SMM in Hamburg (http://www.smm-hamburg.com/en/) is one of the largest (if not the largest) maritime trade shows in the world. With over 50,000 visitors and 2000+ exhibitors one gets good first-hand insight just how large an industry shipbuilding is.
Albeit shipments last year were at an all-time high, with over 1600 large vessels supplied in 2013, lead-times are lengthy and hard times are predicted ahead for many in the industry. According to the UNCTAD Review of Maritime transport 2013, current commercial orders are lower in all segments from highs in 2008/9; 50% lower for container ships, 58% for bulk carriers, 65% for tankers, and 67% for general cargo ships. Deteriorating commercial order books aren’t the only challenge. With new, energy efficient designs in the offing, prices for less efficient second hand ships are one of the many factors that’re driving down resale values. Of course large ships aren’t the only assets in the marine ecosystem. To do due diligence to the market one should also consider other vessels such as offshore structures and ships (oil/gas for example), naval vessels (also under price pressure due to tightening national budgets), and somewhat smaller vessels such as pleasure boats, yachts etc.. Interestingly enough and definitely bucking the trend, luxury yachts, most notably super-yachts are/were going gangbusters. Of course the latter may face some challenges due to current geo-political situations (Russian nationals being a large markets for these floating gin-palaces).
So why’s this important, and what’s this to do with Siemens? In a nutshell the marine industry’s in the throes of change. Notable in these changes are a focus on efficient designs that improve capability of ships and initiatives that reduce the design, build, operating and overhaul costs of vessels in what is a truly global ecosystem. And this play right to the hands of Siemens (PLM). Siemens have arguably the most competent single-vendor solution for the marine industry, with software products that span the complete ships’ lifecycle; from concept, design, manufacture, assembly, to maintenance/overhaul and disassembly. But it’s not just software products (from Siemens PLM and other software divisions) are party to this industry; the bigger Siemens also has many hardware and service assets that are focused on this market. Their control systems technologies (motor control centres etc.) and propulsion systems, for example, are market leaders in their own right, and (marine) revenues from these are not insignificant.
When I speak of planes, trains and automobiles, while these have many differing attributes, what they have in common with shipbuilding is complexity – PLM being one obvious means to address this complexity. So to the need for advanced technologies in areas such as design, manufacture, service and overhaul. The ability, for example, to specify, design, manage and produce at scale and take advantage of new materials technologies (fibre materials for example) and/or manufacturing techniques are all constituents of the Siemens’ PLM portfolio. And these can definitely benefit companies looking to face the challenges forecast in the industry.
With numerous references in the shipbuilding market, from small to large, both vessels, fixed platforms (e.g. rigs) and, of course, members of the marine supply chain, Siemens is understandably proud of their success to date. But their aspirations of growth in this market are significant. I for one was impressed, not just with Siemens PLM Software investments into shipbuilding-centric solutions, but more so to (bigger) Siemens’ ability to deliver at scale across the broad needs of this industry as it has done for over 125 years. One often hears, “execution is everything” – if Siemens’ execution is as competent as their strategy, I can see interesting (and profitable) times ahead for the Siemens PLM marine solutions team.