MIT Manufacturing Summit US Manufacturing impressions from a

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MIT Manufacturing Summit US Manufacturing impressions from a Global conglomerate Cambridge, October 2011 ©

MIT Manufacturing Summit US Manufacturing impressions from a Global conglomerate Cambridge, October 2011 © Siemens AG 2011. All rights reserved

Overview of Siemens origin & growth Innovation has been making Siemens strong for over

Overview of Siemens origin & growth Innovation has been making Siemens strong for over 160 years Outstanding innovation and sales development of Siemens AG, since 1847 Sales, in logarithmic scale like Siemens « Acancompany only be lastingly successful with technologically superior products. We must constantly produce innovations that give us an advantage over the competition. "Eurosprinter" » Start of production of highly integrated LSI circuits Heinrich von Pierer, shareholders' meeting Jan 23, 2003 ISDN "HICOM" First GSM mobile phone with color display Digital EWSD telephone exchange World's first pacemaker from Siemens First Siemens radio receiver First pointer telegraph 64 kbit storage First Simatic First 256 Mbit chip Magnetom ICE 3 W. v. Siemens develops Dynamo 1847 Page 2 1866 Electric train Sensor "Fingertip" First traffic light 1879 1924 1926 "Synapse 1" 1958 1959 1973 1974 '80 '81 '82 '84 '92 … '03 © Siemens AG 2011. All rights reserved

Siemens has 4 Sectors, with 60, 000 employees and Overview of Siemens businesses $25

Siemens has 4 Sectors, with 60, 000 employees and Overview of Siemens businesses $25 Billion in revenue in the US during FY 10 & size Siemens Sector & Division setup, with employees & revenue (USD) for FY!0 Industry Automation Drive Technologies Energy Fossil Power Generation Renewable Energy Healthcare Imaging & IT Infrastructure & Cities Building Technologies Medium & Low Voltage Workflow & Solutions Smart Grid Customer Services Oil & Gas Diagnostics Power Transmission Key FY 10 information Global Employees: 405, 000 US Employees: 60, 000 Page 3 Mobility Osram Global Revenue: US Revenue: $104 Billion $25 Billion © Siemens AG 2011. All rights reserved

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

A review of Siemens Mfg landscape, shows opportunities & challenges exist in the US US mfg overview & comparison US manufacturing overview Siemens Manufacturing Overview United States § Nearly 100 manufacturing sites across US § All four Sectors & all of the divisions have US manufacturing facilities § Locations in all 50 states § Sites originate from both investment & acquisition § Limited return to US once off-shoring occurs Germany § Majority of manufacturing capacity with continually heavy investments in automation § Off-shoring generally for non-critical components Rest of World, mainly emerging markets § Traditional focus on low-cost, low-value mfg § Recent shift to local-for-local & local-for-global Page 4 Current opportunities for Siemens in the US § ~3, 000 open positions in US § Majority are manufacturing related § Average potential salary ~$89, 000 § Refocus on US manufacturing § Exchange rates helping to maintain competitive US costs / investments § Perception that intellectual property needs to be preserved in US & EU Current challenges for Siemens in the US § Identifying candidates & hiring for open positions § Remaining cost competitive § Ensuring continued innovations in both products & mfg processes © Siemens AG 2011. All rights reserved

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

Examples of global mfg strategies, resulting in an expansion of US-based mfg value-add Mfg project examples that I led Global manufacturing strategies followed a process to obtain results Manufacturing strategies Energy Sector § Workshop footprint strategy Industry Sector § EBIT improvement & manufacturing best practices Page 5 Process & evaluation § Identify required core competencies § Generally based on market differentiators § Can include considerations for IP & trade secrets § Evaluate existing capabilities & future demand § Determine location & workforce to deliver core competencies § Develop a detailed business case: § Rationale for changes § Financial analysis (NPV, cashflow, P&L impact) § Project timeline § Risk assessment & mitigations Results Energy Impacts § Opened a new site in the US § Based on a manufacturing innovation § Enhanced product portfolio, while reducing costs Industry Impacts § Shifted high value-add work to US for customized products § Increased focus on high margin customized solutions § Low skill & high-run-rate work remained in Mexico facility © Siemens AG 2011. All rights reserved

Siemens’ Healthcare portfolio designed to enhance Current area of patient outcomes from diagnosis to

Siemens’ Healthcare portfolio designed to enhance Current area of patient outcomes from diagnosis to treatment responsibility Siemens Healthcare portfolio overview Understand the patient‘s disease § Diagnosis of a disorder (e. g. infection, cancer, …) § Localization of disease (e. g. stenosis, tumor, …) § Reveal multi-morbidities Imaging, Diagnostics Page 6 Understand the patient‘s biology § Genetic pre-disposition § Patient metabolism / immune reactions § Molecular specificities of the disease § Stratification for treatment Molecular applications Leverage state-of-the-art databases § § Assessment of similar cases Structured outcome analysis Decision support systems Standards of Care Healthcare IT © Siemens AG 2011. All rights reserved

Trends in Healthcare require improvements in innovation & manufacturing Trends in my area focus

Trends in Healthcare require improvements in innovation & manufacturing Trends in my area focus on innovation & manufacturing Healthcare market trends with needed responses and statement from Eric Spiegel Market trends Need for improved healthcare § Growing & aging population § Emerging rural healthcare § High growth in emerging markets § Increasing demand for healthcare services § Diverse & scattered customer base § Cost pressure (e. g. Deficit Reduction Act) § Financing problems § New structure of competitors § Innovations needed to drive customer & Siemens cost reductions § Improved processes & workflows § Disease orientation § Healthcare IT § New applications & clinical pathways § Flexible and customer-specific IT solutions Page 7 © Siemens AG 2011. All rights reserved

Closing statement – invest in education & training statement as said by CEO of

Closing statement – invest in education & training statement as said by CEO of NA “The old jobs are not coming back. We need to invest in education and training to get people prepared to fill these high-skilled, high-wage jobs of the future” – Eric Spiegel, president & CEO of Siemens Corp (NAFTA) Page 8 © Siemens AG 2011. All rights reserved