Siemens Points to the ‘Case for Optimism’ in U.S. Manufacturing

Economic recovery, manufacturing’s move to digital, and increasing interest from the next-generation workforce are all reasons that industrial automation looks to have a good future in 2014 and beyond.

Helmuth Ludwig, CEO of Siemens Industry Sector U.S.
Helmuth Ludwig, CEO of Siemens Industry Sector U.S.


At the Detroit Auto Show this week, visitors can see not only cars, but also a section of an automated assembly line, in celebration of the assembly line’s 100th anniversary. Ford teamed up with Siemens to showcase the automation behind automotive assembly, including Siemens PLM software solutions and more than 1,000 Siemens components. It was with that backdrop that Helmuth Ludwig, CEO of Siemens Industry Sector U.S., spoke today about “positive indications” for U.S. manufacturing in 2014 and beyond.

Ludwig discussed three key trends—economic recovery, digitization of manufacturing, and the next-generation workforce—that all provide “a good case for optimism” for manufacturing in the U.S.

The automotive industry, which has always been a poster child for industrial automation, is at a five-year high for sales, Ludwig noted, and is showing positive signs for the future. But besides those and other positive economic indicators, technological advances play a significant role in future investments.

The assembly line at the Detroit Auto Show “is a great example of how modern manufacturing can be virtually and then physically realized,” Ludwig said, describing a move toward more software-driven efficiencies. “The CAFE standard is definitely a driver on the powertrain side. And there’s an explosion of the breadth of different models that can only be supported by an intelligent software system.”

But it’s not just the automotive industry that is showing positive signs, with investments in automation. Shale gas, and the opportunities that it brings with it, is leading a high and significant investments in the oil and gas industry, Ludwig said. And cheaper gas resources are also pushing investments in other industries. “In metals technologies, we see investments that I personally would’ve not expected three years ago,” he said. “In the chemical industry, we expect very, very significant investments. The CEO of Dow has put a list together of about $100 billion in investments that are based on shale gas.”

Manufacturers are making automation investments in order to be able to handle the complexity of their customers’ requirements, Ludwig noted. “It is supported by significantly increased efficiency and productivity, but also a cash reserve on the balance of companies that we haven’t seen since the 1960s,” he added.

The move to manufacturing that is more digital contributes significantly to increased efficiencies, Ludwig said, describing an example in which only the software was changed in how robots were managed, leading to 24 percent less energy used for exactly the same manufacturing results. “This is what the software can do,” he asserted. “It leads to extraordinary improvements.”

Although Big Data has become a common buzz word, Ludwig said, Siemens has been involved with such concepts for many years, creating benchmarks for optimization and using manufacturing data to further optimize processes. The robot example is a “real example of how Big Data can be used,” he said. “We were able to improve energy intake by almost a quarter without anything physically being changed.”

A combination of virtual planning and real manufacturing is one way that digitization can increase efficiencies. In one example, a manufacturer running a virtual machine parallel to a physical machine provides advantages in the changeover process for a new part, Ludwig explained. With the ability to test the production beforehand in a virtual environment, machine downtime during actual changeover is decreased by 18 percent.

This increasing reliance on software in manufacturing is good news for manufacturing in the U.S., Ludwig pointed out, because the U.S. is so focused on software development. Of the top 100 software companies in the world, 79 percent of the revenue comes from companies headquartered in the U.S., he said. “It’s the basis for a sustainable manufacturing resurgence, manufacturing strength,” he said, pointing to possibilities to optimize Big Data for manufacturing. “We have optimism for the future, and especially optimism for manufacturing in the US.”

Ludwig also spoke of the need to have the right people in place to bring it all together. Although for many years a focus has gone away from science, technology, engineering and math (STEM) subjects, technological advances such as 3D printing are beginning to make manufacturing more attractive, he said. He pointed to programs that manufacturers increasingly have with local colleges, including Siemens’ apprenticeship program with Central Piedmont Community College in Charlotte, N.C., in which students learn about all aspects of mechatronics and have the opportunity to work for Siemens after completion of the program for a higher wage than they would otherwise earn. “Many, many companies are doing this today,” he said, speaking with optimism about students’ increasing interest in manufacturing. “It’s the next generation that wants to make things and wants to make things right.”


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