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Siemens, UGS Outline Vision Post-Merger

by David R. Brousell, MA Editorial Staff

Posted on Wednesday, June 20, 2007 5:05:00 PM       Sign Up to receive Daily News Alerts in your E-mail Inbox                               

In their first meeting with press and analysts following the completion of a $3.5 billion acquisition deal in early May, executives from Siemens and product lifecycle management (PLM) provider UGS today outlined how the two companies would work together to deliver on the idea of an integrated "product and production lifecycle management" platform for manufacturers.

Even as UGS continues this year to bring to market new versions of its Teamcenter, NX, and Tecnomatix products, executives said that UGS and Siemens Automation & Drives, the huge Siemens business unit in which UGS now resides, have embarked on an initiative that will bring the worlds of product design and development and manufacturing production closer together.

Called Project Archimedes, the initiative is centered on developing what UGS Chairman and Chief Executive Tony Affuso called "use cases" in five areas. They are: Adaptive Manufacturing, Virtual Commissioning, Harmonized Lifecycles, Hi-Fi Machining, and Mechatronics.

The project in Adaptive Manufacturing, for example, will concentrate on intelligent production components for the integration of process and automation design with UGS' Teamcenter product, Siemens officials said. Virtual Commissioning, to take another example, will focus on a validation engine for process, automation, and manufacturing execution systems.

"Project Archimedes will define projects that bring product and production together," Affuso said. "Products will result from these projects." He stopped short, however, of putting a time frame on the projects and eventual products, saying that Project Archimedes is still too new for that.

Nevertheless, early reaction to the concept from both manufacturers and industry analysts was positive.

Peter Lundh, vice president for development projects and IT procurement at Swedish tooling, mining, and construction manufacturer Sandvik AB, said in an interview with Managing Automation that his company intends to bring together its MES and PLM systems. "It's very interesting and very good," Lundh said of Project Archimedes. "There is some overlap in the areas, but I'm thrilled that they have come so far."

Andy Chatha, president of analyst firm ARC Advisory Group, said he, too, was impressed with the project idea, but saw some regional inconsistency in the market's readiness to accept the digital factory idea. "I think it is a terrific vision," Chatha said. "But digital manufacturing is further along in Europe than it is here."

Bob Parker, vice president of Manufacturing Insights, an IDC research firm, took a somewhat different view of the market. "What is the appetite in the market to buy a product portfolio of this breadth?" he asked rhetorically. "Their timing may be good."

Nevertheless, during a luncheon question-and-answer period, Chatha and others warned Siemens officials that the biggest obstacles to the kind of integration they are attempting are organizational and cultural issues within manufacturing companies. Indeed, Managing Automation readership surveys on plant floor-to-enterprise system integration have consistently showed that integration projects are either being slowed or postponed due to those types of problems.

The two-day meeting with reporters and analysts started on Tuesday with an update on UGS' product lines; announcements of several contract wins, including a new three-year agreement with General Motors that Affuso said was worth $150 million; and presentations from Sandvik and other customers about how they are using UGS software.

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