant competitive advantage in any industry. “After all, efficiency gains are profits which pay off repeatedly,” he adds.

The products and solutions available within the Siemens Environmental Portfolio aim to assist Siemens customers to reduce their carbon dioxide emissions, bring down their energy costs and enhance business success through greater productivity. “In this way, we are also driving the growth of Siemens,” says Russwurm.

Through a process of intense research and development, Russwurm points out that “green” products will become more affordable in the future. “That said, the price of the product is not the only thing to consider. One should also weigh up the costs for the complete product lifecycle.

“For example, in the case of electric drives, 95 percent of the overall costs derive from the electricity costs, with the actual purchase price accounting for a mere three percent. This is particularly pertinent when one considers that the latest generation of energy efficient electrical drives consume 45 percent less energy – a sizable saving potential,” he notes.

Indeed, Siemens as a global market player is cognisant of the opportunities that abound on the African continent.

Evidence of the continents’ importance in the global economy is the fact that at the end of 2011, the United Nations the 17th Conference of the Parties (COP17, known informally as the Earth Summit) will be hosted in Durban, South Africa. This is the first time the global climate change conference will be held in Africa.

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