Siemens Splits out Motor and Drive Businesses

Siemens announced its intention to separate its three-billion euro motor and drive business into an independent entity last November. This move both impacts the motor and drives market in general and further reveals business strategies now undertaken by large automation and controls suppliers.

Blake Griffen, senior analyst at Interact Analysis, writes, “The new motor & drives business would be an amalgamation of 5 current Siemens businesses/divisions. Large drives, Sykatec, Weiss Spindeltechnologie, and the low voltage motors & geared motor divisions from Siemens Digital Industries.”

He notes that what is included in the spin-off and what is retained are both indicators of strategy. He begins by looking at a little history.

Since their announcement of Mindsphere in 2017, Siemens has taken explicit steps to refocus the company away from being a hardware manufacturer in favor of being software and services provider. The move away from lower margin hardware businesses has yielded results for the company in terms of profit margin. Since 2017, Siemens’ gross profit margin averaged 35.5% compared to 28.8% in the previous 5 years. 

For those of us who are close observers, we have noticed similar moves by other companies such as Rockwell Automation, Emerson, Honeywell, and Schneider Electric.  Perhaps even ABB. One astute executive told me when I observed how these companies now self-identify as software and automation companies that this is what “Wall Street” expects. Financial analysts clearly believe this is the path toward growth.

Back to the Siemens announcement. Griffen writes, “We were expecting Siemens’ low voltage drive portfolio, SINAMICS, to also be a part of the new business. However, from what we can tell by the information publicly available, the low voltage drive product line will be retained by Siemens.”

I’m not surprised, and I agree with his explanation. Low-voltage drives have so much intelligence and networking power these days, I believe they should be considered part of the control system. Writes Griffen:

The drive represents the closest ‘smart’ device to a motor. As such, the device can be a powerful enabler of many digitalization strategies. VFDs have long had the ability to sense changes in the electrical behavior of the motor it is controlling. Many drive vendors, including Siemens, have begun offering condition monitoring and predictive maintenance services which employ this ‘drive as a sensor’ mentality. 

As a customer, should you be concerned about the direction of your supplier, you’d do well to consider these thoughts.

Zebra Technologies Looks At Automotive Industry

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Zebra Technologies Corp. is an interesting case study of a company building on a rather mundane, albeit useful, technology in a classic MBA strategy sort of way. I knew it for years as a label printer company—even sold a few in an earlier career. Now its technologies are found in many industries.

Along with the current meme of all God’s children doing research and reports (where have all the industry analysts gone?), here is a report Zebra compiled regarding attitudes and expectations of both consumers and managers in the automotive industry.

A couple of quick highlights:

  • Consumers are driving a growing environmental imperative in automotive manufacturing that decision-makers need to address: Eight-in-10 consumers say sustainability and eco-friendliness are key priorities in their vehicle purchase and lease decisions.
  • Navigating the increasing demand for EVs: More than half of consumers indicate their future preference is for a hybrid electric vehicle (HEV). However, navigating the growing demand comes with challenges as 68% of automotive industry decision-makers say they are under high pressure to produce next-generation (i.e., electric) vehicles.
  • Trust and transparency in automotive manufacturing is a must: Approximately 80% of consumers and fleet managers want to have end-to-end visibility during the manufacturing process.

Zebra Technologies Corporation released the findings of its Automotive Ecosystem Vision Study which confirmed automotive manufacturers are under pressure to accommodate growing consumer demands for sustainability and transparency throughout the manufacturing process and fleet managers’ need for the digitization of operations and supply chain. 

  • Despite a fluctuating economy, automotive manufacturers are ready to invest in technology innovation as seven-in-10 expect to increase their tech spend and six-in-10 plan to increase their manufacturing infrastructure spend in 2023.
  • Spanning multiple generations, consumers are a driving force behind automotive manufacturers’ acceleration to technology innovation as eight-in-10 say sustainability and eco-friendliness are key priorities in their vehicle purchase and lease decisions.
  • Consumers are also driving the growing emphasis on personalization – the ability to customize a vehicle to their liking. Nearly four-in-five consumers say personalization options factor into their decision to purchase a vehicle, and eight-in-10 fleet managers share these same requirements for sustainability and personalization. 
  • Three-fourths of automotive manufacturers say a top priority is to build strategic partnerships with tech companies for their next generation of production. 
  • Data and information transparency is highly important to consumers and fleet managers alike, and they’re seeking more visibility into the automotive ecosystem. When considering a vehicle for purchase or lease, 81% of consumers and 86% of fleet managers indicate they want to understand the origin of materials and parts on their vehicle.
  • Beyond gaining greater visibility into the automotive manufacturing process, once they have their vehicles, 88% of consumers and 86% of fleet managers want to understand how the data from their vehicles will be used by the automotive ecosystem. After a vehicle purchase, 83% of consumers and 84% of fleet managers expect ownership and control of the data their vehicle generates. 
  • A majority of consumers and fleet managers (80%) want end-to-end visibility during the manufacturing process. However, only about three-in-10 automotive industry decision-makers say they will prioritize connecting real-time data systems to enable a holistic view of operations and increase visibility across production and throughout the supply chain over the next five years. 
  • About one-third of original equipment manufacturers (OEMs) said autonomous mobile robots (AMRs), RFID, rugged handheld mobile computers and scanners as well as industrial machine vision will improve supply chain management while about one-third of suppliers cite mobile barcode label/thermal printers, wearable computers and location technology as the technologies to do so. 
  • Overall, seven-in-10 automotive industry decision-makers agree digital transformation is a strategic priority for their organization. In the next five years, they anticipate expanding their use of technology with 47% focused on additive manufacturing/3D printing and 45% on supply chain planning solutions. 

ABB Energy Advances

[Note: If you had previously signed up to receive new posts via email, you’ve noticed that they stopped and then restarted. WordPress had notified me that this service had ended. I recently saw where it was active, but not supported. It’s on for as long as WordPress enables it or until you unsubscribe.

You can subscribe to an occasional newsletter that I’ve been playing around with. It comes through my HEY.com email account. If you haven’t checked out Hey, give it a look. I haven’t moved my business email there, yet, but I like the new take on an email client. My email address there is [email protected] The newsletter is at https://world.hey.com/garymintchell and you subscribe there or get the RSS feed for your reader.]

Click on the link on my homepage for the Carbon Almanac. It is a volunteer effort to compile information about carbon and climate change. I made a very minor contribution, but I do promote the work.

Process automation technology developers have become focused on such areas as energy saving, carbon capture, methane leak detection, and so forth. I view these as ethically valid—and also valid examples of Lean…reducing waste. 

ABB has become a leader of the pack. I have two recent pieces of news about programs. One is an independent report to help discover problems and solutions; the other is a use case with an end user partner.

ABB Energy Report

  • Energy efficiency is the best way for industry to cut costs and reduce emissions right now
  • Independent report highlights 10 actions to help industrial users improve their energy efficiency right now
  • Improving energy efficiency will reduce energy bills and emissions substantially in the short- to mid-term, without compromising productivity
  • Industry is the world’s largest consumer of electricity, natural gas and coal, and accounts for 42 percent of electricity demand

A new report from the Energy Efficiency Movement shows that improving industrial energy efficiency is the fastest and most effective way for a business to cut energy costs and greenhouse gas emissions. The Energy Efficiency Movement is a global forum of around 200 organizations sharing ideas, best practices and commitments to create a more energy-efficient world.

The “Industrial energy efficiency playbook” includes 10 actions that a business can take to improve its energy efficiency, reduce energy costs and lower emissions right now. It focuses on mature, widely available technology solutions that will deliver rapid results and ROI – and are capable of being deployed at scale.

Industry is the world’s largest consumer of electricity, natural gas and coal, according to the IEA, accounting for 42 percent of total electricity demand, equal to more than 34 exajoules of energy.[1] The iron, steel, chemical and petrochemical industries are the largest consumers of energy among the world’s top-five energy-consuming countries – China, United States, India, Russia and Japan. This energy consumption carries high costs in the current inflationary environment. It was also responsible for nine gigatons of CO2, equal to 45 percent of total direct emissions from end-use sectors in 2021, according to the IEA.

Organizations interviewed for the report include ABB, Alfa Laval, DHL Group, the IEA, Microsoft and ETH Zürich, the Swiss federal institute of technology. The contributors’ recommendations range from carrying out energy audits to right-sizing industrial machines that are often too big for the job at hand, which wastes energy. Moving data from on-site servers and into the cloud could help save around 90 percent of the energy consumed by IT systems. Speeding up the transition from fossil fuels, by electrifying industrial fleets, switching gas boilers to heat pumps or using well-maintained heat exchangers will also offer efficiencies.

Further actions involve installing sensors and real-time digital energy monitoring to reveal the presence of so-called “ghost assets” that use power when on stand-by, unlike a digital twin that can simulate efficiency actions without interrupting production. Using smart building solutions to control power systems, lighting, blinds and heating, ventilation and air conditioning (HVAC) will also save energy in industrial facilities.

Other recommendations include installing variable speed drives which can improve the energy efficiency of a motor-driven system by up to 30 percent, yielding immediate cost and emissions benefits. If the more than 300 million industrial electric motor-driven systems currently in operation were replaced with optimized, high-efficiency motors, global electricity consumption could be reduced by up to 10 percent.

ABB partners with Boliden to reduce carbon footprint of its industrial products

  • ABB to use Boliden’s certified recycled and low-carbon copper in electric motors and electromagnetic stirring technologies
  • Move supports ABB’s target of at least 80 percent of its products and solutions taking a circular approach by 2030

ABB is working with Boliden, the Swedish mining and smelting company, to build a strategic co-operation to use low carbon footprint copper in its electromagnetic stirring (EMS) equipment and high-efficiency electric motors. The aim is to reduce greenhouse gas (GHG) emissions while driving the transition to a more circular economy.

The partnership with Boliden forms an integral part of ABB’s strategic ambition to reduce the environmental impact of raw materials used in its products by replacing them with lower carbon alternatives. Apart from using recycled copper, ABB has committed to increase the use of recycled electric steel (e-steel) and recycled aluminum. The move is also an important step in closing the circularity loop that has already seen ABB designing its motors to be up to 98 percent recyclable, with the remaining two percent of materials available to be incinerated for heat recovery. Recycling copper, aluminum and steel offers energy savings of between 75 and 95 percent compared to virgin production.

The co-operation includes ABB placing the first order for Boliden’s certified recycled copper through Finnish metals manufacturing specialist Luvata. Hollow conductor wire made from the material will be used in ABB’s EMS products for both steel and aluminum manufacturing.

Furthermore, as of 2023, ABB will purchase Boliden’s low-carbon and recycled copper to cover the demand for its IE5 Ultra-Premium Efficiency SynRM and e-mobility motors produced in Europe. The two companies have also signed a memorandum of understanding that will see ABB supporting Boliden in identifying inefficient low-voltage motors across its operating units. These motors can then be replaced with high efficiency motors within ABB’s take back upcycling framework, with the old motors recycled to provide raw material for Boliden’s recycled copper.  

Copper is a vital material for manufacturing industrial electrical equipment, but its production is energy intensive. To address this, Boliden has developed low-carbon copper that is mined using fossil-free energy and also produces copper using secondary raw material from recycled products. The carbon footprint of these products is 65 percent lower than the industry average. A typical 75-kilowatt (kW) motor weighing 650 kg might include 80 kg of copper. Using Boliden’s copper saves approximately 200 kg of CO₂ emissions for every one of these motors manufactured. Each stirrer has up to 2,700 kg of copper, saving up to 6,700 kg of CO2 per stirrer.

PwC Industrial Manufacturing Merger and Acquisition Outlook

PwC issued its analysis of the current state of industrial manufacturing merger and acquisition (M&A) activity. Looking at the transition from 2022 to 2023, their analysts predict industrial manufacturing M&A will be strategically focused going into 2023.

A handful of industrial manufacturing transformational deals (transactions exceeding $1 billion in deal value) in the fourth quarter of 2022 pushed the year to a strong finish — despite macroeconomic headwinds — and demonstrating growth over the previous quarter. 

Overall, industrial manufacturing M&A deals declined in 2022 from historic levels in 2021. However, the 2022 level of deal activity is nevertheless above historical trends, specifically higher than 2019. M&A volume in the second half of 2022 appeared to illustrate a shift to investments in North America due to economic and geopolitical uncertainty and the desire for nearshoring of certain operations. This may continue to influence the M&A landscape into 2023, despite the strengthening of the US dollar. 

Strategic focus areas and investment along with portfolio review and resulting divestitures are expected to support stable deal activity going into 2023.

PTC Acquires ServiceMax

PTC to Acquire SaaS Field Service Management Provider ServiceMax

PTC continually enlarges its footprint in the digital enterprise domain. There was its expansion a few years ago into Internet of Things with acquisition of ThingWorx and Kepware. Those brought a relationship with Rockwell Automation—and I noticed its stand at Automation Fair this month was continually busy. Now an extension into field service management related to its product lifecycle management (PLM) portfolio. 

This is an interesting acquisition. Management believes it can bring all these acquisitions together to get the jigsaw puzzle pieces to interlock.

  • Acquisition expected to strengthen service capabilities of PTC’s closed-loop PLM portfolio
  • PTC’s manufacturing customers rely on field service management for product performance, customer satisfaction, and profitability expansion
  • Strong synergies between PTC and ServiceMax’s manufacturing customers and product portfolios
  • Transaction expected to be accretive to PTC’s SaaS ARR and cash flow in FY’23

 PTC announced that it has signed a definitive agreement to acquire ServiceMax for approximately $1.46 billion in cash on a debt-free, cash-free basis from an entity majority owned by Silver Lake. ServiceMax is a recognized leader in cloud-native, product-centric field service management (FSM) software. The acquisition is expected to strengthen PTC’s closed-loop product lifecycle management (PLM) offerings by extending the digital thread of product information into downstream enterprise asset management (EAM) and FSM capabilities. Subject to the satisfaction of regulatory approval and other applicable closing conditions, the transaction is expected to close in early January 2023.

Partners since 2015, PTC and ServiceMax both support manufacturers of complex, highly configured products for the medical device, industrial products, aerospace, and related verticals. These manufacturers view field service as a strategic part of their businesses to maintain product performance, extend their products’ lifecycles, increase customer satisfaction, drive revenue growth, and expand profitability.

Details:

  • The purchase price will be funded in two stages, with $808 million paid at closing and $650 million paid in October 2023. The transaction will be funded with cash on hand, borrowings under PTC’s existing credit facility, and a new $500 million committed term loan.
  • ServiceMax is expected to contribute approximately $160 million in ARR for PTC’s Q2’23.
  • The transaction is expected to be accretive to PTC’s FY’23 cash flow from operations, free cash flow, and adjusted free cash flow targets.

Hexagon Startup Accelerator Picks Eight Metaverse Startups

Is “Metaverse” a flash-in-the-pan? An ephemeral vision soon to succumb to reality? This news from Hexagon from a couple of weeks ago is about the last I’ve heard. There was one comment about metaverse at the trade show I visited this week, but I think the person spoke ironically.

At any rate, the technologies (if not use cases) are real and under development. Hexagon has announced previously a startup incubator called Sixth Sense—an “accelerator-style” program to fast-track their solutions to commercial success.

Hexagon has announced eight startups that will join its fold under its Sixth Sense. These start-ups have been identified by Sixth Sense as the next big thing for digital reality solutions in the manufacturing sector (digital reality, AR, VR Metaverse).

Examples of the start-ups’ innovations include:

  • A ‘handheld lab’ gel scanner that replicates human skin tactility to autonomously test materials
  • An algorithm that can analyse an entire car or plane, and in seconds recommend which elements would be stronger, cheaper or lighter if 3D-printed
  • An app that takes product data and turns it into a 3D virtual and interactive model, using any smartphone
  • An AR overlay to remote customer service, enabling technicians to literally show how it’s done

Eight ‘best of the best’ startups have won out in a competitive pitch process and will join a rigorous ten-week programme to inform and refine their offering with Hexagon’s market insights to global brands like Audi, Boeing, and Microsoft. It will conclude in showcase in February, where two winners will be offered a unique opportunity to scale with Hexagon’s portfolio and bring their digital reality solution directly to customers.

The eight start-ups are:

  • 3YOURMIND, Berlin, Germany—enables more agile manufacturing with a software suite that standardises, optimises and automates the entire process chain to enable on-demand part production. Software is designed to efficiently schedule and track manufacturing processes – from the initial order to the finished part.
  • Augmentir, Horsham, USA—provides companies with smart insights to the workforce and processes, from “hire to retire”. The collected data helps to reduce time to productivity, enables targeted reskilling and upskilling, and provides individualised guidance and support at the point of work.
  • Threedy, Darmstadt, Germany—provides the visual computing technologies to translate the ever-growing web of 3D, business and process data into highly responsive and interactive 3D applications. Its instant3Dhub technology translates existing 3D data entities into highly interactive experiences while minimising device and infrastructure costs.
  • oculavis, Aachen, Germany—develops Visual Assistance software which connects machinery and equipment with experts, technicians and customers worldwide. Intuitive Augmented Reality (AR) annotations in video calls facilitate focused collaboration between technicians and clients.
  • CASTOR, Tel Aviv, Israel—provides automated 3D printing software which analyses thousands of parts simultaneously and offers deep technical analysis of a complete machine design. It enables manufacturers to identify cost reduction opportunities, suggests geometry changes to the part’s design, estimates the cost and lead time and connects the manufacturer to a printing service bureau.
  • GelSight, Waltham, USA—develops human skin-like tactile sensing technology that provides detailed and rapid surface characterisation, enabling several surface measurement applications and robotic sensing capabilities.
  • JITbase, Montreal, Canada—builds smart manufacturing software that uses machine data and information from CNC programmes to calculate the optimal sequence of machinist activities on the shop floor. The Optimal Path System (OPS) is based on algorithms that calculate in real-time what should happen in production to maximise the availability rate of the fleet of machines.
  • Teratonics, Orsay, France—offers highly automated non-destructive testing, imaging systems and analysis services through the use of ultrashort Terahertz pulses. Users can look into every produced part to uncover internal defects and measure dimensions.

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