Siemens 2012 Annual Report Download - page 191

135 D. Consolidated Financial Statements
239 E. Additional Information
130 C. Siemens AG (Discussion on basis of
German Commercial Code)
134 C. Notes and forward-looking statements
129 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report

Among the R&D priorities in the Industry Sector is the soft-
ware-based integration of product planning and production
processes within the framework of product lifecycle manage-
ment. The objective is to accelerate processes at every point
along the value chain, so that time to market can be reduced
by as much as %. The further development of automation
technology, and industrial IT and industry software in particu-
lar, plays a major role here. This is especially true in the case of
metal production, where the IT-supported planning and opera-
tion of entire steel mills has significantly changed and will fur-
ther influence manufacturing processes in the steel sector.
In addition, the Industry Sector also strives to achieve greater
energy efficiency, reduce raw material consumption, and reduce
emissions. These objectives also guide the development of tech-
nology-based service concepts such as energy management and
remote maintenance systems, and the creation of efficient solu-
tions for steel production that also conserve resources.
R&D activities in our Infrastructure & Cities Sector focus on
urban growth issues. Main research fields therefore cover sus-
tainable technologies for major metropolitan areas and their
infrastructures. The aims are to increase energy efficiency, re-
duce burdens on the environment, and improve the overall
economy and the quality of life in cities. To this end, the Sector
develops building technologies that conserve energy, solu-
tions for ensuring an efficient and secure supply of electricity
in cities, and intelligent traffic and transport systems. Exam-
ples here include the extremely light and almost fully recycla-
ble Inspiro modular subway train, and the Desigo building
management system, which integrates several system compo-
nents within the buildings themselves, and which also leads
to significant energy savings. In addition, researchers are look-
ing for ways to integrate buildings into smart grids so as to al-
low them to transfer the electricity they produce into the net-
work and provide additional power during peak demand times.
One innovative technology that can be used for this is
SIESTORAGE – a modular storage unit that balances out the
power generation fluctuations that are typical of electricity
produced from renewable sources by stepping in to provide
energy during brief power outages.
.. Supply chain management
Supply chain management at Siemens aims to contribute to
the success of our businesses in a significant and sustainable
way. The principal goal of our supply chain management activ-
ities is to ensure the availability and quality of the materials
we require to serve our customers.
In fiscal , Siemens’ purchasing volume, i.e. external spend,
amounted to approximately € billion which equals roughly
half of our total revenue.
We focused on continuing to enhance our supply chain man-
agement and strengthening Siemens’ competitiveness by
achieving substantial savings. The main enablers for that were
already part of the Supply Chain Management initiative that
was successfully completed prior to fiscal . In line with our
strategic priorities, we further developed and continuously
rolled out our enablers for leveraging saving potential. These
enablers include
> Siemens-wide managed volume: We bundle more than
half of our purchasing volume on the corporate level where
it is managed by dedicated organizations for both direct and
indirect material. For the direct material, we set up more
than  category management teams and started more than
 cross-functional commodity engineering projects aiming
to bring down material cost together with our suppliers. The
strategic and operational procurement for all indirect materi-
al throughout Siemens has been brought together in a global
organization. By integrating the former procurement offices
for indirect material in the Sectors and regions, we achieve
substantial economies of scale effects through worldwide
bundling of volume and consolidation of resources.
> Sourcing from emerging markets: One essential element
of moving towards a globally balanced supply chain network
is to constantly increase the share of sourcing from emerg-
ing markets (Global Value Sourcing countries, GVS). To ac-
complish this goal, we identify, select and fully qualify sup-
pliers from Global Value Sourcing countries, and engage
them in a continuous development process thereafter. Addi-
tionally, we encourage and support our suppliers to expand
their operations in order to follow our manufacturing foot-
print in Global Value Sourcing countries. In fiscal  we
further increased our GVS share on a comparable basis.
> E-sourcing: We significantly increased the share of external
purchases that we award via electronic bidding over the last
few years from low single digit levels to significantly more
than %.
Sectorspecific material Pooled directed and
indirect material
> 50%
Siemens-wide managed

billion