© Siemens AG 2011. All rights reserved

MIT Manufacturing Summit

US Manufacturing impressions from a Global conglomerate

Cambridge, October 2011

Page 2 © Siemens AG 2011. All rights reserved

Innovation has been making Siemens strong for over 160 years

Outstanding innovation and sales development of Siemens AG, since 1847

First pointer telegraph

World's first pacemaker

from Siemens

Digital EWSD telephone exchange

W. v. Siemens develops Dynamo

Magnetom

"Synapse 1"

"Eurosprinter"

First Simatic ICE3

Sensor "Fingertip"

Electric train

First Siemens radio

receiver

First traffic light

ISDN "HICOM" First GSM

mobile phone with color display

First 256 Mbit chip

1847 1847 1879 1879 '80 1924 1926 1926 1958 1958 1959 1959 1974 1974 '03 '03 1866 1866 1973 1973 '81 '82 '84 … '92

Start of production of highly integrated

LSI circuits

64 kbit storage

A company like Siemens can only be lastingly successful with technologically superior products. We must constantly produce innovations that give us an advantage over the competition.

Heinrich von Pierer, shareholders' meeting Jan 23, 2003

«

»

Sales, in logarithmic scale

Overview of Siemens origin

& growth

Page 3 © Siemens AG 2011. All rights reserved

Siemens has 4 Sectors, with 60,000 employees and $25 Billion in revenue in the US during FY10

Siemens Sector & Division setup, with employees & revenue (USD) for FY!0

Industry

Osram

Medium & Low Voltage

Industry Automation

Drive Technologies

Customer Services

Energy

Power Transmission

Fossil Power Generation

Renewable Energy

Oil & Gas

Infrastructure & Cities

Building Technologies Imaging & IT

Workflow & Solutions

Diagnostics

Healthcare

Smart Grid

Mobility

Key FY10 information Global Employees: 405,000 US Employees: 60,000

Global Revenue: $104 Billion US Revenue: $25 Billion

Overview of Siemens businesses

& size

Page 4 © Siemens AG 2011. All rights reserved

Current challenges for Siemens in the US

§  Identifying candidates & hiring for open positions §  Remaining cost competitive §  Ensuring continued innovations in both products

& mfg processes

A review of Siemens Mfg landscape, shows opportunities & challenges exist in the US

US manufacturing overview

§  ~3,000 open positions in US §  Majority are manufacturing related §  Average potential salary ~$89,000

§  Refocus on US manufacturing §  Exchange rates helping to maintain competitive

US costs / investments §  Perception that intellectual property needs to be

preserved in US & EU

United States §  Nearly 100 manufacturing sites across US

§  All four Sectors & all of the divisions have US manufacturing facilities

§  Locations in all 50 states

§  Sites originate from both investment & acquisition §  Limited return to US once off-shoring occurs

Germany §  Majority of manufacturing capacity with continually

heavy investments in automation §  Off-shoring generally for non-critical components

Rest of World, mainly emerging markets §  Traditional focus on low-cost, low-value mfg §  Recent shift to local-for-local & local-for-global

Current opportunities for Siemens in the US Siemens Manufacturing Overview

US mfg overview & comparison

Page 5 © Siemens AG 2011. All rights reserved

Examples of global mfg strategies, resulting in an expansion of US-based mfg value-add

Global manufacturing strategies followed a process to obtain results

§  Identify required core competencies §  Generally based on market

differentiators §  Can include considerations for IP &

trade secrets

§  Evaluate existing capabilities & future demand

§  Determine location & workforce to deliver core competencies

§  Develop a detailed business case: §  Rationale for changes §  Financial analysis (NPV, cashflow,

P&L impact) §  Project timeline §  Risk assessment & mitigations

Energy Sector §  Workshop footprint strategy

Energy Impacts §  Opened a new site in the US

§  Based on a manufacturing innovation

§  Enhanced product portfolio, while reducing costs

Industry Sector §  EBIT improvement &

manufacturing best practices

Industry Impacts §  Shifted high value-add work

to US for customized products §  Increased focus on high margin

customized solutions §  Low skill & high-run-rate work

remained in Mexico facility

Results Process & evaluation Manufacturing strategies

Mfg project examples

that I led

Page 6 © Siemens AG 2011. All rights reserved

§  Diagnosis of a disorder (e.g. infection, cancer, …)

§  Localization of disease (e.g. stenosis, tumor, …)

§  Reveal multi-morbidities

§  Genetic pre-disposition §  Patient metabolism / immune

reactions §  Molecular specificities of

the disease §  Stratification for treatment

§  Assessment of similar cases §  Structured outcome analysis §  Decision support systems §  Standards of Care

 Imaging, Diagnostics Molecular applications Healthcare IT

Siemens’ Healthcare portfolio designed to enhance patient outcomes from diagnosis to treatment

Understand the patient‘s disease

Understand the patient‘s biology

Leverage state-of-the-art databases

Siemens Healthcare portfolio overview

Current area of responsibility

Page 7 © Siemens AG 2011. All rights reserved

§  Increasing demand for healthcare services §  Diverse & scattered customer base

§  Growing & aging population §  Emerging rural healthcare §  High growth in emerging markets

Market trends Need for improved healthcare

Trends in Healthcare require improvements in innovation & manufacturing

§  Cost pressure (e.g. Deficit Reduction Act)

§  Financing problems §  New structure of competitors

§  Disease orientation §  Healthcare IT

§  Innovations needed to drive customer & Siemens cost reductions

§  Improved processes & workflows

§  New applications & clinical pathways §  Flexible and customer-specific

IT solutions

Healthcare market trends with needed responses and statement from Eric Spiegel

Trends in my area focus on innovation

& manufacturing

Page 8 © Siemens AG 2011. All rights reserved

Closing statement – invest in education & training

“The old jobs are not coming back. We need to invest in education and training to get people prepared

to fill these high-skilled, high-wage jobs of the future”

– Eric Spiegel, president & CEO of Siemens Corp (NAFTA)

Closing statement as said

by CEO of NA