03 | 2010 Creating sustainable value through technological

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Creating sustainable value through technological leadership

03 | 2010

www.siemens.com/industry

Focus: Innovation management

Intelligent

How successful companiesturn good ideas into marketable products

Innovative

How newly industrialized countries are developing into global technology centers

Environment-friendly

Why high-speed trains are often the preferable alternative to flying

Subject to change without prior noticeOrder No.: E20001-A80-S100-X-7600 DISPO 06330Printed in Germany© Siemens AG 2010

Siemens AGIndustry SectorCommunicationsWerner-von-Siemens-Str. 5091052 ERLANGENGERMANY

The information provided in this magazine contains merely general descriptions or characteristics of performance which in case of actual use may not always apply as described or which may change as a result of further development of the products. An obligation to provide the respective characteristics shall only exist if expressly agreed in the terms of contract.

All product designations may be trademarks or product names of Siemens AG or supplier companies whose use by third parties for their own purposes could violate the rights of the owners.

The editorial content of the reports in this publication does not necessarily reflect the opinion of the publisher. This magazine contains forwardlooking statements, the accuracy of which Siemens is not able to guarantee in any way.

02 Industry Journal | 03 | 2010 | Editor’s note

Editorʼs note

Prof. Dr. Siegfried Russwurm, CEO of the Industry Sector

03Industry Journal | 03 | 2010 | Editor’s note

Dear Readers,Worldwide, financial monitors are indicating growth again. Innovation is the single, most effective way of supporting this upward trend. This is why we have spotlighted innovation management in this edition of the Industry Journal. Within this context, we shed light on the various innovation strate-gies of global corporations, and provide some insight into our own “innovation toolbox.” 30,800 Siemens AG researchers and developers use it very success-fully. A total of 56,000 registered patents, 7,700 invention disclosures, and 4,163 initial patent applications, in the 2009 fiscal year alone, speaks for itself. In addition, we deal with the topic of venture capital in this edition, which is a successful instrument for generating inventions and making them marketable. This type of collaboration benefits both idea-rich companies and investors equally.

Furthermore, we cast an eye on the BRIC countries. Whereas innovations have long been considered the exclusive domain of companies within the high-tech nations, the picture is beginning to change. Newly industrialized countries are catching up, are prioritizing innovation with increasing confidence, and are proving attractive development locations for globally operating companies.

It would have been easy to issue a monothematic edition of the Industry Journal on the subject of innovation. However, one of the attractive features of our journal is its variety. For this reason, we present you with informative reports from other fields, on topics related to our sector. These range from the future of high-speed trains and hybrid buses, and the various possibilities of integrat-ing sustainability into core business, to the significance of oceans as sources of raw materials and much-needed climate control.

Sincerely,Siegfried Russwurm

10–20: The secret behind innovations There is no silver bullet for successful

innovations. Find out why some corpora-

tions have been successful innovators for

decades.

21–23: Master plan for progress The innovation strategy of the OECD is to

support the world in planning its future.

24–26: Improve or innovate? Developing products further can be very

clever – if you know when it’s time to stop.

27–33: Smart strategies in newly industrialized countries

The BRIC countries are increasingly shed-

ding their image as merely economical

production locations.

34–36: The hunt for new ideas How young companies and established

corporations use venture capital to jointly

create innovations.

37–41: Promoting stable growth The demand for steel is growing in China

and India. Large, environmentally friendly

production facilities are set to meet the

demand.

06–09: Spotlights Economic, scientific, and technology

news: from cellular phones with LED

flash, and automatic passenger systems,

to nanotechnologies for road coverings.

42–47: Changing sides: Learning from lions

What African lions can teach western

managers.

82–83: How does … … safety work in the chemical industry?

84: Imprint

Performance


04 Industry Journal | 03 | 2010 | Contents

10: The secret behind innovations

There is no ideal way of making innovations successful. Three essential factors are central to its success, however – formal development processes, consis-tent commercial evaluation, and market orientation.

21: Master plan for progress

For the first time in its history, the Organization for Economic Cooperation and Develop ment (OECD) has published its own innovation strategy on how the urgent problems facing humanity should be solved.

27: The BRIC states are catching up

An increasing number of inno-vations are coming out of Bra-zil, Russia, China, and India. A report about changes spanning from the workbenches of the world to the research centers of industrial nations.

Contents

48–55: Get there fast – get there relaxed Report across three different continents

about the future of high-speed trains.

56–58: For a short time only Flexible airport terminals are one of the

solutions for quickly building up and

dismantling processing capacities.

59–61: Turbo rate of return for real estate

Real estate increases its rate of return by

getting certificates from “green building

organizations.” However, only very few

of these quality seals are acknowledged

worldwide.

62–63: City of the Future I n Singapore, Siemens uses an interactive

showroom to show what city planners

have to watch out for.

64–69: Good from the bottom up Oceans can contribute greatly to resolving

the serious problems of humanity.

70–73: In the green zone How a chemistry plant increased safety,

productivity, and environmental friendli-

ness using modernized installations.

74–76: Brake and you’ll win How hybrid buses convert braking power

into energy, and reduce environmental

stress on cities.

77–79: Interview with Alexander Holst The sustainability expert discusses the

integration of sustainability into core

businesses.

80–81: Certificate for green solutions What is green? Siemens has developed an

objective evaluation system, together with

renowned universities.

Urbanization Environment

48: Get there fast – get there relaxed High-speed trains are developing more and more into environmentally friendly competitors to air traffic. Countries like China, Russia, and even the USA, where the car reigns supreme, are recognizing their potential, and taking to the tracks.

64: Good from the bottom up

Less research has been done on our oceans than on outer space. Not for much longer, though. The reason is that the importance of the world’s oceans as a supplier of raw mate-rials, as environmentally friendly energy carriers, and as the climate control unit of the world is becoming increasingly apparent.

05Industry Journal | 03 | 2010 | Contents

Spotlight

Industry Journal | 03 | 2010 | Spotlight06

Siemens has received an order from China Post to equip its new logistics hub, the Nanjing China Post Air Express and Logistics Hub. By the end of 2011, the system will go into operation as the largest express and logistics center in Asia, and the third-largest in the world. Siemens is deliv-ering and installing ten package sorting sys-tems, including the Variosort XB central control system. When complete, the system will have a sorting capacity of 96,000 packages per hour. This high sorting performance will drastically reduce the transport and processing duration of mail shipments. In the future, the new sys-tem will be able to process more than half of the country’s domestic express mail. The order is valued at 45 million Euros.

Package sorting system for China

American golf professional Rickie Fowler is only 21 years old. At the PGA’s Memorial Tournament in Dublin, Ohio this past summer, Fowler tied the 36-hole record of 131 strokes, which has been unmatched since 1987. One reason for his success was an innovative club from Adams Golf: The Speedline Driver is the first club whose aero-dynamic properties were optimized in a wind tunnel. Its smaller face area is a significant fea-ture that reduces air resistance. For this design, as well as for its other golf clubs, Adams Golf has used the Siemens NX PLM flow software. Adams Golf is considered a market and innova-tion leader in the golf club industry. NX plays a critical role in the design as well as in testing and production. Its use has reduced production

A steel producer in Northern China has contracted Siemens VAI Metals Technologies for the delivery of a dry de-dusting system. This order adds to the company’s presence and helps build its market leadership in dry dedusting systems in China.

Record times for record golf club

lead times and testing times. As a result, Adams Golf has managed to reduce market introduction times by 50 percent, securing a significant com-petitive advantage.

Since the end of 2009 alone, five comparable systems have gone into operation there. The current order, in addition to all the mechanical equipment, includes the corresponding electri-cal and automation technology. Siemens will also provide monitoring services for production and assembly, system testing, and start-up. After start-up, which is planned for Fall 2010, the emission thresholds of the steel plant will meet European standards. The project also in-cludes a gas recovery system that collects and prepares the converter gas for subsequent en-ergy generation.

Environmentally friendly dedusting system for the steel industry

Industry Journal | 03 | 2010 | Spotlight 07

Osram Opto Semiconductors has developed an LED flash specifically tailored to cell phones and smart phones: Oslux is only 2.5 mm thick, which makes it particularly suitable for mobile devices. Additional benefits: At 150 lux, the light output is one-third higher than the previous model. Thanks to integrated UX:3 technology, the LED flash can illuminate a wider area and provides a more uniform light distribution. As a result, it is more efficient at higher currents than previous LEDs. Oslux is available with two different lens types, which are already integrated and matched to the beam characteristics of the UX:3 chip. This ensures smooth, rectangular illumination of the subject. The light distribution depends on the lens used. At a distance of one meter, the LED

flash evenly illuminates a diagonal of 90 cm. As a result, sharp pictures can be taken even in low-light conditions.

Cell phones with LED flash

Limited (RMGL), a joint venture of ITNL ENSO Rail Systems Ltd. (IERS), IL&FS Transportation Networks Ltd. (ITNL), and Delhi Land and Finance (DLF). The planned metro line will connect Gurgaon Cyber City, the new business and residential area some 30 kilometers south of central Delhi, with the rest of the capital’s metro network. In addition to the vehicles, Siemens is providing all the electrification and signaling technology. During peak traffic times, this will allow trains to arrive every 90 seconds. Up to 30,000 passengers per hour will be transported. Completion of the 6.1- kilometer metro line is expected by the end of 2012.

Siemens has implemented a turnkey railway system in India for the first time. The order was placed by Rapid MetroRail Gurgaon

First turnkey railway system in India

New material for more efficient inverters

Frequency inverters for large electric motors could become more efficient, powerful, and reliable through the use of new materials. For example, replacing silicon with the semiconduc-tor silicon carbide as the diode material would reduce power losses in the inverter by up to 15 percent. The economic potential is enormous: large devices such as pumps for pipelines, com-pressors for liquidizing natural gas, and ship pro-pulsion systems are driven almost exclusively by electric variable-speed motors. Their energy ef-ficiency depends in large part on the use of high-performance frequency inverters. This summer, Siemens and a number of partners established a corresponding research project, funded by the

German Federal Ministry of Research and Educa-tion to the tune of around 1.7 million Euros.

Industry Journal | 03 | 2010 | Spotlight08

SpotlightRoad surfaces could be used to bind hazardous materials in the air, and reduce the percentage of nitrogen oxide by up to 45 percent. This is according to scientists at Eindhoven University in the Netherlands. By using nanotechnology, they were able to replace conventional concrete with titanium dioxide. The titanium dioxide acts as a catalyst, providing a self-cleaning road surface. It captures the ultraviolet sunlight and causes oxygen to bind with environmentally damaging nitrogen oxide, which would other-wise contribute to a rise in ground-level ozone. Instead, this process produces harmless nitrates and nitric acid, which would be washed away when it rains. Nanomaterials are among the key technologies of the twenty-first century. They are already in use in many consumer products, for example, as UV filters in suntan lotions, as corrosion protection, or in scratch and stain-resistant paints.

Latin American and the Caribbean require long-term environmental policies. It is the only way to protect the region’s vast resources. This was the conclusion of the recent “Latin Ameri ca and the Caribbean: Environment Outlook” report pub-lished by the United Nations Environment Pro-gram (UNEP). Due to demographic growth and increased agricultural production, the region’s demand for drinking water has increased by

UNEP Report on Latin America and the Caribbean

Streets clean the air

76 percent in just 15 years, to 264 million cubic kilometers per year. At the same time, there are 50 million people in the region with no access to fresh water. According to the UNEP report, fight-ing poverty is critical to establishing authorita-tive environmental policies. Furthermore, it is a prerequisite for greater environmental aware-ness and the effective implementation of sus-tainable technologies.

Industry Journal | 03 | 2010 | Spotlight 09

In collaboration with the Instituto Pedro Nunes (IPN), an independent center for technology transfer at the University of Coimbra, Portugal, Siemens has just developed the “Move” autono-mous transport system. This new solution is a small, environmentally-friendly transport system for airports, hotels, natural parks and leisure parks, that can be operated without a driver. The “Move” mobility system was used for the first time at a rehabilitation center in Tocha, Portu-gal. There, the system has made the transpor-tation of patients on the premises much easier. The non-manned vehicle is steered by a Simatic S7-300 control device, supported by various sen-sors and actuators used to control vehicle mo-vement and minimize collision hazard. Siemens also supplied a range of devices for the “Move”, including pulse counters, servo control units, and an RFID reader. The RFID reader is used to control both the stops and the various speed phases of the vehicle.

Driving without a driver

Energy for Peru’s Highest Hotel

Siemens has realized a com-prehensive building solution for the highest hotel in Peru. At the 5-star “The Westin Hotels & Resorts” in the capital of Lima, Siemens implemented systems involving power sup-ply, building automation, and security. The order was award-ed by the Bovis Lend Lease real estate group in recognition of the well-known flexibility of Siemens as well as the breadth of its portfolio. As an additional advantage Siemens products and solutions operate in accor-dance with NEMA/UL and IEC, electronics standards that are recognized worldwide. “The Westin Hotels & Resorts” is located in the center of Lima’s financial district and sets new standards in terms of security, service, and comfort. It is al-ready viewed as a symbol of the continued growth in the Peruvian economy. The hotel is expected to open on the 1st of May, 2011.

10 Industry Journal | 03 | 2010 | Performance

The secret of successful innovations


Decade after decade corporations have been looking for reproducible formulas

that transform new ideas into marketable and profitable products. They analyze

champions of innovation, benchmark, research, and test. And more often than

not, what they finally come away with is that the rules for success used by other

corporations and markets are not transferable. Yet nearly all innovative corpora-

tions live by three essential truths.

11Industry Journal | 03 | 2010 | Performance

“Managers who forget how to dream and envision throw away the future of their companies.”

Peter F. Drucker, US economist


according to Rolf Berth, a German psychoanalyst and ma nagement consultant, every single per-son interested in change is opposed by five other people equally interested in maintaining the sta-tus quo. “Large companies tend to defend their success. Innovative ideas are usually put on the back burner,” says Reinhold Achatz, head of Cor-porate Research and Technologies of the Central Research group at Siemens. “The objectives of a business unit are frequently aligned with quick rates of return. This makes it difficult for new in-novations, especially those of seemingly disrup-tive and radical nature, to be given the neces-sary time before they turn profitable,” confirms Klaus Streubel, CTO of Osram. “Large companies like Bosch that are not listed on the stock market do not need to hurry innovations to market.”

“Never change a winning team” – this soccer rule can apply to products as well. And occasion-ally – usually in low-tech fields – there is a Coca Cola, a Big Mac, or a Post-It Note, products that change only slightly over the years but continue their success story for decades. But even compa-nies that profit from these proven workhorses innovate to enter new market segments.

Companies that rely for too long on proven prod-ucts, especially in technology-driven sectors, disappear quickly from the marketplace. For example, as established by the industry associa-

Money alone can’t buy happiness. And it won’t make you innovative, either. These were the rather sobering conclusions that Booz Allen Hamilton, an international consulting compa-ny, reached in 2005. Across the globe the sales numbers of 1,000 companies with the highest budgets for research and development (R&D) were compared. These efforts were for naught because it was not possible to draw a correlation between the trends for sales, earnings, or share-holder value and the size of the R&D budget.

Equally futile is the option to drastically re-duced R&D activities, because companies that fail to create avenues for new products are tra-veling down a dead-end street. “Companies that produce have to be innovative to differentiate their products from the mass market. Innova-tions are often the only way to obtain suitable margins, especially in stagnating markets ruled by strong competition,” claims a current study by Bain & Company, a global management con-sulting company.

Innovations are natural enemies of what exists

Many companies are faced by this dilemma. In-novations are the natural enemy of what exists, what works, and ergo what should be continued for these very reasons. In large organizations,

It costs the pharmaceutical industry a fortune when developments go wrong. That’s why companies like Bayer AG (top) use a specially structured innova-tion management process.


tion Spectaris, more than 30 percent of sales in the German medical engineering sector is gen-erated by products that were not on the market three years ago. For the overall German econo-my, the Center for European Economic Research (ZEW) in Mannheim determined that new prod-ucts accounted for a good 16 percent of sales.

Innovation methods specific to the industrial sector

But how will companies be successful with new products when money and good ideas alone simply fail to pass muster? The answer lies in a system that may vary greatly from country to country, from sector to sector, and from com-pany to company. Google proved this point by allocating 20 percent of the employees’ work hours for projects that had nothing to do with their actual jobs. It helped the company to stay in touch with real-life needs and to recognize new opportunities. The technology company 3M has set aside 15 percent of work time as well as a financing fund called “Genesis” to give its em-ployees the means for developing innovations – again, proposals and follow-up are tied into a structured process.

However, in the food or automobile industry, classic market research appears to be successful. It does have its limits when the objective deals less with detecting needs and adapting product developments than with defining new products. Years ago, when General Motors developed a questionnaire designed to find out what the average customer wanted in a perfect car, the results looked very much like a – Toyota.

Lots of studies, lots of recipes for innovation

Because new products are so important for the success of a corporation, there are always stud-ies underway trying to determine the secrets of innovative companies. In a study by McKinsey & Company, a corporate consulting company, three elementary characteristics were deter-mined after examining how innovations were produced at 28 American and European cor-porations. Corporations that showed the best results recognized their project goals early on and defined them quite clearly. They favored a strong project culture and were in close contact with their customers for the duration of the project.

A study by the European Foundation of Quality Management (EFQM) reached a different con-clusion that does not necessarily contradict the other results. The findings of the EFQM: The most important factor for successful innovations

Cooperation leads to success

Siemens’ ongoing interest has the company enter into new and highly promising cooperative agree-ments with universities, research institutes, and industrial partners to expand its innovation portfolio. “It has helped us to generate numerous solutions that sustainably support our business,” reports Dr. Dieter Wegener, CTO of Siemens Industry Solutions. The closest form of cooperation is the “Center of Knowl-edge Interchange” (CKI) with academic institutions worldwide. They are established directly on the cam-pus of partner universities and headed by a Siemens manager. Responsible for a wide range of activities, this manager coordinates the cooperative efforts, identifies the most important cooperation partners, organizes workshops, and places students with the Siemens student programs. Currently, ten different CKIs are active, among these are the TU Munich, DTU Copenhagen, Tsinghua University, Beijing, MIT in Boston, and the University of California in Berkeley.

Even closer forms of cooperation for more innova-tions are Technology to Business Centers (TTB). A number of Siemens Divisions participate financially as well as professionally in independent young com-panies that are working closely with partner univer-sities. For example, California start-up company Pro-gressive Cooling has developed an extremely bright and efficient light source (see photo below) from LED lamps, which is based on a concept developed at the University of Cincinnati. The TTB in Shanghai is also involved in LEDs. In its Outside-In-Innovations strate-gy, TTB includes potential vendors who can be used for introducing technologies from third parties.


Siemens has two central tools in place for detecting trends and possible business models early on: “Picture of the Future” and “Innovation Benchmark-ing.“ The “Picture of the Future,” a central tool for innovation management at Siemens, is used to get a clear idea about how to move successfully into the future. For one, road mapping is applied, that is, to update known technologies and product families for the future. This method estimates at what point in time certain technologies will be available as well as needed.

Known disadvantages: it is not possible to predict leaps in innovation or discontinuities. To be able to do just that, Siemens developed future scenarios for 10, 20, or 30 years from now in parallel to the “Picture of the Future.” These scenarios also include, for exam - ple, assumptions regarding social or political changes, developments in the world economy, demographics, or changes in climate. From these data, Siemens de-rives tasks that have to be resolved today to be suc-

cessful tomorrow. The combination of these meth-ods helps to identify areas with growth potential and broad effects as well as to detect future cus-tomer expectations and business possibilities. In the final analysis, the technology selected by Siemens hinges on two questions: How large is the market and what is the expected market growth? And what’s more, does Siemens have the necessary expertise or can it be obtained for the right price? “This trend diagnostic method has proven to be excellent,” says Dr. Albert Wick, CTO of the Industry Automation and Drive Technologies Divisions.

Innovation benchmarking, on the other hand, is a valuable basis for improving innovation manage-ment. Business Units are analyzed to determine whether or not they have the prerequisites for suc-cessful innovations. Based on a number of criteria, strengths, and weaknesses as compared to the com-petition are defined.

is good corporate governance and management, followed by corporate culture, market research, and, last but not least, the structure and organi-zation of innovation processes.

Results after decades of research

The mountain of scientific and empirical research shows that there are no surefire formulas. Inno-vation researcher Holger Ernst, professor and chair for Technology and Innovation Management at the internationally renowned WHU Otto Beis-heim School of Management near Koblenz and head of the “innovation success panel to improve innovation management by benchmarking” com-pared dozens of innovation studies over several decades. The bottom line is that although every market situation is different, there are a number of elements that have been of steady importance to the success of innovations for decades, across industrial sectors and continents.

1. Formal product development processIt has to include the entire process and be fully defined for all areas of the project. It is not just a question of getting volatile elements like crea-tivity or inspiration back on track again, but rath-er on how to proceed in a structured manner from the very beginning.

As Holger Ernst knows, “the quality of plan - ning prior to entering the development phase decides the success of the product.” As part of this process, Siemens uses, for example, the “Picture of the Future” method (see box above) for the early detection of trends and future technologies. Within its Strategic Management Innovation (SIM), Osram has gone as far as es-tablishing a central special department for dis-ruptive innovations – new products that usually meet with the greatest resistance in-house. At Bayer AG, innovation management includes a “Stage Gate” process: To minimize the risk for

Predicting the future


development projects, gates (stopping points) are defined early on. When reaching one of these gates, the development is tested and – if required – even stopped. There is rarely a suc-cessful international company that does not use a formalized, although widely differing, model – be it Phase Gate (BASF), Integrated Innovation Management (Beiersdorf), or SIMPL (Procter & Gamble).

2. Continual commercial evaluation Innovations as such are not valuable – they have to create value. At times, in their state of euphoria, participants in the process could lose this simple connection. The study “Next Genera-tion NPD” by Droege & Comp., a consulting com-pany, claims that 85 percent of all CEOs noted the lack of sufficient information about the in-trinsic value of new products within the frame-work of innovation control. That’s why it is necessary to separate the wheat from the chaff

at exactly defined points within the innovation process – similar to Bayer’s Stage Gate process. “The market is changing rapidly, due in part to new competitors from the IT field who want to get into our business. For this reason, we put a lot of energy into commercializing new software applications in our products, for example ener-gy efficiency or building energy management – and we are going to step up these efforts in the future,” says Helmut Macht, CTO of Siemens Building Technologies.

The most important for Holger Ernst is the de-cision made at the end of the design phase for an innovation. Personnel and finances increase drastically for the subsequent development phase – meaning that resources should be fo-cused on the most promising products. One of the most innovative chemical corporations in the world, 3M in the US, has made this reaso-ning its mantra. Three out of four designs for

The next LED generation: organic LEDS (OLEDs) are extremely thin light-emitting assemblies that can be both transparent as well as flexible.

An employee makes a visual inspection after metallizing the organic semiconductor mate-rial.


new products don’t clear the internal hurdle. Not because they would have been so awful, it is just that other products are even better.

3. Customer orientation Customers are not just the recipient of innova-tions but quite often the actual trigger. Keeping this in mind, innovative corpo-rations work closely together with their customers. “Creative entrepreneurs have to know what is technically possible; they also have to know what customers want, how the glob-al value-added chain can be optimized, and how solutions can be brought to market,” says Reinhold Achatz, the head of Siemens Research.

A study on service innovations at Oestrich-Winkel, a European business school, shows that managers consider customer pro-posals the most important source for ideas. A questionnaire by the European Intelligence Unit confirms these findings. Accordingly, 41 percent of companies worldwide consider their customers as the originators of their best ideas, followed by

those from heads of business units (35 percent) and in-house R&D departments (33 percent). An excellent example for close cooperation between customers and developers are the innovations for liquid crystal production at Merck in Darmstadt. Cell phone and TV producers decide on the ideal characteristics for their next screen – and Merck

goes ahead and locates the right liquid crystal mixture. Another corporation, Procter & Gamble, is going as far as planning to create half of its new products in response to customer proposals. Most notably, in the invested assets sector, vendors in their role as worldwide specialized problem solvers in development partnerships are increasingly adding to the creation of inno-vations.

Customer feedback as a standard tool

To understand customer needs and as a method for determining market changes, questionnaires are required that are based on clear evaluation criteria, allow for comparison among compe-titors, and also target improvements. Siemens

41%41%of companies consid-er their customersto be the most impor-tant source of inspi-ration for innovation.

When it comes to optimizing the production pro-cess, the Siemens Industry Automation Division is renowned as a trendsetter around the globe – from product development and planning to production planning and manufacturing. The product portfolio of the Division integrates both the real and digital worlds of products and production. This is highly beneficial for customers, as they particularly profit from a drastically shorter time to market.

Universal system for all data

In the beginning, new products are nothing more than mere ideas in the minds of engineers and mar-keting experts. But once they are put down on paper or in the computer, they take shape. To become real, they need to be produced. The cycle from idea to market introduction includes many individual steps. Currently, they are based on closed standalone sys-tems.

For an optimal process run, all data have to be sys-tematically integrated across the entire value-added chain in a universal system. Siemens realized early on the need for integrating industrial software. With the “Totally Integrated Automation” solution, the company created a worldwide leading concept in automation technology on the basis of these prod-ucts that are for one individually competitive, but also offer customers significant additional use when integrated.

Homogenous information structures

Siemens traveled a similar road in the product life-cycle management (PLM) area with the “Teamcenter” solution. This platform combines product data gen-erated during the development with information from many other parts of the company – even up to data from vendors. This interaction guarantees homogenous information structures that are the pre-requisites for a digital factory.

Moving toward a digital factory


Using software from Siemens, com-panies can carry out virtual develop-ment and testing of their products and production processes – the complete lifecycle.

sends out these types of questionnaires on a regular basis as “Lead Customer Feedback.”

However, innovation researcher Hugo Wernst warns against catering too much to individual customer needs: “When the focus settles too much on just a few customers, niche products may be developed that reduce the success of new products.” He also recommends looking at market requirements as such. “If Henry Ford would have listened only to the wishes of his cus-tomers, he would have upgraded horse-drawn buggies instead,” warns Stefan Thomke, profes-sor at the Harvard Business School.

But even if a corporation does everything right, successful innovation cannot be guaranteed. The bumpy road of a product, highly praised today, is well illustrated by the example of the hybrid engine. It was developed and brought to market by Audi, one of the most innovative car manufacturers. In 1994, the Audi 80 duo was the first hybrid production car worldwide. Unfor-tunately it did not sell. It may have been priced too high, or the time was not right for the drive concept, or perhaps it was some of both. Anyhow, the car was taken out of production in 1997.

Yet that very year, the Toyota Prius came on the market, using a similar technology. It was Toyo-ta who managed the breakthrough. Today, ap-proximately 400,000 vehicles are sold per year, primarily in the US, followed by Europe and Japan. And that in the face of massive resistance from the manufacturer’s own people. For a time, as Holger Ernst tells it, the developer at Toyota was joined by just one other fan – the Chairman of the Board.

Worlds grow together

Product development, production, and production automation have been separate worlds so far in terms of data processing. This will change in the coming years thanks to an extensive integration approach from Siemens. Using the “integration platform” solution, product data will be digitally and seamlessly used for the planning, simulation, and control of production processes. The result: in-creased performance of the individual products and a considerably improved working environment.

Currently Siemens, together with important custom-ers in their respective industries, is developing con-sistent concepts and is ensuring their practicability in order to accelerate time-to-market by up to 50 percent. Siemens’ own experience as an industrial company plays an important role in this process, as challenges equal those of the customers when it comes to increasing productivity, flexibility, and ef-ficiency.


The key requirements will be sustainability, multimodality, and efficiency during operation and will be met by innovative prod-ucts. In turn, this will lead to products such as a zero-emissions train, a train concept where no emissions are created, from pro-ducing energy to operating the train. The Vectron generation of locomotives, which already exists, points the way forward: it can be applied nationally and across borders for passenger and freight trains. The different performance classes and voltage systems enable flexible configurations, and country-specific automatic train control systems are easily replaced or supple-mented. There will also be completely new fields of activities, for example, in electromobility.

It will be crucial for producing companies to bring goods to market faster and to produce more flexibly to meet individual needs and fast-changing markets. Siemens integrates product and production engineering – from the first idea to the com-plete product. With industry automation and industry software, the entire value chain of producing companies is optimized – enabling customers in both factory and process automation to reduce their time-to-market by up to 50 percent.

In industrial facilities, highly-efficient electrical drive technology such as compressor stations for oil and gas, or electrically powered vehicles, are used to re-place comparably less efficient combustion engines. Intelligent status monitoring of the entire drive train would increase the productivity and reliability of production systems, and machines. Customers are being encouraged to install energy-efficient motors in production (see image).

Industry Automation

Drive Technologies

Mobility

Innovations that Siemens Industry predicts for its fields of business until 2020


In the area of environmental technology developments and solutions will emerge that help reduce environmental damage. These could involve reducing or converting CO2, or preparing and desalinating water in an energy-efficient way.

Siemens’ saltwater desalination is based on separating electri-cally charged sodium and chloride ions of the salt. In the picture to the left, a water sample is taken from the pilot installation for ocean water desalination for a taste and odor test.

In the future communication will be entirely IT and IP based. This sector will see net zero-energy build-ings. In decentralized Smart Grids, smart buildings will effectively coordinate energy supply and stor-age. The Green Building Monitor will not only visual-ize current energy consumption, it will also provide information for the useful incorporation of abstract data. In addition, building information models (BIM) will arrive on the scene; that is, integrated building models ranging from planning to operation.

Soon enough, there will be special energy-saving lamps, mod-ules, and lights (LED, OLED) as well as new designs, including the integration of light into the construction material. Another step is light-management systems that are as easy to operate, as the Internet, and will be integrated into building manage-ment systems. Other interesting developments involve off-grid lighting systems. Additionally, there are high-performance laser and LED projectors like the pocket projector by 3M that can be connected to notebooks, cell phones, or cameras.

Industry Solutions

Building Technologies

Osram


Open Innovation (OI) – this term describes how to generate approaches, competencies, expertise, devel-opments, or suggestions from experts, customers, or suppliers outside the corporation. It includes top uni-versities and research institutes from all over the world as well as customers, think tanks, other industrial sec-tors, start-ups, venture capital companies, employees, and even competitors. “For companies with a global base that possess a great deal of in-house knowl-edge, Open Innovation is a wonderful opportunity. Researchers from different departments are able to bundle their knowledge and leverage synergies,” said Frank Piller, professor for Technology and Innovation Management at RWTH Aachen. Huschke Dietmann, CTO of Siemens Mobility wholeheartedly agrees: “We are applying diverse Open Innovation approaches to utilize ideas from outside established networks. They will gain in importance.” For the systematic use of OI, Siemens has established an OI department for internal and external activities. Siemens won second place for its knowledge management and OI activi-ties associated with the study “The European Most Admired Knowledge Enterprises (MAKE)” by the mar-ket research company Teleos. For OI, Siemens relies essentially on four methods: Internet-based network developments, competitions regarding ideas with and for customers, moderated Internet discussions, and personal roundtable discussions.

Expert networksOnline networks proved to be especially successful. In this case, e-brokers are included when dealing with es-pecially challenging research. They get external prob-lem solvers to contact Siemens: Siemens publishes research questions and explains the problems involved on the Web pages of e-brokers, for example NineSig-ma, vet2come, or Innocentive, and offers a reward for the best solution. And that solution could come from

a large IT company in India or from a student in Korea, a professor in the US, or a hobbyist in Germany. To date Siemens has managed to solve about half of its problems – one of them was for an especially fast and efficient mail automation.

Employee networkTechnoWeb is based on the same principle. It is a closed Internet forum for registered Siemens employ-ees. Every employee can offer his or her solution to problems or answer questions ranging from compli-cated technical issues to operating difficulties with Microsoft Word. This also makes TechnoWeb a tool for networking researchers from different departments within the company.

Innovation jamsInnovation jams are Web-based, usually company in-ternal, moderated discussions with hundreds or even thousands of participants. In 2009 Siemens asked how future information and communication technologies like cloud computing could change business, and in return received hundreds of valuable responses.

Ideas competitions and roundtable discussions When Siemens holds ideas competitions, it calls on the creativity of its customers by having them participate in finding new product ideas, usually via online plat-forms. Different from expert networks, the emphasis in this type of crowd sourcing is not on technologically mature solutions, but rather on innovative stimuli. In 2009 Osram held an ideas competition for low-cost and simple lighting solutions, and received over 600 mostly marketable solutions. Moreover, researchers at Siemens meet at least once a year with important partners in the market, and these include colleagues from Philips, a Siemens competitor.

Disruptive and radical innovation research at Siemens

Research institutesUniversities Lead customers

Public contracting entities

Start-ups/Venture Capital

companies

Competitors

Think tanks

Additional industrial sectors


For the first time in its history, the Organization for Economic Cooperation

and Development (OECD) has developed its own innovation strategy. Its

economists view that a global growth in innovation activities is the central key for

solving humanity’s urgent economic and social problems. The OECD has

outlined three vital fields that will determine the innovation capacities of

companies and countries – and offers its support as an innovation consultant.

Master plan for progress


We simply can’t go on like this: the global year-ly CO2 emissions will more than double if the global economic development of the last decade were to continue for the next four decades. Ac-cording to the computation of the International Energy Agency, this scenario will result in 62 gigatons of CO2 in the year 2050 – this is simply inconceivable!

We have to stop this: the global yearly CO2 emissions would be reduced by more than half if the global economy decides to go in another direc-tion during the next four decades. 14 gigatons CO2 in 2050 – that means 40 gigatons less than in the first scenario, as calculated by the IEA, which is simply fantastic.

Angel Gurria is the Secretary-General of OECD – recently the institute pub-lished its own innovation strategy.


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strong growth was created but could not be sus-tained – because innovative strength fell by the wayside. According to the OECD this should not happen again in the next economic cycle. “The innovation activity connected to the introduction of new or greatly improved products, actions, or methods will play an increasingly essential role as a motor for growth and jobs, as well as a higher standard of living.” To this end, the innovation strategy of OECD is activating three different levels:

1. Human innovative potential

Human resources will increasingly become the decisive production factor not only for corpo-rations, but also for public and social organiza-tions. To date, in countries such as Finland or Denmark, the contribution of human resources adds already more to the growth of labor pro-ductivity than investments in real capital (see the figure at top of next page). To increase hu-man resources, according to the OECD, a reorien-tation of the educational system as well as the support of companies is needed.

In the educational field, the greatest challenge is “to recognize the decidedly important role of universities with respect to innovation activities instead of just viewing them as a provider of important public assets as is frequently the case.” For that purpose, “independence, compe-tition, excellence, corporate initiative, and the flexibility of universities” have to be promoted.

Technology makes the difference between these scenarios. Forecasters at the IEA have planned a considerable increase in research and develop-ment for the sustainable path into the future – for example for the efficiency increase in energy production and distribution as well as improve-ments in renewable energies (see figure above).

But while new technology alone can make changes possible, it cannot effect them. To do that, it has to be implemented in new products, has to enter and sweep the market place. In short: it has to become an innovation. And that does not happen by itself. The invention of an X-Y pointer at the Xerox Research Center in Palo Alto did not advance humanity by one single step. It took Steve Jobs borrowing the invention and marketing a computer mouse that went on a victory march around the world.

If humanity wants to solve the economic, social and ecological problems of the 21st century, it has to accelerate progress. This is why the OECD, actually more of an economic research institute of industrial countries, published an innovation strategy for the first time. “Growth based on in-novation activities,” so the organization “makes it easier for governments to take measures for coping with urgent social and worldwide chal-lenges, for example climate change.” That the OECD is taking the initiative right now is also part of the developments that led to current financial and economic crises.

Especially in those countries that created a real estate bubble, such as the USA, Spain and Ireland,

International EnergyAgency (IEA); Basis: IEA WorldEnergy Outlook 2007

CO2 emissions in gigatons per year CCS industry and transformation 9%

CCS power generation 10%

Nuclear 6%

Renewables 21%

Power generation efficiency and fuel switching 7%

End-use fuel switching 11%

End-use electricity efficiency 12%

End-use fuel efficiency 24%

Contribution of key technologies to climate change mitigation

Baseline emissions: 62 GT


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Additionally, special attention has to be given to the education of future entrepreneurs because they play a central role in both the development and implementation of innovations. Although this combination has been well-known for some time, educational and training policies still do not take this into account. Only a very small sec-tion of the population receives an education that prepares them for entrepreneurship.”

2. Corporate innovative potential

Without entrepreneurs it would not be possible to convert ideas into products and jobs. This is why OECD considers it necessary to facilitate both market entries as well as market exits for corporations. Young companies in particular would benefit if requirements for founding busi-nesses would be simplified. As experience tells us, these young companies often seize opportu-nities that are not implemented by already exist-ing corporations.

But, a society’s capacity for innovation increas-es also due to the market disappearance of unsuccessful companies. “The reallocation of resources for the benefit of more efficient and innovative companies is of decisive importance to innovation and economic growth.” When cor-porations’ capacity for growth expresses itself in success on the market, the next hurdle is already waiting in the wings. In most countries, admin-istrative, social, and tax regulations increase with the size of a company – in short, growth is pun-ished rather than rewarded. The OECD advocates

that all regulations that increase the cost for growth are put under scrutiny.

3. Knowledge of corporations and society

While the markets for goods and finances have been globally organized for some time, the development of knowledge markets is still in its infancy. The OECD addresses deficits in this instance – these include the protection of intel-lectual property as well as the transfer of knowl-edge between business and the sciences up to information access in the public sector. While the last point addresses politics in the main re-questing easier access and use of public data, the OECD strategy agitates for “a multitude of cooperative mechanisms” for knowledge transfer and the handling of intellectual property.

The only problem that OECD faces with its inno-vation strategy is that the agency itself cannot implement anything. Instead, it relies on those who seize its suggestions having their own edu-cational, research, and development budgets. Accordingly, their strategy concept does not end with an action catalog, but rather with an offer: “The OECD is ready to support governments as well as international entities in applying the in-novation strategy.”

Source: OECD, based on Coinvest(www.coinvest.org.uk) andcountry studies

Labor productivity growth

Contribution from tangible capital

Contribution from intangible capital

Intangible capital accounts for large share of labor productivity growth from 1995–2006 (in %)

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More information and downloadable innovation strategy (60 Euros):www.oecd.org/innovation/strategy


Innovations must not necessarily be groundbreaking new inventions, they can also

be the further development of successful, existing products. However, only companies

that know the right time to cease developing existing products and turn their atten-

tion to new things, experience long-term success.

Managers who want to ensure healthy growth patterns for their companies have to ask them-selves two important questions: When is innova-tion necessary? And what should it be?

To answer these questions, innovators of prod-ucts and services often create competitive ad-vantages that are improvements of existing of-fers. However, every innovator knows the limits

of this approach. Simply because at one point or another, the market no longer rewards additional product refinements – even if they greatly improve the quality of a particular product. And what makes matters even more complicated for a manager is that waiting for a product to mature, is a dead-sure strategy for failure. A soft transition to the next product generation requires that investments in “improvements” or “innovations” are coordinated

By Ken Hutt, PhD, and David Rosenblum, principals at Deloitte Consulting LLP


Improve or innovate? Innovations during the lifecycle of a product


company became famous for its processors. Ac-cording to today’s standards, the first Intel chips were not very performance-oriented. Back then, they were not even good enough for the main-stream market, namely, the manufacturers of large processors and mini-computers. For this reason, Intel had to try and enter a relatively un-demanding market – the pocket calculator. Yet in order to expand its business, the company had to contact more demanding customers. As a result, the company decided on higher proces-sing speeds and power – although neither see-med to be quite in the realm of the possible. But the temptation – greater profitability and faster growth – was enormous.

And the company’s efforts paid off. Intel ac-tually managed to make a number of improve-ments in processor speed and power previously thought not possible. Different from what the product lifecycle theory predicted, none of its new chip generations went through the typical introductory phase. Instead, it gave wings to the growth already present in this industrial sector. The three reasons for this: Early adopters, who had already bought the new technology, realized that they needed more and more processing power. So they started to update. Newcomers to the business concluded that the new computer generations finally showed enough power to meet their requirements for simple software with intuitive graphical user interfaces. And the increase in processor speed contributed – toge-ther with improved storage drives – to replacing mainframes and mini-computers with distribut-ed computer architectures.

In essence, these improvements were sustain-able, because they allowed Intel to continue on the road to increased performance, a road that could be labeled as one of “more speed and pow-er.” Each new chip generation brought higher prices and higher profit margins. And as long as the market rewarded sustainable improvements, Intel could consider itself in the growth phase.

The trick now is to recognize when this strategy is no longer successful: the very time when im-provements no longer meet customer require-ments. This can be determined by studying the decline in price of successive chip generations. When the price has to be reduced shortly after market introduction, it is safe to assume that the

early on in the process. Only when these prere quisites are met, can managers count on conti-nuous and profitable growth.

This lofty goal requires theoretically substanti-ated as well as practical models that allow us to estimate the developmental stages of a product: Is it the next big thing, the dernier cri of today? Or is it just a faint reflection of days past? The favorite for managing this Herculean task is the concept known as product lifecycle. Accordingly, the product goes through four predictable stages: introduction, growth, maturity, and demise.

The concept known as product lifecycle

The principle of this concept is basically a sim-ple one: Invest heavily in improvements when the product is in the introduction and growth phase to earn as much as possible in the elated marketplace. During its maturity and demise use it as a cash cow to get as much investment monies as possible for the next big thing.

At the core of the product lifecycle concept lies the phenomenon that is consumers’ enthusi-asm for innovations. They who always treasure new things, buy first – everybody else buys later. However, in more dynamic markets where products change frequently and consumer re-quirements develop at a similar rate, it is no longer possible to sufficiently explain customer reactions based on their enthusiasm for innova-tions. What’s more: the key to understanding is no longer the acceptance of a product, but rather the size and growth of the market.

The product lifecycle mechanism in dynamic markets

Let’s look at the problem from another perspec-tive. In this case, it is not the product targeted by the analysis. Instead, it centers on the inno-vation that makes a product such as hardware solutions dynamic, for example. The core of this approach is that products change over time, and that consumers select products that satisfy their requirements more effectively than others.

Take Intel as an example. It is one of the most successful companies of the digital age. Origi-nally the company manufactured memory chips, so-called DRAMs, however in the eighties the


About the authors

The American, David Rosenblum (top), is di-rector and national leader of corporate and competitive strategy at Deloitte Consulting LLP in Los Angeles. He also occupies a cen-tral position in the Deloitte strategy and operations business unit. His most recent research projects concentrate on innovation and growth in organizations.

Ken Hutt (bottom) from Scotland, has a doctorate in physics. He is a consultant at Deloitte Consulting LLP, and is a member of senior management at the company’s strategy and operations business unit. He established the innovation and growth ser-vice unit there, which applies the disruption theory to make growth, and innovations, foreseeable and repeatable.

demand of the mainstream market has dropped. It is now high time to invest less energy into im-provements and more into innovations.

From improvements to innovations

The new version of the product lifecycle con-cept allows companies to detect impending “overshoots.” Obvious indicators are higher and sustainable prices for continuously improved products. But that means only half the battle is won. How should one react to this realization?

Intel’s competition, AMD, shows one possible strategy. In 1999, the company introduced a cost-effective chip that helped it reach about 44 percent of the desktop PC segment in the US retail sector, outperforming Intel’s sales in that space for the first time. This was due to the increased sales of PCs with a price tag of under 1,000 US dollars. The clock rate of these chips was slower than what was possible for other “high-end” chips, but more cost-effective.

However, to manufacture more cost-effective chips that have to perform at a certain level is not considered an improvement. Instead, it is basi-cally a new innovation. The challenges are not so much technical know-how as they are a question of the business model used. What is important now are the cost structures and target groups. Although still faced with considerable technical requirements, Intel had to suddenly set other pri-orities and radically reinvent its own business.

When the performance-driven market was still in its growth phase, the price-dominated market was entering its introductory phase. This market, so successfully tapped by AMD, was considerably smaller and less profitable than the one that had captured Intel’s focus. To maintain its growth long-term, Intel had to re-route its resources – away from lucrative, dead sure investments in continuously faster chips to a market of less volume and lower profit mar-gins. Products to date could not be improved further using long-term innovations. Instead, a new business model had to be created that also reached customers not included in the previous core business.

The necessity for this change results from the underlying dynamics of technology. While Intel chips have improved steadily since the eighties, so have the processors of the competition. The phenomenon of having a market leader attacked by competitors, who earned their spurs in see-mingly unattractive markets, is known as dis-ruption.

When Intel finally introduced its inexpensive Celeron chips line, the company subjected itself

to this kind of disruption as well. It gave Intel the opportunity of enjoying continuous growth, although the character of its innovations changed from improvements (sustainable innovations) to inventions (disruptive innovations).

Disruption theory as a basis for innovation

The concept governing the product lifecycle explains the evolution of markets and the ac-ceptance of innovations. However, to apply it as a prognostic tool, it is important to understand its basic mechanism. It is not enough to accept the existence of product lifecycles as a given. We have to understand why these types of lifecycles exist. We use the disruption theory to illustrate customer behavior in dynamic markets. This theory makes product performance and custom-er requirements the central point.

Performance improvements meet their limits when customers don’t want to pay for them any longer. That’s why every one-dimensional path of a sustainable innovation will lead a company from the pinnacle of success to saturation and its ultimate downfall. If this occurs, pure prod-uct improvements alone no longer allow the company to grow further.

This is the time when the business model has to undergo changes – changes that will realign the company according to new target functions while factoring in certain barriers. A company will be able to translate continuous expansions of the sector into growth and profitability only by disrupting its own business model and in-venting something new.

This article was based on a chapter for the book ‘Innovations: Promise in the Future’ (Copyright 2004 Deloitte Development LLC), written by Michael E. Raynor of Deloitte Consulting LLP, a Distinguished Fellow with Deloitte Research.


In the past, newly industrialized countries like

Brazil, Russia, India, and China in particular were

renowned for their manufacturing. Recently,

however, these regions are increasingly becom-

ing sources of innovations that are subsequently

adapted to the demands of high-tech states.

Smart strategies in newly industrialized countries



In the Indian metropolis of Delhi, right in the middle of the Quwwar-ul-Islam mosque, stands a 7.3-meter-high steel column. Erected about 1,600 years ago, this colossus weighs a stag-gering six-and-a-half tons. It bears impressive testimony to the capabilities of the Indian met-allurgists of old, not least considering that in its 1,600 years of existence, the steel column has shown no signs of rust to date.

Until just recently, the secret behind this peculiarly rust-free phenomenon remained undiscovered. However, researchers at the Indian Institute of Tech-nology in Kanpur have established that the iron in the column contains large quantities of phosphorous, which, under the local conditions there, forms a protective outer layer against oxygen-induced rust.

Today, India is well on its way to becoming a pow-erhouse of metal manufacturing. With plans to expand its steel production extensively over the coming years, it aims to become the world’s sec-ond-largest steel producer by 2016. In around ten years time, it is expected to generate an out-put of 275 million tons of iron ore a year, com-pared to 62.8 million tons produced in 2009.

Simple and economical manufacturing

Nevertheless, while high-technology countries in Europe, and in the USA and Japan, all focus firmly on the efficiency and flexibility of their production, customers in India and China, by contrast, want to produce their steel primarily using simple, economical methods (see p. 37). Whether steel, trains, building technology, medical devices, automation technology, pow-er plants, IT hardware, vehicles, or consumer goods, this example illustrates a trend that is currently a significant issue for international corporations operating in traditionally industri-al countries. Products for newly industrialized countries such as the BRIC countries (Brazil, Russia, India, and China) need to meet other sets of demands, compared to those met by simi-lar products in mature economies. “For the most part, in these countries, the products which are geared towards western markets are simply un-affordable,” says Dr. Reinhold Achatz, director of central research at Siemens. “That’s why ‘SMART products’ are needed in these regions.”

IndiaWith a population of 1.2 billion, India is one of the largest markets in the world with an average wage of a mere one US dollar an hour. This calls for innovative and economical solutions. Local conditions of this kind are dealt with at best directly in the region con-cerned, where solutions are sought and found where they are needed, rather than from afar. A typical example of this is Siemens camera systems, which are both economical and low maintenance.

Population: 1.2 billionAverage age: 25.9 yearsGDP 2009: 3,600 billion US dollarsGDP per capita: 3,100 US dollars


SMART products for newly industrializedcountries

SMART is an acronym for simple, maintenance-friendly, affordable, reliable, and time-to-market. Time-to-market actually means time-to-market and profit, which means that SMART products are designed to generate profit as quickly as possible. “Of course, applying knowledge of global technologies is essential here,” explains Mr. Achatz. “We orien-tate ourselves on the market re-quirements of the newly indus-trialized countries, however.”

Building technology fromBrazil

This also applies to Brazil. There, the demand for affordable housing is high. In response to the demand, the Brazilian government is push-ing its national construction industry, which employs about six percent of the Brazilian

workforce. Since 2004, Iriel, the Brazilian electro-nics manufacturer, has been owned by Siemens Building Technologies (BT). The company de-velops switches and sockets specially designed

to meet the demands and the purchasing power of local con-sumers in that country.

Many industrial countries clas-sify their products into groups to designate them according to the degree of technology they represent. Siemens uses this type of categorization in its prod-uct groups M1 to M3, for exam-ple. “M1 and M2 products are geared towards the upper mar-ket segment, and feature very modern design and technology

with some electric functions and light automation functions,” explains Fernando Peiter, director of Siemens BT in Brazil. “For most consumers in Brazil, these goods are too expensive. That’s why we’ve developed affordable solutions with our M3 segment, which fulfill regional requirements and are produced locally.

BrazilPreparations for large sports events are made by the countries hosting them, long before the events themselves. This also applies to Brazil, which will host the world cup in 2014 and, two years later, the Olympic summer games in Rio de Janeiro. In preparation for these huge events, the country is investing in twelve of its states to modernize its infrastructure. Government policy is currently placing an emphasis on the construc-tion of new residential property. Both of these policies call for SMART products (for example in construction technology), which are adapted to the needs of local consumers.

Population: 201 millionAverage age: 28.9 yearsGDP 2009: 2,000 billion US dollarsGDP per capita: 10,200 US dollars

of the international cor-porations who increased their investment in low-income countries gener-ally, in 2010, invested in Latin America.


else with lifecycle costs, while in newly industri-alized countries, the purchase price is usually the deciding factor among consumers. Such sim-ple solutions are best developed in the countries where they are to be marketed, because native engineers know best what is needed locally.” All of this has contributed to the growth of the en-tire organization.

“Since we began to concentrate more intensively on the M3 mar-ket, it has expanded greatly, and in some business units it has even doubled,” explains Mr. Mol-nar. “The goal now is to in crease our market share in this segment to the same level as our M1 and M2 segments,” he explains. “Today, the M3 segment accounts for one-third of our global indus-trial market. However, in this segment we have a significantly lower market share than in the industrial average.”

Fire alarm systems from China

Fire detection systems from Beijing Siemens Cerberus Electronics Ltd. (BSCE) are also typi-cal M3 products, which, in just one year, were

Upgrading simple products

The newly developed M3 switches and sockets program from Iriel has also the potential to be marketed throughout the whole of South Amer-ica. This new program was designed also to provide modules to new products within the M1 and M2 segments. This offers a clear cost advan-tage for future launches of these products. This approach is new and innova-tive in that “almost” top-quality products are being technically trimmed to meet local demands. More commonly, relatively simple technologies are being developed and then increased in value. Siemens uses a dual mar-ket strategy here. M3 products carry the Iriel logo, while M1 and M2 goods carry the Siemens label.

“Contrary to popular thought, the expansion of new develop-ment capacity in the BRIC countries is not at the cost of German engineers,” emphasizes Dr. Peter Molnar, director of the strategy department of Siemens Industry. “Two different paths of in-novation are being followed here. In developing countries, consumers are concerned above all

ChinaFrom the workbench of the world to an empire of inno-vation: 1.5 million researchers are employed in present- day China. This amounts to 1.9 researchers per1,000 employees. The difference between China and high-tech countries like Germany remains significant(7.2). However, with a total of 750 universities, the country produces a staggering supply of young academ-ics each year. In 2004 alone, the total number of grad-uates amounted to four million. This is also reflected in the number of patents produced in China, which mul-tiplied sixfold between 2000 and 2009, while the USA showed an increase of a mere 50 percent in the same time period.

Population: 1.3 billionAverage age: 35.2 yearsGDP 2009: 8,800 billion US dollarsGDP per capita: 6,600 US dollars

of Chinese companies have declaredinnovation as their top strategic priority.


developed and successfully launched onto the Chinese market in 2009. BSCE is part of the Building Technologies Division, within the framework of the “Global M3 Fire Safety” proj-ect, to position its products on the entry-level segment of the Chinese market and market them in the other BRIC countries, too.

BSCE’s portfolio ranges from components such as central fire alarm systems, smoke and heat detectors, manual fire alarms, and peripheral devices such as connection modules for a range of building technology requirements.

These were developed in China and fulfill all requirements associated with SMART products. High quality at a low price is the achievement of these locally manufactured products which have a competitive advantage over local competitors on the one hand, and “on the other hand, our Cerberus ECO, for example, is the most sim-ple product to configure on the market,” says Stephan Guse, CEO of BSCE and director of the SMART competence center for fire protection products in Beijing.

The center for fire protection products is also located here, at the heart of one of the largest and fastest-growing markets in this segment. In order to be even closer to its customers,

the entire value added chain is located here. “We have implemented this by almost 100 per-cent,” explains Mr. Guse. “Research and deve-lopment for the entry-level segment as well as the product management, the procurement of materials, and the production itself are all loca-ted here.”

In China, the Siemens corporate research de-partment also has branches in Beijing, Shanghai, and Nanjing, with a staff of 250 people working on SMART and cost innovations. For the indus-try sector, they have developed a condition diag-nosis system for the pitching technology of wind turbines, which positions the rotor blades in the optimal position in response to wind direction. This avoids damage to the pitch system and thus to wind turbines. “Conventional systems use vibration sensors which are relatively expensive and require maintenance,” says Arding Hsu, director of Siemens Corporate Technology in China. “We are using a new method that analyzes existing control and monitoring information without the need for additional sensors.”

Openness to new approaches

The fact that these innovations are Chinese is no simple matter of fate, says Mr. Hsu. “Develop-ments in this country are shaped very forcibly

RussiaWith a total land mass of approximately 17,000 square kilometers, Russia constitutes the largest single land mass in the world. The country’s inter-national significance as an industrial nation is based in part on its wealth of natural resources, in oil and natural gas in particular. However, its political and economic aim is to reduce its dependence on the export of raw materials and to increase its energy efficiency. To this end, the government provides extensive support to Russian research and develop-ment in such initiatives as national target programs to increase the salaries of scientists, the promotion of young academies, and by setting up technology parks nationwide.

Population: 139 millionAverage age: 38.5 yearsGDP 2009: 2,100 billion US dollarsGDP per capita: 15,100 US dollars


t

here. These products also need to be robust enough to withstand our extreme climate condi-tions,” explains Dr. Rolf Epstein, CEO of Siemens Mobility in Moscow. “We are contributing our expertise in the area of asynchronous drives. These drives offer great coefficients of perfor-mance and require minimal maintenance.”

Production of the first prototype is due to be completed by the end of 2010. The first of these new locomotives is due to take to the tracks for the first time in 2012. Meanwhile, Russian devel-opers at Siemens will be working on adapting existing products like the Velaro high-speed train and the Desiro regional train to local con-ditions and requirements (see page 54).

Products like these have gained the interest of the Russian market and those of practically all other countries of the former Soviet Union. Fin-land is also among the potential takers, since Finnish railway tracks are of the same width as those in Russia.

by market demands here, rather than by what is technologically possible in and of itself,” says Mr. Hsu, who incidentally lived in the USA for 30 years. “In China we need affordable solutions. That’s why developers here are open to trying new approaches.” In the long term, customers in industrial countries also benefit from Chinese technical innovations which can be introduced to their markets later.

Innovations from Russia

Siemens Mobility is also working on tailor-made innovations together with its local partner in Russia for the growing market there. Together with the Russian freight locomotive manufac-turer OJSC Sinara Transport Machines, Siemens formed a joint venture called OOO Ural Locomo-tives as the basis for this cooperation. Siemens supplies the electric drive components for new locomotives and is currently building a development center for rail transportation in Moscow.

“In Russia, we need to develop products that are suitable for the track width of 1,520 millimeters

GDP growth compared to previous year (in %)

Strategic significance of innovation for companies (in %)

Country 2010 2012 2014

China 9.6 8.3 8.1

India 7.7 8.2 7.9

Brazil 5.5 4.9 4.6

Eurozone 0.8 1.6 1.9

USA 2.5 2.0 2.3

Japan 1.5 1.2 0.9

Source: European Intelligence Unit

Source: BCG 2010 Senior Executive Innovation Survey

Brazil Top priority

Top-three priority

Top-ten priority

Not a priority

India

China

BIC countries

Mature economies

0 20 40 60 80 100

27 37 33 3

1

22 46 25 7

41 51 8

35 44 21

36 46 17


Siemens VAI Metals is due to supply a single-strand slab caster to Jindal Steel & Power Ltd, India. Located in Angul, the system is set to be one of the most modern in the country.

The new Cerberus ECO fire protec-tion system brings together high safety standards with innovative technology and is developed in Beijing, China.

Economical, practical light switches and lamp holders manufactured by the Siemens owned Brazilian com-pany, Iriel, currently hold 18 percent of the market share.

Russian developers at Siemensadapting both Desiro regional trains (see image) and Velaro high-speed trains to meet local technical require-ments and climatic conditions.


The number of international corporations working with

young companies to expand their own product spectrum

with innovative solutions is growing steadily. One way of

making such cooperation possible is through venture

capital. It is money well spent, because both the investors

and the financed companies benefit in equal measure.

The hunt for new ideas



What do Google, Amazon, Facebook, and Yahoo all have in common, aside from their meteoric rise, that is? They were all financed by outside investors, without whom these “stars” would have remained largely unknown to most people. According to a study by Deutsche Bank Research, this type of groundbreaking innovation occurs most successfully within young start-ups in the USA that do not need expensive R&D depart-ments.

Venture capital has long been used in the Unit-ed States to help small companies on the path to success. The money begins to flow as soon as the entrepreneur’s own funds are exhausted and professional financial institutions are un-willing to get on board, due to the risk involved.

A survey on the extent to which venture capital is accepted as a financing tool for small, innova-tive entrepreneurs in the US has shown that in California, venture capital investments repre-sent seven percent of gross domestic product. In Germany by comparison, in 2007 that venture capital investment was a meager 0.05 percent.

The shortest route to innovations

However, this is set to change now. Large companies increasingly want to leverage the innovative strength of small high-tech firms around the globe, and join them in opening up new vistas in the business sector. Peter Molnar, who heads the Strategy department at Siemens Industry, knows why a growing number of cor-porations are building on the creative support of newcomers. “When it comes to risky inno-vations, companies with a start-up culture are more successful, because they follow a trial-and- error approach. Large corporations, by contrast, follow a decision-making process optimized to safeguard innovations.”

Siemens aims to establish closer connections with these entrepreneurial companies through its own venture capital funds. To date, the corpo-ration has invested more than 800 million Euros in over 100 small businesses and 35 venture capital funds. They are focused primarily on growth sectors within the areas of energy and environmental technology, industrial automa-tion solutions and infrastructures, as well as the healthcare industry.

Bosch is proceeding in the same way. The com-pany recently founded Robert Bosch Venture Capital (RBVC). “In order to continue growing, we need to bring innovations to the market in ever-shorter cycles. Through venture capital, we secure access to innovative technologies and concepts. Our internal development depart-ments simply cannot cover all market require-ments,” explained RBVC Managing Director, Claus Schmidt. Similarly, BASF, Intel, Deutsche Telekom, and other multinational corporations have recently established financing companies.

Double-digit returns on investment

However, such involvement is a matter of more than just simply procuring technological know-how and young vibrant teams. Investors also expect to profit from considerable returns. The economic success of such partnerships usually equates to significant double-digit returns on investment.

At the same time, investors know there is nev-er a guarantee that the cooperation will be a

From Seattle to the

world market

Powerit Solutions helps industrial firms avoid peak electricity loads in their production pro-cesses. The small company with some 70 employees links together all of the im-portant energy consumers in its customers’ production processes, coordinates them with one another, and contributes to overall ener-gy efficiency. The system builds algorithms that precisely determine when, where, and to what extent a component can be shut down – without having a negative impact on the quality of the goods or the production process.

The innovation by this start-up from Seattle (USA) has caused a sensation in the North American market. Sales double annually, and the objective of its CEO, Bob Zak, is to position the company on the world market.

Siemens Venture Capital (SVC) got involved in May 2009. Mr. Zak expects the cooperation to experience rapidly increasing demands for its offering outside the USA: “Today everyone wants to produce in a more energy-efficient way – tailored to their processes.”


success. “Our venture capital investments as a whole have to be profitable. The contribution to success made by our venture capital partners varies,” explains Mr. Molnar.

Flops are the exception

Complete mistakes are rare, because start-ups are thoroughly audited before investors take the plunge. After all, not every company is suit- ed to venture capital investment. Often, the problem is not really the business idea itself, but the entrepreneur’s unwillingness to let go of the project. “Our future partners have to be willing to have their strengths and weaknesses optimized by new members of the management team,” explained Detlef Pohl, who is responsible for the Industry Sector at Siemens Venture Capi-tal. This is the reason why investors take a lot of time to discuss in detail, review references, and attempt to scrutinize their potential partners as extensively as possible.

Companies use various means in order to find promising start-ups. Through their global networks and know-how, they often recognize promising potential partners earlier than other-wise. Special venture capital days for start-ups and other events attract the heads of young companies. Bhalchandra G. Kulkarni, the head

of Transparent, a company in Pune, India, is such an example. “We were invited by Siemens to an innovation competition and we won,” said Kulkarni. His company specializes in waste heat recovery.

And last but not least, the in-house financing organization reacts to information from its col-leagues in the product areas, and analyzes the markets around their worldwide offices. Increas-ingly, however, young companies are searching for partners on their own. Some venture capital-ists see such initiative as a real plus.

Financing takes place in stages

If the management team, business plan, and market opportunities for the innovation are convincing, the money flows in – usually in a number of stages. In general, the entrepreneur-ial company receives between one and several million Euros initially. The venture capital firm also provides advice on organizational struc-tures, negotiates partnerships, and frequently opens doors. The investors generally forfeit investment security, but remain involved in the company for a period of three to ten years, on average. Then, many look to be bought out of the company and make significant returns of in-vestment by selling their shares.

Small initially, but huge after an influx of venture capital. Californian Mark Zuckerberg (left) founded the online social network Facebook, in 2004. Today it has more than 500 million users worldwide. The Yahoo Web portal is ten years older. Headquarte-red in Sunnyvale, USA, (right) its annual sales are around 6.5 billion US dollars.


China and India are currently experiencing unprec-

edented economic growth. Accordingly, the demand

for steel in these countries has increased dramat-

ically, resulting in massive investments in this

business segment. Yet to date, many steel producers

continue to work at considerably less-than-optimum

efficiency. Numerous small plants are being closed,

modernized, or merged. The objective is to estab-

lish large, energy-efficient and environmentally

friendly operations. Worldwide, the industry is

experiencing a massive market shift to southeast

Asia.

Promoting stable growth

With a nominal capacity of 2.8 mil-lion tons of iron per year, the new No. 3 blast furnace at JSW Steel Ltd. is the largest in India.


Whenever there is an amazing display of engineering capability in Asia, it quickly draws large audiences: Expo 2010 in Shanghai is such an example. Each day, more than 25,000 visitors pass through the pavilion of Germany. The total number of visitors is expected to reach four mil-lion by the time the expo draws to an end in October of this year.

Germany’s largest and most expensive appear-ance ever at a world expo is a thrilling expe-rience, mainly due to its contradictions. The interior presents sophisticated technology, from microprocessors for leg prostheses to organic photovoltaic systems. But the exterior is characterized by heavy industry. Architect Lennart Wiechell used 1,200 tons of steel for the building. He wanted to show that even modern sectors of the economy need a stable framework. It is a con-cept that China has taken to heart.

China’s government knows that conquering ex-port markets around the globe requires a function-ing infrastructure at home. With its skyscrapers, railways, and bridges, there is more construction going on in China than anywhere else in the world. The steel industry delivers the material for the backbone of this economic wonder. “Steel consumption is higher than ever this year,” says Bernhard Schaaf, an expert from the Germany Trade and Invest (GTAI) business development association.

In the first half of 2010, steel production reached a record 323 million tons, an increase of more than 21 percent compared to last year. By the end of the year, some 620 million tons of steel will have been sold almost exclusively to Chinese consumers. This amounts to 53 million tons more than in 2009, which itself was a record year (see page 40).

The steel industry is a major energy consum-er and source of environmental emissions. Siemens is providing green solutions for the booming Asian market.


to western environmental standards,” said Alexander Malkwitz, a partner at A.T. Kearney management consulting firm.

Currently, there are more than 800 steel manu-facturers in China alone, most of which produce less than one million tons per year. “These oper-ations not only damage the environment, they waste money,” said GTAI expert, Mr. Schaaf. Tech-nology from Europe could help these companies solve problems.

A few large mills instead of lots of small ones

The Chinese government has a clear objective. It wants to streamline the domestic industry and make it efficient by significantly reducing the number of small, obsolete plants, or by moderniz-ing and merging them into large mills. The mod-el already exists. The Luojing industrial park is home to the most efficient and environmentally friendly production facility in Asia. Using a mod-ern process, not only has the Chinese Baosteel Group managed to reduce CO2 emissions by a third and sulfur dioxide emissions by 97 percent by modernizing its technology, it has also reduced operating costs by ten percent, due to a lower energy consumption. The core component is a Corex C-3000 plant, developed and delivered by Siemens VAI (see page 39). The results have been

Shipbuilding is part of the growth strategy

The enormous demand for steel is on view for all to see on Changxing Island, a mere 25 kilometers northeast of the expo site. Just a few years ago, its residents lived from fishing and fruit cultivation. Today, thousands of workers are welding together steel freighters in record time. The government in Beijing has declared the expansion of Chang-xing to be of national strategic importance, with the goal of making it the country’s largest ship-yard. Numerous shipbuilders have moved their production facilities here. STX, the world’s largest supplier, has invested more than 2 billion Dollars here. Last year, the manufacture of a 58,000-ton freighter was completed. Within two years, the company hopes to be producing 70 ships per year in Changxing.

The increase in demand from Chinese industry has resulted in a major shift in the steel market to Asia. Today, more than half of worldwide produc-tion comes from China. Neighboring India also wants to expand its capacity, and hopes by 2016 to become the world’s second-largest steel manu-facturer. That spot is currently held by Japan. But rapid growth also presents problems for these countries. “As in the past, China continues to operate a lot of small mills that work inefficiently, consume massive resources, and do not conform

A model plant

The C-3000 plant in Luojing is the newest genera-tion of environmentally friendly and cost-effective Corex production facilities for hot metal. With an annual production capacity of 1.5 million tons, it is the world’s largest plant of this type.

In addition to considerably lower CO2 emissions, the Corex process also significantly reduces waste-water contamination by ammonia, phenols, and sulfides. Export gas generated by the process is used to produce electricity in a power plant as well as for heating purposes in the steel mill. Contrary to blast furnace operations, Corex plants use non-coking coal as the primary source of energy and only minimal quantities of coke are required. As a result, there is no need for a coking plant to be built on-site.

+ 13%

– 26%

+ 9%

– 12%

– 36%

– 9%

– 29%

– 20%

– 21%

– 6%


impressive. In March 2011 a second Corex plant of the same size will go into operation. Luojing will then be able to produce three million tons of hot metal per year, which can then be processed into steel.

Lower costs as incentive

The cost argument should produce copycats. “Iron ore is a raw material that is becoming increas-ingly expensive,” said Mr. Schaaf. “The biggest change producers can make for a brighter future is to invest in their own plants.” The importance of efficient production methods for Chinese in-dustries can be seen in a study produced jointly by the Deloitte management consulting firm and the Chinese Steel Industry Development Research Institute (CSDRI). It showed that steel producers could save 10 to 30 percent of their expenditure by using modern technology. “The lack of focus on efficiency significantly hinders the industry’s competitiveness,” said Rosa Yang, a consultant at Deloitte China. “In the long term, it will become necessary to streamline production in order to raise the industry to a world-class level.”

Many Chinese steel producers are looking for in-ternational support in the efforts to lower costs. “While the demand for new steel plants in Europe and the USA continues to fall, we expect more than seven percent annual growth in Asia,” said Tim Dawidowsky, head of the Siemens Business Segment Casting & Rolling. To be successful in threshold countries, technology providers have to change their way of thinking. “We cannot simply export existing technologies to China. That would not work,” said Dawidowsky. “Instead, we have to understand these new markets and change to meet their requirements.”

China and India differ significantly from tradi-tional industrialized nations. “These countries are geared for different kinds of steel goods compared to Western Europe and the USA,” said A.T. Kearney’s Malkwitz. While western countries look for high-quality steel grades, in China there is a high demand for relatively simple structural steel.

China

Japan

India

Russia

USA

South Korea

Germany

Ukraine

Brazil

Turkey

Asia dominates the steel market

Production in millions of tons in 2009 / changes compared to the previous year

Source: World Steel Association

567.8

62.8

87.5

60.0

58.2

48.6

32.7

29.9

26.5

25.3

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009


Success through local involvement

Only those willing to establish a local company in China or India can benefit from Asian growth. Siemens VAI has already recognized this trend. The company currently employs 1,600 people in Beijing and Shanghai in more than 20 sales offices. In India, more than 800 people work for the company in the cities of Kolkata and Mumbai. And this involvement will continue to grow. Over the next three years an additional 300 engineers and 200 sales personnel will help to expand the company’s market position in India and China.

China and India are not just sales markets, they are a source of inspiration and creativity (see page 27). Development, design, production, and service of plant components such as for blast fur-naces and rolling mills have been transferred to the region in order to offer solutions that meet local requirements. “We give the business re-sponsibility where it originates, where it can grow and should grow,” said Werner Auer, CEO of Siemens VAI.

A history with a long tradition links the company to this region. Siemens VAI, originally founded in Linz, Austria, received its first international order from India more than 50 years ago. At that time, it was the revolutionary LD steelmaking process in the city of Rourkela. The city grew up around the steel plant that was financed with German development aid.

Steel from India for the world

Today, local industry no longer needs develop-ment aid. On the contrary, Siemens VAI will mar-ket worldwide what it produces in India, in the near future. “We want to offer the best services in order to participate in the country’s growth,” said Ashoke Pan, who heads the Indian business of Siemens VAI. “This attitude will be the basis for our future success beyond our domestic market.”

Production in millions of tons

New giants

Development of steel production in China and India

India

China

Source: World Steel Association

123.3 24.3

127.2 26.9

150.9 27.3

182.2 28.8

222.4 31.8

280.5 32.6

355.8 45.8

422.7 49.5

489.9 53.1

500.3 57.8

567.8 62.8

Siemens delivers the automation and drive technology for three new LD (BOF) converters to the Handan Iron & Steel Co. Ltd. in China.


For more than 30 years, the game ranger Ian Thomas has been

studying lions in their natural habitat. By observing the way they

hunt, how they adjust to their changing environment, and how

they live together as a pride, the South African gains insights

into the success factors of their social behavior which he then

applies to the modern world of business. Business people and

athletes from all over the world come to his “wilderness lessons”

on such topics as developing strategies, change management,

and team building.

Changing sides

Learning from lions


“People hope that I can transform their team in an hour. I can trans-form their understanding of the root causes of good and bad teams in an hour, but most of these principles take time to be put into place. It is only after the presentation finishes that the real work begins.”

Ian Thomas


The sun stands low on the horizon and bathes the barren brushland in red-gold light to the chorus of countless crickets. Suddenly, a dan-gerous roar fills the air. A full-grown lion runs at full speed towards a group of observers. Weighing close to 200 kilo-grams, this lithe, sinuous king of beasts thunders dangerously close, its long tail whipping back and forth in agitation, eyes set on the goal in front of it. After a few seconds, it draws to an abrupt halt. Drums roll. Cut! The observers lean back and re-lax, and the fear subsides. It’s no real lion, after all. We are watch-ing a film.

Nevertheless, it is the real Ian Thomas who is now standing on stage. The game ranger and management coach from South Africa is a master in capturing the attention of his audience from the very beginning. Sitting in his audio-visual presentation, “Survival of the Fittest,” we remind ourselves that, contrary to what the film title might suggest, Ian Thomas has no desire to incite fear of these mighty crea-tures in us. We are here to learn from them.

For more than three decades, Ian Thomas has been observing the king of the wilderness in his natural habitat. Nowadays, he draws helpful analogies between lions and the modern busi-ness world. The African savannah provides pic-

turesque material for many coach-ing topics such as teamwork, strategy, change management, and customer service. “The Pow-er of the Pride” is a 75-minute-long presentation that focuses on the hunting style of a pride of lions.

It consists of three parts, “The Hunt,” “Raising the Young,” and “Safety.” The presentation con-cludes with “Every individual is only as good as his team, and

the team is only as good as its individuals.” This message may be rather familiar to one or the other of his international audience of employ-ees from IBM, Nedbank, and Hewlett Packard, athletes from the Transvaal cricket team and the Springbok rugby team, to mention but a few. However, Thomas brings this message across in a rather unusual context. The audience gets to exchange its rational, objective, somewhat

My love affair with wild-life has been incredibly rewarding. To me there is nothing more beautiful than the grace and power of a big cat – nothing which represents the thunder of Africa more than the full-blooded roar of a lion.

Whether training and team building or achievement of objectives, the rules for success in the wild and in business are comparable.


artificial world for the savannah, filled with creatures of the wild, heat and dust, a world of hunters and the hunted, where things are basic, heroic, and instinctive.

Predatory competition seen in a new way

Wearing a game warden’s shirt rather than a suit and tie, and rustic trekking shoes in place of the conventional shiny wingtips, and his deliv-ery peppered with a refreshingly stalwart sense of humor, Ian Thomas presents himself rather unconventionally as well. In place of sparkling consultant rhetoric, we hear the sounds of the animal world, typical presentation images on PowerPoint slides are replaced by his own breath-takingly spectacular photos, and the usual theo-retical formulas one might expect are replaced by the laws of the wilderness. Sights and sounds of lionesses hunting together are used to illus-trate how companies create value. Those of lions fighting for territory serve to demonstrate how to keep one’s competition off the market, and a lioness with a cub is used to show how to inte-grate a new team member.

On stage, this man with a mustache simulates the graceful movements of these large cats he

Lessons of the wilderness

The secret of successful teams

Lions are the only big cats that hunt in packs or prides. Since they do this in open grassland without cover, their joint hunting and close cooperation increase the opportunity to catch their prey. Ian Thomas points to parallels how corporations are able to develop successful teams. Key conclusion: “The success of the team is because of the individual and the success of the individual is because of the team.” The team comprises strong personalities who know where they excel. The objectives are challenging and clearly defined.

• Theteamconsistsofpowerfulindividualswho know what they are superb at. • Thegoalsaredemandingandcrystalclear.• Incentivesrewardsuccess.• Non-performanceisconfrontedandrectified.• Trustisbuiltonconsistentpracticalbehavior.• Trainingisseriousbutfun,anddirectlylinkedto essential skills.

Thomas: “If there is any magic it is that these prin-ciples must be put into practice. The fact that they are talked about, or written down in some company

has spent so much of his life observing, how they cleverly stalk their prey as a team, keeping their fellow hunters in the team constantly in view, for support. Physically, his presentations tax him to a degree that he has to warm up be-forehand. Ian Thomas’ entire appearance is far more a performance than a corporate training session. The fact that he knows the wilderness far better than the corporate workday of his par-ticipants, does not take away from the meaning or the value of his statements. His focus is to pass on perfectly formed methods used by wild animals to ensure survival. There are no fairy tales to be heard here, assigning human traits to animals. On the contrary. Thomas explains, “Lions are the only big cats that hunt as a team. They do that because their prey lives in open grassland without cover – antelopes, gazelles, gnus, as well as even buffalo and elephants. We are talking about animals that are either too fast or too large for a single lion to kill.”

As a group, lionesses have developed special techniques for different roles. One stalks the prey as closely as possible, the others circle it. If the lioness moving in on a zebra does not kill it outright, she can count on the help of the others to do so. She is at no risk from dangerous kicks

statement only means that someone has recognized their importance. You don’t learn to hunt or fight by reading a book.”

Crises as an opportunity

Financial or business crises usually arise unexpected-ly and impact every part of the system. However, an attitude of wait and see can be fatal. The art is actually to recognize imminent opportunities, to make bold decisions, and to drive forward-looking concepts. This applies in the hunting ground as it does in business.

• Makedecisions,eveniftheyaredifficult.Todo nothing is always dangerous. • Theobjectivehastobeclearandtheagreed method must be understood by all participants. • Allparticipantshavetobehighlyqualified,highly involved, and highly motivated. Avoid followers or dazzlers. • Ithastobepossibletoobtainconsiderably. improved results in real time, while expending the same amount of effort, or less effort. • Viewcrisesasopportunitiesandemergeinvigo- rated from a situation.


by the victim fighting for its life for very long. “A clear objective, role distribution according to individual capabilities, and a great deal of trust in one another – this combination helps lions to successfully kill their prey – and corporations to obtain top teams,” claims the game ranger.

Success through trust and communication

In his book, “The Power of the Pride,” Thomas illustrates the importance of communication when creating successful teams. One of the pictures shows seven lions standing closely together in the dusk, drinking at a watering hole. One of the animals, a young male, holds his head up, pricks his ears, and peers intensely into the dusk. He is the only one that has heard the nervous cough –“Pah! Pah!”, the warning sound of an impala antelope. Two seconds later,

Ian Thomas tells us, all seven lions raise their heads and the pride quietly divides into two groups, circles the watering hole, and the second “Pah! Pah!” follows.

Ten minutes later the deed is done: the pride has killed the unwary impala and starts to feed on it. Only one member of the pride had heard the noise, but it was enough, because all the others immediately put their trust in him, with-out any break in communication, acting coop-eratively for the good of all. The lesson learned: “There is no ego inside a lion pride and no com-plaints about not getting the MD’s memo on the subject of impalas. Team members must be alert to communication.”

Ian Thomas does not address problems specific to corporations per se. Crises such as recalls for

The prey of lions is often stronger, faster, and more numerous. Nothing less than an ingenious hunting strat-egy and excellent teamwork saves big cats from starvation.


About the author

Since the mid-1990s, Ian Thomas has been working as a professional coach in more than 25 countries worldwide. Af-ter completing his Bachelor’s degree in Business Administration, he decided to follow his dream and became a game ranger for the Londolozi Game Reserve in South Africa. There, he soon special-ized in tracking lions. In recognition of his outstanding service, the Field Guides Association of South Africa awarded him the official title of “Scout.”

Through the ongoing contact with safari guests, Ian Thomas discovered his talent for teaching and storytelling. This realization led the 57-year-old to a second career as a presentation coach. Combining his know-how about corporations with a thorough under-standing of the laws of nature, he is convinced that humans can learn a great deal from nature. As a guest of numerous radio and TV shows, he talks on subjects such as team work, achieve-ment of objectives, and successful risk management. Ian is a member of the National Speakers Association of South Africa (NSASA) and has consultancy cli-ents in Europe, Asia, the US, and Africa.

Contact information:E-mail: [email protected].: +27 (11) 883 2088Fax: +27 (11) 883 2600PO Box 651521Benmore, 2010Johannesburg, South Africa

During his years as a game ranger, Ian Thomas has taken many spectacular pictures of lions. Some of his best are included in his book “The Power of the Pride.” In it, he describes his observa-tions and illustrates the lessons that can be learned from them in chapters under various headings, such as hunt-ing. In this chapter, he explains the rules of hunting as a pride and shows what can be learned or derived from them, for creating effective teams.

Order info:www.ianthomas.net/order-form.htmlPrice: 20 Euros plus shipping costs

Suggested literature:

“The Power of the Pride”

car manufacturers, dramatic stock market news, employee strikes or dissatisfied customers, well, lions don’t know anything about that kind of thing. However, thanks to Ian Thomas, the king of the beasts bears valuable testimony to the fact that, especially during challenging times, it is wise to listen more to the simple rules of nature.

48 Industry Journal | 03 | 2010 | Urbanization

“Our country cannot successfully com-pete in the global economy if we fail to invest adequately in our domestic trans-portation infrastructure, particularly in cities and their metropolitan areas.”

Tom Cochran, Chairman of the US Conference

of Mayors

49Industry Journal | 03 | 2010 | Urbanization

Travel in comfort, take the train, get there fast, take an air-

plane? That was then. Nowadays, high-speed trains are not

only eco-friendlier; they are also faster on many routes than

their airborne counterparts. We traveled through three con-

tinents to witness their speed and efficiency at first hand.

Get there fast – get there relaxed


travel has proven to be the more economical, comfortable, and faster choice compared to fly-ing, at distances of up to 700 kilometers.

Fast rail connections between major cities provide not only greater mobility, an increased standard of living, and growth, they also benefit the environ-ment. Spanish researchers have calculated that each airline passenger on the Madrid-Bar-celona route creates emissions of 71 kilograms of CO2. A high-speed train passenger on the same run only produces 13.8 kilograms of CO2, a mere fifth, by comparison.

High-speed trains are passenger trains with a minimum speed of 200 kilometers per hour. Globally, the majority of them are in operation in Europe, followed by East Asia and North Ame-rica. However, the train is growing in impor-tance in other regions, too. The State of Qatar is currently planning to build a 180 kilometer high-speed train link between its capital Doha and the neighboring Kingdom of Bahrain, which will be connected via a 22-kilometer-long bridge.

Things are much quieter these days at Barce-lona Airport than they used to be, especially at Terminal 1D, the so-called “Madrid terminal.” Air traffic there has dropped by nearly half over the past year. As recently as 2006, with 4.4 million passengers annually, the air link between the Catalo-nian and Spanish capitals was the busiest in Europe.

After the new rail line between these two cities opened at the end of 2008, airline market sha-re dropped dramatically. With a travel time of six hours compa-red to a flight time of 55 min-utes, few people saw the train as a viable alternative, until recently. Today, however, almost half of travelers choose to go by high-speed train. In just two-and-a-half hours, it completes the 600-kilometer-long route. That’s record time.

This example shows the effect high-speed trains can have on transit flow in a world of increased general urbanization and ever-growing cities. Given current check-in procedures and distances between city centers and most airports, rail

Several million people each year use the high-speed Velaro E between Madrid and Barcelona.

Introduced at the Berlin trade show in 1879, the first elec-tric train by Siemens & Halske caused a sensation.


Fastest series-produced train set in the worldThe Velaro E high-speed train operating in Spain is the first of the Velaro range, and the fastest series-produced train set in the world. It is impressive not only because of its speed, but also because of the flexibility in the design of its interior. It includes three classes of service, a cafete-ria, and two compact galley kitchens which cater for Span-ish Rail’s elaborate at-your-seat food service.

For the design of the Velaro E’s unusual and comfort-able interiors, Siemens was awarded the “2008 Railway Interiors Innovation and Excellence Award.” With a more than 99 percent on-time arrival rate, the Velaro E is also extremely reliable. The 26 high-speed trains built between 2002 and 2007 for Renfe, the Spanish national rail com-pany, are used primarily on the Madrid-Barcelona route. Completing the 630-kilometer-long route in around two and a half hours, they outstrip their airborne competition.

According to a study, investments in rail transportation in the USA would create hundreds of thousands of jobs.

Qatar is investing 17.4 billion Euros in its rail project. Last year the project secured the support of German Rail. As one of the world’s leading manufacturers of high-speed trains, Siemens is currently working to win the order, worth more than two billion Euros, to supply the project with train technology.

German know-how is also in demand beyond the Persian Gulf. The USA, China, and Russia are fol-lowing the successful European rail model and are expanding their high-speed rail networks.

USA: from the highways to the rails

The United States’ image as a land of unlimited opportunity is due in some part to Dwight D. Eisenhower. The 32nd President authorized the construction of the first interstates more than half a century ago. The age of major highways had begun, and soon interstates were crossing the country in all directions. Since then, unli-mited mobility has been closely associated with the American Dream.

But things have changed over the past fifty years. Today, freedom has come to mean inde-pendence from oil. The transportation sector is

responsible for two-thirds of total US oil con-sumption, generating more than 30 percent of CO2 emissions there.

The US Conference of Mayors, which represents more than 1,200 cities across the USA, commis-sioned the Economic Development Research Group in Boston, to prepare a study on the eco-nomic consequences of high-speed rail trans-portation. Tom Cochran, Chairman of the US Conference of Mayors, stated “Transportation is the backbone of America’s economy. Our coun-try cannot successfully compete in the global economy if we fail to invest adequately in our domestic transportation infrastructure – partic-ularly in cities and their metropolitan areas.”

The researchers selected as examples four met-ropolitan areas of different sizes: Los Angeles, Chicago, Orlando, and Albany, the capital of the State of New York. The results were similar and the message was the same from all four cities: investments in high-speed rail pays off. Long- term, in all four cases, the investment in high-speed rail was seen to create new jobs and sus-tainable economic growth.


cities examined. A growth in day trips and week-end getaways was also predicted, as travel in comfortable and modern trains would become less expensive, more convenient, and more at-tractive to a broader sector of the population.

Improvements in trade connections

The planned high-speed connections will sig-nificantly increase efficiency for business travelers. The travel time in trains can be seen as working time in a well-equipped rolling of-fice that is more effective than an automobile and much more comfortable than an airplane. Transferring large volumes of traffic from road to rail would reduce traffic jams and ensure in-creased growth. After all, there is nothing less productive than employees stuck in traffic.

In addition, the experts estimate that the new high-speed connections would result in more business travel generally and in increased busi-ness relations between the cities connected by the high-speed route.

Finally, high-speed rail represents enormous potential for developing the local economy. When competing for highly qualified employees, job offers with good transit connections often win out over the attractiveness of a location itself. If a city can be reached from other metropolitan areas by high-speed train, it is

150,000 jobs and 20 billion Dollars in added revenue

In Greater Los Angeles, up to 55,000 new jobs could be created along with 7.6 billion Dollars in added revenue. Chicago could see 42,000 jobs and 6.1 billion Dollars in potential revenue. According to the study, Orlando could create 27,500 new jobs and add 2.5 billion in revenue, while Albany, the smallest of the metropolitan regions in the study with less than 1 million residents, could produce 21,000 new jobs and add 2.5 billion in revenue. In just these four met-ropolitan areas alone, that amounts to a total of 150,000 potential new jobs and almost 20 billion Dollars of potential new revenue per year.

These impressive figures are not only based on the immediate economic impact of the construc-tion and operation on jobs and revenues. They also reflect the numerous positive benefits of new high-speed rail connections to commut-ers, business travelers, and tourists, that is, the three groups that both use the new infrastruc-ture and benefit from it most.

Cities linked to a high-speed rail line benefit from the increased numbers of visitors. In the study, rail station buildings and surrounding streets could see their value increase consid-erably. Further investment in business and the service sector was also predicted for all four

Bremerhaven, 2008. Three cars of the first eight-unit Velaro CN high-speed train for China are loaded on a freighter (right).


more likely to win seasoned employees for the local job markets from outlying areas. Employees are rarely willing to get on an airplane each day or drive hundreds of kilometers to get to work. Experience in Europe and Asia has also shown that commuters find traveling by high-speed train to be much more attractive than by road or rail, because it offers greater flexibility and comfort.

CO2 emissions fall by a third

In addition to the economic benefits highlight-ed by the study, the environment would also profit from the construction of a high-speed rail network. According to Siemens figures, introducing rail connections to the four met-ropolitan areas reviewed would reduce overall CO2 emissions from transportation by 2.8 mil-lion tons per year, which is one-third less than current emissions.

It is the first time that such precise data has been available on the consequences of investing in US rail transportation. What is needed now, are policies to implement the investment pro-gram and to drive planning of the high-speed rail network. There are some positive indica-tions that President Obama could go down in transportation history as “the father of Ame-rican high-speed trains,” just as Eisenhower is immortalized as the founder of the highway system.

China gets 45,000 new rail kilometers

China is banking on railways. Over the next de-cade, more than 45,000 kilometers of rail will be laid in the country, including 20,000 kilome-ters designated for high-speed passenger rail transport. The Beijing-Shanghai route will reach speeds of 380 kilometers per hour. Given the relatively short distances along the densely pop-ulated east coast of the People’s Republic, rail travel has developed into a serious competitor to the airplane.

The government is relying on European know-how for its train technology. This is how Siemens, together with a local partner, received the order in 2006 for 60 high-speed trains. It was the birth of the Velaro CN, the second produc-tion series developed in the Velaro range. Ex-tensive modifications had to be made to adapt the train that was originally introduced in Spain as the Velaro E (see next page), to East Asian re-quirements.

Car bodies had to be widened

“The greatest technical challenge was widening the car bodies by some 300 millimeters. The change meant the interiors could be equipped with five seats per row, three on one side of the aisle, two on the other, instead of the usual four. This means a 200-meter-long train of this type provides seating for 600 passengers,” says Edzard Lübben, head of the Highspeed Subseg-ment at Siemens Mobility in Erlangen.

The trains were built primarily in China, which was challenging for the Siemens engineers. Despite the challenges, however, the transconti-nental technology transfer worked. Just in time for the 2008 Olympic Summer Games in Beijing, the Velaro, called CRH 3 (China Railway High-Speed) rolled out on various routes around the country, in particular between Beijing and Shanghai, as well as Beijing and Tianjin. “Our Chinese partners highly value the quality of our trains,” said Lübben.

This positive experience is one of the reasons why the Chinese-German success story contin-ues to this day. Last year, the Chinese Ministry of Railways ordered another 170 high-speed trains. The train sets will be based on the Velaro CN and manufactured by local compan-


Velaro – a success story

ies in China. Siemens is providing critical com-ponents such as the electrical equipment and bogies. The new trains will operate on the route between Beijing and Shanghai, completing the 1,318 kilometers at speeds of 380 kilometers an hour, adding proof to the reality that China is in the fast lane.

Trains for the Russian steppe

The second of May, 2009 was an historic day in Russian rail history. During a test run, the Sie-mens Velaro RUS high-speed train developed for Russian Railways set a new speed record of 281 kilometers an hour for Russian trains. At that moment, the world’s largest country in terms of land mass entered the high-speed era.

This historic event was preceded by a costly construction phase that brought many chal-lenges. “A train had to be developed that could handle the biting cold of the Russian winter, and still maintain high speed and maximum effici-ency,” says Edzard Lübben of Siemens Mobility.

Additional space was required to add thermal insulation. “As with the Chinese variant, the car bodies were widened,” explains Mr. Lübben. Specialized materials ensure that excessive amounts of energy are not required for heating. Despite an outside temperature of anywhere between minus 40 and plus 27 degrees Celsius, a comfortable internal temperature of 22 degrees Celsius is maintained at all times. The air con-ditioning on board is achieved with a minimum of energy, and all safety-related systems remain operational at temperatures as low as minus 50 degrees Celsius.

In contrast to the Velaro E series operating in Spain, cooling is provided through ventilation ducts in the carriage ceiling, to prevent fine snow from entering sensitive system parts.

Travel time cut in half

As is standard, the scheduled start-up of the eight Siemens trains took place in cold weather. In December 2009 the first trains raced through the Russian winter along the broad gauge route

In the late nineties, on seeing German Rail’s new ICE 3 for the first time, many people asked, “Where is the locomotive?” The train, produced with significant Siemens participation, was Europe’s first high-speed electrical multiple unit. The push-pull locomotives required in earlier ICE models were made obsolete by distributing the drive motors across the entire length of the train. To this day, it provides more space on board, and it offers significant technical benefits. Because the drive and brakes are distribut-ed across multiple axles, the tracks are subject to less stress during acceleration, and more energy can be recaptured during braking than was previously possible.

Developed by Siemens since 2001 as an ongoing enhancement of the ICE 3, the Velaro train set reaches record-breaking speeds of up to 403 kilome-ters an hour, making it the world’s fastest of its kind. In addition to its speed, the train is characterized by its cost-effectiveness as operating and maintenance costs have been reduced to a minimum.


between Saint Petersburg and Moscow at speeds of up to 250 kilometers an hour. The train, which was named “Sapsan” (Russian for peregrine falcon) by the railway company, completed the 436-kilometer-long route in 3 hours, 45 mi-nutes. Previously, train travelers had to endure a travel time of up to eight hours on the same route.

The demand is enormous. On average, more than 90 percent of seats are occupied. The train will now be used on other routes as well. And on the route between Saint Petersburg and the cap-ital, maximum speeds of up to 300 kilometers an hour will be reached. At that point, yet another new chapter in Russian railway history will be written.

Its efficiency makes Velaro one of the most environ-mentally friendly modes of transportation today. Calculating the trains energy consumption in gaso-line equivalence, when operating at full capacity, the train would consume a mere 0.33 liters per pas-senger over 100 kilometers. Even the most environ-mentally friendly automobile when fully occupied, cannot come close to it in terms of efficiency.

The elimination of the locomotive is just one reason why the Velaro always has plenty of space on hand. The interior was built based on the “empty shell” principle. This means individual interiors can be mod-ified quickly and easily to meet customers’ needs. As a result, a 200-meter-long train, comprising eight cars with two bogies each, for instance, can be con-verted from its traditional 420 seats to 500 seats for maximum space utilization.

The first of the Velaro series was the Velaro E(which was developed for the Spanish high-speed rail network, and stands for “España”, see page 33). In addition, the Siemens train has also been deplo-

yed successfully in Russia and China, and will soon go into service in its German homeland. By the end of 2011 under the name of Velaro D, the fifteen-unit trains will run on Germany’s and Europe’s tracks – and will replace some of the original ICE trains still in use at that time. In addition, it will operate on new high-speed connections into neighboring France.

Extensive innovations on the bogies of this fourth generation train ensure highest safety and easier maintenance. Sensor bearings (wheel set bearings with an integrated sensor head) automatically report component status on board. “Parts only have to be replaced when it is technically necessary – and not within strict maintenance intervals,” explains Edzard Lübben, himself an engineer.

Another highlight is the redesigned nose cone on the Velaro D. The installed coupling not only means a smooth connection for double-traction train ser-vice, it also gives the new high-speed train a much sleeker appearance than its predecessors – all this, without a locomotive.

The Velaro RUS withstands temper-atures as low as minus 50 degrees Celsius. It was tested in the most modern cold chamber of its type at the Rail Tec Arsenal in Vienna.


What to do when an airport’s capacity becomes insufficient for a longer period of

time due to a large event? Siemens Mobility provides a solution with CapacityPlus

flexible terminals that can be erected quickly to alleviate peak loads. The inno-

vative solution once again proved its effectiveness during the FIFA World Cup in

South Africa.

For a short time only


On the inside, the temporary terminals did not differ from conventional airport terminals. Each of the tents covered an area of 1,800 square me-ters and provided travelers with check-in and security systems, baggage handling and sani- tary facilities. During the World Cup, some 10,000 passengers on international and domestic charter and scheduled flights used the Capacity-Plus terminal in Port Elizabeth. In Bloemfontein, the majority of passengers were booked on chartered flights or were VIP guests – including the German national team.

Construction time of six weeks

From groundbreaking to start-up, just under six weeks were needed for construction. This was possible thanks to the involvement of an extreme-ly well-tuned team. “Building a temporary terminal is a highly complex undertaking. We have to not only ensure security requirements are met but also mobilize a great deal of tech-nology in a very short time. That’s why we act as a single source provider,” reports Wegner. Siemens provides most of the technology. The building is the only object provided by a third party, and the Infrastructure Logistics special-ists, based on their deep level of expertise, have developed a detailed requirement catalog for providers.

Prior to the start of a project, the team goes to the customer to obtain important key data in-cluding flight schedules, the types of airplanes, amount of baggage per passenger, and local security requirements. With respect to interna-tional connections, customs and immigration have to be located in the terminal as well. Based on this information, experts develop the lay- out of the CapacityPlus terminal and look for a suitable building. “This could be a tent or a lightweight construction.

International air travelers are familiar with the situation: the airplane has barely landed and the first thing they encounter are incredibly long lines that make for a negative first impression. The probability of this happening is all the greater when a large event is taking place and the destination airport does not have the capacity to handle the influx of visitors. Seemingly endless lines at check-in also count among the less than pleasant aspects of air travel in peak periods.

South Africa, host of the 2010 World Cup, an-ticipated problems like these well in advance. More than three million people would pour into the city stadiums to watch the final rounds of World Cup matches. And many of those spec-tators would fly in from all over the world and cause a tremendous increase in passengers at the airports of Cape Town, Johannesburg, Durban, Bloemfontein, and Port Elizabeth – and test the limits of especially the last two. For this reason, Airports Company South Africa (ACSA) decided to draft Siemens into its World Cup team.

Special tents for processing air travelers

For big events like these, experts in the Mobility Division have a one-of-a-kind product in their portfolio: CapacityPlus temporary terminals that help handle peak crowds to avoid long lines and frustrated passengers. Siemens quickly con-structed a tent at the Bloemfontein airport and the Port Elizabeth airport, each fully equipped with everything needed to handle additional crowds of up to 350 and 450 passengers per hour, respectively. “Of course, these were spe-cially constructed tents. For security reasons they had solid side walls to prevent break-ins,” explains Christian-Marius Wegner, Senior Vice President of Siemens Infrastructure Logistics Customer Services.

The history of a product

In 2004 CapacityPlus had its baptism of fire in Lisbon. Within four months Siemens built a 7,000-square-meter terminal housed in a huge tent and a convert-ed hangar. The location was designed to process up to 3,000 passengers per hour, and by the end of the event some 700,000 had passed through the termi-nal. Today another temporary terminal measuring 8,800 square meters for up to two million passengers per year is helping operators deal with high passen-ger numbers. The temporary terminal will continue

its service until construction has been completed on the new airport outside the city.

In Doha, in the Emirate of Qatar, Siemens Mobility built an 8,000-square-meter terminal in 2006 fea-turing Arabian-like tents and an independent power supply.

After the 2010 FIFA World Cup in South Africa, ter-minals are waiting to be built for the 2012 European Football Championship in Poland and Ukraine.


Backed by the success in Portugal, logistics experts started to develop the prototype into a marketable product. They were treading virgin territory since they were the first worldwide to help airport operators temporarily expand their capacities. In fact, Infrastructure Logistics is still the only provider of this type of flexible terminal.

Cooperation with regional companies

For all international projects, good cooperation with the respective Siemens regional compa-nies is decisive for success – as in South Africa. “From the very beginning, colleagues in Johan-nesburg fully supported the project and contrib-uted a great deal of added value,” remembers Arsénio. “By integrating a broad spectrum of Siemens technology and know-how into an inno-vative system solution, the Mobility Division im-pressively applied the Siemens One credo with CapacityPlus.”

Now that the FIFA World Cup is over, the termi-nal experts from Siemens are not sitting idle: “In the Middle East we are negotiating with a number of low-cost carriers and in the United States we are working on avoiding capacity bot-tlenecks. Interest for CapacityPlus has also come from Ukraine and Poland where in 2010 the next European Soccer Championship will be held,” says Wegner.

Together with our colleagues we continuously scour the globe for new solutions,” says Wegner. The CapacityPlus experts come from Siemens Portugal, where the idea behind CapacityPlus was born. The event that triggered its incep-tion was the 2004 UEFA European Football Championship. The existing capacities at the Portuguese airports did not suffice. And at that time, UEFA requested that fans from different countries be processed separately on their homeward journeys, which required additional handling capacities.

Implementation of an idea

“Back then we talked with the airport operator and developed the idea to establish an addition-al terminal in a tent,” remembers José Arsénio, the head of Infrastructure Logistics in Portugal. “The Portuguese Air Force also offered to clear out a hangar, which we used to house a large waiting area with restaurants and shops.” With the help of experienced on-site employees, Siemens Mobility was able to successfully im-plement the unusual project. “Everything went very well, and altogether the terminals proved to be a fantastic idea,” says Arsénio. To this very day, Siemens employees in Portugal handle project management and monitor technical constructions when an airport somewhere in the world needs to be temporarily expanded.

The temporary terminal shown here at the airport in Bloemfontein ensured that passengers were processed quickly and efficiently despite peak loads due to the 2010 FIFA World Cup.


National and international green build-

ing organizations are setting new qual-

ity standards for single-purpose build-

ings and, increasingly, for residential

buildings, too. Much-coveted certifica-

tion increases the value of real estate

considerably, once it has been awarded.

Occupants pay quite a bit more for low-

er operating costs and the prestige that

goes with having the “right address.”

Turbo rate of return for real estate


Platinum, gold, and silver – these precious materials are becoming much more popular in real estate, but not as raw materials. In fact, they are labels for the ecological correctness of buildings. Siemens is vying for a LEED platinum certification for its company’s new headquarters in Munich. The Sueddeutsche Verlag already managed a LEED golden certification for its new headquarters. And that’s not all. There is a huge demand for the US label. Currently more than 20,000 buildings worldwide have been regis-tered as having passed the test in accordance with LEED criteria for environmental respon-sibility and energy efficiency. In addition, there are another 60 Green Building Organizations currently offering their own certification.

Added-value for buildings

There are good reasons for the eco-seal trend: recognized buildings create higher returns, fewer vacancies and better leasability at at-tractive prices. Overall, they ensure a higher resale value. Real estate experts talk about rental incomes that are up to 12 percent higher or revenues that have increased by as much as 16 percent. According to the figures of the US Green Building Councils, tenants are 27 percent more satisfied with commercially used “green” buildings as compared to traditionally built or renovated houses. What this also means is that employees do not get sick as often and their gen-eral motivation at work is significantly higher. And let’s not forget, occupants save about 30 percent on energy, water, and garbage disposal fees. CO2 emissions are reduced by one-third.

Small wonder that the US publisher McGraw Hill expects the construction volume for green buildings to have reached five times as high as it is now, within the next two years. “Green buildings are for real estate what jeans were for fashion – a trend that takes a long time to catch on and ends up as a long victory march,” pre-dicts Thomas Beyerle, the research director of Aberdeen Immobilien Kapitalanlagegesellschaft headquartered in Frankfurt.

The battle of the certification agencies

The battle of the real estate appraisers is a fierce one. The most recognized certificate worldwide is the LEED certificate. Globally-oriented inves-tors and managers of real estate funds in partic-ular, value the label highly, because it provides for an internationally defined and established basis for comparison.

Deutsche Bank hired not one but two Green Building Organizations to certify the ecologically outstanding modernization of their two high- rise office buildings in Frankfurt. The building now carries the LEED quality mark and the “German seal of approval for sustainable con-struction” of the German Society for Sustain-able Building (DGNB). “For this seal, they exam-ine a great deal of criteria that addresses such items as social, functional, and site quality,” says Ullrich Brickmann. The Siemens expert for en-ergy efficiency solutions believes that the DGNB testing procedure could pay more attention to such areas as energy efficiency and technical building equipment. Aside from that, this

Platinum for the Sierra Nevada College

Environmental scientists at the Sierra Nevada College work in first-class surroundings, in a building combining state-of-the-art technology with unconventional solutions, located in the midst of pristine nature, between Nevada and California. A Siemens building automation system, together with additional installations, optimizes the environmentally friendliness of the building. A combined heat and power plant significantly reduces power consumption. A solar current installation generates 30 kilowatts of electricity. And sunlight creates comfortable lighting by using lighting screens to break sunbeams by up to 9 meters. Old jeans and newspaper double as building isolation or as part of the ceiling. The balance obtained is excellent: Energy and water consumption are reduced by 65 percent as compared to other building automation systems. The college takes well-deserved pride in its LEED platinum certification.


testing system is actually known only to those directly involved with it, for the most part. This goes for the EU-initiated Green Building Program, too, which has yet to make it beyond Europe. The flood of certifications for sustain-ably built or modernized real estate is on the increase.

The German TÜV Süd presented its own certifi-cation system at the beginning of 2010. Known as SCoRE (Sustainability Certification of Real Es-tate), the organization defines itself as “the first German sustainability certificate for investment properties.” And very soon, the German Energy Agency (dena) will follow suit with a seal of ap-proval for non-residential buildings. But Ullrich Brickmann does not waiver: “We live in a global environment. In the medium term, national seals of approval won’t be able to keep up with the pace set by international investors, who are rapidly increasing in number.”

rather recent test seal has yet to gain interna-tional acceptance. In essence, only a seal with worldwide recognition can provide the manu-facturer of sustainable construction material, energy-efficient components, and system solu-tions with an image that withstands the global field of competition.

Many certificates are only accepted nationally

Other national Green Building Organizations that award eco labels are rather similar. For the most part, their quality certificates are only known in their own country. This is true, for example, of the French HQE (Haute Qualité Envi-ronmentale), the Australian Green Start Certifi-cation and the Japanese CASBEE certificationsystem. To date, only the British BREEAM seal is sought-after abroad.

Despite having certified approximately 185,000 buildings to date, the quality of the British

Summary of available certifications

Approximately 60 national Green Building Organizations worldwide offer test procedures for buildings. Europe alone awards close to 20 different eco labels. Here is a summary of the most important seals of approval.

LEEDLeadership in Energy and Environmental DesignEstablished: Primarily in the USA and CanadaAreas: New buildings and extensive modernization, buildings in inventory, residential buildings, intellectual development, inlaid shell, etc.Evaluation criteria (main criteria): sustainable site,water efficiency, energy and atmosphere, room and envi-ronmental quality, innovation, and planning processRating system for certification: certified, silver, gold, or platinum

Energy StarEstablished in: the USAAreas: public/commercial buildings, residential real estateEvaluation: energy efficiencyCertificate: Energy Star seal

EU GreenBuildingEstablished: in EuropeAreas: non-residential real estateEvaluation: energy efficiency, ventilation,savings recommendationCertificate: GreenBuilding seal

EU GreenLightEstablished: in EuropeAreas: non-residential real estateEvaluation criteria: energy efficiency for outside and inside lightingCertificate: GreenLight seal

BREEAM Building Research Establishment’s Environmental Assessment MethodEstablished: in Great BritainAreas: residential and non-residential constructionsEvaluation criteria: management, health and comfort,pollution and land use, energy consumption, CO2 emis-sion, infrastructure, building material, water demandRating system for certification: passed, good, very good, excellent

BUND energy-saving hospital quality sealEstablished: in GermanyAreas: hospitalsEvaluation criteria: CO2 emissions, energy consumption,energy managementCertificate and information plaque

DGNB German Society for Sustainable Building Established: in GermanyAreas: new construction for office, administrative, and residential buildingsEvaluation criteria: ecological, economical, socio-cul-tural and functional, technical quality, as well as process and site qualityRating system for certification: bronze, silver, and gold


Cities are gaining in importance in the battle against climate change. At the “City

of the Future” exhibition in Singapore, Siemens is presenting its entire portfolio

of solutions and technologies for sustainable city development.

City of the Future

Currently, half of the world’s population lives in cities. Although these cities comprise only one percent of the earth’s surface, 80 percent of all greenhouse gas emissions are produced by them. By 2050, 70 percent of the world’s population will be living in cities that will contribute more than 90 percent of greenhouse gas emissions. In addition, the number of megacities with popula-tions of more than ten million inhabitants is on the rise – exacerbating air, water, land, and noise pollution, and compounding the already uneven distribution of resources. Mastering these chal-lenges for sustainable city development is the job of city planners, public services operators, and the industrial and manufacturing sectors.

Since March 2009, Siemens has been presenting its comprehensive portfolio of solutions and

technologies for sustainable city management at the “City of the Future” exhibition in Singa-pore. The company’s partner in this undertak-ing is the Singapore Economic Development Board. The 1,485-square-meter exhibition space displays more than 200 solutions and 90 case studies. In the public gallery, visitors have the opportunity to navigate interactively via Ubiq screens through the entire range of Siemens in-novative products and technologies for sustain-able city development. These solutions provide answers to such issues as water treatment, build-ing technology, public mass transit, and comple-te transportation. Just a few steps ahead, prac-tical applications of these solutions are shown at the “Reference Kiosk,” which offers detailed information about existing Siemens projects worldwide.


live in an area measuring a mere 710 square kilometers. This is three times as many inhabit-ants per square kilometer as in Hamburg, which has 1.7 million inhabitants living on 755 square kilometers.

It is a result of deliberate strategies for sustain-able city management. Singapore has developed into a green city, leading the way for many other neighboring megacities in Asia. In Singa-pore, many exotic plants grow between street canyons. A thriving rain forest is located just a few kilometers from the center of the city, and boasts a greater variety of trees than the entire North American continent. This is vital to Sin-gapore’s air quality, as green open spaces are green “lungs” to urban metropoles, in that they provide a natural source of air-conditioning. De-pending on the size of the plants found in such forests, the effect on the surrounding tempera-ture can mean a reduction of up to four degrees Celsius.

Singapore as a true experimental field

Singapore depends on the development of inno-vative technologies and processes. Its govern-ment focuses on close cooperation with interna-tional corporations and research organizations, and offers incentives to encourage them to base their operations there. Optimal research facilities prove attractive to corporations when deciding to relocate to Singapore. Companies are able to use the metropolis and its infrastruc-ture as a true experimental field and to develop ideas together with local universities, making Singapore an innovation hot spot, today, and in the future.

The core of the exhibition is the “City Manage-ment Solutions Center.” Visitors have the op-portunity to test and expand their know-how of city management. In the “City Game” they try to manage a city in an interactive simulation game. For example, they may be confronted with the complex challenge of balancing the benefits of building transport infrastructure like roads and train systems against cost recovery and noise and air pollution. And if the player does not pro-vide sufficient water and energy, the metropolis collapses.

City Cockpit and effective city management

Timely and accurate data is required for effec-tive and efficient decision-making. The City Cockpit provides just that – a software solution that allows the display of city data such as finan-cial, environmental, and transport-related data. City decision makers can have relevant data dis-played on a customized dashboard, and have the ability to drill down to the specifics.

With its “City of the Future,” Siemens has cre-ated a comprehensive work exhibition of the company’s complete city management portfolio. The project has developed into a global com-petency center and forum for sustainable city development. More than 500 high-ranking poli-tical and business leaders worldwide have visit-ed the exhibition so far. They use the forum for socializing and exchanging experiences.

Singapore, ranked in 2009 as the most innova-tive city in the world by the Boston Consulting Group, is an ideal location for the exhibition. The dynamic and vibrant Southeast Asian me-tropolis is a testament to environmental and resource consciousness in spite of its high population density. Its five million inhabitants

In the “City of the Future,” experts can choose to run through simulated exer-cises that focus on building cities. Or they can use the touch screen or models to familiarize themselves with solutions for sustainable city development.

64 Industry Journal | 03 | 2010 | Environment

65Industry Journal | 03 | 2010 | Environment

More than two-thirds of the earth is covered with water. Today, human-

kind is increasingly discovering how oceans could provide answers to

the problems that threaten our very existence. As savior of our climate,

supplier of precious raw materials, and as an environmentally friendly

energy source, oceans and the concept of their industrialization have

firmly captured our attention to become a major focus of scientific

research.

Good from the bottom up


algae farming over first-generation biofuel feedstock such as rapeseed and corn is that they do not compete with food cultivation for arable land.

Microalgae as CO2 annihilators

More effective than any high-tech solar cell, micro-algae change sunlight into energy via photo-synthesis. In addition, algae require carbon dioxide, one of the greenhouse gases, in order to grow, meaning it eliminates waste gas bio-logically, a highly useful side effect indeed. In the future, energy providers may be able to feed otherwise emitted CO2 from their installations to algae instead of having to obtain expensive emissions rights to emit it into the atmosphere in the conventional manner. Accordingly, cor-porations and research scientists have taken an active interest in algae. Airlines are currently involved in the process of developing biofuel using microalgae. Algae-fueled airplanes could travel longer distances without refueling, com-pared to kerosene-fueled planes. In addition, algae fuel generates far less carbon dioxide and sulfur oxide exhaust than kerosene. For the first time ever, during the International Luftfahrt-messe ILA 2010 in Berlin, a small Diamond DA42 plane took to the air running purely on algae fuel, alone, to the awe of spectators and the en-ergy and aviation communities alike.

Jules Verne, the 19th-century French author, was clearly ahead of his time. “The depths of the oceans hold zinc, iron, silver, and gold that perhaps can be mined one day,” proclaimed the character Captain Nemo in “20,000 Leagues Under the Sea,” Verne’s science fiction bestsel-ler that was first published in 1870. What we know of Captain Nemo’s prediction today is this. Not only are the oceans of huge importance to humanity because of their metal reserves, they also hold tremendous resources of both energy, in the form of methane hydrate, and food, in the form of algae. They are one of the most impor-tant regulators of our climate.

Microalgae are of tremendous importance to our world. Invisible to the naked eye, they are detectable only en masse in the form of thin slime. About 100,000 different types of algae are known worldwide. Some are as minute as bacte-ria, while others are more than visible, in the form of 50-foot-long threads, or even longer. Re-searchers investigating alternative energy sour-ces refer to microalgae as “green gold,” because they can be used for a multitude of purposes, and because they can be cultivated in closed systems called photobioreactors, irrespective of their proximity to large water sources. Furthermore, an ocean alga doesn’t even need drinking water to thrive. Contaminated water or salt water is adequate. Another significant advantage of

In Asia, algae are already farmed commercially (left). Freighters transport 90 percent of the world’s trade goods (right).


By 2040, half the fuel used for flying airplanes could come from biological sources, according to optimistic prognoses. Small wonder, then, that the airplane manufacturer Airbus is heavily involved in algae research. To date, the techno-logy used to convert microalgae into fuel using sunlight, water, and CO2 is as developed as the technology for using algae fuel for air travel.

The issue of industrial production capacities still needs to be resolved, however. At present, passenger airplanes consume a total of 200 million tons of kerosene per year worldwide, whereas the current yearly production of algae oil barely reaches 10,000 tons. This amounts to just a little more than the fuel requirements of a large carrier such as Lufthansa, for instance, in a single morning. The reason is this. The manuf-acture of biological fuel from algae including harvesting the feedstock, extracting the oil, converting it to fuel and refining it is still too expensive to be commercially viable. Currently, the price ranges between 300 and 1,000 Euros per ton.

“To competitively produce biofuel from algae, we need to be able to drop the price to 150 Euros per ton,” says Professor Laurenz Thomsen, geo-scientist at Jacobs University in Bremen.

However, algae have a broad range of uses. They help to ease food scarcity worldwide, for ex-ample. The dark green nori leaves that are well known to sushi lovers are rich in proteins, carbo-hydrates, unsaturated fatty acids, vitamins, and iodine, and contain only small amounts of fat. Nori leaves are also used in the pet food industry to aid digestion in fish and pigs. The pharma-ceutical industry also uses them, in medication to treat Alzheimer’s disease. Clinical trials have also shown that microalgae have anti-inflamma-tory, antispasmodic as well as vasodilatory prop-erties, that they strengthen the immune system, and are an antioxidant that protect against harmful free radicals. As a result, many research institutes are working on algae production technologies. In Asia, large farms are already specializing in raising macroalgae as a form of vegetable and for the production of sushi rolls.

Technologies for greener shipping

Approximately 100,000 ships traverse the earth’s oceans. Quite often they are no more than notorious polluters. Not only do they transport close to 90 per-cent of the world‘s goods, they also produce huge volumes of toxic substances. A study by the US weath-er and oceanographic agency NOAA established that a relatively low number of ships create about as much particulate matter as 300 million cars. Accor-ding to other studies, the world’s 15 largest ships together produce as much sulfur dioxide as 800 mil-lion cars worldwide.

A study carried out by the researcher James Corbett from the University of Delaware, USA, shows that 60,000 people per year die from respiratory diseases or lung cancer due to the emissions of ship motors. In response to these problems, Siemens Marine Solu-tions provides innovative technologies and solutions for the “green ship.” These include the Waste Heat Recovery System (WHRS) developed together with Siemens partners. WHRS uses hot exhaust from the ship’s diesel engines to drive turbo generators that produce up to six megawatts of energy for the on-board power supply. This reduces fuel consumption and CO2 emissions by up to 12 percent. Energy costs drop by approximately ten percent. An environmen-tally friendly solution was also found for ships ancho-red in port that conventionally get their power supply from their diesel-driven generator sets.

The new approach proved to be effective and ecolog-ically sound. Today, ships anchored in port are sup-plied with onshore current via a mains connection, eliminating the need for ship generators and their associated damage to the environment. And we are not talking about small quantities here. A luxury ocean liner such as the Queen Mary 2 requires 40 megawatts for its onboard power supply. That’s as much as a West European town with 200,000 inhab-itants.

Another problem for marine ecosystems is ballast water. When ships have unloaded their cargo, water is pumped onboard as ballast to stabilize the ship’s tanks, only to be pumped into the sea again at a la-ter date, together with all manner of foreign organ-isms. Comb jellyfish from the coast of the US, for example, have ended up in the Baltic Sea, multiplied there and now threaten local fish species by eating their eggs. In answer to this problem, Siemens has developed a safe ballast water management system called Sicure that prevents this type of bio-invasion.

Currently, Siemens Marine Solutions is working on another method to enhance environmental protec-tion, energy efficiency, and profitability on the water. An operating management system is being designed that helps ship operators to optimize their use of energy and resources, thus saving costs as well as energy in a wide range of onboard processes.


Methane hydrate as an alternative energy source

Another important subject for oceanographers is methane hydrate, which could soon become an alternative to conventional energy supplies due to its high carbon content. Also known as burn-ing or fire ice, it consists of methane trapped in cage-like ice crystals. When methane ice rises to the surface of the water, it melts quickly and the resultant methane enters the atmosphere. As a greenhouse gas, methane is extremely harmful to the environment in that it causes global warming.

Nevertheless, methane hydrate is highly in-teresting, because it occurs in large amounts. Geologists assume that the world’s oceans hold around 12 billion tons of it. That’s twice as much carbon as that found in all crude oil, natural gas, and coal reserves put together. According to a US Department of Energy prognosis, it should be possible to start extracting methane hydrate in approximately ten years and in an ecologically harmless and commercially viable way.

Professor Peter M. Herzig, Director of the Leibniz Institute for Marine Sciences at the University of

Kiel (IFM-GEOMAR), is one of the proponents of commercial methane hydrate utilization. “It of-fers tremendous opportunities in relation to our energy supply.” Accordingly, his institute tests me-thods that sound easy, at the very least. CO2, which occurs during burning, is pumped into methane hydrate deposits under the ocean floor and forms a solid substance, due to the low temperature and high water pressure found there. This solid substance displaces methane hydrate, which is brought to the surface via an additional borehole.

Many excavation technologies will have to be de-veloped and security risks eliminated before the system can work efficiently, both ecologically and economically.

Manganese nodules as a supplier of raw materials

Manganese nodules are completely different. They are, quite literally, the truffles of our oceans in that they contain rare metals such as copper, nick-el and cobalt. However, a lack of technology that is suitable for extracting these metals at depths bet-ween 3,000 and 6,000 meters still remains.

The oceans remain more unexplored than outer space. There is much that still needs to be done. Jellyfish are a source of fluorescent protein GFP for the pharmaceutical industry (top left). Hazards to polar microorganisms and their general impor-tance (top right) or that of the Antarctic ice (right) remain largely unknown. The glider RIMG (left) measures temperature, pressure, and salt content.


The technology used to search for diamonds below sea level is far advanced. The first drill ships are already in operation along the coast of Namibia. “Ultimately, harvesting raw materials from our oceans will become more refined and sophisticated in time. After all, when one thinks of fish, salt, and water, oceans have been fun-damental sources of food and raw materials for humankind for thousands of years,” says Prof. Herzig.

Oceans as natural climate control agents

Oceans are not just enormous deposits of valu-able raw materials, they are also essential to the regulation and stabilization of our climate. These huge expanses of water absorb 50 times more greenhouse gases than the atmosphere and absorb approximately 30 percent of CO2 produced every year by humans. But continu-ous global warming also leads to higher ocean temperatures. Simply put, higher temperatures pose detrimental consequences to our eco-system. As ocean temperatures rise, they absorb less CO2 thereby allowing climate change to gain additional momentum. It is a vicious circle.

And that’s not all. The TEEB study “The Economics of Ecosystems and Biodiversity” by the Indian economist and UN consultant Pavan Sukhdev proved that the effects of climate change on our oceans will also bring tremendous economic consequences to bear. The endangered coral reefs alone constitute the livelihood of more than 500 million people. According to Mr. Sukh-dev, the situation is similar for mangroves that have been functioning as important carbon sinks and coastal protection for many years. And there is yet another danger. CO2 causes the acidification of the oceans.

It is high time scientific efforts were intensified in relation to our oceans, the “inheritance of humanity” as expressed in the addendum to the UN Law of the Sea Convention of 1994. Ad-mittedly, there is no legendary underwater city of Atlantis awaiting researchers (in contrast to their colleague Professor Pierre Aronnax in the novel by Jules Verne). However, the case for oce-anic research is undeniable.

Gas hydrates, one of which is meth-ane hydrate, could become a source of energy within the next ten years. Manganese nodules contain pre-cious metals.

Deposits of marine gas hydrates

Gas hydrates and mineral raw material on the ocean bed (source: Future Ocean, Kiel Marine Science)

Indications of gas hydrate locations

Manganese nodules


“Growth for the benefit of safety” – a phrase that sounds about

as credible coming from a chemical company as tales of a perpet-

ual motion machine. But Ineos Phenol, in Gladbeck, Germany, is

proving that modernized installations can improve even further

on already high safety standards, and at the same time increase

productivity. The company produces in the midst of a residential

area, where its top priority is just one thing – not to be noticed

at all.

In the green zone


Joachim Pieper is familiar with the surprised re-actions of guests who visit his plant for the first time. The Managing Director at Ineos Phenol, in Gladbeck, is a low-key gentleman with a clear eye for what really counts. He knows what’s at stake here each and every day: “We’re producing in the midst of our neighbors’ front yards. But they mustn’t smell us, hear us, taste us – they just shouldn’t notice we’re here at all.” That’s not just lip service from Pieper. His strategy ensures that even minor accidents are avoided, so that major ones remain practically inconceivable. It would put people in danger and infuriate residents and politicians. So Pieper’s error tolerance is zero. And this has allowed his company to earn a rep-utation in the region as a safe, environmentally friendly, quality-conscious employer. “Safety, quality, and environmental protection are insepara-ble, and are crucial corporate objectives,” he says.

Massive responsibility

All in all, Ineos produces more than a million metric tons of phenol and acetone each year – equivalent to the capacity of more than 40,000 large tank trucks. Pieper bears a massive re-sponsibility on his shoulders. In meeting that responsibility, he has just one goal: “Our prod-ucts have to stay inside the pipes and apparatus. Without exception.”

The way to Ineos Phenol in Gladbeck leads along picturesque, tree-lined streets, past luxuriantly planted fields. Arriving visitors might well think themselves in an urban recreational zone. The area is too attractive, the landscape too green, for anyone to guess that this is where the pro-duction facility of the world’s largest producer of phenol and acetone is located. Not until the plant’s massive towers appear in the distance will visitors take a deep sniff, expecting the typ-ical acrid smell of a chemical operation. But it’s a false alarm. Here the air smells no different than if an insurance company were waiting just past the tree-surrounded plant gate.

Phenol – sometimes better known as carbolic acid – is a toxic chemical used as a raw material for medications, as a weed killer and disinfec-tant, and in synthesizing epoxy resins and plastics. Phenol can damage the mucosa, burn the skin and eyes, attack the kidneys, blood, and central nervous system. In other words, not really a product that fits with a verdant idyll of carefully mowed lawns and freshly painted gar-den fences. Yet Ineos Phenol, in Gladbeck, does indeed sit peacefully in the midst of a quiet, prosperously middle-class residential area of neat single-family homes and lovingly tended gardens and façades.

Joachim Pieper, Managing Director of Ineos Phenol, in Gladbeck, is re-sponsible for a production volume of 650,000 metric tons of phenol and 400,000 metric tons of acetone a year.


To maintain the requisite level of safety and prod-uct quality, Ineos Phenol, in Gladbeck, invests continuously in modernizing its installations. Its most demanding project so far was retrofit-ting its control and instrumentation systems to Simatic PCS 7 – without stopping production. The open-heart surgery was a success. “Working with Siemens, we set a milestone in migrating from an old system to a new one,” Pieper says. “Our goal was to retrofit on the fly – without giv-ing up a single ton of production.” Two factors were crucial to success: “The teams fitted togeth-er perfectly, and the plans were really extremely sound and detailed,” the executive recalls.

Ullrich Dallmeier, head of electrical and instru-mentation technology at Ineos Phenol, in Glad-beck, assisted the project right from the start. He, too, is impressed with the new control center. “Simatic PCS 7 has the critical advantage of offer-ing not just a high level of automation and every automation option, but absolutely seamless inte-gration with safety equipment. That ensures the performance and the safety standards we need.”

Alarm system ensures safety

A significant role in maintaining those safety standards belongs to a sophisticated alarm sys-tem that includes all areas of the plant that are relevant to safety, and responds instantly to any slight deviation from the norm. Like all other information from logistics, production, and pro-cesses, the alarm messages also converge at the new control center.

“If something were actually to happen, we can be anywhere in the plant within no more than two and a half minutes,” says plant fire brigade chief Holger Kaiser. But in the past few years his team has only had to run drills. The safety systems have earned the confidence of a professional like Kai-ser. “I know every detail, I’ve been part of all the planning, and what I see here lets me sleep sound at night. I don’t know of any other plant where I’d rather work, because I just feel safe here.”

Asset Management improves productivity

Maximum product quality and maximum safety, especially in chemical production, call for pre-cise, stable processes. Apart from the quality of the raw materials, what’s needed is flawlessly operating production facilities. In a plant like the one at Ineos, which has been in existence for more than 50 years, the maintenance expense is substantial. But maintenance leads to costs. The art of properly maximizing productivity lies in allowing no compromises on safety and quality, but, at the same time, allowing no excessive ex-penses, either. A complicated balancing act.

Safer with Simatic PCS 7The Simatic PCS process control system from Siemens stands for the latest state of the art in automation, no matter what the industry, world-wide. It combines a scalable architecture with powerful engineering tools and add-on functions that can be seamlessly integrated, such as Alarm Management, Process Safety, and Asset Manage-ment. So Simatic PCS 7 offers everything that’s needed to automate the entire production process at processing and fabrication plants, safely, across the board – from receiving to shipping.

Ineos Phenol decided to migrate to Simatic PCS 7 without interrupting production. The plant was down for not a single minute, and there were no revenue losses of any kind. By installing Simatic PCS 7, Ineos Phenol also significantly expanded its capacity.

Control centers combined

As part of the modernization process, the former-ly separate control centers for two major process units – distillation and oxidation – were combined in a single new center. The migration to Simatic PCS 7 included rerouting 8,000 process signals. Siemens took on the complete engineering of the system. Thanks to detailed planning and smooth teamwork between Ineos and Siemens, the change-over took only ten months, instead of the pro-jected fourteen. Simatic PCS 7 was designed for maximum process safety. Extensive safety func-tions ensure that if an alarm occurs, employees can transition all processes to a safe status within a very short time.


Measurements signal that it’s maintenance time

Andrzej Kurpik, Technical Unit Manager at Ineos Phenol in Gladbeck, and his team are respon-sible for Asset Management. For years, he has successfully pursued a strategy of preventive and predictive maintenance. “Ongoing mea-surements of specific values show when a piece of equipment needs to be replaced or repaired,” Kurpik says. That must never be done too late – but wherever possible it should also never be done too early. “Our goal is to repair or replace the equipment five minutes before a defect crops up.”

In the past few years, Ineos Phenol, in Gladbeck, has further expanded its position as the world’s leading maker of phenol. But that growth hasn’t been at the expense of safety. Quite the contrary. Rather, today all processes at the Gladbeck plant are coordinated more precisely than ever. The new process control system plays an important part here. But even more important are the em-ployees who each day treat safety and environ-mental protection as their paramount corporate goals. Not least of all because most of them are from the area. And after all, everyone likes liv-ing in a recreational zone.

Ullrich Dallmeier (upper left), head of electrical and instrumentation technology; Holger Kaiser (upper right), head of the plant fire brigade, and Andrzej Kurpik (below), head of the technical department, all master the balancing act between productivity, safety, and environmental protection at Ineos Phenol in Gladbeck.


The engineering world is working tirelessly to improve environmentally friendly

mass transit in an effort to loosen the traffic’s stranglehold on modern-day cities.

Studies show that buses are more fuel-efficient when their diesel drive is supple-

mented by an electric motor that uses braking energy than their conventional coun-

terparts. The ELFA hybrid drive developed by Siemens has seen the company take a

leading role in commercially utilized hybrid vehicles, and today’s demand for them

far exceeds expectations.

Brake and you’ll winThis article is based on an article featured in Siemens Pictures of the Future in the fall of 2010.


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users pay tolls to enter the inner city, and “gas-guzzlers” are charged an extra fee. Munich, too, has taken steps in the same direction, by rerout-ing trucks away from its inner city. Many metro-politan areas are soon to follow suit, restricting direct access to the inner city to fuel-efficient vehicles and those with electric drives.

However, technical challenges remain. “A battery that keeps a bus operating for an entire day still weighs and costs too much,” says Manfred Schmidt from Siemens Drive Technologies Divi-sion in Nuremberg, the manufacturing site for electric drives. For this reason, Siemens’ hybrid buses are equipped with both an internal com-bustion engine and an electric drive. Conveniently, they don’t need to be connected to an outlet: as soon as the driver steps on the brake, the energy is fed into an electric storage unit. Typically, a metropolitan bus spends between 25 and 40 per-cent of its time waiting at bus stops or red lights. When the bus starts up again, it uses the stored braking energy to accelerate with zero emissions and a very low noise level.

Currently, MVG, Munich’s public transportation company, uses two hybrid buses for its routes. One of them is the City Hybrid by MAN, equipped with Siemens drive technology. “We want to test and compare different hybrid buses and support manufacturers in the further development of in-novative automotive engineering,” says Herbert Koenig, CEO of MVG.

Serial instead of parallel hybrid solutions

The serial hybrid solution by Siemens is based on ELFA technology. Whereby a parallel hybrid, drives the axle by both an internal combustion engine and an electric motor drive, a serial hybrid by contrast, uses only an electric motor to do this. Here, a varied energy mix that allows just about all combinations of energy production with ener-gy storage, supplies the motor. Generators driven by internal combustion motors or fuel cells gen-erate power while batteries or ultracapacitors (ultracaps) are used for energy storage. The ad-vantages of an ultracap compared to batteries are its far higher power density and power efficiency. The ultracap is capable of storing a large amount of energy in a small space. In addition, it is largely maintenance-free and has a much longer service life than a lithium-ion battery. When the ultracap is discharged, the diesel motor starts up and sup-plies a generator, which in turn generates current for the energy storage.

“With serial hybrid technology, more brake power can be injected than with parallel systems, because the electric motor is larger,” explains Schmidt. When brakes are applied in a bus, about 150 kilo-

The World Bank study “Reducing Air Pollution from Urban Transport” does not mince words when it claims that the “development of cost-efficient hybrid drives is the best possible way to leverage the benefits of emissions reduction by switching to electric drives.” The study is alarm-ing. Every year, one hundred thousand people die of air pollution-associated diseases and continued global economic growth greatly exacerbates this problem.

Today, in many large cities, people prefer to take the bus downtown than to go by car. This is not only the case in threshold countries where car ownership is a luxury. In many industrialized countries, bus transport constitutes half of all local transportation.

The more congested metropolitan cities are, the more fervent the wish for quiet and clean vehi-cles, and for less traffic in general. A number of cities across Europe have taken measures to reduce traffic congestion in recent years, and the trend is set to continue. Since 2003, London has been limiting access to its inner city. Both London and Stockholm have decided to make their car

Speed in km/hours

Respirable dust (in grams per kilometers driven)

How stop and go is detrimental to the environment

Source: The World Bank 2004

Respirable dust caused by conventional buses and trucks is disproportionately high in congested traffic. The use of low-emissions hybrid vehicles is a very effec-tive means of protecting the environment.

Medium-sized buses

Trucks

Large buses

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0.0

1.0

1.5

2.0

2.5

3.0

3.5

4.0


watts of electricity is made available. In a parallel hybrid drive, however, a smaller electric motor can hold approximately 50 to 80 kilowatts. “This means that you give up as much as two-thirds of valuable braking energy and the savings poten-tial is rather low,” says Schmidt.

30 percent fuel savings

A serial hybrid consumes one-third less fuel and reduces climate-damaging carbon dioxide emissions in the process. Depending on the number of bus stops and inclines, a conventional bus requires

between 40 and 60 liters of fuel per 100 kilome-ters. A bus that drives approximately 60,000 kilo-meters per year consumes about 30,000 liters of diesel. A hybrid consumes a mere 20,000 liters. In sum, a hybrid bus saves about 26 tons of CO2 com-pared to a conventional bus.

Siemens engineers have succeeded in reducing diesel consumption by a further ten percent thanks to an additional innovation. The drive usually comprises two three-phase asynchronous motors that are linked with a summation gear. If they are replaced by self-excited synchronous motors, the motor requires less electric power to generate a magnetic field that turns the motor. This working principle reduces losses, makes the machine more efficient, and transfers more ener-gy to the axle.

Extraordinary demand

The hybrid bus is gaining momentum at the moment. If Beijing follows through on the an-nouncement that it is going to change half of the city’s bus fleet to hybrid buses, the demand for these buses will skyrocket. “Worldwide interest is already huge,” says Manfred Schmidt. Siemens in Nuremberg works with many different bus manufacturers worldwide. MAN is not the only one among them who is placing orders for ELFA. Mercedes, the Belgium manufacturer Van Hool, and the Indian company, Tata Motors, have also placed their orders for ELFA.

Wrightbus from Northern Ireland ordered drive technology for double-decker buses from London. When the mayor of London, Boris Johnson, in-troduced plans for the new vehicles in May 2010, he praised their “innovative green technology” and predicted that the streets of London will see hundreds of these hybrid buses in the near future. To date, ELFA buses are to be found all over the continent, in Spain, Belgium, the Nether-lands, Italy, Turkey, the USA, and Brazil. In Ger-many, Public Transportation Services in Hamburg plans to introduce Mercedes hybrid buses that combine a mixture of battery and fuel cells based on ELFA. Beginning in 2020, every new bus in the hanseatic city will be a hybrid model.

“It was a political decision for emission-free inner cities,” says Schmidt. Also suitable for hy-brid drives are garbage trucks and small trucks, especially for longer trips with many stops. Faun, a North German company, markets a gar-bage truck with ELFA, a model that is already in use in Leipzig.

The next generationTraffic experts are convinced that hybrid buses (see image below) are already an important step forward in improving urban environments. However, in the final analysis, they are only an intermediate step to zero-emission buses. There are two different ways to reach this goal: either with battery-operated vehicles, where the energy storage unit would be charged at the final desti-nation or in the depot, or with a hybrid model that uses fuel cells for the drive in addition to the battery. The fuel cells could then charge the on-board battery while the vehicle is in operation.

It is currently not possible to predict which tech-nology will prevail. “Whether we are going to use hydrogen or electrical current as fuel depends how and where we produce electricity in the futu-re,” says Manfred Schmidt of Siemens Drive Technologies Division in Nuremberg.


The sustainable production of goods and services is no longer a question of

ethics. In this interview, Alexander Holst, head of Sustainability Services at

Accenture, an international consulting firm, outlines how corporations are

able to profitably integrate the aspect of sustainability into their core busi-

ness, why infrastructure providers have a keen interest in this topic, and how

optically attractive LED lighting systems help cities save costs and at the same

time contribute to mitigating climate change.

“Sustainability is primarily not a question of ethics”


Public discussions frequently do not reflectthe economic mood. What are your expe-riences with customers when you address the topic of sustainability?

Since the second half of 2009, this topic has taken off again, for example under the aspect of cost savings. The price of oil has gone up again which increases the demand for energy-efficient solutions at the same time. Previously, the request for sustainability moved somewhat into the background during the financial crisis because many corporations viewed the whole more or less as a philanthropic engagement.

Has something changed in the basic attitude?

Absolutely. For economic reasons alone, it is be-coming more and more feasible for corporations to integrate sustainability into business, because it is a proven value driver. Using a sustain-able approach, costs can be reduced and trust increased. Many top managers have recognized this effect. Examinations have shown that more than half of all CEOs are deeply involved in this topic, considering it extremely important. Sus-tainability is no longer primarily a question of ethics.

How is it possible for corporations to success-fully integrate sustainability in their core business?

Four points are especially important:Firstly: Implementation has to be holistic – that is, integrated. This means that the three pillars, namely economics, ecology, and social issues have to be viewed for the company overall – for its products, installations, processes, and busi-ness models.

Secondly: Sustainability has to be a value-based implementation. This is the only way to obtain internal acceptance by those decision makers in the company who show a strong financial orien-tation. Each sustainability action has to contrib-ute to increasing sales, reducing costs, and minimizing risk, or to increasing the company’s reputation – preferably all of them.

Thirdly: Sustainability requires practical inte-gration. This is the area plagued with the greatest backlog. What is extremely important is the support of top management. Added to that should be an internal structure that is respon-sible for the team, something in the way of a “sustainability board (council).” Also, it should be possible to measure success with a charac- teristic data system. A positive example from the

food industry is Danone: the corporation considers carbon reduction extremely important. As a result, Danone began to measure carbon dioxide emissions for all its products. Upper management has even attached part of the bo-nus to it. Because the topic applies to so many different areas of the corporation, satisfactory project management is highly important. A company has to have clearly defined sustain-ability objectives and train its executives and employees accordingly.

And as a fourth step: All steps taken have to be oriented toward the customer or the stake-holder. The question in this case is: What do my customers and stakeholders really want? And how can the products and processes change to provide the customer with true benefits and de-mand increases due to the steps taken?

Do you know of examples of how corpora-tions successfully integrated sustainability into their business?

Siemens itself is a good example for sustain-ability. Recently the corporation introduced the most efficient gas turbine in the world. Products of this kind contribute to slowing down climate change and present Siemens with an obvious competitive advantage and therefore an increase in value. Similar indications apply to energy savings in the building sector where Siemens offers many interesting products. And Osram helps cities and communities to reduce costs with LED technology. With a spectrum of such innovative products, Siemens is able to help reduce carbon emissions far more than with internal measures.

Another good example is Otto Versand, a mail-order company: the objective was to reduce risks in the supply chain. Among textile corpo-rations, the largest risk is the suppliers’ use of child labor. For Otto, the statement of a supplier is not enough. Instead the company has employ-ees in Asia who check the companies on-site – and even help them in case of problems. But this is not just a matter of humanitarian motiva-tion. In fact, Otto reduces the risk of being pub-licly associated with child labor. The additional costs for this “social management system” are well spent because a scandal of this magnitude would be much more expensive.

Which countries and regions are especially interested in the approaches described?

In Europe, it is among others Great Britain and France. The British public sector is far ahead


when it comes to sustainable acquisitions: 90 percent of all bids in the EU that mention sustainability are provided by that island. The background for this is that Great Britain sees an opportunity to develop a new area of service in addition to the financial sector. And in France a great deal of thought is given to a new defini-tion for “growth” that takes sustainability into account. In Japan the topic is accelerating across a broad front. Trends of this nature are extre-mely important for infrastructure providers such as Siemens.

What do things look like in the US? The Obama Administration is set on sustain-able energy and transport policies.

To date it is still up to individuals of a company to drive this topic. The focus is far more on mor-al considerations than on contributions to the success of a company.

Are rapidly growing threshold countries in-volved in sustainability?

It is difficult to provide a sweeping answer. How-ever, when I was in India, I did not experience strong demands from corporations. Usually other things are more relevant there and closer to the concerns of the people – for example, medical care.

Do you consider sustainability a luxury affordable by rich countries only?

The question is: What is sustainability? In indus-trial countries, essentially the ecological aspect is the primary focus. In India, however, the so-cial pillar is currently far more important than sustainability – in addition to health care, there is also the question of food and education.Furthermore, Aids plays a central role in Africa. As a first step, money has to be invested in the medical field. And in the final analysis, carbon emissions per head are far higher with us than in threshold countries, putting the onus of im-proving ecology on industrial countries.

During sustainability discussions, it is fre-quently implied that there is a primary de-mand for sustainable products. Is that true or is the demand artificially produced by using appropriate marketing tools?

Many trends are generated on the level of end-users and continue in the value-added chain to the very beginning. For a number of years now, we have a target group of the so-called LOHAS – Lifestyle of Health and Sustainability. These are

people who want to contribute to sustainability through their consumer behavior. In industrial countries this involves between ten to 40 per-cent of the population. And this group is asking for specific offers. But LOHAS alone cannot save the world – the idea of sustainability has to enter the mainstream of society. And that will also have to do with marketing.

We have a nice example from New Zealand for that: A flyer for sustainably produced coffee – bought by a mere two percent of customers – was lying on the counter of a coffee shop. Ho-wever, when the clerk talked about the coffee at the check-out, 30 percent of customers bought it. As soon as a certain social control was added, the percentage rose further. For that purpose, somebody behaved like a customer and positi-oned himself as closely as possible behind the shopper so that he could hear the answer. And what happened next? Suddenly 70 percent of cu-stomers bought the sustainable coffee. For cor-porations this means that a change at the point of sale motivates customers toward sustainable behavior.

About the person

Alexander Holst is responsible for “sustainabil-ity services” in Germany, Austria, and Switzer-land at Accenture, an international consulting firm. He is in charge of projects for developing sustainability strategies, for measuring sustain-ability, and for smart cities. Alexander Holst is also the author of the first “Phoenix Reports,” an analysis of success factors for corporations, where the connection between sustainability, innovation, and corporate success was exam-ined. The executive majored in European Business Studies at Osnabrück and received his MBA at the IESE Business School in Barcelona.


nomic criteria. Toward this end, known methods of the eco-balance or Life Cycle Assessment were combined with capital and operating costs.

During the development of the Eco-Care Ma-trix, a comparison of different methods for producing pig iron numbered among the pilot projects. The conventional blast furnace routine was compared with the Corex/Finex methods developed by Siemens VAI Metals Technologies. The Eco-Care Matrix identified this method as a “green solution”: The conventional blast furnace routine requires coke and ore sinter to produce pig iron from iron ore. In comparison, the Corex method produces hot metal directly from coal, lump ore, or pellets, rendering coking plants and sinter installations superfluous. It also eliminates two energy and emissions-intensive processing steps.

The winners are the ecology and the economy

Because of these characteristics, BaosteelPudong Iron and Steel Co. Ltd. decided to procure a Corex-C 3000 installation for their planned smelting works at the western edge of Shanghai. Pig iron production in a blast furnace

Rising energy costs, awareness about the fi-niteness of resources and the understanding that global warming has to be stopped – these factors are changing customer expectations: “The development of green products and solu-tions is gaining in importance due to climate change and increasing lack of resources,” says Jens Wegmann, CEO of Siemens Industry Solu-tions (IS). What is required are innovations that protect the environment and improve customer competitiveness by leveraging energy efficiency. “Sustainability and economic feasibility are not contradictory terms,” explains Wegmann.

To provide proof for this premise, Siemens In-dustry Solutions developed the Eco-Care Matrix in cooperation with the Danish Technical Uni-versity (DTU) and the Technical University of Berlin (TU). Using this matrix, it is possible to display both the environmental compatibility as well as economic feasibility of products and methods.

The starting point was the question: “What does green mean?” Siemens wanted to develop a clean and stringently scientific method that would eval-uate whether solutions were representing value added in accord with ecological as well as eco-

What does green actually mean? Trying to increase their market success, more

and more companies claim supposed green products and solutions. Together with

the Danish Technical University and the Technical University of Berlin, Siemens

developed a method that puts this claim to an objective and transparent test.

Certificate for green solutions


would have failed in the face of strict environ-mental requirements.

At the end of 2007, the Chinese iron and steel multi – the third-largest pig iron manufacturer in the world – has put the largest Corex instal-lation into operation with a yearly output of 1.5 million tons of hot metal. The operating costs have been reduced by approximately ten percent as compared to those for conventional pig iron production. And compared to the use of a blast furnace, CO2 emissions are reduced by close on one-third. Also the emissions of sulfur dioxide dropped by 97 percent, and the emissions of nitrogen oxides and dust were reduced to approximately one-tenth of the former amount. Also the pollution of sewage with ammonium, phenols, and sulfide has been greatly reduced (see page 37).

Key role for environmental portfolio

By 2015, Siemens Industry Solutions plans to have increased the share of environmental so-lutions in total sales. The Eco-Care matrix plays a key role in this undertaking: “New develop-ments will be aligned with sustainability, costs, and environmental protection,” emphasizes Jens

Wegmann. For Industry Solutions all innova-tions in the Eco-Care Matrix would have to score before they become part of the environmental portfolio.

The Eco-Care Matrix can be integrated in the already existing product lifecycle management – driving sustainable engineering forward. This is why Dieter Wegener, Chief Technology Officer (CTO) of Industry Solutions, refers to the matrix as an important instrument within the innova-tion process: “It shows engineers which param-eters have to be changed to obtain truly green solutions.”

To nip any kind of Eco label fraud in the bud, he stresses transparency: The results of the Eco-Care Matrix and the methodology are checked by the Institute for Technical Environmental Protection belonging to the TU Berlin and the Department of Management Engineering of the DTU. At the TU Berlin, a special department known as “Sustain-able Engineering” is responsible for the certifica-tion; employees of the “Quantitative Sustainabili-ty Assessment” section perform the certification as such. Both chairs are considered renowned addresses for evaluating the sustainability of products, services, and methods applied.

Eco-Care Matrix

The y-axis displays the “Eco CareParameters” that acquire essential envi-ronmental pollutants such as CO2 emissions, emissions of sulfur dioxides, nitro-gen oxide, and dust, usage and contam-ination of water as well as the need for energy and other natural resources. The x-axis shows customer value expressed by the productivity indicator. The Eco-Care Matrix is a relative methodology: The product or method is evaluated by setting it in relationship to another alternative sol-ution entered as a reference point in the center matrix. Green solutions that score economically as well as ecologically are located to the right above the reference point. The Eco-Care Matrix also shows the comparison between Corex methods and conventional blast furnaces.

Reference: Traditional blast furnace routine

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Industry Journal | 03 | 201082

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How does ...

... safety work in the chemical industry?

The rising costs of raw materials, the balance between economy and ecology, and globalization are just some of the challenges that are increasingly facing the chemical industry. First-line responses to these challenges are max-imum system availability, process stability, innovation, and flexibility.

In the chemical industry in particular, maximum plant and process safety is considered a matter of course.

Raw materials

Raw materials are usually expensive, vary in terms of quality, and are at times, difficult to procure. Product quality and pro-cess safety can be seriously jeopardized by even minor devia-tions from the quality specified, or by improper handling. To en-sure optimal results, quality is checked and analyzed repeatedly, from the raw material state to the end product being produced, throughout the entire production process.

Logistics

From raw material to the end-product stage, progress is regulat-ed by defined processes and continuous monitoring. Neverthe-less, flexible production methods and efficient logistics must be available to react to changes that arise. Secure RFID and identi-fication systems ensure, for example, optimized material flows and high delivery reliability for the customer.

Production

In short, the more exact the continuous processes, the more efficient the operation of the chemical plant. Greater process transparency means greater plant safety. Clearly-defined pro-duction workflows form the basis of continuous product quality. Sustainable results in the chemical industry rise and fall with uninterrupted plant operations. Safety as such, includes process development, integrated optimization, as well as intelligent maintenance concepts. Process quality is defined by the careful adherence to defined conditions such as humidity, temperature, and pressure or gas concentration. Siemens reliably contributes to process safety, with flexible measurement and analytical systems. Just a hint of carelessness when using caustic sub-stances can have serious consequences for safety and follow-up costs. Siemens Automation and Drive Technology already has the necessary safety functions in place, with Safety Integrated – for the protection of people, machines, and the environment.

Process control system

All information from the laboratory, production, and logistics is channeled into the process control system, i.e. the nerve center of the plant. All processes are controlled around the clock and protected by a sophisticated alarm system. This ensures that severe problems caused, for example, by a stuck valve or an overfull storage tank, are detected in time, and eliminated, even during chemical production. With its Simatic PCS 7, Siemens offers a process control system for handling demanding tasks. State-of-the-art field bus technology, such as Profibus and FF (Foundation Fieldbus), provides the ideal communication medium between the control center and the periphery, as these are the fastest and safest communication links in the industrial sector.

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People and the environment have to be protected more than in other industries, while the profitability and sustainability of business activities must be assured. Siemens Safety Integrated portfolio provides functional as well as specially tailored safety concepts to meet the requirements of the process and manufacturing industry. These safety concepts can be successfully integrated into the complex production workflows of chemical plants.

Asset management

All production systems in a chemical plant have to be tested continuously for satisfactory operating status and functiona-lity. Simatic PCS 7 offers professional asset management, not only for electrical assets, but also for mechanical assets, such as pumps and heat exchangers. The objectives are to provide smooth production workflows as well as extensive information when system parts need to be replaced. For reasons of safety and efficiency, parts should not be replaced too late or too early.

Business processes

No system can guarantee full safety, regardless of how sophisti-cated it is. Every chemical plant needs comprehensive business, plant, asset, and process protection. This begins with access con-trol and video monitoring, fire extinguishers, and control systems that serve to protect against fire or chemical substances being released into the air. However, it also means adequate safety tech-nology for IT infrastructures and communications.

Uninterrupted services

Environmental protection and safety go hand in hand in the chemical sector. They are intrinsically linked to one another. There is also a large potential to optimize the responsible han-dling of energy and water, which in turn means cost reductions and an increase in overall plant efficiency. Siemens solutions enable significant savings in energy and CO2 emissions as well as ultra-pure and cooling water, water and industrial waste-water treatment. Energy Optimization Service (EOS), Advanced Process Control (APC), Continuous Emission Monitoring Systems (CEMS), supply chain and waste management perfectly adapted to the process, all serve to prevent environmental pollution and ensure greater productivity across the lifecycle of the chemical plant.

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ImprintIndustry JournalCreating sustainable value through technological leadership

Published bySiemens AGIndustry SectorCommunicationsWerner-von-Siemens-Str. 5091052 Erlangen, [email protected]

EditorGerald OdojSiemens AGIndustry SectorCommunicationsErlangen, Germany

ConceptMatias Ernst, Thomas Thiele (Siemens AG)Andreas Jung (das AMT GmbH & Co. KG)Hendrik Leyendecker (feedback communication GmbH)

Editorial staffdas AMT Gesellschaft für individuelle Kommunikation mbH & Co. KGAndreas Jung (CEO)Tiessenkai 10 D-24159 Kielwww.das-amt.net

Contributors to this issueChristian Buck, Maximilian Geyer, Detlef Gürtler, Meike Hebestreit, Stefanie Heinrich, Ken Hutt, Andreas Jung, Mathias Peer,Jochen v. Plüskow, David RosenblumAndrea Wiedemann, Martin Wiedemann

Creationfeedback communication GmbHHendrik Leyendecker (CEO)Hannah Egelseer (Project management)Mario Kienel (Art direction)Geisseestrasse 6390439 Nuremberg, Germanywww.feedback-communication.de

PrintMediahaus Biering GmbHFreisinger Landstrasse 2180939 Munich, Germanywww.biering.de

Always well-informed, always up-to-date

Keep your finger on the pulse of innovation. Be one of the first to learn about and profit from the latest developments for more productivity, efficiency, and flexibility! Simply download the latest issue as a PDF file, or subscribe free to the printed magazine at www.siemens.com/industryjournal

Photo credits Getty images: Cover, p.7. above., pp.10/11, p.27, p.29, p.30, p.34, pp.42/43, p.44 left, p.44 right, p.46, pp.64/65, p.66 left, p.80Fotolia: p.8 above.© Bayer AG: p.12 left and right© OECD: p.21© David Rosenblum: p.26 above© Ken Hutt: p.26 below© Facebook: p.36 left © 2010 Yahoo! inc.: p.36 right© Ian Thomas: p.47 above and below© Sierra Nevada College 2007–2009: p.60© Uni Kiel: p.68 below left, Jürgen Haacks p.68 above left, Nicolai Mumm p.68 above right, W. Hagen p.68 below right All other images: Copyright Siemens AG

Copyright© Siemens AG 2010All rights reserved. Reproduction of this publication and use of its content are subject to prior consent.Technical details are subject to change. All information provided in this document refers to general technical possibilities and characteristics that do not always apply as described in every individual case.

Can old buildings be just asenergy efficient as new ones?

Cost-effective building modernization: Our innovative solutions forenergy efficiency reduce emissions and costs.

From intelligent building technologies, lighting and light management by OSRAM to financing, Siemens offers a comprehensive portfolio of energy saving solutions for building modernizations. These solutions reduce CO₂ emissions and help our customers to lower energy costs by up to 50% – the costs for lighting can be cut by even up to 80%.

siemens.com/answers

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Creating sustainable value through technological leadership

03 | 2010

www.siemens.com/industry


Intelligent

How successful companiesturn good ideas into marketable products

Innovative

How newly industrialized countries are developing into global technology centers

Environment-friendly

Why high-speed trains are often the preferable alternative to flying

Subject to change without prior noticeOrder No.: E20001-A80-S100-X-7600 DISPO 06330Printed in Germany© Siemens AG 2010

Siemens AGIndustry SectorCommunicationsWerner-von-Siemens-Str. 5091052 ERLANGENGERMANY

The information provided in this magazine contains merely general descriptions or characteristics of performance which in case of actual use may not always apply as described or which may change as a result of further development of the products. An obligation to provide the respective characteristics shall only exist if expressly agreed in the terms of contract.

All product designations may be trademarks or product names of Siemens AG or supplier companies whose use by third parties for their own purposes could violate the rights of the owners.

The editorial content of the reports in this publication does not necessarily reflect the opinion of the publisher. This magazine contains forwardlooking statements, the accuracy of which Siemens is not able to guarantee in any way.

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03 | 2010 Creating sustainable value through technological