Siemens AG was founded in 1966 after the consolidation of numerous global corporations in which Siemens held a major stake. Since then they have developed many strengths that assist them in continuing to successfully be one of the largest companies worldwide, operating more than 285 manufacturing locations spread across 190 countries. (Shah, 2013) With ventures in computer software, IT, nuclear power, telecoms equipment, and more Siemens has found strength in diversifying itself. Functioning in so many areas has provided Siemens opportunities to service customers in various sectors, significantly increasing their advantage in the number of revenue streams over competitors such as General Electric in the United States.
However, a large focus and part of the Siemens strategy is innovation and continually improving on sustainable operations. One of the core factors in the decision to report on Siemens was its reputation as a sustainable leader. With programs already in place such as the Siemens Strategy Program Vision 2020+ aimed at meeting UN Sustainable Development standards and beyond, they are well-positioned to continue with the popular trend of sustainability.
(Kauflin, 2017) As a result, conforming to the trend of sustainability will not have a major influence on the structure and operations of Siemens. As a part of the culture, they instill daily Siemens emphasis on “Sustainability in the Supply Chain” by teaching team members to prevent, detect, and respond to risk. (About Siemens, nd) For a company so large, Siemens understands that sustainability is achieved by the efforts of all those on every level.
As with any firm Siemens is not perfect nor above flaws Siemens AG’s commitment to sustainability is not without motive.
Siemens has their sights aimed at reducing its debt to equity ratio in the short and long term, one of its marquee weaknesses, partially through the use of sustainable practices to reduce costs. Also, the company has not been successful at adjusting to the challenges that can be presented by the new market. Siemens is so large that as a corporation being agile and acting quickly can be difficult; to combat this they should create internal mechanisms for feedback directly from frontline team members seeing issues firsthand. Another weakness of Siemens that could affect any attempt to implement sustainable practices is the sheer size of the corporation. As a large firm, they have made numerous acquisitions of other companies, still, over the years Siemens has had trouble assimilating new mergers coming from a differing working culture. To say the least, Siemens faces many obstacles just to operating normal business, which is to be expected for a company with over 360,000 employees. Facing issues such as culture, distance, and time schedules to greater things like differing languages. Some of these are obstacles that other firms will never encounter, yet Siemens has measures in place to effectively communicate amongst branches and regions worldwide. Thus, communication has become one of the largest factors in Siemens’s ability to successfully carry out sustainable efforts.
At the core of my suggestions would be clear communication of operational methods that are instilled to promote sustainability. Perhaps Siemens could form several small committees in each global region that are specially trained in sustainable techniques. Once crafted, the teams could travel to each facility in the various regions to then start implementing the techniques. When implementing the techniques on such a personal level they will increase the ownership of techniques across the whole company and make team members at every level realize their role in sustainability. As a result, there would be increased employee knowledge and morale because they would feel directly responsible for the reduction of costs and waste. As well, I would suggest that Siemens prioritize the costs or wastes they wish to reduce in specific departments globally and focus on each implementation till they start to see the desired effects and changes. At this time Siemens would then move on to a new area of focus.
As with operations, there is always a risk associated with implementing improvement and change. When implementing the above recommendations, Siemens will encounter its fair share of risks. A major potential risk is that implementation of this trend could result in slowed-down production or operations at the site techniques are being taught. Should the implementation take longer than necessary, or require delays or halts in production for any period, Siemens at that point is at great risk of losing money. Manufacturing a cell that isn’t producing a product is costing money instead of earning. Therefore, when implementing these sustainable techniques, the committees need to schedule accordingly to attempt to have the least impact on the production schedule possible. At times things become unavoidable, when this occurs to mitigate the risks, time out of production should be planned accordingly. Another risk that is possible during the implementation of this operational trend is that of the people being trained themselves. Using employees from a similar region negates some of the difficulty of language barriers, however sometimes personalities prove to be difficult when accepting a daily change to their tasks. If any of the team members are unwilling or do not buy into the culture change that can hurt the outcome of the implementation. As a consequence with that, sustainability is lower, and the technique could have resulted in additional costs the company had not previously realized. Both the risks mentioned can be mitigated, but it takes the total effort of team members throughout Siemens to help prevent them.
A few continuous improvement tools and technique recommendations that I have for implementing sustainability are the following. Several tools and techniques that assist in trying to prioritize where the largest opportunities to implement lean methods within the organization are; A3, Gemba Walks, Kaizen events, and the PDCA Cycle. Each of these is to help a company analyze situations, processes, areas, products, and direction. (6, n.d) A3 is a structured approach taken to see the big picture while trying to solve a problem. A3s help to facilitate communication, document learnings, and decisions and planning directions; the A3 can be used to help provide structure when trying to determine root cause and opportunities within the company. (6, n.d) Also useful, are Gemba Walks which are another tool/technique used to focus on just familiarizing oneself with what is going on in an organization. These walks are done informally and allow for several different departments to see what is happening in a company and get ideas from the people closest to these areas. This tool encourages all employees to have ownership and be involved in improvement ideas. Lastly, is the PDCA Cycle which stands for plan, does, check, and act; this technique is similar to the scientific method. This is used to help identify and test a concept or method, therefore this technique would be good to use during implementation to see how effective the lean techniques can potentially be.