Chapter without image
International Supply Chains:
Challenges, Opportunities
and Partnerships
28 March 2012
Andrew Lister
Head of Procurement & Materials
Page 1
March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Contents
• Siemens Overview
• The Siemens UK Rolling Stock Maintenance Portfolio
• Challenges
• Opportunities
• Partnerships
• Summary
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Siemens – global Sectors
Industry
Industry
Automation
Drive
Technologies
Customer
Services
Metal
Technologies
Infrastructure &
Cities
Energy
Building
Technologies
Low and Medium
Voltage
Fossil
Power Generation
Renewable
Energy
Smart Grid
Oil & Gas
Mobility and
Logistics
Workflow &
Solutions
Service
Diagnostics
Healthcare
Cross-sector
activities
Imaging & IT
Siemens Financial
Services
Clinical Products
Rail Systems
Osram
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Siemens – Rail Systems
Rail Systems
High Speed and
Commuter Rail
 High speed and intercity
trains
 Commuter and regional
trains
 Components
 Refurbishment
Page 4
Metro, Coaches and
Light Rail
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March 2012
Metro rail cars
Passenger coaches
Tramcars and light rail cars
AGT rail cars
Components
Refurbishment
Locomotives and
Components
Customer Services and
Transportation Solutions
 Electric and diesel-electric
locomotives
 Propulsion and control
components
 Bogies for metros,
tramcars, high speed trains,
and locomotives
 Electrical equipment and
traction systems for rail cars
 Refurbishment
 Maintenance of rolling stock
and infrastructure
 Spare parts service
 Test and validation center
 Repair center
 Consulting and
system design
 System engineering, project
and interface
management
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Twelve Fleets, Eight Operators
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67x4 car Desiro EMU (AC)
Maintenance – Northampton/Crewe
Staffing – 70
Contract – Full Service, 20 years
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14x4/5 car Class 332 EMU (AC)
5x5 car Class 360 Desiro EMU (AC)
Maintenance – Old Oak Common
Staffing – 42
Contract – Full Service, 19 (2) years
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16x4 car Class 380 EMU (AC)
22x3 car Class 380 EMU (AC)
Maintenance – Shields, Glasgow
Contract – TSSSA, 10 years
127x4 car Class 450 Desiro EMU DC
45x5 car Class 444 Desiro EMU (DC)
Maintenance – Northam / S'Hill
Staffing – 200
Contract – Full Service, 20 years
 Metronet Central Line Contract
 1420 Bogies to modify
Maintenance
Facilities
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51x3 car Class 185 Desiro DMU
Maintenance – Manchester/York
Staffing – 130
Contract – Full Service, 8 years
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16x4 car Class 333 EMU (AC)
Maintenance – Leeds
Staffing – 22
Contract – Maintenance, 35 years
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21x4 car Class 360 Desiro EMU AC
Maintenance – Ilford
Staffing – 25
Contract – Maintenance, 7 years
 Eurostar Trains and Service
 10 x e320 Velaro High Speed
 TSSSA – 10 Years and Depot
Modifications
Scope of supply
 Full service Contracts
 Safety and Integrity
 Planned and Corrective Maintenance
 Overhauls (at train or component level)
 Obsolescence
 Development and Innovations
 Major Repairs
 Cleaning
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Rail Systems has a commuter fleet of some of the most
reliable trains in the UK
350 trains in service travelling
over 50 million miles per annum
Over
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
“New EMU” ReFocus Reliability Figures
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
“New DMU” ReFocus Reliability Figures
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Challenges - Scale
 1508 vehicles in service
 50 million miles of operation annually
 650 staff
 10 depots (six built by Siemens)
 1 million materials transactions annually
 Every major owner and operator has Siemens trains
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Challenges
Manufacturing locations –
 Our trains are made in Germany and Austria
 Technical (design) expertise is often in Germany
Language –
 Siemens business language is English
 Often technical spec’s and contracts are in German
Suppliers –
 Relatively small pool of potential suppliers
 Technically complex and safety critical
 Often (historically) selected to suit requirements of train build not the
aftermarket
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Challenges
Supplier (558) locations –
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March 2012
Fiscal year2012 (P's 1-5)
Country of Supplier
Australia
Austria
Bahrain
Belgium
Czech Republic
Denmark
Finland
France
Germany
Hungary
Ireland
Italy
Netherlands
Spain
Switzerland
United Kingdom
EUR
9,930.30
16,298.43
16,369.63
5,760.75
279.33
150,493.56
15,135.62
242,750.12
916,546.32
2,385.17
25,257.18
20,993.56
565.99
48,909.57
3,365,632.52
37,030,834.34
Total
41,868,142.39
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Challenges
Demanding customers and penalties for non–performance  Our trains run 364 days/year
 We commit to making trains available to meet the timetables
 Maintenance activity is carried out outside of peak hours
Massive variation in terms of the fleets
 One DMU fleet – all rest EMU’s
 Different suppliers and technologies on our trains
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Opportunities
Size of our installed base gives us a critical mass
 1508 vehicles and growing
Long term contracts
 Our maintenance contracts last for between 2 years and 35 years!
 Over £1bn in order backlog based on existing fleets alone
Real growth prospects – opportunity to double in size
 Eurostar vehicles in manufacture (160 off)
 Additional Cl 350 vehicles for TPE/London Midland (80 vehicles)
 Preferred bidder on Thameslink (1140 vehicles)
 CrossRail ITT recently issued (Siemens one of pre-qualified suppliers)
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
“Partnerships”
We tend to avoid using the term “Partnerships”
We focus on working together with our customers, suppliers and
employees to delivery mutually beneficial long term benefits……
Two key elements of collaboration
 First aspect is internal collaboration
 Second aspect is how we collaborate with our suppliers
Communication is key to both…….
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Internal collaboration
Act together for growth
Procurement Update
United Kingdom
Procurement Update
Germany & Global
Procurement collaboration
in Rail Systems
Procurement for
maintenance and services
Page 17
March 2012
Best suppliers for
Siemens
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Procurement collaboration in Siemens Rail Systems
International procurement network
 Organize communities of
knowledge & experience
exchange on specific
procurement topics
 Foster (cross-)regional
pooling activities
 Utilize transparency on
global preferred supplier
base & contract content
HQ
Denmark
Poland
France
Czech Rep.
Portugal
USA
>500 Mio € PVO is
managed in RL’s
procurement
regions
Great Britain
Russia
China
Spain / Nertus
India
REG
Brazil
Thailand
Australia
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March 2012
Collaboration between UK and Germany
Example: Eurostar
 2 Project Procurement
Managers for maintenance
installed on both sides of the
channel
 Exchange of maintenance
related procurement issues (e.g.
life cycle cost, contracts,
overhaul)
 Joint interface to procurement
activities during build phase
 Overlook all material issues of
the vehicle since vehicle is in
plant (contracts, Annex SA,…)
Same approach would apply for
all future projects
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Procurement for maintenance and services
Major focus within Rail Systems
Overview
Key aspects
Maintenance and services for Rail
Systems / Integration of build and
maintenance projects
Maintenance and service aspects are
key elements for sourcing decisions,
e.g.
 More of a focus on the
aftermarket in sourcing decisions
 LCC
 Warranty and repair & overhaul
support
 Engineering / production capacity
 ToCo installed
 UK and Germany are in close
communication on key sourcing
decision for both Eurostar and
Thameslink
 From an aftermarket perspective,
we want to encourage the use of
suppliers with a UK support
network
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
International collaboration
Supplier day
 RL UK holds an annual supplier days for it’s key strategic suppliers
 Approx. 40 suppliers in attendance
 Involves a cross-functional approach
 Focus is on sharing information and improving collaboration and
communication
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
“A Better Way of Working”
Welcome…………….
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Consistent approach to supplier management
UK
crossfunctional Material
Strategies
Supplier Qualification
2012
Output / value add
Ensure Mandatory
minimum
requirements for
Suppliers
UK
Define qualification
scope
Supplier related
EH&S
Assessments 2)
Supplier related
quality
requirements 1)
Export /
customs
Requirements
Code of
Conduct
Corporate selfassessments
Self-assessment
Self-assessment
Additional
requirements
Process interface to
cross functional modules
Risk
Evaluation
Business
Collaboration
Operational
Competence
Integration
Compliance
Business
Continuity
Balance of Power
Quality
Competence
Quality Integration
Legal compliance
Financial Situation
Supply Chain
Management
Integration
Social and Ethical
Responsibility
Risk management
@ Supplier
Commitment
Procurement
Competence
Procurement
Integration
Environment,
Health and Safety
Business Environmental Factor
Cooperation
Technology &
Innovativeness
Technology &
Innovativeness
Compliance in
supply chain of
supplier
Contractual
framework
Regional Presence
Supply Chain
Management
Competence
Supplier
Development
Corrective Actions
Monitor Supplier
status for every
module
UK
 Continuous improvement
of our supply chain
performance
Supplier Audit
FPL
Supplier
Portfolio
 Ad-Hoc Audit aus akt. Risiken
 Audit und FAI aus Projekten
 Audit
aus Lieferantenqual. / -Zulassung
AuditPlanung
 Audit
aus Zielvereinbarung nach Bewertung
 Regelauditierung
AuditDurchführung
SQE
der FPL
Massnahmenverfolgung
Verbesserung der
Lieferantenperformance
 Development of a
portfolio of best-in-class
suppliers
Supplier Award
 Focus on ToCo-installed
Auditergebnisse
UKSupplier Classification
2012
Awarding process
Factor
0,98
Preferred
 Transparency on
performance in build and
aftermarket projects
1,0
Advanced
Approved
provisional approved
Sub-Standard
1,04
UK
1,08
Registered
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Closure & outlook
 Siemens has exciting prospects and great
opportunities
 We also have demanding customers and
challenging competitors
 We want to engage with our suppliers such
that together we can gain a real advantage
over our competition and delight our
customers
 We want to be number one together across
all aspects of our working relationship –
technical innovation, lowest total cost,
comunication, reliability and availabily.....
 We want you to be part of our future
success
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March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division
Q&A
Andrew Lister
Head of Procurement &
Materials UK
Siemens plc
Infrastructure & Cities Sector
Rail Systems Division
United Kingdom
+44 1530 258 125
andrew.lister@siemens.com
Page 24
March 2012
© Siemens AG 2012
Infrastructure & Cities Sector, Rail Systems Division