Siemens AG and lean software purveyor Factory Logic have entered into an agreement that bundles production scheduling and management software with machines that aim to help circuit board manufacturers respond to changing customer demands and supply chain volatility.
The Factory Logic Lean Operations Suite will be integrated into Siemens' surface mount technology (SMT) machines, which are made by the company's Automation and Drives Group, as part of the new Siplace lean manufacturing solution for electronics manufacturers. Siplace, the product family that includes Siemens' integrated hardware, software, and services, adds pull-based supply synchronization and production scheduling through the Factory Logic deal.
Siemens currently holds a 30% stake in Factory Logic, a private firm that makes a Web-based application suite that leverages the lean concepts of the Toyota Production System to help production keep pace with incoming orders.
To date, Factory Logic has done much of its work in the automotive and aerospace arenas, and counts automotive parts manufacturer Johnson Controls as its largest customer. The Siemens deal moves the company into the high-tech sector, adding about 200 new prospective clients that have already purchased Siemens SMT machines to manufacture circuit boards.
"By combining software applications with machine control applications, [Siemens] can provide these firms with a holistic manufacturing platform that could in effect be plugged into any ERP backbone," said Allan Wilson, Factory Logic's CEO, in an interview. Under that type of configuration, orders would come in through the ERP system and be sent to the SMT line, which would rely on Factory Logic's applications for scheduling orders and sequencing work.
The Web-based Factory Logic software, built on J2EE, includes operations scheduling, production, and supply synchronization modules. While Siemens will be using the Factory Logic software for a very specific industry, the overall concept of creating a lean technology hardware and software platform is a significant shift in the lean conversation, noted Colin Masson, an analyst with AMR Research Inc.
Traditionally, lean aficionados have said manufacturing processes should be simplified before applying any technology. That works fine when there's a low product mix and stable demand, but manufacturing has shifted to a high product mix with very volatile demand. "It is difficult to recalculate that on a regular basis," Masson said in an interview. "There's now a move to think about lean planning. Rather than the standard principles of kanban and takt time, people are looking at more complex scenarios ... and the tools to handle all of the calculations in the product mix. They need software to do that."
For Siemens, the Factory Logic relationship could translate into a competitive differentiator as it takes the concept of lean and turns it into a product of sorts. This particular integration effort would take a long time for others to replicate, as the duo has been working on the Siplace solution for almost two years.
While Siemens already had the electronic assembly system and the MES software and had found ways to connect to ERP systems, there was still a need for more.
"Customers today face more challenges," said Dr. Tuan Nguyen, director of software business for the Siemens Automation and Drives group. "It's not just about running the line more effectively, but the whole supply chain, and that is the challenge. In manufacturing, [the problem of] how to schedule and run the line is where the Factory Logic piece makes sense," he said in an interview.
Moreover, Nguyen said this holistic lean solution could potentially be used in other Siemens products, but declined to offer specifics.