Siemens is Creating a Digital Supply Chain Stretching from the Factory to the Office

Digital technology is driving so much of our industry these days, and Siemens is working to digitise the entirety of its supply chain.

Siemens began life as Siemens & Halske when Werner von Siemens and Johann Georg Halske founded the company to market their telegraph-based invention, the Telegraphen-Bauanstalt von Siemens & Halske, in 1847. The following year, the company built the first long-distance telegraph line in Europe which stretched from Berlin to Frankfurt. Over the following decades the company diversified with interests in technology, healthcare, defence, and power, to name but a few.

Today, Siemens is one of the world’s largest companies and employs over 370,000 people across the globe. The Munich-based company has revenues over $91 billion, which places it at #66 on the Fortune Global 500.

Outdated Technology

Siemens is presently engaged in the process of integrating new technology and services from OpenText with the goal of encouraging over 100,000 of its trading partners to do away with outdated modes of business and embrace digital innovations.

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Siemens realised many of these trading partners were still relying on phone, fax, and surface mail to process invoices and for other common tasks. The software provided by OpenText will instead power a digital supplier portal, available with 24/7 support, in a multitude of languages.

The project, dubbed the Electronic Supplier Integration Program (ESI+) is designed to increase the efficiency, quality, and profitability of all companies involved in the Siemens supply chain by connecting them more effectively with digital communication solutions. ESI+ reduces the errors inherent in manual processes.

When the OpenText platform, known as Trading Grid, receives a notification of a purchase, the user simply clicks on the grid point to flip it over and turn it into an order confirmation, dispatch advice note, or invoice. Key information such as date, order number, and address are copied between the forms automatically, and can be sent off to the relevant department with a single click – eliminating the possibility for transfer errors.

“The near-term objective for the ESI project is to streamline our process with suppliers and avoid the more manual, error-prone processes that might take place today, moving towards a lean order confirmation, order change, dispatch and invoicing process,” said ESI+ Project Lead at Siemens, Andreas Kolb. “It’s not something which is easy to get to the supplier’s mind but also our employees’ minds. It’s also an area that will require continuous effort. It will never end. It’s a never-ending story.”

A Digital Factory

Another way Siemens is digitising its supply chain is at the manufacturing level. Using 3D printing, IoT, and other Industry 4.0 technology, Siemens is bringing its machinery and plants online.

Digital twins enable manufacturers to establish proof of concept in the virtual world before creating in the physical one, with cyber-physical systems feeding data back to the computers to further optimise production. AI and machine learning can process huge volumes of data, with cloud functionality making the resultant insights available all over the world. Finally, advanced robotics can perform repetitive factory assembly tasks without ever getting tired or making mistakes, allowing for 24/7 continuous manufacturing.

Many existing machines can be simply upgraded to become IoT enabled, reducing barriers to implementation, and making sure that factories can be quickly and efficiently brought in line with these new technologies.

“Digitalisation changes all our lives,” said Siemens Industrial Central Technology Officer, Alan Norbury. “It changes the way we stay informed, it changes the way travel, it changes the way we buy things. It also changes the way we manufacture products. We need the skills to be able to work in a virtual environment, we need to be able to work with robotics, and we also need a combination of skills – hybrid skills, where the IT people are working with engineering people who are working with the design people.”

Final Thoughts

Digital technology is here to stay, of that there is little doubt, and companies such as Siemens are leading the way in applying these exciting innovations in all walks of life and business. As these technologies develop further and become ever more sophisticated, we are likely to see supply chains and manufacturing processes becoming more efficient, effective, and safer than ever before.

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