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Creating sustainable value through technological leadership

01 | 2011

Focus: Software as a success factor

Interconnected
The automation business is reinventing itself: industry faces an IT revolution.

Fast
Red Bull has millions of customers and a Formula 1 world champion thanks to PLM Software.

Puzzling
India may be an attractive market for Western nations but the rules of the game are difficult to understand.

02 Industry Journal | 01 | 2011 | Editors note

Industry Journal | 01 | 2011 | Editors note 03

Editors note
Dear Readers,
I think there is a world market for maybe five computers. These words are attributed to Thomas Watson, former chairman of IBM, at the unveiling of a mainframe computer in 1943. Even experts can make mistakes, after all. Without a doubt, we live in a digital world today. The only question is, how will this world develop over the coming five, ten or 20 years? For me, one thing is clear: software will become the determining factor in the success of industrial companies. For example, automotive experts predict that IT will account for a roughly 40 percent share of a cars value ten years from now. 50 percent of the development costs of an automotive controller already goes toward software development. I anticipate a comparable trend in the investment products industry, where the biggest challenge particularly in the area of automation is to find the best way to network individual software solutions, people, and machines, and to simplify an ever-more complex world. In the 20 pages of this issue of Industry Journal, you can discover what these developments may look like, how Siemens takes on this task, and what added value we can offer our customers. I have been pondering two scientific studies: one is on the terrible consequences of climate change, as we recently experienced with the flooding and cyclones in Australia (p. 78). The other deals with humanitys resource consumption, which is now 50 percent higher than the earths annual production capacity (p. 80). These studies strengthen Siemens resolve to resolutely pursue its green direction and rapidly expand its environmental portfolio with energy-efficient electric motors (p. 70), for example, and with massive efforts to improve sustainable and more profitable infrastructures for the worlds cities (p. 48). I hope you will enjoy reading about these topics. Sincerely, Siegfried Russwurm

Prof. Dr. Siegfried Russwurm, CEO Industry Sector

04 Industry Journal | 01 | 2011 | Contents

Focus: Software as a success factor

10: Totally networked Automation technologies have become a natural part of industrial environments and everyday life. Extensive networking with intelligent software solutions now offers a new key to success.

20: A perfect match Product Lifecycle Management (PLM) reduces development and production costs and shortens time to market. 70,000 Siemens customers around the world rely on products from the PLM Software business unit.

25: One for all Siemens has been setting new standards in production for the past 15 years with its Totally Integrated Automation (TIA) solution. The revolutionary new TIA Portal now offers a unique user interface for all applications.

Performance
1019: Totally networked
Software solutions are becoming the most important driver of industrial growth. The automation sector is facing an IT revolution where the primary goal is to network machines, people, and departments.

3641: Red Bull on the fast track


The Red Bull beverage manufacturer has 600 million customers and a Formula 1 world champion. How did the Austrian company manage this great success?

2024: A perfect match


A profile of Siemens new PLM Software business unit, a global market leader in its sector.

0609: Spotlight
News from the world of business, science, and technology: from new materials and OLED luminaires to steel production.

2529: One for all


The Siemens TIA Portal, an IT working environment for a wide range of applications, is revolutionizing engineering.

4247: Changing sides: From chess genius to economics guru


Kenneth S. Rogoff, Harvard professor and chess grandmaster, reveals what managers can learn from the game of kings.

3035: Greener computing


Computer centers have an enormous potential for energy efficiency. Sixty million kilowatt-hours go unused every year.

8485: How does


a PLM Software concept work?

86:

Publication details

Industry Journal | 01 | 2011 | Contents 05

Contents

48: A new homeland Cities are important growth regions and key locations for increasing climate protection. Sustainably designed satellite cities in greater metropolitan areas intend to bring ecology in line with economics.

70: Savings as requested Beginning in June 2011, only energyefficient electric motors in efficiency class IE2 will be available for sale throughout Europe. This will save millions of tons of CO2 emissions and also pay off for companies, thanks to lower operating costs.

Urbanization
4854: A new homeland
As conurbations continue to grow worldwide, so do resource consumption and climate damage. Prudent urban planners work to devise new concepts in response to these problems.

Environment
7077: Savings as requested
Efficient three-phase asynchronous motors in efficiency class IE2, which will be mandatory throughout Europe starting in June, are more expensive than their predecessors and they pay for themselves after less than two years.

5557: Interview with Prof. Albert Speer


The prominent urban planner and architect discusses future-oriented metropolises, Chinas Detroit, and the role of the automobile.

7879: Consequences of climate change


A report by the Intergovernmental Panel on Climate Change (IPCC) identifies the regions on earth that will suffer the most from climate change and the regions that will benefit.

5865: A market full of surprises


India is booming and that makes it attractive to Western companies. Yet the business world there operates using entirely different rules.

8083: Planet in a stranglehold 6667: Tightrope-walking in Venice


A cable car provides environmentally safe transportation in Venice. Humanitys resource consumption is already 1.5 times higher than the earths production capacity, according to warnings issued by the Living Planet Report 2010 of the World Wide Fund for Nature (WWF).

6869: Cities in a new light


Innovative LED lighting concepts lend special character to cityscapes and buildings.

06 Industry Journal | 01 | 2011 | Spotlight

Spotlight

Green factories
Siemens wants to improve its energy and CO2 efficiency by 20 percent by the end of 2011. To reach this goal, the company is investing some 25 million Euros for the modernization of its factories. Until 2012, the 120 most energyintensive factories (of a total of 300) are of particular focus. Suppliers have been deliberately involved in the overall concept to realize the highest possible savings. Siemens wants to save 1.5 million tons of CO2 and 170 million Euros in energy costs with its suppliers alone, and offers an environmental and energy check-up to this end. Depending on the size of the company, this check-up ranges from an online test at a companys own initiative all the way to a one-week intensive workshops led by Siemens experts.

New from old


On behalf of the Brazilian steel producer ArcelorMittal Tubaro, Siemens is modernizing the worlds oldest blast furnace still in service at a cost of more than 10 million Euros. This project is the third blast furnace modernization Siemens has carried out for ArcelorMittal, the worlds biggest steel producer. The renovation aims at increasing the output of the 26-year-old blast furnace located in the Brazilian city of Tubaro by some ten percent, from 3.3 to 3.6 million tons per year. For this purpose Siemens is rebuilding the ore feed, for instance. Moreover, a new monitoring and automation system will provide optimized processes. In order to keep blast furnace downtimes during the 80 days of modernization work to a minimum, Siemens uses a modular project concept, which makes possible the disassembly and reassembly of the blast furnace in large units.

New process control system for Bacardi


Bacardi, the worlds largest family-run business in the spirit drinks industry, has recently started using the Siemens distributed control system Simatic PCS 7. It makes possible the consistent and safe automation of the entire production process. Following a migration phase of about three years, in January 2010 Simatic PCS 7 replaced the control system APACS+ used until then. Thanks to the two systems high degree of compatibility, the rum producer was able to continue using the existing basic components such as controllers and their wiring. Step-bystep introduction of the process control system ensured that production could be continued without any standstill.

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Reliable trains
The internationally renowned Modern Railways Magazine awarded the Siemens Desiro UK Class 444 electric train with the Golden Spanner award for 2010, an annual award that recognizes achievements in train reliability across the UK. The Desiro UK trains are specially developed for British railway services. In 2010 the fleet, operated by South West Trains, achieved recordbreaking reliability. Moreover, the Desiro UK Class 360/2 Heathrow Connect fleet was awarded a Silver Spanner for the most improved new electric multiple unit (EMU). Hence, Siemens trains are considered the most reliable trains in Britain. The ticket to success is that all railcar maintenance is performed by Siemens itself contrary to standard practice in many other

countries. Siemens has maintenance contracts for all trains delivered in the UK.

Reducing converter losses


A group of experts from German companies and universities is currently researching a new material to make frequency converters for large electric motors more efficient and more powerful. The use of silicon carbide could reduce losses from the transformation of permanent line frequencies into variable frequencies of zero up to 250 Hertz by up to 15 percent. The research project, which commenced in June 2010, is financially supported with 1.7 million Euros by the German Federal Ministry of Education and Research. As well as Siemens, the Technische Universitt Dresden, Infineon, curamik electronics, and SiCED Electronics Development take part in the project, which runs until April 2013.

Clear water for giant aquarium


The Georgia Aquarium in Atlanta, GA, USA, one of the worlds largest aquariums, relies on Siemens technology: two carbon towers, as well as reverse osmosis systems, clean and treat its more than 30 billion liters of water. Several recirculation loops ensure a constantly high water quality. Siemens had provided temporary systems during the construction of the main aquarium. They were required for research purposes as well as to ensure the survival of the thousands of marine creatures living in the aquarium. The Georgia Aquarium opened in November 2005.

08 Industry Journal | 01 | 2011 | Spotlight

Marvelous material
were awarded the Nobel Prize in Physics this year for groundbreaking experiments regarding the two-dimensional material graphene. Graphene is a special type of carbon made of a one-atom-thick layer. Its application potential is enormous. It can be used as an alternative to silicon in transistors, or for DNA sequencing. Graphene layers are about one million times thinner than a sheet of paper and can be applied to glass panes and monitors quite easily. The graphene layers are electrically conductive. Their translucence transfer (the amount of light transmission) can be adjusted by varying the electric voltage applied. This means that in future they could be used for transparent touch screens or intelligent window panes that might even regulate how much light passes through them in a continuously adjustable manner.

The Russian scientists Andre Geim and Konstantin Novoselov from the University of Manchester

First OLED production lines in Regensburg


In Regensburg, Osram is setting up the first production lines for organic LEDs (OLED). The goal is to advance both OLED technology and to bring manufacturing processes to the pre-production development stage. Over the next three years, Osram is set to invest over 50 million Euros in the new pilot production facility in Regensburg, and in research on LED applications. In 2009 Osram launched the first OLED product Orbeos, which is used in the making of designer lamps. With the start-up of production in Regensburg in mid-2011, Osrams OLED portfolio will soon include panels, modules, drivers, and luminaires.

Europes largest CO2 producers


The energy sector and the transport sector in Europe create significantly more CO2 emissions than all other industry sectors put together. Sector Energy generation Transport Process industry Agriculture Industrial processes Waste management
* CO2 equivalent in 1,000 tons, in 2008. Source: Eurostat

Greenhouse gas emissions* 1,556,384 940,702 652,141 487,057 397,122 161,497

Industry Journal | 01 | 2011 | Spotlight 09

Siemens helps Russia save energy


Every year, the same quantity of energy is wasted in Russia as is used in the whole of Germany in the same time period. In order to change this for the better, the Russian-German Energy Agency (RUDEA) in cooperation with the Russian construction conglomerate RENOVA, has opened a competence center for energy-efficient construction in Jekaterinenburg. Siemens and the German Energy Agency (DENA) are involved in the project. On the German side of the RussianGerman undertaking, the competence center has been set up to provide information on energy issues in building refurbishment, for example. RUDEAs initial pilot projects in Jekaterinenburg have already demonstrated that building modernizations can generate energy savings of up to 80 percent.

Infrared LED detects microsleep


tems. Thanks to its small size and an integrated lens, the IR-LED can easily be used for systems that offer only limited installation space, as is the case in dashboards, for instance. From there it directly illuminates the driver from the front, both day and night. The IR light, invisible to the human eye, is detected by a camera with a CMOS sensor. An image evaluation software analyzes the data, the drivers eyelid blink frequency, for instance, and recognizes whether the driver is tired. The system triggers an alarm even before microsleep occurs and warns the driver with an acoustic signal or with a vibrating steering wheel. The Osram IR-LED is the first one of its performance level with an integrated lens and has a service life of tens of thousands of hours.

Osram has developed an infrared light-emitting diode (IR-LED), which is particularly suited for microsleep detection in driver fatigue alarm sys-

40 million liters of potable water for Kenya


A face for a face water for Kenya. This is the slogan of a fundraising campaign for clean potable water in Kenya that Siemens started in Munich during the IFAT ENTSORGA 2010 trade fair. IFAT is considered to be the worlds leading trade fair for water, sewage, waste, and raw materials management. At the center of attention was a three-dimensional floor painting. Visitors were invited to have their picture taken on the painting and, thus, seemingly surfing on a waterfall. Siemens donated potable water for one person for the duration of ten years for each photograph that was published on the Siemens Facebook site with the consent of the portrayed participants. The donation will be in the form of mobile water filtration systems, so-called SkyHydrants. Using a particular membrane technology, these small units can purify up to 10,000 liters of dirty water per day. About 1,300 participants had their picture taken and thus contributed to the donation of three SkyHydrants. Siemens added a fourth unit, so 2,000 people in Kenya can from now on be supplied with clean water. The four SkyHydrants will purify a total of some 40 million liters of water during the next decade.

10 Industry Journal | 01 | 2011 | Performance

Focus: Software as a success factor

Totally networked
Many technical devices today can no longer operate without state-of-the-art software. Consider, for example, milling machines, traffic lights, trains, baggage conveyor belts, heating systems, and letter-sorting systems. Automation technologies are now so common in industry and our everyday lives that they are taken for granted. Many are still insular solutions incapable of intercommunicating digitally. Now, however, we are on the verge of a breakthrough to end-to-end networking: and indeed, this has already begun in many industrial sectors.

Industry Journal | 01 | 2011 | Performance 11

12 Industry Journal | 01 | 2011 | Performance

This unstoppable trend toward automation affects all areas of industry. Microcontrols can be found in even the smallest devices, and there is no limit to the size or complexity of production plants in which control systems are used. In all cases, the final and definitive method of optimization is the software. In parallel with the automation of the work environment and the actual products, machines, and systems, the product development and protection process themselves as well as the entire engineering and product-creation process have also been digitized.

CAD (computer-aided design) supplies the product data that are processed on CNC (computer-numeric control) machines with CAM programs (computeraided manufacturing). The digital models are pretested with CAE (computer-aided engineering) instead of building expensive hardware prototypes. The factories in which the production equipment is installed are initially created as digital factories on a computer screen, where the systems are in operation virtually long before they are physically installed. Software is always the driving force at every stage, from the initial idea through the concept and

Trillions of possibilities
Customization and standardization uniting these two spheres is a tremendous challenge, especially for the automotive industry. For instance, the buyer of a Ford F150 pickup in the US can choose from among 16 equipment options to create a personalized model, for a total of 654 trillion possible Ford F150 combinations.

Equipment option

Variants

Theoretical combinations

Trim Passenger compartment Power train Cargo space Engine Transmission Rear axle ratio Wheels Tires Seats Power seats Radio Running boards Rear windows Colors Interior trim colors 16 individual options

6 3 2 4 3 3 7 9 8 18 2 5 4 3 12 3

6 18 36 144 432 1,296 9,072 81,648 653,184 11,757,312 23,514,624 117,573,120 470,292,480 1,410,877,440 16,930,529,280 50,791,587,840
Software handles all the complex tasks of product lifecycle management for machine tools from product development to validation.

12,870 653,687,735,500,800

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development stage, through testing and validation to production planning and finally production. Totally new business models The result is entirely new business models. The virtual model is becoming more and more important, and availability of this model is increasingly becoming a key factor. Suppliers of complete solutions must therefore offer the software for developing and manufacturing products and systems as well as the systems, components, and products

themselves along with the software needed for operating them. The purchase of US software house UGS is one way that Siemens has responded to this challenge. The UGS products NX and Solid Edge for CAD, Tecnomatix for the digital factory, and especially Teamcenter (TC) for Product Lifecycle Management (PLM) rank among the worlds leading programs in these sectors. With its PLM Software business unit, the Siemens Industry Automation Division has created the basis for greater end-toend consistency (see p. 20). Product lifecycle management and automation are converging.

CAD standard optimizes the workflow


As a result of market consolidation, the number of different CAx systems has shrunk to only a few. However, two CAD or simulation models seldom use the same data format. Consequently, theres a need in distributed development with external partners and above all in communication between engineering and other corporate areas such as purchasing, production, sales, or service for a neutral data format that does for 3D geometries what PDF does for texts. Thats why Siemens developed the Jupiter Tessellation (JT) data format. JT can process data in the format of almost any CAD system, and the many translators on the market permit fast conversions. ISO standard sought by end of 2011 Siemens released JT and made it freely available for standardization purposes in December 2006. With the support of the VDA and ProSTEP ViP Association, in April 2007 Siemens submitted an application to the International Organization for Standardization (ISO) to standardize JT. JT was then released as a publicly available specification (PAS) in fall 2009. Just one year later, the latest JT specification (Version 9.5) was submitted, and shortly thereafter accepted for standardization by ISO. The goal is to have a JT ISO standard available by the end of this year. By May 2009, the Siemens PLM Software business unit was already counting around 50,000 customers

with approximately 4.8 million JT users. Since 2008, JT has had group-wide approval for long-term archiving, in addition to the reduced 2D drawing set. Within the Daimler Group, for example, each CATIA model is automatically converted to JT when checked into the SMARAGD PDM system, and also stored as a JT file. This alone had already resulted in over two million JT files stored in SMARAGD by spring 2009, and around 3,000 active JT users with both figures rapidly increasing. At Daimler, JT has since become the strategic format for exchanging data between Engineering and the Digital Factory. The availability of JT played a major role in Daimlers decision to migrate vehicle development from CATIA to PLM Softwares NX in 2010.

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Large-scale individual production Over the course of the past fifteen years, mass series production has evolved into large-scale individual production. For example, the number of equipment combination options that exist for every vehicle model today amounts to trillions of variations (see p. 12). This variety is only possible thanks to software that is capable of handling such complexity. The outer form of many products has become more elegant, softer, and safer. CAD has led to shapes that would not have been possible to produce at all with the old machines and processes. And internally, too, products and systems contain a mass of electronic systems and software without which they could not function. Again, without additional software support these systems could not be developed and manufactured in the first place. At the same time, the use of software has further increased the complexity itself. Experts estimate that the volume of digital information is increasing by a factor of ten every five years. The total amount of data accruing is growing at around twice the rate of increase of storage capacities, a development that cannot be managed without highly intelligent software. However, digitization is an ongoing process. It permeates all areas of social life and it is becoming increasingly common for products, processes, services, and rules and regulations that are networked under software control and also via the Internet. All products, from machine tools to mobile phones, from rail tickets to automotive lighting systems, must first move in the direction of greater intelligence: in other words, they must support networking technologies. Secondly, the networking of more and more objects and processes is becoming a challenge in its own right, which likewise can only be resolved with smart software solutions, softwarebased services, and software products. New mobility concepts The increasing requirements for security and environmental protection call for new concepts for mobility. In the future, cars will be endowed with intercommunication capabilities that enable them to avoid accidents and traffic jams. LED lights will become small, smart, luminous elements whose luminosity, angle of illumination, and color will automatically adapt to external influences. For example, the truck fleets that head for the port of Hamburg when a giant container vessel docks, and which then block access roads, unmistakably cry out for an inter-

company control system that encompasses both port administration and operators. It will not be viable to expand public transport without further automation of rail traffic and without automated monitoring and control of the material and traffic flows. Numerous services providers, companies, institutions, and public authorities operating largely independently of each other are active in these and many other sectors. Harbors and airports, rail stations, and subway control centers all use software, but it is usually highly disparate software. There are hardly any standard data formats, and only rarely do efficient interfaces exist between the systems. The result is a group effort that is still based on hard-copy documents, telephone calls, and meetings. Standardization as the next step At Siemens, too, most business areas initially only used software and its associated visualization and communication technologies on an individual basis. Now Siemens is going a step further, further even than most of its competitors. The strategic route is clear: the digitization of individual departments must be followed by standardization based on open standards. Instead of programming primarily new software for individual functions, platforms are now created for a large number of applications. These include, for instance, Teamcenter from Siemens PLM Software for the management of product data of any kind over the entire product lifecycle (see p. 20). Other examples are Siamos (Siemens Airport Management & Operation Suite) for the integration of all logistics functions at and around airports (see p. 17), and Siveillance ELS Vantage from Siemens Building Technologies. This integrated security management solution is employed in critical infrastructures and in industrial complexes, heavy industry, the chemicals and pharmaceuticals industries, in power generation and distribution, the oil and gas industry, local transport, harbors, and airports (see p. 18). It also provides the integration platform for functions relating to every aspect of mail and product delivery (see p. 18). And instead of a welter of non-communicating systems in individual fields, in the near future total solutions networked by software will expand to link service providers, companies, and customers. Standards are indispensable in order to firmly establish a technology in the mass market. National and international standardization committees play a central role because their standards are recognized worldwide as being neutral and independent. For users, that creates the certainty

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Using a process control system from Siemens, the Stiegl brewery in Salzburg, Austria, controls the entire brewing process from a single screen view, making production faster and more cost-effective.

Control system synergies


The control and monitoring of technical processes is highly complex. The ETM Professional Control software company, with headquarters in Eisenstadt, Austria, and branch offices in Germany, Switzerland, and Holland, specializes in this very field. ETM is a subsidiary of Siemens Industry Automation and develops the SCADA System Simatic WinCC Open Architecture, better known as PVSS. In automation, SCADA (supervisory control and data acquisition) represents the control level. What makes Simatic WinCC OA so special is that it was not developed for monitoring and controlling specific processes or production facilities. Instead, it is industry-neutral with a special focus on complex systems that are widely distributed geographically and have high security and availability requirements. Siemens Industry supports such processes on many levels, which is why Simatic WinCC OA is used at so many locations today.

Currently, the system is being used in the transportation, environmental, energy, and research fields. Four Siemens Divisions Industry Automation, Mobility, Building Technologies, and Industry Solutions have already migrated to the new, standardized platform. Because Simatic WinCC OA can work with any operating system, it is entirely suitable for international use where, in some cases, support for the LINUX open operating system is a must. Simatic WinCC OA is also freely scalable from single-station systems to highly networked and redundant high-end solutions. Above all, however, Simatic WinCC OA is designed for continuous expandability and adaptability. These features make Simatic WinCC OA a catalyst for the offerings and operation of Siemens automation solutions. As the importance of integrating different fields continues to grow, communication between specialists will also become a key factor in rapid market availability and nowhere can this be better communicated than on a standardized platform.

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that they can be relied on in the long term and are not hostage to changes of strategy by individual companies. An example of this is the 3D data format JT (see p. 13), which has been submitted to the International Organization for Standardization (ISO). However, this example also highlights the limitations of standardization. JT was submitted by Siemens for standardization in 2007 and is not expected to become an ISO standard until the end of 2011 at the earliest. Four years in todays world is an eternity. Industrial standards effectively set themselves For this reason, it is increasingly important for companies to set de facto industrial standards themselves with outstanding products, solutions,

and especially software that are recognized across the industry. A high degree of uniformity, integration, networking, and above all consistent data will become the criteria against which industrial companies must measure themselves in years to come. Complexity will increase but, at the same time, software will help encapsulate this complexity and make products, solutions, and services more transparent for users. However, automation technologies will not live up to their full potential and become an invaluable and indispensable tool for greater productivity, energy efficiency, and competitiveness until this is implemented successfully across the board and in all sectors of industry.

A desk for decision making


In rail traffic, it is usually exceptional situations such as extreme weather conditions or technical faults that cause operating delays, repeatedly raising the question of how rail operators can ensure that trains continue to run and that the best decisions for all passengers are made. Thats

a nerve-wracking business. Each train dispatcher has five monitors, several telephones, and sometime considerably more on their desk in order to run an orderly operation. Depending on how modern the equipment is, there can be additional monitors and one or more large-scale screens. In the event of a fault, the controllers on duty have to make fast decisions as to what action to take in order to get trains moving again as quickly as possible and minimize negative consequences: or they must decide which train will be given priority for entering the station. With conventional control centers, that leads to endless telephone calls and constant running back and forth and explaining the situation, because the decision makers are not always sitting side-by-side. Siemens Mobility is working on a model of a desk for decision making known as the Operation Control Interaction Lab that will make many tasks easier and more efficient for operators. A design study for this desk was presented at the Innotrans 2010 in Berlin. Several decision makers can log in simultaneously at the desk so that they can continuously work together. Each participant has the use of individually adapted modular applications. Multitouch functionality enhances and speeds up the interactions and allows totally new forms of work organization. Decisions will now be made jointly on a large-scale display at a so-called collaboration-design table instead of at individual monitors. This solution has aroused considerable interest, especially since the software can be upgraded rapidly in the future. This means that operators can retrofit without having to wait until the next major investment. The integration of mobile terminals is another possibility with this solution.

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Effective airport management


Airports are almost unique in that so many services, operators, and customers share the same space. Data is generated and processed everywhere in communications between tower and pilots, during refueling and security checks, at boarding gates, and in catering but there is no central point where all this data comes together. Especially when the flood of information increases, for example during peak hours, when flights are delayed, or in bad weather conditions, there are many decision-making situations where every second counts. The faster the participants can access data from all kinds of different sources, the more successful the collaborative decision-making will be. Siemens Mobility has developed and tested business intelligence solutions that collect and consolidate all required data to form the basis for decision making. This is the only way that rapid analysis is possible in an emergency situation. A master system that oversees the individual subsystems is required: Siemens provides such a system with Siamos (Siemens Airport Management & Operation Suite). An airport without airplanes for performing tests Applications of this kind are first tested at the Siemens Airport Center (SAC) in Frth. In prin-

ciple, the SAC is a complete airport only with no aircraft, no runways, and no shopping or catering areas. It is divided into several areas of expertise that provide the complete logistics and infrastructure of an airport. This test center is a unique innovation that is also used for developing integration solutions for all areas of airports as well as for airlines. Standard airport processes are in operation at the Center to demonstrate the advantages of an end-to-end networking of the very systems that most often cause stress at airports for employees, service providers, and passengers. Building management for airports The SAC also demonstrates building management solutions, for example parking lot technologies that include parking guidance systems with video surveillance, parking position display, and registration number recognition. Other applications include passenger tracking using biometric recognition techniques, mobile check-in, end-to-end security systems, and a flight information system. Knowing who is where is not only relevant for security. If boarding-gate personnel can determine that a missing passenger who used mobile check-in has not yet arrived at the airport, they would no longer wait for that passenger and so could prevent expensive aircraft turnaround times.

Control room in the Siemens Airport Center (SAC) in Frth (l.). The SACs test baggage handling system was also used to test installations for expanding the capacity of airport terminals in Beijing and South Koreas Incheon (r.).

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Digitized mail centers


Large postal and parcel companies use software applications for address acquisition and processing and for production planning. These applications control the activities at the sorting centers and optimize process flows in the network. Over recent years there has been a growing demand for optimization of the entire system in order to enhance the interaction of subsystems and improve higher-level processes. Siemens Mobility Divisions solution is the process integration platform. It is suitable for mail services as well as CEP services and other logistics applications. The platform and the application portfolio are an integral part of REMA (reengineering mail processing), the largest European logistics project to date, which was successfully completed in Switzerland in 2009. Within the scope of the REMA project, Switzerland has reduced its Postmail division from eighteen letter centers to three new centers, which it placed along the busiest traffic arteries and fastest road and train links in the Alpine Republic. This is where 86 percent of all letters are posted and 77 percent are delivered. The restructuring has led to annual cost savings of more than 150 million Euros. All in all, the networking of state-of-the-art sorting systems in combination with comprehensive IT equipment control and innovative IT system technology and engineering generates totally new options for automating mail services. The outcome is a combination of high-performance warehousing technology in the product receiving area, a sorting solution paired with flexible and efficient picking, and optimized transport flows with which the Swiss Post is also extremely satisfied.

The thinking building


Blinds that can be controlled by mobile phone, rooftop photovoltaic systems that detect impending cold periods and preheat to compensate, sensors that monitor the interior climate much has been written about software-controlled building management. But little of this has actually been implemented. But gradually a lively demand has arisen for the services that building automation can provide, especially for commercial buildings. The technological means are available, and with rising energy prices a rapid return on investment is now possible. In addition, operators and landlords of administration and production facilities, hospitals, swimming pools, and event halls are placing greater value on sustainability, safety, and better risk management. Global Management Station is an innovative new program that Siemens Building Technologies will bring to market in 2012. It bundles the various possibilities for automated enhancement of comfort, security, fire safety, and control of lights, electricity, heating and ventilation in a single system. The solution can integrate standard peripheral devices, and allows management of the building infrastructure from a single user interface. Another Building Technologies software product is Siveillance ELS Vantage. It is designed for integrated security management in critical infrastructures such as industrial complexes, local transit, harbor facilities, and airports, usually used as decentral, individual systems, which are coordinated and consolidated in one place.

Almost all of the worlds major postal distribution centers rely on sorting systems that use Siemens technology (l.). The Siemens Siveillance ELS Vantage software for infrastructures can display all the information in a single screen view (r.).

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History of automation
In addition to the steam engine, electric light, railroads and the telegraph, the shift from handcrafting to industrial enterprise required that new production methods be found. It wasnt until the advent of Taylorism, division of labor, and assembly line production as modeled by Ford and General Motors that automobiles and other consumer goods became affordable, generally available, and symbolic of the standard of living in the West. The next step toward industrialization was the automation of production steps, which was pioneered by Siemens. The first Simatic control system came onto the market in 1958 and laid the foundation for automations continuing success story. Electronics found its way into industrial production, as transistors, rectifiers, and resistors ensured that the decision between AND and OR for a production step could be made almost automatically. Production was faster, thanks to the interconnection of components as well as automated flow and signal control. At the same time, product quality improved. Programmable logic controller In those days, there was no such thing as software, but in the next development stage, the controller actually became a computer. Beginning in the early 1970s, the programmable logic controller (PLC) made it possible to replace wired control functions with programmed and thus also reprogrammable functions. Once again, the auto industry led the way. Consumers had come to expect cars of a certain type in unlimited equipment variants. To be able to manufacture these variants on production lines that were increasingly automated, production plants had to become more flexible. Wired logic was no longer enough. The switchover from one vehicle variant to another had to be made more quickly. Soon the programmable logic controller was taking the manufacturing industry by storm. At Siemens, the shift toward PLCs occurred in 1973 with the third generation of control technology, the Simatic S3. The programming device for this controller weighed almost 100 kilograms, but it was portable and thus gave customers previously unimaginable flexibility. From then on, everything moved quickly. In 1979 PLC technology came into mass use with the Simatic S5. However, industries wanted more intelligence in automation, which meant standardization and open systems. Now it was all about computer-integrated manufacturing (CIM). Through the use of software, the process steps could be networked in such a way that automation included not only individual steps, but also the entire process chain including lathes and milling machines, which were now also programmable as CNC machines. However, CIM arrived a little too soon, when the software technology, hardware, storage capacities and visualization options were not yet sophisticated enough to support it. Nevertheless, Siemens was already working on interlinking engineering with automation and, in 1996, introduced totally integrated automation (TIA). Siemens now offered all the steps from controller planning and development, to the human-machine interface (HMI), all the way to protection of the plant and its controller all from a single source. By the end of 2010, this development with the TIA Portal had reached its highest level ever (see p. 25).

The first Simatic controller with germanium transistors was launched in 1958 (l.). In 1983 Siemens in a joint effort with the users developed the Simatic S5 as an instrument for the operation, observation, and diagnosis of production processes (r.).

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Focus: Software as a success factor

A perfect match
When a leading international provider of automation solutions joins forces with the worlds top expert in PLM and CAx software, the result can only be a global market leader. That is precisely what happened when Siemens took over the American company UGS Corporation: Siemens PLM Software has proven to be a highly successful business unit with an excellent growth outlook.

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The scene is a hair salon in Torrance, California. Its just a few bucks for a cut here the gossip is free. Everyone knows each other. One floor up is a computer shop called United Computing. No one knows them. And no wonder, since back then in 1963 computers were not part of everyday life in this small town near Los Angeles. 47 years later, this software shack has grown into a corporation with a collaborative team of about 8,000 people, roughly 70,000 customers worldwide, and annual revenue of around one billion Euros as well as being a global market leader in product lifecycle management (PLM) solutions under the name Siemens PLM Software. But lets start at the beginning. The 1960s was an era when computer pioneers were developing many revolutionary visions. Doug Engelbart invented the early precursors of the computer mouse. Ivan Sutherland developed Sketchpad in 1963: his software was one of the first graphic user interfaces for computers the user could make entries directly on the monitor with a light pen, for example to draw lines or circles. This sounds a little like present-day programs for computer-aided design, computer-aided engineering analysis, and computer-aided manufacturing (CAD/CAE/CAM). And this is where United Computing took the stage. In 1969, founder John Wright introduced the program

UNIAPT to the market one of the first computer-aided manufacturing (CAM) programs targeted directly at end customers. It was followed in 1975 by UNI-GRAPHICS, an early software program that enabled computer-aided product design and manufacturing. End of independence One year later, United Computings independence came to an end. Over the next few decades, the company changed owners as well as its name and headquarters several times. From 1976 to 1991 it was under the control of aviation group McDonnell Douglas. Then it was acquired by IT infrastructure and outsourcing specialist EDS (1991 to 2004), and from 2004 onward by a private equity consortium under which the software group took the company name UGS Corporation. A continually changing background with lots of different parents and correspondingly varied expectations of the child. In 2007 Siemens bought UGS for about 3.5 billion US dollars. The deal turned out to be a perfect match for both partners. UGS finally became a fully integrated strategic partner of a global corporation with a clear future vision and entrepreneurial goals. For Siemens, too, the takeover was a stroke of luck: UGS software is the ideal counterpart to the Siemens Industry Sectors automation solutions. Customers in the manufacturing and process industries can

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Siemens PLM
2010 revenue: 1 billion Euro A collaborative team of around 8,000 people worldwide pproximately 70,000 customers in 62 countries, inA cluding ThyssenKrupp, MTU, General Motors, Bosch, Daimler, Philips, BMW, Kion Group, and Volkswagen 6.7 million licensed sites ore than 40 percent of global 3D product data is genM erated or managed with programs from Siemens PLM Software
Products are designed and processes are simulated on the computer, eliminating costly corrections later in production and reducing the time before the products are brought to market and manufacturers are able to increase their competitiveness.

now benefit from the integration of the material world of Siemens groundbreaking automation technology with the virtual world of the leading software from UGS PLM Software for plant design, product design, and digital collaboration, commented Tony Affuso, Chairman and CEO of Siemens PLM Software, about the acquisition in 2007. Today, PLM Software is part of Siemens Industry Automation Division. But what is PLM? The basic concept is that a manufacturer gathers all information about a product, from the initial idea through its design, manufacture, customer service, decommissioning, and recycling the entire lifecycle from beginning to end. Sources of data include not only programs for CAD, CAE, and CAM but also ERP systems, office applications (used, for example, to compose manuals or marketing materials), or special software for designing electronic modules. In other words, a PLM solution brings together all the product-related information (technical, sales, marketing, financial, etc.) generated during the lifecycle of the product into one knowledge platform encompassing its entire life from cradle to grave. Transparency through Teamcenter One of Siemens PLM Softwares leading tools is Teamcenter. Teamcenter ensures maximum transparency throughout the lifecycle of a product, says Thorsten Elsen, Marketing Director for

Teamcenter (Germany, Austria, Switzerland). Development and manufacturing can be better managed and more easily optimized. For example, in a relaunch the manufacturer can refer back to all the collected experience of the predecessor model. Teamcenter doesnt just gather and link up information it also contributes its own modules for tasks involved in the product creation process. Its users include ATK Space Systems Group, an American aerospace corporation that was part of the Space Shuttle program. Given the companys many new projects, it has to define clear focus areas and Teamcenter helps. This product and process management tool aids ATK in assessing which products, programs, and customer needs should be prioritized. The American aviation group Lockheed Martin also relies on Teamcenter for example in the development of its F35 fighter plane, which involves roughly 600 suppliers from 30 countries. Its not just data generated in the design and manufacturing process that needs to be managed. Maintenance information for the over 3,000 planned aircraft, with useful lives of about 30 years, is also fundamentally important and all of it is handled by the PLM Software. Companies in the aerospace industry and automobile manufacturing including Formula 1 (see p. 36) were forerunners in implementing the PLM idea. Today, companies from other

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ules equipped with a tangle of cables and hoses and all controlled by the software. At Heidelberg Printing, NX is involved in all phases of product development from draft to detailed mechanical design, from sheet-metal construction to cabling, from calculation to kinematics, and from NC programming of the machine tools to simulation of processing flows on the computer. Virtual factories Besides Teamcenter and NX, Siemens PLM Software also offers the Tecnomatix product portfolio, which can be used to represent a digital factory on the computer. This is not just about controlling individual machine tools. The interaction of all manufacturing resources in production is what is important for instance, whether robots work together smoothly and can easily access all tools. Long before the manufacturing begins, Tecnomatix users are able to simulate the material flow and figure out the optimal assembly line speed. Teamcenter, NX, and Tecnomatic fulfill their greatest potential when working in concert. But solutions from other providers can also work together with products from Siemens PLM Software. That means we can very easily integrate our programs into existing IT landscapes, explains Schfer. It is no problem to combine Teamcenter with another CAD program, or NX with another software application. 250,000 licenses in one year Siemens involvement with PLM has already paid off. In fiscal 2010 alone, we sold over 250,000 PLM licenses and gained over 2,600 new customers with our PLM Software, says Siegfried Russwurm, CEO of Siemens Industry. The software sector has not only contributed more than its share to the Industry Automation Divisions growth it also has a superb outlook for the future. Analysts have reported that PLM Software will achieve an annual growth rate of eight percent. In turn, Siemens intends to invest further in its software subsidiary. In only three years, PLM Software has made a lightning-fast start with an excellent outlook as part of the Siemens family not bad for a company founded over a hair salon in the suburbs of Los Angeles.

The product and process management tool from PLM Software also assisted the American corporation ATK Space Systems in the development of the Space Shuttle.

industries, such as consumer goods and the clothing industry, also benefit from it. Teamcenter is used by customers with ten to 40,000 users, and can provide centralized management of virtually any quantity of data in global enterprises. Reducing time-to-market Another highlight of Siemens PLM Software is NX engineering software. This is an integrated CAx program that is an associative combination of CAD, CAE, and CAM. NX forms the basis for digital product creation and reduces time-tomarket by parallelizing workflows, says Andreas Schfer, Marketing Director for NX (Germany, Austria, Switzerland). The individual modules make it possible to develop optimized products in a shorter time and ensure better quality of the end product by using the latest simulation methods that safeguard product characteristics already in the virtual stage. For some products, the time-to-market has been reduced by up to 50 percent, which makes for a significant competitive advantage. For instance, with Heidelbergs sheet offset printing machinery, the NX integrated software proves what its capable of. The component sets consist of 60,000 to 80,000 components, mostly in multiple options and variants for customerspecific or adapted models. There is also the complex ballet of the mechanical components with electronic, hydraulic, and pneumatic mod-

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Focus: Software as a success factor

One for all

Faster, better, more cost-effective these are the goals of all companies in the manufacturing and process industries and automation is the key to success. Industrial companies use a variety of systems that assist their numerous departments at work. With its Totally Integrated Automation Portal (TIA Portal), an intuitive and user-friendly engineering framework that integrates all applications in a single user interface, Siemens has now closed the last big gap and paved the way to maximum user-friendliness and efficiency.

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In our computer club, we called it a revolution. Computers were going to make us powerful, says Apple cofounder Steve Wozniak, reflecting on his invention of the first computer that included a keyboard and monitor. Back then, just 35 years ago, the Apple 1 had only a meager onemegahertz processor, four kilobytes of memory, a wooden case, and used a cassette recorder as the storage medium. What hardly seems revolutionary today was nothing less than the dawning of a new age in the IT industry. Just a few years later, everyday life would have been unthinkable without PCs. In November 2010, Siemens launched another era in the automation industry by introducing the Totally Integrated Automation Portal (TIA Portal). With this revolutionary engineering framework, customers can now efficiently design all planning and production processes in a single tool from development and start-up to maintenance and expanding of automation systems. Multiple systems, one development environment The TIA Portal combines all automation software tools into an intuitive development environment. In contrast to previous systems, engineers no longer have to use several different tools at the same time when developing automation systems. Rather than being a purely task-specific software system for a small group of specialists, the TIA Portal is a system that everyone involved in automation

projects can quickly understand and operate. This significantly reduces costs and substantially shortens time-to-market. The TIA Portal is a working environment that provides simultaneous access to all systems and interconnects their functions in fundamental ways. The heart of the portal is formed by products that have become well-established in their specific sectors: Simatic STEP 7 for developing automation programmes for Simatic controllers S7-300/400 and PC based automation; Simatic WinCC for all visualization tasks from key or touch panels to panel PCs as machine level human machine interface (HMI) or even SCADA systems for larger plants; and Sinamics StartDrive for installation startup, control, and diagnostics of drive inverters. All of these components are integrated in version V11. A tried-and-tested automation solution Siemens conceived this term in 1996 to describe the linking together of vastly different aspects of automation into a complete solution spanning the entire breadth and lifecycle of installations that require an integrated automation solution for production from programming the controller and designing the user interfaces and visualization tools to direct control of operation and maintenance. From engineering to operation and modernization, Totally Integrated Automation (TIA) enables all automation components to interact smoothly

We were able to easily familiarize ourselves with the software very quickly and without extensive orientation by Siemens employees. We found much that we already knew from previous systems, such as Step 7 and WinCC. We believe that the TIA Portal will change our work routines simply by making many things easier.
Thomas Janssen Electrical Division Butting GmbH & Co. KG (Germany)

The main advantages of the TIA Portal are efficiency, efficient engineering, and no more guesswork in managing equipment and networks and handling HMI. We found one function to be particularly efficient: the hardware catalog is built right into the product. When I configure a programmable controller, I no longer have to consider what device or what drive I am using because I have the catalog with the part numbers within easy reach.
Bob Meads, President iQuest, Inc. (USA)

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using the same controllers as well as standard controls and interfaces even if they come from different manufacturers, different generations, and multiple production areas. This offers a wide range of advantages. Administrators always have access to the latest synchronized data and receive complete documentation of all process workflows. Since its launch, TIA has formed the basis for more than 100,000 automation products worldwide. There was only one challenge with the original concept: due to the state of technological development at the time, it was not yet possible to envision a single system. Each system had its own format, its own process, and its own specific functionality. Each one was designed to support as far as possible the specific tasks of its user. Software integration as a quantum leap forward The fully scalable TIA Portal for the automation industry therefore represents a technological quantum leap forward. There are many reasons for integrating systems into the portal. Consider this example: data is needed in all various areas; numerous relationships link the various components to each other; and even variables and attributes of individual entries refer to the same database. In the past systems have been used separately for specialized purposes, all this data had to be defined separately and consistently. This increased error susceptibility, because each entry involves the danger of a simple yet serious typo be-

ing made. And this in turn increases costs, as each consistence check takes time. A second reason is that separate systems necessitate multiple trainings and the availability of specialists who must master the relevant tools without being overly burdened by them. The third reason is that industrial companies are trying to make interdisciplinary collaboration more effective worldwide and in all sectors with the support of information technology. One of the key objectives is the single point of source that makes data and information available to all parties involved. In addition, companies are attempting to optimize the integration of specialist departments and improve the synchronization between them. The TIA Portal is the answer to these challenges. It is based on the concept of simplification and improvement. Instead of purely task-specific software for a small group of specialists, the TIA Portal is a system that everyone involved in automation projects can quickly understand and operate. Customers as development partners This technological leap forward was successful only because the TIA Portal was not kept behind locked doors, but rather was developed and tested worldwide in collaboration with customers from different industries, with corporate consultants, and with Siemens partners who contributed their entirely different perspectives and

The TIA Portal helps industrial companies reduce their total cost of ownership. In addition, the portal can help companies develop their products in short cycles. This mean shorter product launch times and therefore a valuable competitive advantage. When I saw the TIA Portal concept for the first time, I thought, Finally, there is a Microsoft Office for production.
David W. Humphrey, Director of Research, Europe, ARC Advisory Group

In the tests and applications that we ran with the TIA Portal, we determined that this software fully implements the TIA concept of totally integrated automation. It enabled us to increase our production capacities extremely rapidly.
Fang Lianghui, Design Department, Wuhan Guide Electromechanical Engineering Co., Ltd. (China)

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In the past, we used different software tools to perform our work. Now we use a single interface with a single database. Everything is easily accessible from the application. In particular, the products user-friendliness makes the TIA Portal an outstanding solution.
Wang Qian Hou, R&D Engineer, Yantai Longyuan Power Technology Co., Ltd. (China)

The main advantage of the TIA Portal is that the entire software is integrated. The software is very easy to program, and the help is excellent. It is ideal for entry-level employees. Each new staff member is almost a full programming partner after a single day-long course and can begin working right away.
Thomas Erb, Managing Director Tech 3d Control GmbH & Co. KG (Germany)

requirements. The portal is the result of intensive collaboration in accumulating the requirements from countless pilot projects and fundamental test phases, with a total of 70 companies participating over a period of three years. In addition, the TIA Portal is not a new invention for which users still need to be found the users already exist. Standard operation for all users The TIA Portals most prominent feature is its standardized operation. All components have the same look and feel, and the concept takes into account and supports two different user views. A user who wants to quickly add the first devices, programs, or control screens at the beginning of a project selects the portal view of the TIA Portal. In this view, the user has easy access to all automation objects, including controllers and user interfaces belonging to the project, along with a large amount of support. Another user who wants to have full control over all aspects of the automation task will select the project view. This view displays all project details and permits extensive customization of the project. Both the project and portal views are available at any time, and users can switch between the two as required. The standard operation also means that the editors of the different components now work the same way across disciplines. And this doesnt just apply to the way that text and data are processed and manipulated. The system has an intelligent drag-and-drop system, which provides a convenient way to avoid input errors.

Another element of integration concerns the question of how the software supports the planning and development of automation systems in the background. Once again, the portal offers helpful features that make the work easier without requiring the user to actively intervene. For example, if a user wants to display a variable from the controller on an HMI screen, all thats needed is to drag the variable to the screen: the associated HMI variables and the link between the controller and HMI are automatically created. But the system can do even more. If a components value undergoes a change that has relationships to components in other areas, the change is activated in these other areas as well. Another feature of the portal is the intensive use of libraries. Shared libraries can be used for all engineering tasks. Users no longer have to divide their libraries up according to software tools, but can instead structure them according to technological factors. Parallel software use during the transition period Despite the portals many advantages, it will not immediately replace all conventional products with the installed solutions in all individual areas. For a transitional period, many users will work with old and new software at the same time. To guarantee that this is successful, the developers were careful to ensure that the portal and the individual applications will interact with each other smoothly and can be used in the same installation. An upgrade is therefore not manda-

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For Solvere, it is important to be able to test the software before its final release, like the system integrators we build for many different customers. My experience with the TIA Portal to date: The software is easy to use and is a real improvement over the old Siemens software.
Jack Garr, Design Engineer, Solvere (USA)

As the importance of automation systems increases in China, so do the requirements that customers place on the automation tools. I am convinced that software like the TIA Portal is an excellent choice for customers.
Huang Cen, Senior Engineer, Shanghai Dahua Network & Electric Technology Co., Ltd. (China)

These and other expert opinions can be found in video clips at: www.siemens.com/tia-portal tory; instead, customers can make the transition without feeling pressured, at the right point in time for their purposes. A key argument in favor of the TIA Portal is its user-friendliness. In the past few years, Apple has earned success with its products because they are so much fun to use. With the TIA Portal, we show

that programming and operating machinery can also be fun, says Ralf Michael Franke, CEO of Siemens Industrial Automation Systems. If there were such a thing as an Automation Club, its members would likely also call the TIA Portal a revolution just as the members of Steve Wozniaks Homebrew Computer Club did when the Apple 1 was demonstrated 36 years ago.

Three questions for


... Anton S. Huber, CEO of Siemens Industry Automation

What is the TIA Portals biggest advantage?


It helps make customers more competitive and enables them to bring their products to market faster. The TIA Portal, which is designed for efficiency, intuitive operation, and future viability, enables our customers to greatly speed up engineering tasks in automation and drive technology.

tools in multiple disciplines. The controller is programmed with different systems than the input and output screens, while security programming requires different software than does the network configuration. This situation makes it difficult for industrial companies to quickly bring innovative products to market with further integration and synchronization. Siemens Industry Automation has invested a lot of time and energy in order to remove these barriers through software development.

What are you planning as the next step?


The portal is an important element in the overall strategy of the Industry Automation Division, which wants to enable its customers to manage the entire lifecycle of their products from product development and product/production planning to startup, control, and maintenance. The TIA Portal combines everything relating to production planning and engineering. The integration of product development, simulation, and security is now at the top of our agenda.

What are the challenges facing the industry?


Anyone who plans automation in a production plant today has many tasks to perform, which are usually fulfilled with an equally large number of software

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Focus: Software as a success factor

Greener computing
Data centers in the Internet world are gigantic energy hogs. What used to be shrugged off as unavoidable is now topic number one in the IT industry. Green solutions already exist they simply have to be implemented worldwide. The potential savings are enormous even for industrial enterprises where business is increasingly based on software applications.

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Specialized, purpose-built structures of a very special kind are located in The Dalles, a small city on the Columbia River in the far north of the US state of Oregon. Googles new data center at the heart of the online world has been in operation for two years now. It is located in two halls, each the size of a football field. These two halls stuffed with computers, cables, and airconditioning systems are the reason the 15,000 inhabitants of the town call it Googleville. And it is also the reason the IT world is beginning to ask the question: Just how much energy is consumed by this large number of computers? How much does a click into the worldwide data network cost? And just how environmentally friendly and energy-efficient is our information society, where information is no longer collected on the hard drive of a home PC or in folders, but rather distributed in a cloud? Harvard professor Alex Wissner-Gross alarming calculations remain etched in peoples minds to this day. In an online article for the English newspaper The Times, the physicist wrote: Googling twice consumes as much energy as

boiling a kettle full of water. That translates to a bathtub full of scalding water every working day, a million times over worldwide. According to his calculations, Google emits seven grams of CO2 per search. The company produces more CO2 per year than the entire aviation industry. Google rejects these allegations, and in its own company blog indicated that the level is 0.2 grams of carbon dioxide per search. Neither number has been independently verified. Verified, on the other hand, seems to be the fact that Google covers about half the energy demand of its new data center in The Dalles from renewable sources, as the ecology group Greenpeace reports favorably. Two billion kilowatt hours Ten years ago the prevailing opinion was that the distributed network would have a positive environmental impact. Today, the attitude is a different one. The IT industry has long been criticized for the fact that factories of the information age allegedly devour more energy than old factories did in their days and that their

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impact on the climate is enormous. Greenpeace estimates that by the year 2020, if growth rates do not change, the Internet alone with its servers and data centers will consume almost 2 billion kilowatt hours of energy more than the power consumption of Germany, France, Canada, and Brazil taken together. Because electricity is largely generated from fossil sources, large amounts of CO2 are being blown into the atmosphere. Transferring economic processes to the virtual world has certainly resulted in carbon emissions reductions. But the massive increase in cloud computing has almost negated this effect, according to Greenpeace. Two years ago, the Climate Group and the Global e-Sustainability Initiative (GeSI) published their study Smart 2020. According to its findings, around 49 percent of CO2 emissions in the United States were due to computers and peripheral devices in 2007. By 2020, that number will be 57 percent. IT companies are not ignoring the criticism. On the contrary, chip and computer manufacturers have established initiatives to fight climate change. And hardly a week goes by without one

or or more symposia on the subject of environmentally friendly information technology. Everyone now agrees: data technology and its data centers have to be green, for ecological as well as for economic reasons: companies like Google and eBay pay several million dollars for their electricity every month. 60 million kilowatt hours gone up in smoke Rajiv Sivaraman knows the enormous sums that are wasted every month due to inefficient data centers. Data centers are among the biggest energy hogs in the world, says the Senior Vice President Corporate Accounts, Data Center, at Siemens Building Technologies. They are responsible for 1.5 percent of the worlds energy consumption, and increasing at a rapid pace. And that is completely unnecessary, as in most data centers server utilization rarely exceeds six percent and facility utilization can be as low as 50 percent. The result is that 60 million kilowatt hours of energy are wasted each year a significant savings potential that could be leveraged with an efficient strategy and conse-

Five factors for sustainable energy efficiency


A method of site selection that, apart from considering reliability aspects from a power and communication point of view, takes into account energy efficiency. This makes it possible to determine whether the chosen location provides an opportunity to harness ambient conditions in order to reduce the cooling load through free cooling, or through the use of air-side or water-side economizers. To give an example, it would be a smart move to establish data centers in Iceland if power and communication infrastructures are state-of-the-art there.

The optimization of the IT infrastructure by either consolidating data centers or by virtualization, to ensure the optimal use of IT resources, space, and energy. The entire IT system needs to be designed in a way that ensures that servers run at optimum capacity and IT services work efficiently.
Staff check the air-conditioning of the server rooms using portable thermal imaging cameras at Berlins Internet service provider Strato.

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quently improve the so-called power utilization effectiveness, which is commonly accepted as an indicator for data center energy efficiency as well as for the achieved level in green operation. Rajiv Sivaraman and the Market Development Board Data Centers which he manages are focusing on this very challenge facing the industry to provide insights into how Siemens can contribute to green data centers. The experts look at multiple aspects at the same time: First, the IT system is designed in a way that the servers are running at optimum capacity and IT services work efficiently (consolidation, virtualization, and IT automation). Second, the energy systems are optimized with energyefficient products, systems, and concepts. In particular, cooling is optimized by bringing in more air circulation from outside or using a water-side economizer. And, for example, it is smarter to establish data centers in locations with lower exterior temperatures than, say, in Texas, where summer temperatures are well above 30 degrees Celsius for months at a time. Accordingly and thirdly building architec-

ture should be designed so as to offer optimum prerequisites for the energy-efficient operation of a data center. Sustainability and the use of eco-friendly materials go without saying. The infrastructure has to be designed flexibly so that it meets the needs of future generations of computers as well as it meets current needs. As a fourth step, renewable or locally produced electricity are used to the extent possible, and waste products such as cooling water are recycled. Lastly, the use and design of data centers is permanently monitored and managed in accordance with the needs of all departments in the company. Progress as challenge In the Netherlands, Siemens is supporting telecommunications giant KPN in establishing more effective data centers. IT services are part of KPNs core business, which it provides to companies in Holland, Belgium, and Germany. An increasing number of these customers are outsourcing IT services. These services are expected to be secure and function around the clock.

A dynamic and flexible infrastructure, with energy efficiency as an integral element of its overall design concept, making sure data centers are adaptable to the rapidly advancing server technology and new business needs. Effective monitoring and refinement of all infrastructures in order to continuously deliver IT improvements and transparency about their impact on business. The optimization of the airflow system, the implementation of an energy-saving hardware platform, and continuous server virtualization and consolidation are major focal points here. Last but not the least, the use of renewable energy, the recycling of water whenever water-side economizers are used, and the use of eco-friendly components in order to ensure a high degree of sustainability. Siemens is able to deliver all the approaches mentioned comprehensively. This is why the company is a highly esteemed technology partner whenever it comes to establishing sustainable, green data centers.
There is a lot of high tech hidden in the data centers false floor.

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For this reason, KPN is constantly expanding its capacity and calculating it accurately so that the company can offer its services effectively. Its a major challenge. In the past, after a few years our systems could not keep pace with technical innovation. They were not energy-efficient enough, and our air-conditioning costs were through the roof, said Max Alias, Program Manager of CyberCenter Services at Getronics, a subsidiary of KPN. At that time we were looking for a more flexible solution at KPN, one that could keep up with both growing demand and the needs of our customers. And we were looking for a partner to implement a solution. Today, the data center at KPN is modular in design. Instead of cooling the data center with an air-conditioning system, the company uses an energy and cost-saving air exchange system (KyotoCooling). Siemens designed a modular power supply system for the company that can be tapped when needed and adapted to the requirements of the KPN data centers. The building technology of the new CyberCenter was also adapted by Siemens experts to save energy. The close, continuous cooperation with on-site Siemens consultants who permanently monitored and managed the work in the data center has proven particularly effective. CyberCenters have become a critical element in all industrial production, says KPN Manager Alias. And because Siemens is an industrial company itself, it has the know-how and experience we need. Thats why we build every data center with Siemens. Moreover, the partnership ensures a green future. Strato, the Internet service provider from Berlin, also has experience with green solutions. In its data center, the computers are located in two rows across from one another. With doors at the end and a roof, the data center forms a cold aisle. The exact volume of cold air required is blown into this aisle. The cold air is sucked into the servers and the warm air is expelled into the warm aisle, where the servers stand back to back. The warm air rises there and is sucked into the cooling system at the ceiling. A sophisticated measuring system ensures efficient operation. The cold aisle housing makes it possible to cool the servers in a controlled manner instead of cooling the entire data center. 30 percent savings in energy costs This single measure alone saves 30 percent of energy compared to a conventional data center, Strato CEO Damian Schmidt points out. In addition, the company has used only hydroelectric

The Siemens data center near Brussels gets through most of the year without compressors or energy-guzzling air-conditioning systems (above). The servers are green at the Strato data center (right).

Green center
The ecological footprint is a metaphor for resource consumption by humans (see p. 81). But what traces do IT companies leave behind? We know resource consumption is high, says Roland Beck, Head of the Service Management Consulting Team at Siemens IT Solutions and Services. But most of us speculate on how high it actually is. Almost no one knows the size of the footprint for a single email or an application such as SAP the basis for measurement has been lacking. For this reason, Siemens IT Solutions and Services and the Sustainable Europe Research Institute (SERI) established the EcoFIT pure research project. Lower consumption means lower costs. Replacing old systems with new ones is not enough and should be critically scrutinized, Beck explains. An analysis of the own behavior is important: How does a company use IT, how many transactions take place, and how many of those are really necessary?

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power since 2008. More than 30,000 servers and the Web presence of more than 3.5 million domains operate completely without CO2 as a result. However: Green power is not enough. Energy efficiency and energy savings are the challenges of tomorrow, even in IT, says Schmidt. Green in IT is one way. The other is called Green through IT, referring to the extent to which the use of smart IT resources can save resources, for example in industrial production. If a company switches from running its pumps at 100 percent around the clock and opening a bypass valve when needed, to installing the necessary control software that regulates operation as required instead, a lot of power could be saved, estimates Martin Streibel of the German Energy Institute in Berlin. In industry, the distinction between these two concepts has occurred along with the awareness that sooner or later it will probably be necessary to find economically and ecologically compatible ways of implementing data technology. At the end of November 2010, the study Green IT: More than a passing fad! by Deutsche Bank Research and the green IT consulting firm of BITKOM, the industry association, confirmed this observation. Green through IT in industry According to the study, 54 percent of companies know the difference between Green in IT and Green through IT. However, only a quarter feel obliged to actually implement green IT projects at an operational level. Just 38 percent have an environmental officer, 32 percent have joint budget responsibility for energy and IT, and 43 percent still shy away from green IT solutions because they are afraid of the investment risk. In actual application, best practice examples can help make the complexity of planned projects transparent, the study concludes. With a project plan based on a positive example, companies will find it easier to estimate the measures necessary for their IT. And in 45 percent of companies, who is it that decides whether the firm takes that step toward green data technology or not? Senior management.

But Beck also knows that there is no golden rule. In addition to efficiency and sustainability, the solution also has to include aspects such as geographic features, architecture, infrastructure, security, reliability, and comfort. Vienna Floridsdorf has been a success in this respect. In addition to a multi-level security concept, maximum fire protection, and optimum energy supply, the new Siemens data center is as green as possible. While rooms were kept at 21 degrees Celsius before, they are now maintained at 27 degrees Celsius here. Every single degree more translates into energy savings of approximately three percent, Beck points out. In addition, there are the strict adherence to the cold and warm aisle principle, different enclosures for the IT equipment, and an energy-efficient air-conditioning system on the roof. All in all, one of the most modern IT facilities in Europe.

36 Industry Journal | 01 | 2011 | Performance

Red Bull on the fast track


30 years ago, Red Bull was a largely unknown sweet fizzy drink. Now, this drink is on everyones lips, both figuratively and literally. The drink manufacturer has 600 million customers in over 160 countries, but Dietrich Mateschitz is much more than just that. He is also the Formula 1 constructors champion for example, and the race car supplier to Sebastian Vettel, the 2010 Formula 1 world champion. And there is still more. He owns two soccer teams, a television network, as well as a cell phone business. Three billion Euros in sales and 123 million Euros profit speak for themselves. Just how are these Austrians doing it?

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38 Industry Journal | 01 | 2011 | Performance

As long as its crazy: Red Bull invests millions in its brand messages from sky divers to BMX riders, stunt pilots to ice climbers, and race car drivers.

When Sebastian Vettel let the champagne corks fly in Abu Dhabi on November 14, 2010, it was more than just a great triumph for the 23-yearold Formula 1 driver. Having the youngest racing world champion of all time while simultaneously winning the 2010 constructors title once again put racing team owner Red Bull into the public eye. This energy drink really does give you wings. To ensure that this message was not lost on anyone, Red Bull allowed its super champion to race in a publicity event along the Berlin fan mile between the Brandenburg Gate and the Victory Column on the last Saturday of November 2010. Vettel whipped his 750-horsepower racer over the asphalt and serenaded the crowds at the tour bus together with Smudo, front man of the German rap group Die Fantastischen Vier. The fans applauded their star just as they once celebrated the German national soccer team during the World Cup in the summer of 2006. Dietrich Mateschitz, tanned, easygoing, as well as looking young and full of energy, can be satisfied. Once again, a risk taken by the head of Red Bull had paid off. Sebastian Vettel, teammate Mark Webber, and everyone else associated with the Red Bull Racing team are part of a slick, skillful marketing machine that has helped to turn the winged fizzy drink from Fuschl am See, Austria, into a major

success story over the past thirty years. Mildly ridiculed at one time by competitors such as CocaCola and Pepsi, Red Bull has become a giant: the energy drink is available in more than 160 countries, and is drunk by 600 million people worldwide. The company achieves three billion Euros in sales annually, with profits of 123 million Euros in 2009. 11 billion Euros brand value In addition, company founder Mateschitz owns two Formula 1 racing teams, two soccer teams, sponsors 500 athletes worldwide in trendy sports from cliff divers to BMX riders purchased his own TV network, and two years ago jumped into the cell phone market. For some time now, Red Bull has been much more than just a lifestyle drink. The company has grown into a global brand with a value estimated at more than eleven billion Euros by the European Brand Institute. The almost unbelievable success story began in 1982. Dietrich Mateschitz was 38 at the time, had studied international economics in Vienna, worked in marketing for Jacobs, and had a lucrative job as a salesman for toothpaste giant Blendax. He flew to Thailand on a regular basis for Blendax and there, suffering from jet lag, he discovered this unique drink that keeps Asians fit: Krating Daeng (Red Bull). There must

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be a market for this back home, thought the Austrian. Arent people in the Western world, stressed out by all their success, always looking for a bit of extra power, a little kick from a bottle of energy? Mateschitz quickly joined up with the Yoovidhya family, the owners of Krating Daeng (they still retain 51 percent ownership in Red Bull), translated the Thai name into English, took over the logo, refined the recipe, and introduced the sweet soda as Red Bull to the European market in the mid-80s. No production, no original idea How did he do it? Mateschitz didnt have factories or a fleet of vehicles. He didnt have his own product, he didnt even have an original idea. And yet he is the father of the company, Mr. Red Bull in person. He created a market for a type of beverage that was practically unknown in the Western world, the energy drink. He did not do it by imitating his competitors such as Coca-Cola and Afri-Cola, which at that time had double the amount of caffeine, said Ralph Ohnemus, head of the brand consulting firm K&A Brand Research near Nuremberg. Dieter Mateschitz had the courage to set himself apart. A different can format, different taste, and a different price segment. Actually, Red Bull is nothing more than vitamins, sugar, caffeine, and taurine. It acts like an espresso with a lot of sugar. But Mateschitz made this into a can filled with freedom, winning attitude, and elation, a machine that spurs on stressed managers and tired party animals. Together with the advertiser Johannes Kastner, a friend from his university days, he developed the perfect slogan for this product for go-getters: Red Bull gives you wings. He then created animated television and movie ads that to this day brashly deliver the message to customers. He set out on a slow but steady expansion strategy, from city to city, from country to country. He impressed the owners of hip bars and clubs. And every year he pumped almost a billion Euros of marketing money into his product and his brand messengers mostly athletes, the more extreme, cool, and crazy, the better. Concentration instead of diversification All in all, a very smart mix of function and emotion, said Roland Bernhard, the current head of the Zurich office of Prophet, an international consulting firm, and once the head of marketing at Red Bull. He knows of no other company that has invested as much money in a single product.

Clean production for racers


Reduced energy consumption, lower CO2 emissions Siemens is streamlining Red Bulls fast race cars for more than just effectiveness. Using products from its environmental portfolio, Siemens is now optimizing Red Bull Racings production facilities. Energy costs, resource consumption, and CO2 emissions should be significantly reduced at the facility, and production processes will run more efficiently. An industrial company like Siemens is the ideal partner for optimizing production given its knowledge of more than 160 years of production, 300 plants, and the worlds largest environmental portfolio, says Christian Horner, team principal of Red Bull Racing. Currently, Siemens is closely evaluating production as a whole, including all existing machines and workflows at Milton Keynes in the United Kingdom. In addition, the heating, ventilation, and air-conditioning systems are undergoing a thorough energy check.

40 Industry Journal | 01 | 2011 | Performance

PLM Software for greater speed


Resting on ones laurels just does not work. If you want to be successful in Formula 1, ongoing development has to be a constant. Or, as Christian Horner, team principal of Red Bull Racing, says: There is no room in this sport for complacency. Especially given the fact that the rules for Formula 1 change every year and design and construction have to meet very strict criteria. Alone the refueling ban during the races in the past year has meant reinforcing the springs, gears, and brake systems in order to carry the longer, wider, and heavier fuel tank with double the capacity. And test runs during the season have now been banned, which makes optimization less expensive but much more demanding. Red Bull Racing and its 560 employees rely on Siemens software for Product Lifecycle Management (PLM). We call it our digital backbone, explains Steve Nevey, Red Bull Racings business and technical development manager. Nothing would be possible without it. Sometimes there is only a week to prepare the vehicles for the next race. Just a few hours after the last round, the construction team meets in the virtual room to discuss changes, assemble the 4,000 individual components on the computer, construct the new components, test them, and install them in the vehicle. In addition, the respective Grand Prix venue plays a critical role. On an uneven, winding course like the one in Monaco, where power output is important, the car wings are higher, while on courses with many straightaways like Monza, they are flatter, enabling faster sprints. Errors or delays simply cannot happen. Most important, according to Nevey, is that our hundreds of engineers and technicians have access to the same up-to-date data. And that the constructors see when colleagues have changed something. With the NX and Teamcenter PLM solution we always see the correct state of things. The data flow from NX to Teamcenter and then into Red Bull Racings ERP system. From there, the parts list can be accessed directly by production. Just a single mouse click, and the parts are immediately milled and stamped. The objective is clear to all: speed. Any modification that changes the lap time by a fraction of a second can determine the victor. Red Bull Racing has significantly reduced its material expenditures using the software, and has accelerated workflows in design and production by up to 75 percent. The only disadvantage in PLM Software is that almost every other Formula 1 race team is using it as well.

For a long time, there was just this one small can, and not countless product variants as with other drinks producers.

thought about. When we need a jump start, we automatically think of Red Bull. The brand has become a synonym for energy like burgers for McDonalds. Despite its consistent brand stylThe fact that the drink was ing, the sharp upward curve of criticized on and off for its success has flattened somewhat ingredients, and even banned since the 2008 financial crisis. Some 600 milfor a time in Germany and Although to this day Red Bull France, did not damage the remains the cult product in the lion people brand. On the contrary. its ilenergy drinks market, the flood worldwide get legal status gave the drink an of competitors and imitators is aura of mystery and therefore putting the market leader under a shot of extra a must-have. At that time, Gerpressure. In the USA and Rusenergy from this man ski tourists smuggled Red sia, cheap products like Monster Bull home from Austria by the and Rockstar are making things little can. trunkful. That gave the brand difficult for the premium bevan even greater presence. For erage. But they and the other brand consultant Ralph Ohplayers, with names like Pussy, nemus, it is one of the companys recipes for Dose 28, and Cola Rebell Cultimate, for instance, success: do everything to keep being talked and have not managed to knock down the star. The

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A Formula 1 racing car consists of some 4,000 parts. Red Bull Racing develops and manufactures the winning car using Siemens software for Product Lifecycle Management (PLM). This makes it possible to design new components on the computer in the shortest possible time, have them produced shortly afterwards, and finally install them.

major concern is that the cheap imitators are poor in quality, said Ohnemus. At the moment I do not see a real competitor. Red Bull still retains a market share of 70 percent. The brand as content transporter In addition, company head Mateschitz is always looking for new marketing strategies. Having ones own TV network and entering the cell phone business in cooperation with Telekom Austria should strengthen the Red Bull group. The Red Bull brand has become a product and content vehicle. And for those who get their sports news via their Red Bull cell phone, sooner or later they will probably be drinking from that 250 milliliter can as well. Mateschitz knows that he must not overdo things. In the age of websites, the omnipresence

of a brand can quickly become overkill: Thanks, but weve had enough. And: We wont accept that from you anymore. Brand overreach is what Bernhard calls that. As a brand, where am I credible and where am I not? But that does not appear to be a problem for Red Bull, at least not for now. When Mateschitz invites guests to his exhibition and events center Hangar 7 next to the runway at Salzburg Airport, it is impossible to miss: Red Bull leaves nothing to chance. The building is as large as a soccer field and looks like a giant airplane wing. Under the glass roof there are decommissioned airplanes, fighter bombers, and helicopters in a row. Mateschitz is already looking into potential new markets. To date, for example, he has had to leave China to his Thai majority owner. But the final word has yet to be written in this regard.

42 Industry Journal | 01 | 2011 | Performance

Changing sides

From chess genius to economics guru


Kenneth S. Rogoff is undoubtedly famous. Celebrated for his brilliant chess games at the highest international level, internationally recognized for his economics expertise and admired for predicting the financial crash even before Lehmans fall. The Harvard professor explains to Industry Journal why the game of kings is an excellent preparation for the business world and what successful chess players and top managers have in common.

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People with very different abilities and personality structures can become equally good players if they learn to adapt their style of playing to their individual strengths.
Kenneth S. Rogoff, Harvard professor and chess Grandmaster

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The young man with his unkempt black hair, moustache, and small goatee sits surrounded by a crowd of people in the rather desolate shopping center of Rochester, a small town in the state of New York. His checkered shirt has a rather wide collar. His eyes are covered with a silk scarf. He is surrounded by a dozen chessboards on which he simultaneously plays. For money. His opponents tell him their moves. He has to remember them, because he cannot see the pieces. The year is 1974. Kenneth S. Rogoff is just 20 years old, and his chess career is for the most part over. He is now studying business administration at Yale. But his course work there is at best mediocre. Nobody expects that the international chess master will go on to achieve an international career in economics. But he manages to do just that. He rises from being a chess talent to chief economist at the International Monetary Fund, to professorships at US elite universities Berkeley, Princeton, and Harvard as well as becoming the prophet of the Lehman Crash. Forward to the present day Rogoff is the man of the hour. His schedule includes state visits,

meetings with central bank heads, and lectures at financial institutes around the globe. At each meeting, the Harvard economist is helped by his past chess games. His success may be due to the steel nerves developed during his youth. Or it could be because he learned to predict the next moves of his opponents and formulate quick answers in response. And because he analyzes his own strengths and weaknesses as precisely as he does those of his opponents and adjusts his decisions accordingly. Back to the past Rogoff learns to play chess when he is six years old from his father, a professor of Radiology. A few years later he joins the chess club of Rochester, his home town. At 14, he is already chess master and shortly afterward he achieves senior master, the highest national title in the USA. Self-confident and achievement-oriented Playing chess is hard work. Rogoff plays every day for several hours and reads chess books by the dozen. In 1969, at the age of 16, he plays 221 moves, at that time the longest chess game in the world, against the Brit Arthur Williams. Needless to say, he wins. I like the self-confident

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Economic crises in five dimensions


Kenneth Rogoff has identified five typical characteristics of a crisis. These are always repeated, and national economies could learn from them (see recommended reading, see p. 47). 1. People do not learn from mistakes As collective bodies, people always repeat their mistakes and do not learn from the patterns of previous crises. The USA, for instance, is threatened with falling into stagflation, just like Japan in the 1990s. However, the country is repeating the mistakes Japan once made by keeping zombie banks artificially alive. 2. Banking crises announce themselves ahead of time in industrial countries Early indicators for banking crises in industrial nations are strong capital inflow, strong price increases in real estate, booming stock prices, predictions of growth in the shape of an inverted V, and a perceptible increase of the debt-to-equity ratio. 3. All crises are not new even not the latest All crises are markedly similar to one another. The

big recession is no exception: depth and length of associated real estate crises are comparable. Stock price developments are much alike. However, a V-shaped price recovery is more common with shares than with real estate prices. GDP curves and unemployment rates are equally similar. Emerging markets only partially correspond to this pattern, however. 4. Saving banks costs more than it brings in The true costs of a banking crisis are higher than the total investment for the saving of the banks out of tax revenues. The fiscal stance of the country is additionally weakened by economic stimulus programs and falling tax revenues. A country comes out of the crisis with a considerably higher level of debt, and it is, therefore, more prone to suspending the servicing of foreign debt. 5. National bankruptcies are conceivable The possibility of default is particularly high with countries that have high international debt and are highly indebted on the home market at the same time. Governments will always service domestic debt first, as national creditors have the right to vote in coming elections. It will only be at a later stage that politicians consider the servicing of foreign debt often made impossible by the financial situation in the meantime.

style of Rogoff when he sits in front of the chess board, praises Bobby Fisher, the US chess legend of the time. The teenager kisses school good-bye and moves to Europe to play in several tournaments. He finances his life with the prize money he wins or speed chess where he simultaneously plays against up to 75 players. Or he plays chess with his eyes blindfolded, where he plays against up to 26 players at the same time. He sometimes sleeps in 5 star hotels and sometimes at the train station. But the young man is not completely happy in the world of chess. He dislikes the constant travel just as much as he is constantly surrounded only with men. Added to that is the lack of time for his other interests, such as tennis, politics, and books. At 18, he decides to enroll in college. Despite his lack of formal schooling, he is accepted by Yale, one of the elite colleges in the US. In 1978, Rogoff becomes an international Grandmaster, the highest title within his sport. Shortly after that, he abandons chess completely, from one day to the next. Otherwise, the game would have drawn him back, he asserts.

According to him, the game of chess is highly addictive, comparable to the work involvement of many top managers. All of a sudden he knew that he would never make it to be number one in chess and that he wanted to achieve something else in his life. Suppressing emotions To this day, Rogoff proudly recalls the fact that it only happened once that he lost twice in a row. That shows that he can keep his cool an ability that also helps him in his role as an economist. Whoever makes a large mistake quickly loses his self-confidence and commits another error. That is the same with management decisions. The most important thing chess taught me is to breathe deeply after a heavy loss, to remain calm, and switch off my emotions. But in August 2008, it was hard for Rogoff to breathe easily and continue as usual. At a conference in Singapore he said in passing that not only mid-sized banks would falter in the coming months, but also a whopper, one of the largest investment banks or money institutions. A day later, he read his statement in the Guardian. I was shocked when I read my statement in black and

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white in the newspaper. Had I said something that I did not want to say at all? For two weeks, Rogoff went into hiding and did not talk to anyone, even though more than 400 e-mails from famous investors and leading politicians all over the world arrived in his inbox. I was afraid and went into hiding. I did not want to be asked by television reporters to which bank I was referring. On September 10, Fannie Mae and Freddie Mac were nationalized and on September 15, Lehman Brothers collapsed. Analyzing strengths and weaknesses Although chess is a lonely sport, Rogoff honed his understanding of people through chess. Good chess players get to know the character of a human being by the way he plays chess, says the

economist. The ability to quickly judge competitors or business partners correctly is one of the most important success factors in business as well. It is just as important to judge oneself. People with completely different abilities and personalities can become excellent players when they learn to adopt their game plans to their individual strengths, continues Rogoff. That applies to careers as well. The greatest success comes to those who know their strengths and weaknesses and use them to their own advantage. Fitness in body and soul Chess tournaments can last for days and tax the body. It is a matter of the utmost importance to enter the game in good physical condition, explains Rogoff. I always played a lot of sports prior to games tennis, jogging, and basket-

Lehman Brothers collapsed in September 2008. Investment bankers left their workplaces, financial markets plummeted all over the world. Rogoff had already predicted much of that.

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ball. To this day, Rogoff exercises regularly and meditates a method of relaxation he learned in particular for chess. Young talents are considered the most hopeful in chess. Rogoff agrees with this approach. Youth is of tremendous advantage. On the one hand, you cant learn everything there is to know anyhow, and on the other, offensive and defensive strategies develop continuously. Older players have a harder time to stay current. The same applies to business administration. It is hard to find an important article by someone who is over 40. Showing consistency Despite the many parallels between chess and business, Rogoff sees an essential difference be-

tween success in business and chess. Success in chess requires enormous consistency. A single error can lead to the loss of a well-played game or the entire tournament. Yet just one brilliant game in a tournament cannot compensate for the loss of many others. However, in economics, especially in business administration, the picture is completely different. As as researcher, you are always as good as your three or four best ideas and essays. There are also some Eureka! moments that count as additional career bonuses. But at times you have to work months or even years for these. Even in business, great ideas do not come from nowhere they also require consistency.

About the person


Kenneth S. Rogoff is professor of economics at the elite Harvard University in Cambridge near Boston, where he holds a chair of public policy. In the beginning of the 1980s, the 57-year-old was an economist with the International Monetary Fund (IMF) and for the US Federal Reserve. He worked his academic way up from there, starting as an assistant professor at the University of Wisconsin in Madison, then followed a call to the University of California in Berkeley as a full professor, became a professor at Princeton, and finally was appointed professor at Harvard in 1999. From 2001 to 2003 he was also the chief economist and scientific director of the IMF. Rogoff is married and has two children.

Recommended reading
This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth S. Rogoff. 592 pages, 2010, 34.90 Euros The two economists have worked through the data and records of financial crashes in 66 countries and eight centuries. They worked and researched for six years to compile this vivid, best-selling economics book. According to Reinhart and Rogoff, severe crises are usually preceded by a boom that is characterized by excessive optimism and spurred by spin doctors whose common retort to skeptics referring to earlier cycles of boom and crisis is that this time is different. Experience suggests that this never is the case, as crises always follow certain patterns. The authors sobering conclusion is that the financial crisis following the Lehman disaster was not the least bit different from previous ones.

48 Industry Journal | 01 | 2011 | Urbanization

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A new homeland
The worlds cities are more valuable today than ever, not just as growth regions, but as decisive factors for the future of the worlds climate. The number of conurbations, the number of inhabitants, and with them, the consumption level of resources, are all rising at a breathtaking pace. Sustainable satellite cities close to metropoles are being created to help steer rapidly rising population growth in an ecologically acceptable direction.

50 Industry Journal | 01 | 2011 | Urbanization

Peter Lscher, CEO of Siemens AG (left), explains the concept of the drawing-board city of Masdar in Abu Dhabi. Siemens is involved in the planning. Crowding and traffic conditions similar to those in Shanghai (right) will simply not exist in Masdar.

At least there is one thing city planners dont have to worry about nowadays, and thats lack of work. The days of mass exodus by citizens of western industrialized nations in favor of seeking their new homes in outlying areas are long over. Fleeing the city is a thing of the past, according to the German Nature and Biodiversity Conservation Union (Naturschutzbund Deutschland). In developing countries and newly industrialized countries this trend never existed. On the contrary, people have always streamed into metropoles, and they continue to do so, today more than ever. They come in search of work, medical care, clean water, and their piece of the affluence pie. However, many of them encounter unemployment, poverty, and catastrophic hygiene conditions. The United Nations has predicted that the onslaught will continue. They expect that, by 2050, two-thirds of the worlds population will live in metropoles. That amounts to a total of six billion people or twice as many as today. Other studies predict that, within 40 years, as much as 75 percent of people will live in cities. In China alone, each year, 13 million citizens move from the countryside into cities. Consequently, hundreds of huge new metropoles are to be built in this booming country. Cities with populations of 170 million inhabitants already exist in China. Although large cities cover a mere two percent of the earths surface, they already produce

80 percent of greenhouse gas emissions and consume 75 percent of the worlds total energy consumption. If the consumption of resources develops parallel to population growth in cities, an ecological disaster is certain. The Frankfurt city architect and internationally renowned city planner Albert Speer fears the worst, should countries not opt to construct new buildings or modernize existing ones sustainably (see p. 55). Then the world will have nothing left, he explains. Creating infrastructures for increased ecology It cant be allowed to go that far, warns Gregor Hartner, partner of Booz and Company, a global management and consulting firm. The challenge to sustainable city concepts lies in achieving an infrastructure that both offers inhabitants a CO2-neutral lifestyle and develops industries that are capable of producing competitively viable green technology solutions for the world market. The internationally renowned US architect and city planner Daniel Libeskind concurs. The challenge is combining sustainability with living in extremely confined spaces. In Shanghai, around 7,200 inhabitants live on no more than one square kilometer of land. By comparison, Berliners have twice as much land available to them.

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The technology already exists The first steps towards sustainability have already been taken. Many of the essential technologies are already in existence. They just need to be adapted to local requirements accordingly, says Dr. Wienholt, leader of the Marketing Development Board for Cities at Siemens. Such an example is a network management system (NMS) which allows the required components and functions of a water network to be optimized and tested virtually before they go into operation. Siemens has developed the SIWA NMS solutions package for this purpose. It incorporates the monitoring, control, and water distribution optimization from source through to consumer. Using a modular concept, all measuring, controlling, and regulating functions are provided for. From measuring technology to energy distribution, simulation to automation and monitoring, and including all communication technology required to enable it have been conceived on computers, while taking account of the systems lifecycle. The system does not go into operation until it functions in a stable manner. The advantages for municipalities are shorter implementation times for new networks, lower costs, optimum supplies, and lower energy consumption. Self-financing solutions Such systems are just one of many that will go into future-capable cities. This is illustrated in the Sustainable Urban Infrastructure London study, that was carried out jointly by Siemens AG and McKinsey. For example, London could reduce its CO2 emissions by 20 megatons by 2025, using existing technology. 70 percent of the savings potential could be realized by technologies that literally finance themselves, by saving energy costs. In all, 200 technical options were identified by the experts working on London. Such figures illustrate that it is the total number of measures that result in great success. Sustainability can only exist when a broad range of activities coincide with one another, confirms Dr. Wienholt. One cannot expect to achieve much when a city introduces tolling, without improving its public transport considerably and guaranteeing its inhabitants their individual mobility. Milestones for the development of megacities have been set, for instance, by Mr. Wu Zhiqiang in cooperation with Siemens. The vice president of the Tongji University of Shanghai and dean of its College of Architecture and Urban Planning is one of the most renowned city planners

The largest cities in the world in 2010


Megacities are booming. Worldwide, 30 conurbations with more than ten million inhabitants are already in existence. Statistical sources and the various ways in which urban centers are defined mean that data varies considerably. The United Nations (UN) predicts that, within the coming 15 years, the number of megacities with more than 20 million inhabitants will increase significantly. The UN expects an overall rise in the population of the worlds largest cities by around 45 percent.

Rank

City

Country Japan India Brazil India Mexico

Inhabitants (in millions) 38.7 22.2 20.3 20.0 19.5 19.4 18.6 15.6 14.6 13.1

1. Tokyo 2. Delhi 3. So Paulo 4. Mumbai 5. Mexico City

6. New York/Newark USA 7. Shanghai 8. Calcutta 9. Dhaka 10. Karachi China India Bangladesh Pakistan

Source: United Nations, World Urbanization Prospects, New York 2010

The SIWA NMS solutions package enables virtual optimization of municipal water systems.

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Outstanding Curitiba Above average Brazil

The greenest cities of Latin America


In November 2010 prior to the UN Climate Conference in Mexico City, Siemens introduced its Latin American Green City Index. In addition, Economist Intelligence Unit, a research and consultancy company examined the sustainability of 17 large cities in a total of eight countries. In the previous year, the European Green City Index was introduced (see Industry Journal 1/2010). It compares the environmental sustainability of the 30 major European cities throughout 30 different countries.

Belo Horizonte Bogot Brasilia Rio de Janeiro So Paulo Average Medelln Mexico City Monterrey Porto Alegre Puebla Quito Santiago Below average Buenos Aires Montevideo Sub-standard Guadalajara Lima

Brazil Columbia Brazil Brazil Brazil

Columbia Mexico Mexico Brazil Mexico Ecuador Chile

Argentina Uruguay

Mexico Peru

in China. Using so-called eco-city models, Mr. Wu and Siemens aim to bring city growth and environmental protection together. Currently, the cooperation is working on how the individual requirements of cities, based on their individual climatic conditions in particular, can be met by technological means. The next phase is to involve the development of concrete plans for eco-city models. This will form the basis for new cities, making them ecologically sound, extremely livable, and as autonomous as possible from their very inception. A further requirement of eco-city models is that they must be cost-efficient, and applicable to a number of cities. The planning work is in full sway. Mr. Wus city planning concept is already on display near the mouth of the Yangtze River. There, a sustainable city for over 700,000 inhabitants, is planned to reach completion by 2020 with lots of water features and recreational areas, comparable to European metropoles.

Sustainable luxury worldwide Megacity construction projects are also found beyond Chinas national borders. Worldwide, colossal buildings are literally mushrooming overnight. Doha, the capital city of the state of Qatar, for instance, is home to the 8.5-kilometer-long Barwa Commercial Avenue. On 940,000 square meters, 600 luxury stores and offices are to reach completion by the summer of 2012. In addition the complex, which measures around 110 football fields, will feature 800 high-class residential units. Top sustainability standards guarantee energy efficiency and a high-end quality of life. Around 5,000 kilometers away, as the crow flies, in Cologne, on the Rhine, an entirely new city area is being constructed to accommodate more than 3,000 inhabitants. Here, too, construction managers have made the ecological protection of resources and future-oriented infrastructure top priority.

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Masdar city a showcase How a sustainable city concept will look in reality can be seen in the drawing-board city of Masdar, in Abu Dhabi, in the United Arab Emirates. 50,000 inhabitants and a total of 1,500 companies will have settled on this six-squarekilometer piece of land by 2020. Masdar city is to have little or no air-conditioning systems, no cars, minimal greenhouse gas emissions, and no landfill sites. A number of seawater desalination plants will provide drinking water. An innovative power grid combined with modern building technology are to be supplied by Siemens. In the initial project phase, the concern is to deliver integrated automation technology and is developing applications for an intelligent power grid (the so-called Smart Grid), together with the Masdar Institute. This is to connect numerous building management systems to a system for managing the city grid. The goal is to enable the energy consumption of each building to be monitored and controlled individually.

In the realization of Masdar City, we have the newest innovations permanently in focus, emphasizes Sultan Al Jaber, Chairman of the Masdar Group, State Secretary of the Foreign Office of the United Arab Emirates, and member of the UN Advisory Group on Climate Change. Siemens intends to further deepen the partnership. Together, the research team intends to spearhead technological innovation in the areas of carbon capture and storage.

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Contributions to sustainability
Siemens is one of the trendsetters in sustainable city development. Just how efficient and environmentally protective innovative technologies are, is made evident by the following examples: ight billion liters of drinking water per day are purified by E Siemens systems, worldwide n around 7,500 public buildings, innovative systems are I already bringing about a reduction in energy consumption costs of two billion Euros per annum and are sinking CO2 emissions by a total of 2.4 million tons. Using new lighting technology alone brings about energy savings of 80 percent compared to conventional light bulbs. total of 7.6 million tons of CO2 are reduced per year in A large cities by the Siemens Light Rail System. Furthermore, the Velaro high speed train utilizes a mere 330ml of fuel per Kilometer for every 100 passengers transported about as much as the contents of a can of coke. orldwide, more than 8,000 Siemens wind energy W systems are already producing enough electricity to supply 2.6 million homes satisfactorily.

Three questions for


... Dr. Willfried Wienholt, Manager of the Marketing Development Boards for Cities at Siemens.

Will sustainable mega cities differ from the metropoles of today?


Architecturally, these cities will not really differ from our cities today. The real change lies in using resources efficiently, especially in relation to energy. For example, completely new forms of individual and city transportation will come about. Cars will run on electricity or hydrogen. In addition, the use of energy-saving hybrid or electric buses will become the norm.

Solutions from one source


Siemens first positioned itself as an urban infrastructures solutions provider over 160 years ago. In the early days, electrification of cities was top priority. For the past ten years, Siemens has been providing customers with complete solutions. In doing so, the company focuses on the goals of cities, such as on planned economic development for example, or on predicted population growth. A master plan is devised to define in detail, how the intended development can be attained. Should hybrid buses, conventional buses, taxis and trains or a combination of options be used to equip the city with its passenger transportation system? Which heating and cooling system makes economical and ecological sense? These are just two of the many questions posed by customers which Siemens addresses individually, and makes suggestions as to how goals in relation to these questions can be reached. City Account Managers engage in dialog with cities of various sizes. There are 60 such experts worldwide. They identify each citys individual requirements and provide tailor-made solutions together with the relevant Siemens business area.

How will the energy consumption of buildings evolve?


In winter, buildings will hardly lose any heat, thanks to efficient insulation and innovative technology. Lighting costs will fall to a fraction of current levels. Furthermore, buildings of the future will produce more energy than they use, thanks to solar energy technology or combined heat and power systems.

Will fossil fuels such as coal and oil have served their time?
Fossil fuels will remain the mainstay of energy supply. However, in the energy mix of the future, the role of renewable energies will progressively increase.

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At the gates of the metropolis of Changchun, China, Albert Speer and his employees are planning Automobile City, a sustainable expansion of the city for 300,000 inhabitants.

The world will not endure without sustainable cities


Sustainably planned and organized cities are critical to human survival, says Albert Speer. In this interview the internationally renowned city planner and architect explains how to make new cities sustainable, why Changchun in China, aka Detroit East, can be sustainable, and the role automobiles will play in private transportation.
Mr. Speer, for over 40 years you have planned new cities throughout the world, developed high-rise projects, and created public transportation concepts. How have peoples needs changed over the course of time? The demands regarding space, quality of life, and surroundings continue to grow. At the same time, people are moving back into major cities. Will this mean more transportation chaos, slum areas, and environmental pollution in major cities? This concern is unfounded. Singapore is an example which shows that things can be different. This city dealt with these issues early on and came up with model solutions. Today, despite formidable population growth in pretty much the same amount of space, the metropolis offers aboveaverage quality of life and extensive green space.

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In addition, public transportation offerings grew so that, at least in the inner city, owning a car is unnecessary. And there are no slums in Singapore. Do you expect that the worldwide similarity in the architecture of inner cities will continue to grow? Should we expect exchangeable cityscapes? Architecture is in fact showing a greater similarity and is therefore less important. However, city planning should not come off an assembly line. The objective of our work is to shape the characteristics of a city for example through a special plan, through its location, and urban design. And how do you do this? I am convinced that in a sustainably planned city, almost all of the residents can get by without their own cars. Innovative technologies even allow for factories to move into inner cities without polluting the environment. This reduces traffic and hazardous emissions. Is this then a plea for sustainable cities? It certainly is. Things will simply not work without sustainable cities. The world will endure only when cities become self-sufficient and act in a sustainable manner. What does this mean in practice? On the one hand, that buildings should be energy-efficient and their electricity and heating supplies should be decentralized. In practical application this would mean, for example, the use of block heat and power plants. In addition, this would mean that trash has to be separated cleanly, and that there have to be separate cycles for potable and waste water. To make a city self-sufficient requires that agricultural areas close to the city provide food. And we need green spaces within the city, improving the climate and offering local recreation areas. How would such a package of measures impact a citys consumption of resources? By our calculations it would save around 50 percent of resources. And it would mean a higher quality of life. Having ones own car is considered to be a status symbol in much of the world. Does the automobile continue to be important within your concept? Having ones own car will drop in importance as a city vehicle. Nevertheless, citizens will remain

as mobile as before. I am thinking, for example, of the use of small buses which can be ordered by telephone and take the passenger to his desired location a sort of demand-responsive transport. At present you are working in China on a number of large urban development projects. What role does sustainability play? In the major cities, the Chinese planners and authorities have learned a lot over the past few years. The architectural blunders of the past are now just history. China has very precise regulations for the construction of high rises. Increasingly, the existing structure of the building is being retained as well. And the topic of sustainability is playing an increasingly important role. Take our project in Changchun, for instance, an automobile city where about 300,000 people are supposed to work and live. City fathers are hoping to develop it into Detroit East. What characterizes this Changchun International Automotive Development Area? In the development of the 120-square-kilometer auto city, reducing the land used and conserving

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resources were given top priority. For this reason, in Changchun we recommended combining all automobile production plants and supplier operations with a city for more than 300,000 people in a central zone with apartments, green space, institutions of higher learning, as well as other public facilities. It saves a lot of space. What role does the environmental aspect play? A very important one. All plants and supplier organizations, as well as the college for design, materials, and new technologies, are connected via a rail-based supply and delivery network. We also want to connect the new city to the actual city of Changchun with a high-speed rail line. This will decrease automobile traffic and energy consumption, and, of course, CO2 emissions. In addition, the green corridors will bring fresh air into the city because they cool faster than buildings. When will the auto city be finished? Construction on the apartments has begun, and the parks are pretty much completed. With such a massive project, it is impossible to say how

long construction as a whole will take. A city is never really completely finished, it always continues to develop. And what is the importance of cultural characteristics in your city plans? They are gaining in importance. After all, we want to provide an improved quality of life. This can be seen in another project in Changchun, which closely follows Chinese tradition. It is an expansion of the city, with space for an additional 400,000 inhabitants. Following old models, we are planning sections of 350 by 350 meters, where inhabitants can get everything done on foot.

About the person


Albert Speer (76) is one of the worlds most renowned architects and city planners. Together with his partners, the Berlin native developed master plans for Expo 2000 in Hanover, the Cologne inner city, and the 2022 Soccer World Cup in Qatar, as well as a feasibility study for the 2018 Olympic Winter Games in Munich. His planning skills were also seen in other projects such as Frankfurt Airport, and in countries such as Egypt, China, Nigeria, Saudi Arabia, and Romania. In 2001, Speer opened his own office in Shanghai. There, more than 100 employees develop trendsetting concepts for new, sustainable major cities.

In Benghazi, Libya, space for a commercial center is to be restructured (left). In the award procedure for Terminal 1A West at Frankfurt Airport, the design from Speers firm was ranked first for its creative and spatial quality (above).

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A market full of surprises


Indias growth prospects are bright. Around nine percent growth per year has been recorded annually for no less than a decade, and this is set to continue. The country is an attractive market for international companies. However, the rules for doing business are completely different to those characteristic of Western nations. Becoming familiar with these rules before attempting to enter the market successfully is a must.

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With a population of around 14 million inhabitants and a further 21 million in its greater metropolitan area, Mumbai is one of the largest cities in the world, and is the most important harbor city in the Indian subcontinent.

India a statistical overview


Population Population growth Average age Life expectancy GDP GDP growth 2010/2011* GDP per head of population Fiscal deficit 2010/2011* Inflation Unemployment rate in 2009 Literacy rate (Indians over 15 years old) 1.17 billion 1.38% (approx., 2010) 25.9 years 66.4 (ranked 160th worldwide)
1,367 bn. US dollars (nom.), 3,862 bn. US dollars (purchasing power parity)

*Estimate. The Indian fiscal year is from April 1 to March 31 of the following year. ** India has no general price index. Rather, it has indexes for the cost of living for industrial workers. In urban regions, for farmers, for food, for non-food supplies, for cities, for rural areas, for wholesale, for industrial products, etc. The most commonly used of these is the Wholesale Price Index. Source: Reserve Bank of India, Ministry of Statistics, CIA Fact Book

9.2%
1,124 US dollars (nominal), 3,176 US dollars (purchasing power parity)

5.5% (predicted) 8.5% (September 2010, Wholesale Price Index**) 10.7% 61%

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The view from Martin Fuchs office is perfect. From the twelfth floor of his office in the German Center, a joint venture of the Landesbank Bavaria and the Landesbank Baden Wrttemberg, the Managing Director looks out on the major construction site of the new town of Gurgaon as it grows at a breathtaking pace on the periphery of the capital, Delhi. Hundreds of diggers burrow in the yellow sand, gigantic billboards advertising apartments shout to passers-by, brand new shopping centers emerge neatly, side-by-side, like a string of pearls, and palatial office towers (some complete, others not) twinkle in the November sunshine. The city of around two million inhabitants is a shining example of modern India: flashy, loud, and financially buoyant. Somewhere in this vast sea of houses, between piles of debris and cookshops, Rolf Weibel is on his way to his next customer. He sells road-building machinery manufactured by Joseph Vgele in Mannheim, Germany. With its numerous overcrowded and damaged streets and its rapidly growing automobile market, India is a paradise for the road-building machinery company. Today, 340 million Indians live in cities. By 2030 this is set to have doubled. The infrastructure is lagging totally behind, says Rolf Weibel, Vgeles sales manager for India. In the capital city of Delhi alone, the number of vehicles in the year 2000 more than doubled. The roads network has not grown with it, however. This is one of the first things that strikes visitors from abroad, when they come here. Infrastructure can hardly follow growth It is Indias sub-optimal infrastructure that attracts the construction companies, the machinery builders, and equipment suppliers to the country. Nothing has kept up with the phenomenal pace of growth in this country in recent years, not the roads, the electricity networks, the telephone connections, the ports, nor the airports. The government is seeking painstakingly to keep up by investing billions into meeting the energy demand, raising the standard of airports to that of the developed world, and adapting major highways to its countrys needs. Its no easy task. Growth exceeds all planning. The moment an infrastructural project has been completed, it is already too small, explains Chandrajit Banerjee, DirectorGeneral of the Confederation of Indian Industry. Indias economy has grown by an average of nine percent per annum over the past ten years. Even the 2008 worldwide financial crisis had hardly any influence on it. The country is expanding from within. Export is of secondary importance.

The American bank Goldman Sachs is convinced that, within 40 years, India will have become the third-largest economy on earth, six times the size of Germany. Already today, India ranks fourth worldwide, in terms of consumer power, says Bernhard Steinrcke, CEO of the German Indian Chamber of Commerce in Mumbai. No other country on earth has a larger population of consumers. Speculators have recognized this already: shares in Indian companies are comparatively more expensive than those in Asia as a whole. The price-earnings ratio is rather daunting. However, the high level of demand means this has no real negative impact. The end of the boom is nowhere in sight India has long since developed itself into one of the most attractive investment locations worldwide. In 2009, 27.1 billion US dollars were invested in the country. One year earlier, it was no less than 33 billion, and an end to the current boom is nowhere in sight. No one can dare to leave India out of the equation. The Indian market is a mandatory part of every company strategy if it wants to survive globally, according to Dilip Chenoy, CEO of the Indian Automobile Industry Association. This economic wonder has also managed to attract the US service company, Suryalok Networks. Not to its metropolis, however, but to a rural location. In the state of Odisha (formerly Orissa), one of the poorest regions in India located on the east coast, the company aims to sell its financial services to villages there: We are training the next generation of financial advisors in rural India. The goal is to provide people with sufficient information to enable them to do their financial business successfully and independently, says the company head, James Carter. To this end, Suryalok developed a technical platform for mobile phones, which enables banks, insurance companies, and other financial service providers to respond to individual enquiries with suitable offers. A clever idea. Although the country

Road-building machinery manufactured in Mannheim, Germany. Vgele finds itself in long-term deployment in India.

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Siemens in India
It was Werner von Siemens who, in the middle of the nineteenth century, decided to lay the foundation for Siemens success in India. In 1870, Siemens built the first telegraph connection between the then capital of Calcutta and London, of no less than 11,000 kilometers in length. In doing so, the founder of the company made Siemens & Halske famous. 140 years on, India is a pillar of Siemens future business. Its publicly owned Indian subsidiary recorded profits of 93.15 billion Rs (approximately 1.54 billion Euros) last year and was awarded contracts to the value of 124.3 billion Rs (around 2.05 billion Euros). This constitutes an increase of 41 percent on the previous year. The number of employees grew from 16,800 to 17,500. A particularly interesting project is the 1.27 billion Rs (21.5 million Euros) order for the conception and provision of the technical infrastructure for the first Indian Formula 1 racetrack. Jaypee Sports International Ltd. has commissioned Siemens to plan, install, and commission the management system for the racing stewards as well as the infrastructure for data and telecommunication. The Jaypee International Race Circuit in New Delhi is scheduled to be completed by July 2011. In the energy sector, the company has recently been awarded the contract for key components of a 1,200 megawatt combined gas and steam power plant in the special economic zone of Dahej in the state of Gujarat. Energy is one of the key markets: large parts of India are not yet electrified, while there are energy shortfalls in Indias cities and industrial centers.

has less than 30 million landline connections, more than 550 million people have a mobile phone. 20,000 customers are to have been reached by February 2001, according to the Americans. The fertilizer company IFFCO is also making a contribution, by providing farmers with financial services. As James Carter explains, India functions differently to other economies. Forty percent of the population can neither read nor write, and farmers seldom have a bank account. The principle of interest is unknown to most. Nevertheless, these people also have financial needs that cannot be met by conventional banks. It is Suryaloks aim to improve the contact with banks, to make credit more accessible, and to enable farmers to have a share of the economic growth. Keeping expectations low Frankly, India ticks differently, as experienced India experts know. Experiences gained in other foreign countries are non-transferrable. I must warn people against having high expectations. Particularly in the initial years, companies new to the Indian market need to keep their expectations low, advises Klaus Maier, CEO of Maier+Vidorno that specialize in medium-sized companies in India. According to him, expectations of generating profit within the first six months based on the huge growth potential are unrealistic. Businesses, says Dinesh Agarwal, tax advisor and start-up consultant for many companies in India, are founded on personal relationships: Europeans

and Americans are mainly result-oriented, while Indians are more relationship-oriented. If business relations do not click on an interpersonal level, Indians often decline lucrative business prospects. Even a written contract is of limited value, in the event of the interpersonal chemistry having declined during the course of a functioning business relationship. In essence, India demands a completely different strategy. Hectronic learned the hard way. At the beginning of the decade, the measuring equipment manufacturers had a shortage of engineers at their headquarters in Bonndorf, in the German Black Forest. In Bangalore a development department for fuel pumps and a till system was planned, to cover the shortage in Bonndorf. Rather than solving problems, it caused them. The Indians knew too little about the procedures and processes associated with European filling stations at that time, but we were not in a position to provide them with information in such minute detail, says CEO Stefan Forster. For a significant period, China proved itself an alternative for the family company. Forster: I examined the market in detail. On having done so, India seemed somehow closer, its language, its legal system, its corporate landscape. However, three years later, the company had to admit defeat. We had failed, and the project was inefficient, says Forster in retrospect. But we learned a great deal in the process about how Indians understand quality, time, processes, and commercial nuances.

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Massive hurdles for business These are not the only hurdles. After the recent doing business report, the world bank ranked India as number 134 from a total of 183 countries. The country ranked a mere 165 in terms of start-ups. Bureaucracy, a slow judicial system, corruption, and protectionism remain an integral part of the countrys economy. Foreigners have it twice as difficult. They like to think that all documentation is 100 percent correct. However, the civil servants working for the government authorities see it 100 percent differently, says Agarwal. To make matters worse, supply problems make business incalculable. Power cuts are a matter of course. In a number of cities with over one million inhabitants such as Pune (formerly Poona) businesses are required to go without electricity for one day a week. The availability of raw materials is often unreliable, too: Depending on the time of year, our supply of fresh cream is non-existent. It is vital to our production, proclaims a chocolate and praline manufacturer from Delhi. Extreme fluctuations in the quality of local raw materials compound problems. Whether it is butter, chilli or nuts, no two deliveries are the same. This is a great challenge to all producers who want to offer a consistently high level of quality. However, Whoever comes to India, and expects to do business without producing here, will only enjoy limited success. In the long-term, high import duty levels makes the importation business prohibitive, says Klaus Maier. However, the free trade agree-

ment with the European Union still remains unsigned. Automobile manufacturers feel this the most. They pay between 35 and more than 100 percent import duty on all their products. As a result, almost all of them have built manufacturing facilities in the country. Recently, Volkswagen did just that, in Pune. At a staggering 580 million Euros, it is the largest single investment made by a German company in India, despite the lack of a skilled workforce and long-term quality issues relating to suppliers. Cooperation is difficult to establish Niehoffs machine manufacturing facility also had to experience its share of unpredicted complications. Since the 1970s, the company from Schwabach, near Nuremberg, Germany, had licensed the manufacture of its wire-drawing machines to a company in India. Later, the German company formed a joint venture with its Indian partner. As Heinz Rockenhuser explains, this was a mistake. Our partners were keenly focused on their own advantage and less interested in the growth of the joint company. Developing a long-term business relationship over years and the prospects of future business were less important to them. The concept of building a core of customers was foreign to them, as is characteristic of many Indian companies. Short-term gains were to the fore, concludes Heinz Rockenhuser. Hardly any company can simply transfer its goods and services from the West to India. Consumers such as commercial customers in India have clearly

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different goals. Indians are extremely sensitive to price, says Klaus Maier. Without adapting the products successfully to the uniquely individual conditions found in India, Siemens would have had no success in its 140 years in the country. Medical technology is a prime example. We localize our products sustainably, so that we can respond to demands in a cost-effective manner, says the head of Siemens in India, Armin Bruck. In India, the necessary finance is almost always lacking for Western X-ray devices or computer tomography devices that are needed to enable doctors to make quick diagnoses of inner organs. In addition, the required knowledge among medical staff and the suitable environment in which to install them is also lacking. In response to such conditions, Siemens developed product ranges which were designed to meet basic needs products that do not feature additional functions, without affecting quality. As Armin Bruck explains, Such devices need to be inexpensive, easy to use and extremely robust. Taking account of cultural factors In 2005, measuring technology manufacturer Hectronic risked a second try, this time with success. The CEO, Stefan Forster learned from the mistakes of his predecessors. In doing so, he learned about the importance of investing time in searching for suitable employees, engaging with business partners that share the same level of authority exclusively, being aware of close personal contacts, accepting seemingly incomprehensible business signals, and anticipating comparatively low levels of productivity. The chairman of Niehoff, Heinz Rockenhuser and his machine-building enterprise have also remained loyal to the country: In China, growth has ground to a halt for us. Whats more, twenty Chinese companies are copying and building our machinery illegally. We cannot compete with their prices. Something like this doesnt happen in India. By contrast, at the German Centre in Gurgaon, Martin Fuchs leads an oasis of order and reliability. There is no golden, overly decorated altar with incense sticks at the entrance, no grease-stained walls or droning air-conditioning, no exposed cables and no holes in the floor covering. The Bavarian and the Baden Wrttemberg Landesbank decided that here, German standards were to be upheld. The imperfections only become visible upon closer inspection. Broken windowpanes, caused by subsidence occurring after construction was completed, the scratches on the aluminum beams, and the stairwell doors without handles. It is India, after all.

Siemens understands our requirements


India is discovering the joys of metropolitan transit. After Calcutta had the countrys only metro system for decades, the big cities are now busily burrowing train networks into the ground. First Delhi, now Hyderabad and Bangalore and even Mumbai has plans in the pipeline. The time has come to supplement or replace the populous countrys inefficient system of buses, rickshaws, and commuter trains.

1.

Which types of cities in India are ready for its own metro system? Which one needs one most? The Indian government wants all cities with a population of over three million to have a metro system. There are ten such cities. While Kolkata and Delhi already have metro systems in operation, in five other cities Mumbai, Bangalore, Hyderabad, Chennai, and Jaipur, metro systems are under construction. Other smaller cities like Ahmadabad, Kochi, Chandigarh, and Pune are in different stages of planning. I believe that in next ten years there will be between 12 to 15 cities with metro systems, either in operation, or under construction.

2.

Does every new metro system in India need to meet the technology standards of Delhis metro? Are more simplified systems in India thinkable? Delhi Metro has redefined the way people look at mass transit systems in the country. It has set new standards in terms of technology and execution, and has become the benchmark for all future metro systems in the country. In fact, all other metro projects currently being built in the country are following Delhi Metro technology, the only exception being the gauge or the power supply. Therefore, I believe

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Traffic density increases dramatically with prosperity and growth. Main traffic routes like this one in Mumbai often resemble a car park more than a road.

that for a heavy metro system, Delhi Metro will remain a benchmark, but for light metro systems or a monorail, new technologies will be introduced. The first monorail project is already being built in Mumbai. Other cities are planning monorail or light rail networks. It is likely that if the value proposition is sound, cities may look at simpler transit systems.

3.

In industrialized countries public transport on a city level is a loss-making business. Can India change this? Public transport systems, especially metro systems, are highly capital intensive. The cost to build these systems can be recovered only through the fare box. By innovative financing, and taking advantage through property development at the stations and alongside the alignment, some costs can be recovered. This helps the project to supplement its revenue. In India, along with a financial grant, some cities are offering land to project sponsors, to make the projects financially viable. I believe that an optimal mix of a grant, and property development rights, can make metro projects viable.

4.

Your company has selected Siemens as a technology partner for the Gurgaon project. Why? Siemens was involved with our project right from the beginning of project development in 2008. They understood our requirements, and were in a position to offer the right technical solution. We were aware of Siemens technology, their local presence, and their project references. This increased our confidence level in Siemens ability to deliver this project on time.

5.

What are the specific challenges in Gurgaon? How is the project going? The project is going as per schedule. The construction of the project commenced in the first week of November 2010. All major contracts have been awarded. Since the alignment passes through commercial office blocks and residential localities, our main challenge is to build the system with minimum disturbance to the existing traffic flow. Another challenge is building an elevated depot due to space constraints in Gurgaon.

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Tightrope-walking in Venice
Futuristic and environmentally friendly transportation has taken shape in the form of a fully automatic, cable-driven train in the North Italian lagoon city known for its boats as a means of public transportation. Not only does it help reduce road traffic, the train has the potential to become an additional tourist attraction here.

When one thinks of transportation in Venice, images of gondoliers ushering passengers through the city of love springs to mind. Or the vaporetti, the boats that travel in a frequent tempo up and down the Canale Grande as part of the local public transportation system. However, since April 2010 the city in Northern Italy has been home to the new star in transportation, albeit not on the water, but above it. A so-called Cable Liner connects the island of Tronchetto with the Piazzale Roma, the gateway to the historic center of this lagoon city. The train travels between the inner city and the new service center on the man-made offshore

island, with its countless bus and car parking lots for vehicles arriving from elsewhere. The Cable Liner transports a total of 3,000 passengers an hour in one direction alone. This is carried out almost noiselessly, thanks to the use of a pulling cable rather than on-board drives. The train covers the route, which spans 870 meters, in a mere three minutes. By contrast, in the past people travelling by car and bus on the car bridge between the mainland and the island of Tronchetto needed to walk twenty minutes to get to the city center. People traveling alone often avoided the 20-minute walk

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An intelligent mover
The Cable Liner is a cable-propelled train. Its drive technology is located in the basement of its departure station, rather than on the train itself. As a result, the rail cars are 30 percent lighter than conventional models, and glide quietly along, not least thanks to their low-noise rubber tires and light steel construction. These low-energy trains reach a speed of 30 kilometers per hour and retrieve up to 40 percent of their drive power during braking. The units with a capacity of up to 200 passengers consist of four rail cars. There is no driver on board. Employees at the control center monitor the route and operation via video monitoring and can respond quickly when needed, thanks to a network of sensors. In addition, it is also possible to shorten the stopping interval where necessary. This increases frequency

of service and reduces waiting times during peak demand periods. Siemens supplied the entire electrical drive technology, the communication and control system technology for the train system, and also supplied the passenger information system. In addition, the company was responsible for the software development and start-up. The Cable Liner is not only to be found in Venice. Jointly, Doppelmayr and Siemens have fitted numerous airports worldwide with the Cable Liner, and have also supplied it to cities such as Las Vegas. The future of this technology is assured. Thanks to its comparatively lower construction and operation costs, the energy-efficient cable train is an economical and attractive alternative to conventional rail systems for short routes.

From the train station on the offshore island of Tronchetto (left) the Cable Liner takes a mere three minutes to reach the historical center of Venice.

and opted to drive to the Piazzale Roma instead, resulting in a shortage of parking spaces and chaotic traffic congestion in the city. The 20 million Euros traffic system which was realized by Siemens and the Austrian funicular railway specialists Doppelmayr not only relieves the inner city of additional traffic congestion, it also protects the environment. However, the train isnt just environmentally friendly, it enhances this tourist city architecturally. From a height of five meters, the Cable Liner glides along ropeways in seven-minute cycles over the canals. A special feature is the

180-meter-long bridge over the Tronchetto. The Venetians affectionately call it the 'gabbiano,' the Italian word for seagull, because it is shaped like a bird. The three train stations (two end-stations and the station of Marittima which is an intermediate stop) also fit aesthetically into the Venetian city. In fact, the futuristic train ride has what it takes to become an additional tourist attraction. There is just one catch for visitors to Venice, however. There are no photo opportunities with City Liner staff like the typical ones visitors take with gondoliers or colorful vaporetti captains. Why not? The train operates without a driver and is fully automatic.

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Celestial Expo pavilion Shiny parking garage The facade of the Siemens parking garage at the headquarters of the Siemens Building Technologies Division in the Swiss town of Zug is illuminated with LED luminaires made by the Osram joint venture Traxon Technologies. 1,230 luminaires with a total of 25,900 LEDs emphasize the structure of the building. Equipped with high-performance LEDs that can be flexibly controlled in terms of color and intensity, the luminaires can generate any color from the three primary colors red, green, and blue. The total power consumption per operating hour amounts to only 39.2 kW, which approximately equals the power consumption of 20 electric kettles. The World Expo 2010, which took place in Shanghai from May to October 2010, was themed Better City, Better Life. Keeping to this theme, Osram and Traxon Technologies designed the inside of the We are the World pavilion on the Expo grounds. Right at the entrance, visitors were greeted by a virtual sky with a natural daylight effect created by LEDs. Moreover, the LEDs generated several weather scenarios from sunny days all the way to thunderstorms. A total of 1,180 automatically controlled LED luminaires made the outside of the pavilion shine brightly. The spherical architecture of the pavilion posed an extra challenge to the lighting technology. Power cables in special lengths had to be made and laid to ensure optimal lighting.

New light for towns and cities


Innovative lighting concepts give a special character and charm to townscapes and buildings. But such solutions have long been considered an ecological offence with regard to sustainability. The commercial success of extremely energy-efficient LEDs, however, makes it possible to bring aesthetics, safety, cost-efficiency, and environment protection in line in the large-area illumination of buildings.

Industry Journal | 03 | 2010 | Urbanization 69

Historical illumination Lustrous event In 2008, Traxon Technologies showed in the Japanese city of Yokohama how light from a historical railway bridge can create a piece of modern art. Japans second-largest city was hosting the light event Light it up, Ninja, which was organized by LPA, Japans largest lighting design agency. All planning, as well as the date for the event, was kept secret until the kick-off. Traxon illuminated a historical railway bridge in Yokohama Bay with LED luminaires. The luminaires were installed in the steel framework of the bridge and shone in various colors. This created a symbolic link between the old and the new. In Regensburg, Osram shows that it is possible to illuminate a historic city center listed as a UNESCO World Heritage Site with LEDs in the proper style and in an energy-saving manner. The retrofit LEDs melt discreetly into the historical setting and let alleys and facades shine in new splendor. To meet the demands of an old town with a state-of-the-art illumination solution, Osram and the Regensburg branch of Siemens developed a luminaire prototype which makes it possible to replace ordinary 90 W mercury-vapor luminaires with LED luminaires. These can be loaded with a different number of LEDs on each side, which enables various forms of light distribution with a single solution that requires only 42 W.

Man longs for light in the morning darkness on the way to work as well as in the evening after a visit to the opera. Light provides a feeling of safety and creates moods. Thats why light is such an important design instrument that shapes the townscape with the illumination of historical facades, modern office buildings, and public places. The Siemens division Osram, one of the leading lighting manufacturers of the world, and the Osram joint venture Traxon Technologies, a world leader in LED lighting systems, have dedicated themselves, among other things, to city beautification. The range includes street and sign lighting, the illumination of buildings and objects, and even the use of facades as oversized multimedia displays that can transform the sky-

line of big cities into dazzling advertising spaces by connecting single, relatively small lighting elements in a way that makes them appear as a new image from a distance. Powerful LED modules are outstandingly bright and withstand even extreme weather conditions. Moreover, the LEDs are particularly durable and energy-efficient, which ensures low operating costs and protects the environment. A combination with modern lighting management systems makes possible lighting performances with color changes and effects.

70 Industry Journal | 01 | 2011 | Environment

Industry Journal | 01 | 2011 | Environment 71

Savings as requested
From June 16, 2011 on, only LV motors of energy efficiency class IE2 or higher can be placed on the market in Europe. It is estimated that the respective EU regulation will save millions of tons of CO2 emissions. In the beginning, industry was hesitant because of the procurement costs involved. However, manufacturers have now endorsed the EU regulation. The reason: the additional purchasing costs for a new motor compared to the previous, cheaper one will pay back in less than two years because of saved energy costs.

72 Industry Journal | 01 | 2011 | Environment

The EU mandates energysaving lamps. Similarly, efficient industry motors are becoming mandatory.

Pumps for chilled water, for example, consume a great deal of energy. Energy-saving motors, on the other hand, amortize quickly.

In a few months there will be no going back. Its quite simple. If you do not have one by now, you are not going to get an IE1 motor: effective June 16, 2011, only high-efficiency motors meeting the International Efficiency class 2 (IE2) can be placed on the market in Europe.

The basis for this measure is a new EU regulation addressing low-voltage three-phase asynchronous motors. What is being are frequently its The processes and intentions regulated are the minimum energy costs. of these changes are much like energy-efficiency requirements the gradual phasing out of confor asynchronous three-phase ventional light bulbs from Eumotors with an output between 0.75 kW and 375 kW. The objective of the ruling: ropean households: since the EU prohibited the sale of clear 100-watt bulbs in September 2009, to limit the energy consumption of industrial conventional light bulbs are increasingly being electric motors across Europe so as to improve replaced by energy-saving bulbs. Their total disboth climate protection and resource efficiency. appearance from the market has been planned Its an action that carries a great deal of potential, for 2012. But energy-saving bulbs are not to everybodys liking some people have frantically because from a global perspective, asynchronous stockpiled the old bulbs. motors are used more than any other electric

95%

motor. They are implemented in ventilators, pumps, compressors, mills, and rollers ranging from the chemical industry, machine tooling, print shops, and material handling technology up to the ship building industry. The world market volume for low-voltage motors reaches close to 6 billion Euros per year. In Europe alone, they of the lifecycle costs account for sales figures in the millions. for an electric drive

Industry Journal | 01 | 2011 | Environment 73

The new IE2 drives will be used for conveyor technology as well.

High demand for motors of all classes While IE1 motors dont lend themselves very well to stockpiling considering their high investment costs and large storage areas involved, the industrial sector nevertheless has placed reserve orders for discontinued models. During the past months we have observed a precautionary trend in buying motors of the lower efficiency class IE1, reports Joerg Hassmann, Cluster Chief of low-voltage motors at Siemens Industry Drive Technologies. However, we also have many other customers who are already switching over in a large way to the new IE2 motors. Small wonder: the ecological and economic advantages of cost-effective IE2 motors are on the same footing as their unwillingness to admit to the higher degree of efficiency and reduced current consumption. Competitors act in concert For years, Siemens Industry has been looking into the EU regulation. The European motors

and drives manufacturers were involved in the normative process by the Commission via the Commit Europen de Constructeurs de Machines Electriques et dElectronique de Puissance (CEMEP). That was very forward-looking, says Hassmann, because changes with such far-reaching consequences as these need expert knowledge based on practical application. Although prior to the final EU decision many competitors of varied interest met at the round table, a consensus was reached nevertheless. From an ecological perspective, the IE2 motors offer nothing but advantages. Electrical drives are the basis for nearly all industrial production. The leverage obtained with this decision has an enormous effect on reducing CO2 emissions, explains Joerg Hassmann. But there are also sizable economic advantages. Based on lower energy consumption, the operating costs for IE2 motors are much lower than those for their predecessors. These are weighty arguments, because the energy costs of a drive could amount for up to 95 percent of its lifecycle costs.

74 Industry Journal | 01 | 2011 | Environment

International standard IEC 60034-30 establishes the new efficiency classes for asynchronous drives: IE1: Standard Efficiency, comparable to Eff2 IE2: High Efficiency, comparable to Eff1 IE3: Premium Efficiency, effective beginning January 2015 for motors between 7.5 kW and 375 kW IE4: Super Premium Efficiency, already proposed in one of the guidelines

2009 IE2 for all motors


(according to EU regulations 640/2009)

2010

2011

2015

Change in law beginning 6/16/2011 IE2 mandatory minimum energy efficiency for asynchronous motors 0.75 kW 375 kW

IE1/IE2 motors
available from Siemens

11/1/2009

Since 11/1/2009 Siemens labels standard motors in accordance with IE data

IE1 and IE2 available for asynchronous motors 0.75 kW 375 kW

Ecodesign for motors implementing EU framework directive The background for the EU regulation 640/2009 of July 2009 is a European Directive of 2005 establishing a framework for the setting of ecodesign requirements for energy-using products that show both considerable environmental effects as well as potential for improving their impact on the environment without entailing excessive costs. These are criteria that seemed to be tailor-made for industrial low-voltage motors. Electric drive systems were literally predestined for eco-design specifications, confirms Ismo Groenroos-Saikkala, policy officer in charge of the regulation in the European Commission. For industrial operations that use motors for their production processes, electric motors consume most of the electricity. In the member states, drive systems consume about 70 percent of the overall industrial energy consumption, Groenroos-Saikkala states. The energy efficiency of these drive systems can be cost-effectively increased by 20 to 30 percent. One of the most important factors is the use of energy-efficient motors.

Saving 63 million tons of CO2 by 2020 In a preparatory study preceding todays regulations, the EU Commission analyzed the technical, environmental, and economic aspects of electric motors. The results: from an environmental perspective, the energy consumption during operation is the most important phase of this type of drive referenced to the entire lifecycle. In 2005 alone, the electricity consumption of electric motors reached 1,067 terawatt-hours. This corresponds to emissions of 427 million tons of CO2, continues Groenroos-Saikkala. Without taking specific actions to curb emissions, the number will climb to 1,252 terawatthours by 2020. The new regulations will significantly increase the market penetration of technologies designed to improve the environmental compatibility of electric motors during their operating life. The objective is to reduce current consumption by 135 TWh and CO2 by 63 million tons until 2020. Thomas Holzmann, Vice President of the German Federal Environment Agency, explains the effect of these actions on energy-saving motors

Industry Journal | 01 | 2011 | Environment 75

Whether they are used for producing spools of thread or running logistics IE2 asynchronous threephase motors will permeate all industrial branches of Europe.

in the Federal Republic: In this country alone, we will be able to save approximately 27 billion kWh electricity by the year 2020. In turn this reduces CO2 emissions by approximately 16 million tons. This means it will not be necessary to build eight large-scale power plants each producing electric power of 700 megawatt each. Amortization in less than two years

it amortizes in one to two years based on the energy costs saved. Although IE2 motors create a win-win situation for the company and the environment, the step to buy these new motors is not taken lightly. On the one hand, it calls for additional financing. On the other, investment decisions are usually made without focusing on the total cost of ownership and lifecycle costs.

As impressive as these numbers Whats needed is conviction, are, environmental aspects are plain and simple not the only factor affecting investment decisions. The focus Hans Dieter Poenisch knows actually centers on the economfrom experience. Working in ic feasibility of the investment. the motor department of Erich This question does not frighten Schaefer KG in Siegen, he is reof the entire energy the manufacturers of IE2 drives sponsible for supplying motors if anything it does just the opto manufacturers from the supconsumption by posite. The degree of efficienplier industry, mechanical enindustry is due cy of IE2 motors lies between gineering, and pump manufacto electric drives. two to seven percentage points turers. Although the slightly higher than for IE1 motors. Due higher price for energy-saving to their low energy consumpmotors is acceptable, we have to tion, the motors amortize quickly despite deal with a huge communication task. possibly higher purchasing costs as compared to previous models, says Joerg Hassmann. If Since lawmakers did not contribute a great deal this type of motor runs in two-shift operations, toward communication, it is the responsibility

70%

76 Industry Journal | 01 | 2011 | Environment

A highly effective sales argument


Knoll Maschinenbau GmbH located in Bad Saulgau specializes in feeding, filtering, and pumping contaminated coolants and chips. The family-owned company employs 730 people. The head of procurement, Peter Ludewig, and Anton Forstenhaeusler, section leader for electronics, informed us how the stricter legal requirements affect a mid-sized company.

When did the EU regulation for IE2 motors become an issue for you?
Peter Ludewig: We have been dealing with it since the spring of 2010. While the higher price spoke against it initially, the decision to change over to IE2 motors was made in the summer.

of manufacturers and distributors. Yet many customers have already spent some time on this topic as well. The rest will come in the following weeks and months. According to Poenisch, special requests deserve faster processing. Standard motors can be configured and ordered without difficulties. However, we do have an appreciable number of customers who cannot simply exchange their motors for standard drives. They require special developments that need time. Although our inventory is especially well

stocked, customers with special requirements need to act now because delivery times for these special requests will take longer. To be able to optimally handle requirements of this type, the conveyor and drive specialist at Erich Schaefer began working closely with Siemens prior to the conversion. During the last two years, we have responded to many open questions generated in context with customerspecific solutions, reports Poenisch. Aside from that, the documentation and online material of Siemens helped us pass legal requirements to our customers throughout Europe, to explain

Industry Journal | 01 | 2011 | Environment 77

How will the new motors be implemented?


Ludewig: That question involves up to 5,000 to 6,000 motor/KTS pump units. KTS is our series of high-pressure screw jack pumps with pressures up to 120 bar for supplying internal coolant. We plan to deliver the KTS high-pressure pumps including 1LE1 IE2 motors from Siemens by the end of the first quarter of 2011.

been very helpful. Whats more, they also supported us in specifying low-noise designs, UL certification and in-country voltage levels.

How do you feel about the EU specifications?


Ludewig: I think they are positive. This is the only way to create changes, similar to the next efficiency phase with its changeover in 2015. However, to date exceptions to the rule are not very transparent.

What were the preliminary tasks you had to meet first?


Anton Forstenhaeusler: As a first step, the technical data and the sizes had to be adjusted because the ILE1 is somewhat longer than the previous 1LA7 when using the same flange drilling diagram. Afterwards we integrated the changed measurements into the internal documentation. This is relatively expensive. One of the great challenges to be dealt with was repeat versions as well as repeat orders. Because we have so many customer-specific series in our program, this meant that we had to check them all and adjust them, if necessary.

What are the effects of this conversion on your business?


Ludewig: The improved power efficiency and the lower noise development of the motors are a very good sales argument. The additional costs for IE2 motors amortize in less than a year for customers that run three shifts. The electric connection using a diagonally split terminal box optimizes the electric connection. The fact that the flange and voltage ranges correspond to those of predecessor motors, greatly facilitates the changeover.

Were you supported by the manufacturer within the framework of the change-over?
Forstenhaeusler: Corporation with Siemens was excellent. The kick-off meeting motivated us in-house, and we started the IE2 conversion on time. Also we were in constant touch with Siemens employees who have

Are there also indirect effects?


Ludewig: Our business with frequency converters is among the positive effects that accompany the change in business. As a technical leader, we offer upgrade kits with frequency converters. In total, we revived our service business by moving through the necessary retrofits.

the need for change, and last but not least, communicate the huge advantages of energyefficient motors. Two-tier strategy Erich Schaefer gladly accepts these challenges. After all, the EU regulation revitalized the motor business this goes for IE1 drives as well. They continue to be approved outside the EU and are exported in greater numbers than before due to the fixed time frame available for export. At the moment, we are operating a two-tier strategy, says Poenisch. First, we are focusing on the

increase in demand for old drives. And second, we have many customers who bought a motor in the new efficiency class, recognized its advantages, and immediately started large-scale retrofit actions. And that tendency will increase further. In the meantime, the professional world agrees that motors with an optimized ecodesign are highly advantageous. For the salesman Poenisch, it is quite clear that customers who decided for the first time to buy an IE2 motor wont regret their choice.

78 Industry Journal | 01 | 2011 | Environment

Polar regions: benefits for shipping traffic North America: forest fires and water shortages
In the future, North America will be hit harder by extreme heat waves. On the one hand, this will increase the danger of forest fire. On the other hand, energy consumption caused by cooling and air- conditioning systems will grow considerably. Snow and melting water flows will increasingly vanish from the western mountain ranges, the Rocky Mountains and the Sierra Nevada, for example. This threatens the drinking water supply of California. The heavily populated coastal regions must expect to see storm surges of great intensity, which can even exceed the magnitude the disastrous hurricane Katrina reached in 2005. Thawing permafrost threatens the entire infrastructure in the Arctic Circle houses and roads as well as pipelines. Disappearing Arctic ice endangers the natural habitat of local mammals such as the polar bear. For traffic, climate change entails both positive and negative aspects: while shorter frost phases mean smaller time windows for land transport, Arctic sea lanes, from Northern Europe to Japan, for instance, will be more easily navigable.

Central and South America: floods in large cities


Inhabitants of low-lying cities on the Atlantic coast, such as Buenos Aires, Montevideo, and Salvador, will have to expect heavy floods and storm surges due to sea level rise. Rising temperatures and decreasing soil water content are increasingly destroying the rain forest in the Eastern Amazon region. More and more parts of this habitat are being replaced by grass and bush savannah with menacing consequences for biodiversity (see p. 80).

The consequences of climate change


Climate change is progressing, exacerbating problems like drought, storm, and flood events. However, the second part of the report by the Intergovernmental Panel on Climate Change (IPCC) shows that there are not only detrimental effects: some regions will benefit from higher crop yields, larger drinking water reserves, and a better supply of wind energy, for instance.

Industry Journal | 01 | 2011 | Environment 79

Europe: higher crop yields in the north


Climate change also offers some advantages in the form of higher crop and forestry yields. Moreover, offshore wind power production will grow. However, flood risk will rise throughout Europe due to heavy precipitation. Floods caused by sudden warm weather conditions and melting snow during winter time will particularly hit Central and Eastern Europe. Southern Europe must expect more and more severe heat waves that will lead to forest fires and crop failures as well as increasing water shortages resulting in declining hydropower production.

Download the entire IPCC report: www.ipcc.ch

Asia: floods diminish harvests


Glacier melt in the Himalaya mountain system in the north of the Indian subcontinent will continue as global warming progresses. Mountain lakes will overflow and cause flash floods. The water level of rivers will rise a major risk for the inhabitants of the densely populated estuaries of large rivers on the coasts of the Indian and Pacific Oceans. Steadily decreasing precipitation and long hot spells will reduce crop yields in Central Asia, which will entail a higher risk of famine.

Africa: fishery and tourism suffer


The destruction of mangrove swamp forests and coral reefs continues. This will lead to the collapse of important sources of income, such as fishery and tourism. Periods of drought will grow both in number and in intensity. Water shortages and famine are, therefore, critical threats for the majority of the population.

Australia and New Zealand: storms, but also more drinking water
Heavy droughts and forest fires primarily threaten South and East Australia. Coastal regions in particular must expect violent storms and floods. Nature reserves, such as the Great Barrier Reef, are threatened by a massive extinction of species. New Zealand, on the other hand, could benefit from global warming below one degree Celsius through longer periods of growth and larger drinking water reserves.

80 Industry Journal | 01 | 2011 | Environment

Humankind needs an extra Planet Earth


Total consumption of natural resources compared to annual production capacity on earth In less than just 20 years, humankind will consume twice as much natural resources as the earth can produce, if things progress unchanged. This simply cannot work. Only an urgent switch to sustainable development can solve this dilemma.

3.0 2.5 2.0 1.5 1.0 0.5

Development to date Sustainable development


Source: Global Footprint Network

1961

1965

1970

1975

1980

1985

1990

1995

2000

2005

2007

2030

2050

Planet in a stranglehold
The variety of plants, animals, and microorganisms on earth, and the complex way in which species interact, forms the very basis of human existence. The Living Planet Report 2010 published by the World Wide Fund for Nature (WWF) shows just how endangered our variety of species on earth is, and it names the cause the world populations growing demand for natural resources, land, and food.

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Each year, we consume faster than the Earth can produce

On this day, the years renewable resources had already been fully depleted. 1976 1980 1985 1990 1995 2000 2005 2010 January 1 10.09 21.08 09.10 06.11 22.10 07.12 30.12 11.12

The table shows that in 1976, the earth could produce as much natural resources as humanity required. Since then, the worlds population has been living on its reserves. Calculations show that by the middle of August, the consumption of resources would need to stop entirely, in order to avoid living on credit.
Source: Global Footprint Network

December 31

The situation is serious: no less than 130 animal and plant species die out worldwide, every day. That amounts to 50,000 a year. In Europe alone, 42 percent of mammals, 45 percent of butterflies, and 52 percent of freshwater fish are considered endangered species. Most of them are an important part of our ecosystem and with it, the global climate. As they become extinct, the earth loses an important regulatory asset in the reduction of CO2 levels in the earths atmosphere, and with it, part of the basis for human life. Just how threatening the situation has become for biological diversity on earth is illustrated by the Living Planet Report 2010, published by the World Wide Fund for Nature (WWF) in cooperation with the Zoological Society of London and the Global Footprint Network. The report describes how biological diversity has changed since the middle of the previous century and the role that humans have played in bringing about this change. As a result, the vertebrate population alone has dropped drastically in the past 30 years. Three indicators that describe the situation The main cause of the extinction is humankind. Already consuming more raw materials and natural resources than the earth can produce in the long term, humanity robs plants and animals of their natural habitat. Under this extreme strain, the regeneration capability of the planet suffers enormously. Ever more naturally occurring environmental phenomena, such as climate regulation via CO2 absorption or the reduction of erosion and flooding by forests, are lost.

The Living Planet Report 2010 points this out by using three indicators; the Living Planet Index (LPI), the ecological footprint of humankind and the water footprint of products. The Living Planet Index is based on about 8,000 vertebrates, whose populations are regularly examined by the WWF. In a similar way to a share index illustrating the development of value of a sum of selected stocks, the LPI shows how ecosystems are changing. According to this, the trend is dramatic. From 1970 to 2007, biodiversity has fallen by 28 percent. The difference between the earths climate zones is remarkable. While the LPI for the tropics has fallen by about 60 percent since 1970, the index for temperate zones including the polar regions shows an increase of 29 percent. Increase in industrial states A possible cause of this apparent positive development in temperate zones is that many species in such regions had actually already borne the negative effects of global agricultural expansion and industrialization decades before the survey began in 1970. The result is a comparatively lower starting value of plant and animal species. Thanks to increasingly stringent pollutant emission controls and increased nature preservation, resources can recover slowly. That is the good news. On the other hand, since the 1950s, falling LPIs in the tropics reflect the everincreasing demand placed by agriculture and industry on natural environments there. With global population growth, the consumption of natural environments and resources increases further, and with it the threat to bio-

82 Industry Journal | 01 | 2011 | Environment

Poorer countries such as Africa and parts of Asia suffer under the strain of the global consumption of resources, such as drinking water shortages and flooding. In Brazil, like here in the state of Mato Grosso, what remains after deforestation is apparent.

diversity. The Living Planet Report illustrates this by determining the ecological footprint left behind by humans consumption of natural resources. This value is symbolized by the surface area that is necessary to secure the current living standard of the worlds population in the long term. This includes the required surface area for the production of food and consumer goods, for energy generation, for waste disposal, or for the absorption of CO2. Humanity is living beyond its means Current figures show that humankind is consuming renewable resources quicker than the environment can replenish them. Furthermore, it releases more CO2 into the atmosphere than the earth can absorb. The ecological footprint of humans has already overshot the earths natural raw materials production by 50 percent. In other words, humanity consumes 1.5 times the amount of raw materials that the earth can produce per year it is simply being sucked dry. Maintaining the current regeneration capability and increasing it is just as important an issue. The opposite is the case, however. The so-called CO2 footprint of humanity which makes up about half of the ecological footprint is mainly responsible for this. It determines the

amount of forest that is statistically necessary for emitted CO2 to be absorbed. This theoretically necessary amount of forest has increased elevenfold since 1961 and since 1998 it has increased by about a third. However, instead of engaging in extensive forestation, humanity continues to consume more and more forest for building materials, for living space, for agriculture, for transportation, and for generating energy. Annually, 13 million hectares of forest disappeared between 2000 and 2010. This is about the size of Greece, year in, year out. Poverty caused by a lack of forestation Almost 90 percent of all living creatures that live on land live in forests. Not only is the depletion of forests bad for species, according to a survey carried out by the world bank over a billion humans living in poverty are directly dependent on forests and their environs for survival for example as a source of fuel and building materials or as a source of livelihood through tourism. The ecological footprint left behind by humanity on fish stocks is also apparent. The increasing demand for fish and fish products globally, together with the use of huge fleets and aggressive fishing methods that result in large

Industry Journal | 01 | 2011 | Environment 83

Why biodiversity is important


Medicine: Current medical practice worldwide utilizes between 50,000 and 70,000 types of plants in its medications, around 15,000 of which are already endangered. Almost 80 percent of the worlds population use traditional plants as a source of active ingredients for their health care. Economy: Renewable energies such as timber or biomass play an important role in the overall energy supply, particularly in developing countries. Timber, oil, dyes or medicinal plants are more than just a part of the ecosystem; they provide industry with raw materials. Society: Nature achieves something that humans can only achieve with extensive investment of resources: the earth cleans groundwater for instance. Furthermore, the natural pollination of cultured plants by insects remains technically irreplaceable to date. Climate protection: Rain forests and marshland ecosystems are important sources of carbon storage. More than a fifth of worldwide CO2 emissions are caused by deforestation and altered land usage.

tries consume more freshwater than they can cover with their own reserves, among them important producers of agricultural products such as India, China, Israel, and Morocco. A further 71 countries are finding themselves faced with the same dilemma. Worldwide, the shortage of drinking water is set to increase as a result. Industrial waste goes unfiltered A further problem is increasing water contamination. Daily, 2.5 million tons of untreated and wastewater lands unfiltered in our waterways. The situation is particularly dramatic in developing countries: there, according to a UN study published in 2009, around 70 percent of untreated industrial waste ends up in drinking water, endangering drinking water supplies. Should humanity continue to live beyond its means, the future looks grim, according to the Living Planet Report. It states that by 2030 it will take two planets to meet the demand for raw materials needed to maintain current living standards. Consequently, more people must make do with fewer natural resources. As a possible solution to this problem, the authors of the report recommend increased forestation of existing forests and plantations. Not only would this make more timber available along with allowing more CO2 to be absorbed, mountain forests would provide protection from avalanches, and mangrove forests in coastal areas would serve to minimize the destruction caused by tidal waves. The biggest challenge for humans will be the reduction of its CO2 emissions, however. The WWF believes that it is both necessary and possible to supply the population of the world with clean, renewable energy. Additionally, more investment in energy-efficient buildings and energy-saving transportation systems is needed. The next unavoidable necessity is using biofuel rather than fossil fuels such as coal or oil. However, according to WWF calculations, it would take around 200 million hectares of additional forest area to cover the future energy demand alone, an area the size of Greenland. The WWF Living Planet Report 2010 is available for download at wwf.panda.org.

quantities of unused bycatch, have led to massive overfishing. To make matters worse, state subsidies all too often encourage the catching of endangered fish species. Cumulatively, this means that around 80 percent of fish species on earth are already endangered. OECD states are the big consumers The Living Planet Report goes on to show the marked contrast between how humans in various countries affect the earths ecosystem. If everyone on earth consumed resources as extensively as the average American or inhabitant of the United Arab Emirates, the earths population would need four earths in total in order to meet their demand for raw materials. In 2007 the 31 comparatively wealthy OECD states alone contributed almost 40 percent of the total ecological footprint of humanity. By contrast, Southeast Asian countries together with the African states generated a joint total of twelve percent of the global footprint. In addition to the ecological footprint, the water footprint of products is also a measure of human demand on natural resources. It amounts to the total quantity of drinking water needed by the population of a country for the production of its goods and services. According to this, 45 coun-

84 Industry Journal | 01 | 2011

How does

... a PLM Software concept work?


Planning phase
In this early phase, the digital factory ideas converge in a PLM concept. All of the data related to the virtual product is combined with the virtual production data, and material flows and production processes are simulated and optimized. In addition, the cooperation with suppliers and manufacturers of the production machines is brought together into a large model during this phase. The advantage is that findings from the production simulation can flow directly to the product developers and planners. As a result, the end product is already optimized during the production planning process, based on realistic values. This shortens time-to-market and increases the number of new product launches. Production productivity and efficiency increase significantly.

Everything from the idea to design and development of the final product, including planning and optimizing the entire production process comes from a single source and uses a consistent database. This is the idea behind a PLM (Product Lifecycle Management) software concept. The entire product lifecycle is thus fully integrated and can be managed with great flexibility, from start to finish.

Design phase
All important decisions for the later product are made during this phase. The more intelligent the product implementation, the greater the likelihood that the product will be successful on the market. In addition to the forms that the products take, mechanical and electrical components as well as complex electronics and software need to be designed and coordinated. The more these disciplines can be networked and the more that development can be transformed from a parallel or sequential process to an integrated approach, the shorter the time-to-market will be. Software solutions such as NX, the PLM design program from Siemens, cover not only graphic development but also a wide range of simulations. With these solutions, aerodynamic processes can be represented and optimized, using virtual prototypes. They also eliminate expensive design errors in handmade prototypes from clothes irons to jet airplanes.

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This increases competitive strength and cuts time-to-market by up to 50 percent. To accomplish this, a wide range of expertise, concepts, and technologies need to be harmonized a challenge for all manufacturing industries.

Production
For optimum production design, the desired product characteristics must be identified early on. Simulating production virtually, on the basis of a realistic model at an early stage, improves the ability to design the process for maximum manufacturing efficiency. This requires software solutions that are based on open standards and that can be used to exchange data between the relevant organizational units within the company, competencies, suppliers, and equipment providers smoothly and without any interruption in media. Production can thus be optimized virtually across all disciplines worldwide, even before a real product prototype is created. This all leads to particularly transparent production that realistically reflects requirements for machines and personnel early on. The Tecnomatix software from Siemens optimizes factory layouts and organizes the flow of goods. With virtual production, bottlenecks can be visualized and problems can be addressed before hard-to-reverse circumstances arise.

Support
An important phase in the product lifecycle is the operating phase. The better a product can be serviced, the easier it is to carry out that service, which can lead to a more reliable product with a longer lifecycle. This is particularly true of products with especially long lifecycles, where investment costs pay off only after a relatively long period of time as is the case with aircraft and oil rigs. This makes it clear that continuous product improvement and the addition of new and enhanced technologies are long-term objectives that can be achieved with modern, softwarebased support solutions. The Siemens Software Teamcenter ensures that, starting in the design phase, all relevant product data is reviewed and optimized to ensure alignment with the important support steps that will need to be carried out later.

86 Industry Journal | 01 | 2011

Imprint
Industry Journal
Creating sustainable value through technological leadership

Editorial staff
das AMT Gesellschaft fr individuelle Kommunikation mbH & Co. KG Andreas Jung (CEO) Tiessenkai 10 24159 Kiel, Germany www.das-amt.net

Photo credits
Getty images: cover, p. 2, pp. 10/11, p. 24, p. 30, p. 31, pp. 42/43, p. 46. left, p. 71, pp. 78/79, p. 80, p. 82 left, p. 82 right above, p. 82 right below Thinkstock: p. 44, p. 66, p. 78 left above, p. 78 right above, p. 78 below, p. 79 left above, p. 79 left below, p. 79 right below STRATO AG: p. 32, p. 33, p. 35 AS&P Albert Speer & Partner GmbH: p. 55, p. 56 (Visualization: Csaba Horvath), p. 57 (Visualization: Emptyform, Darmstadt, 2006) Robert Fischer: p. 55 right Stev Bonhage/Red Bull Photofiles: pp. 36/37 Predrag Vuckovic/Red Bull Photofiles: p. 38 above Yasir Nisar/Red Bull Photofiles: p. 38 above Brian Nevins/Red Bull Photofiles: p. 38 above Sergio Urday/Red Bull Photofiles: p. 38 above Getty Images/Red Bull Photofiles: p. 38 below Lorenz Andreas Fischer/Red Bull Photofiles: p. 38 below Garth Milan/Red Bull Photofiles: p. 38 below Red Bull: p. 39, p. 40, p. 41 Vgele AG: p. 61 ITNL Enso Rail Systems Ltd.: p. 64 KNOLL Maschinenbau GmbH: p. 76 All other images: Copyright Siemens AG

Published by
Siemens AG Industry Sector Communications Werner-von-Siemens-Str. 50 91052 Erlangen, Germany journal.industry@siemens.com

Contributors to this issue


Christian Buck, Anja Dilk, Maximilian Geyer, Stefanie Heinrich, Nele Husmann, Andreas Jung, Heike Littger, Mirjam Mller, Volker Mller, Jochen v. Plskow, Ulrich Sendler

Editor
Gerald Odoj Siemens AG Industry Sector Communications Erlangen, Germany

Creation
feedback communication GmbH Hendrik Leyendecker (CEO) Hannah Egelseer (project management) Mario Kienel (art direction) Geisseestrasse 63 90439 Nuremberg, Germany www.feedback-communication.de

Concept
Matias Ernst, Thomas Thiele, Sandra Httenrauch, Reiner Schnrock (Siemens AG) Andreas Jung (das AMT GmbH & Co. KG) Hendrik Leyendecker (feedback communication GmbH)

Print
Mediahaus Biering GmbH Freisinger Landstrasse 21 80939 Munich, Germany www.biering.de

Copyright
Siemens AG 2011 All 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.

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