UGS PLM Software outlines its post-acquisition strategy for product- and production-management convergence

Automation giant Siemens’ acquisition of what is now called UGS PLM Software is being seen as a potential landmark in the evolution of manufacturing systems.

“When the dust settles, this whole Siemens/UGS deal will be seen as a real game changer,” says Dick Slansky, senior analyst, ARC Advisory Group. “It’s already having an impact.”

At its annual analyst and media event recently held in New York, UGS and Siemens executives publicly detailed for the first time some organizational changes following from the acquisition, as well as the strategic rationale behind the combination.

For Siemens, the opportunity, says Anton Huber, a Siemens Automation & Drives board member—and said to be architect of the deal—“is to deliver more value in manufacturing-system optimization. By the time automation components are chosen, that decision space is already restricted. That’s why we got involved in industrial software in the first place, and this now is an opportunity to optimize production even as the product is being designed.”

At the event, General Motors and Proctor & Gamble announced renewed multimillion-dollar commitments to continue working with UGS, and it was suggested by UGS executives that this was an endorsement of the new strategy, which ultimately is about a single data model for all information needed to both design and make a product, and best expressed in the cumbersome but workmanlike phrase, “product and production life-cycle management.” ( See graphic at right .)

On the immediate horizon, efforts will be devoted to gaining further benefits from engineering/production synergies in five areas.

Adaptive manufacturing : intelligent production components for integrating process and automation design with product life-cycle management (PLM)—e.g., so that a process definition can be the means to build automation logic.

Virtual commissioning : a “digital” validation engine for process automation and plant-floor execution.

Harmonized life cycles : bidirectional integration of the PLM backbone with controllers and plant-floor systems.

Hi-fi machining : tighter data integration between CAM and physical controllers, with CAM functionality on the “real” controller and a virtual machine driven by real software.

Mechatronics : the blending of mechanical, electrical, and electronic design.

The level of investment and domain expertise needed to achieve these and other goals is such that UGS executives are actively looking for and in negotiation with manufacturing industry partners with whom to engage in joint development efforts.

Siemens announced the $3.5-billion acquisition of UGS in February and closed in May, sparking the same type speculation as to the eventual impact for plant floors as did SAP’s much smaller acquisition of Lighthammer several years ago. Here, however, the possible repercussions seem broader.

Siemens and executives of UGS PLM Software believe deeper integration of product and production management systems will lead to steep productivity gains for manufacturers. For the first time, a computerized system whose impact will rival that of ERP, in distinctly different functional areas, is foreseen.

In making the acquisition, Siemens brings itself into closer competition with major enterprise vendors Oracle and SAP, which both believe PLM should be integral to ERP. It also ups the ante in Siemens’ more traditional competition with automation vendors that include Rockwell Automation, Wonderware, and Invensys, to define the software infrastructure for the plant-floor execution space.

Says UGS Chairman and CEO Tony Affuso, “PLM is where ERP was in 1990. Bigger players are coming into the market. We had the opportunity to be part of Siemens, which had the strategy and stamina to compete.”

If Siemens and UGS together build a bridge between manufacturing and product design, says Gisela Wilson, IDC, “they’ll have something that clearly differentiates them. Chuck Grindstaff [UGS executive VP for products] has done it before, pulling two different product lines together, and he executed superbly.” Wilson says.

Finally, given a wee bit of overlap between UGS Tecnomatix production management products and those of the Siemens Simatic IT line of operations execution software, certain supervisory control products will move from UGS to Siemens Simatic IT, and Simatic IT will “take advantage” of the simulation capabilities found in the UGS Tecnomatix line for process and production management.

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