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Siemens Practices What It Produces

The RFID systems vendor is also one of its own best customers. The technology helps the electronics company meet customers' specific manufacturing needs cost-effectively.
By John Edwards
Jun 14, 2010—German electronics firm Siemens doesn't just view itself as a major developer and supplier of radio frequency identification components. The company is also one of the technology's most ardent adopters, utilizing RFID in both its production and logistics operations (see "Phone Tag" on the last page of this story). "Because it's very important to get quality data, it's very important to have RFID in place," says Herbert Wegmann, Siemens' general manager for industrial communications.

Siemens is a global powerhouse in electronics and electrical manufacturing, operating in the industrial, energy and health-care sectors. The company began using RFID in its manufacturing operations in the 1980s, and the technology is currently being employed in several of its production lines. "RFID is a backbone technology for our production," Wegmann says.

An electrical switch gear within the RFID-controlled production line

At the company's factory in Amberg, Germany, RFID is used to speed and streamline operations on a pair of production lines—which Siemens dubbed "S00" and "3RA6"—that build electrical switches for business customers worldwide. The lines create two types of switches with thousands of variations, designed to meet customers' specific requirements.

Siemens does not typically integrate RFID into existing production operations, according to Markus Weinlaender, a product manager in the company's Nuremberg, Germany-based industry automation division. Instead, the firm opts to make the technology an integral part of its new plants or manufacturing operations. "RFID is part of a complete new design for the production lines," he explains. "We usually build up a new plant, a new production line, a new facility or whatever, and so it's part of the normal start-up process and machinery." Incorporating RFID, he notes, usually adds approximately 5 percent to the overall project cost.

A detail from the assembly line, with an RFID reader visible in the front of the picture (the switch gear is moved on a workplace carrier containing an RFID transponder)

Each Amberg production line produces switches that are custom-tailored according to the orders it receives. "It's a fully automated line," Weinlaender says, "but we can support this with strategic management decisions for the mass-customization concept." Mass customization is a term Siemens employs to describe its ability to use automation to create customized products for its clients without driving costs to an unacceptably high level. "It's the development of devices in a modularized way, and building in options for configurations," he states. In addition to streamlining production, he notes, mass customization is also a powerful sales tool. "Because we're not selling a finished product, we're selling options, and customers have [the ability] to chose from them."
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