{"id":32725,"date":"2018-11-13T15:19:59","date_gmt":"2018-11-13T20:19:59","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/siemens-mobility-going-digital\/"},"modified":"2018-11-13T15:19:59","modified_gmt":"2018-11-13T20:19:59","slug":"siemens-mobility-going-digital","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/siemens-mobility-going-digital\/","title":{"rendered":"Siemens Mobility going digital"},"content":{"rendered":"
    \n
  1. Why <\/em>is 3D printing important in Siemens Mobility\u2019s process improvement? <\/strong><\/li>\n<\/ol>\n

     <\/p>\n

    Additive manufacturing, or \u201c3D printing\u201d is already disrupting the spare parts industry. Along with spare parts manufacturers such as Mercedes-Benz Trucks, BMW, and Deutsche Bahn, Siemes Mobility has been rising to the challenge of increasing levels of client customization and higher speed to serve through the use of 3D printing. Additive manufacturing has not only changed the playing field among spare parts manufacturers, but the shift in the manufacturing process has also lowered the need for capital investment in production capability, thereby changing the competitive landscape. Whether it is logistics companies, the vertical integration of spare part customers, or new 3D-printed specialists in spare-part manufacturing, competition is getting fierce.<\/p>\n

     <\/p>\n

    Logistics companies might be specifically well positioned to capture the mega trend in spare parts production though their network of distribution centers, warehouses, and inventory management know-how. In fact, companies such as UPS have already invested in 3D printing capabilities, UPS currently operating 60 customer-facing 3D printing stores [1]. The threat of vertical integration by spare part customers is also very real. In a survey by PWC, ~ 53% of spare parts customers are investigating the viability of printing their own spare parts, as they consider their suppliers not to be meeting their needs [2]. Lastly, digital manufacturers such as \u201cSpare Parts 3D\u201d pose a significant threat by having 3D printing specialization and higher technological know-how [3].<\/strong><\/p>\n

     <\/p>\n

    Traditionally, providing a high level of service had come at the expense of cost. If we consider that providing a \u201chigh level of service\u201d entails having a fast response time, providing a high degree of customization, and\/or being reliable, spare part manufacturers have to manage a complex network of suppliers, a production operation, and a sales team, while making strategic decisions including the following:<\/p>\n

     <\/p>\n

      \n
    1. \u201cWhether to make or buy the part<\/em><\/li>\n
    2. Whether to make to stock or make to order<\/em><\/li>\n
    3. Where to manufacture the part<\/em><\/li>\n
    4. What service level to offer<\/em><\/li>\n
    5. Whether to continue making the part of discontinue it<\/em>\u201d [2]<\/li>\n<\/ol>\n

       <\/p>\n

      All of these decisions get simplified by implementing 3D printing, as labor costs become negligible, customization does not increase complexity significantly, small batch sizes become cost-effective, and made-to-order does not come at the expense of rising costs or increasing lead times. Looking at the new competitive threats arising with the 3D printing advantages, it becomes essential that current spare-part manufacturers are quick to embrace this new technology to improve their production process.<\/p>\n

       <\/p>\n

       <\/p>\n

      \u00a0<\/strong><\/p>\n

        \n
      1. What is <\/em>the Siemens Mobility\u2019s management doing? <\/strong><\/li>\n<\/ol>\n

         <\/p>\n

        Earlier this year, Siemens Mobility GmbH, part of Siemens AG, launched Siemens Mobility RRX Rail Service Center – its first digital rail maintenance center, located in Dortmund, Germany. In effect, \u201cSiemens Mobility has now eliminated the need for inventory of selected spare parts, reduced the manufacturing time of these parts by up to 95% and can now respond to all internal and customer demands seamlessly\u201d <\/em>[4], possibly placing the facility as the most advanced train maintenance center in the world. Through this innovation, Siemens has reduced production times from 6 weeks to 13 hours, and has enabled an iterative process in order to optimize for the desired product specifications. One such example is the train \u201cconnectors\u201d, a tool used to maintain train bogies – the chassis that carries the wheelset, where according to Siemens\u2019 head of Additive manufacturing, Michael Kuczmik \u201ctools for this application are notoriously hard to produce via conventional methods, as they have extremely complex shapes and require a high-level of customization\u201d <\/em>[4]. <\/em>Going forward, Siemens Mobility aims to grow its digital maintenance center to grow the volume of serviced trains from the current ~ hundred trains every month, to even \u201cthousands per month, all obtained at different time periods, and having different internal designs<\/em>\u201d [5].<\/p>\n

        \u00a0\"\"<\/a><\/em><\/p>\n

        \u00a0<\/strong><\/p>\n

          \n
        1. What other steps do you recommend the organization\u2019s management take? <\/strong><\/li>\n<\/ol>\n

           <\/p>\n

          While having a centralized digital maintenance center makes sense to create infrastructure synergies, I believe that in order to prevent vertical integration from spare-part customers or the threat from logistics suppliers, one must develop a distributed network of smaller digital maintenance centers to produce the spare parts where the customer are.<\/p>\n

           <\/p>\n

          Going forward, I believe that Siemens must develop a key competence in 3D printing technology development. Nowadays, Siemens Mobility relies on \u201cStratasys\u201d technology to provide 3D printing solutions [6]<\/strong>. However, I believe that the integration between product development, customer service and 3D printing technological capability is so high, that Siemens won\u2019t be able to have a competitive advantage without developing 3D technology on their own.<\/p>\n

           <\/p>\n

            \n
          1. What are one or two important open questions related to this issue? <\/strong><\/li>\n<\/ol>\n

             <\/p>\n

            In the face of gigantic logistics companies going into 3D printing, potential vertical integration from customers, and new specialized 3D printing spare-parts manufacturer, what will Siemens Mobility\u2019s competitive advantage be?<\/p>\n

             <\/p>\n

            (Word count: 799)<\/p>\n

             <\/p>\n

            Sources: <\/em><\/p>\n

             <\/p>\n

            [1] Gilles Roucolle and Marc Boilard, \u201c3D Printing is already starting to threaten the traditional spare parts supply chain.\u201d Forbes<\/em>, March 6, 2017, \u00a0https:\/\/www.forbes.com\/sites\/oliverwyman\/2017\/03\/06\/3d-printing-is-already-starting-to-threaten-the-traditional-spare-parts-supply-chain\/#6fe1367f2646<\/a>, accessed November 11th<\/sup>.<\/p>\n

             <\/p>\n

            [2] Dr. Reinhard Geissbauer, Jens Wunderlin, Dr. Jorge Lehr, \u201cThe future of spare parts is 3D: A look at the challenges and opportunities of 3D printing.\u201d Strategy&, <\/em>January 30, 2017, https:\/\/www.strategyand.pwc.com\/reports\/future-spare-parts-3d<\/a>, accessed November 11th<\/sup>.<\/p>\n

             <\/p>\n

            [3] Saunders, Sarah, \u201cStudying feasibility: 3D printing for spare parts production.\u201d 3D Print<\/em>, October 19, 2017, https:\/\/3dprint.com\/191516\/spare-parts-3d-feasibility-study\/<\/a>, accessed November 11th<\/sup>.<\/p>\n

             <\/p>\n

            [4] Griffiths, Laura, \u201cSiemens Mobility is 3D printing spare parts at first digital rail maintenance center.\u201d The Magazine for design-to-manufacturing innovation, <\/em>September 20, 2018, https:\/\/www.tctmagazine.com\/3d-printing-news\/siemens-mobility-digital-rail-maintenance-3d-print-spare-parts\/<\/a>, accessed November 11th<\/sup>.<\/p>\n

             <\/p>\n

            [5] Fabb, General, \u201cStratasys\u2019 manufacturing strategy becomes more real.\u201d Fabbaloo<\/em>, September 20, 2018 \u00a0https:\/\/www.fabbaloo.com\/blog\/2018\/9\/20\/stratasys-manufacturing-strategy-becomes-more-real<\/a>, accessed November 11th<\/sup>.<\/p>\n

             <\/p>\n

            [6] Anonymous, \u201cSiemens mobility puts stratasys additive manufacturing at the heart of first digital rail maintenance center.\u201d MarketWatch<\/em>, September 19, 2018 \u00a0\u00a0https:\/\/www.marketwatch.com\/press-release\/siemens-mobility-puts-stratasys-additive-manufacturing-at-the-heart-of-first-digital-rail-maintenance-center-2018-09-19<\/a>, accessed November 11th<\/sup><\/p>\n

             <\/p>\n

            \u00a0<\/em><\/p>\n

            \u00a0<\/strong><\/p>\n

            November 11th<\/sup><\/p>\n","protected":false},"excerpt":{"rendered":"

            Additive manufacturing is threatening to change the competitive landscape of the multi-billion dollar spare part market. 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