Siemens 2013 Annual Report Download - page 216

92 A. To our Shareholders
117 B. Corporate Governance 155 C. Combined Management Report
156 C. Business and economic environment
173 C. Financial performance system
179 C. Results of operations
192 C. Financial position
204 C. Net assets position
207 C. Overall assessment of the economic position
209 C. Subsequent events
210 C. Sustainability
227 C. Report on expected developments and
associated material opportunities and risks
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C.. Production
In-house production is an important cornerstone of our opera-
tions. Siemens operates around  major production and
manufacturing plants in more than  countries worldwide,
including facilities at certain joint ventures and associated
companies. A major production and manufacturing plant is de-
fined as a facility at Business Unit level in which raw or source
materials are transformed into finished goods on a large scale
by using equipment and production resources such as ma-
chines, tools, energy and labor. Around  major production
and manufacturing plants are located in the region Europe,
C.I.S., Africa, Middle East; around  major production and
manufacturing plants are located in the region Americas and
around  major production and manufacturing plants are lo-
cated in the region Asia, Australia. With around  major pro-
duction and manufacturing plants, the Energy Sector accounts
for the greatest proportion of these, followed by the Infrastruc-
ture & Cities Sector (around  major facilities), the Industry
Sector (around  major facilities) and the Healthcare Sector
(around  major facilities).
Key elements of our production strategy include sustained im-
provement in the cost position for our products and solutions,
and locating production sites geographically to support the de-
velopment of new markets. China, for example, is one of our
largest growth markets, and we have established our presence
there with around  major production and manufacturing
plants. One of the most significant features of our production
activities is the diversity of products, volumes and processes:
The spectrum of our products ranges from hearing aids to a
-tonne steam turbine; production volume can be anything
from a single customer-specific order to high-tech serial pro-
duction; and production processes range from automated
production in clean rooms to manual final assembly of major
installations on construction sites.
Besides innovation in product technologies, also innovation
and efficiency improvement of production technologies
plays an important role for Siemens. In this context the effi-
ciency of energy and raw material as well as environmental
sustainability of production processes is our focus.
We designed the Siemens Production System (SPS) in our
aim to continuously improve our global production process-
es. The SPS is our structured approach to designing and oper-
ating the production operations of Siemens in accordance
with so-called “lean” principles. These principles aim to re-
duce or eliminate activities in our business processes that
add no customer value. This helps us satisfy the increasingly
demanding requirements of our customers while streamlin-
ing our cost position and those of our customers compared
with competitors.
With the implementation of lean principles in our production
operations, we aim to simultaneously achieve both shorter
lead times and higher quality in our processes, products and
solutions. This enables us to react even more flexibly to our
customers’ demands and to increase our delivery reliability.
By now, the SPS has already been established in more than
% of our major production and manufacturing facilities
worldwide.
It is our strategy to ensure that all of our production and
manu facturing facilities apply lean principles and that these
principles are also adopted by other functions such as
adminis tration or engineering. For the latter purpose, we
have widened the range of our lean expert qualifications by
adding specific training programs for employees engaged in
adminis tration. By the end of fiscal , a total of more than
 employees have joined (and in part already completed)
lean expert qualification programs for production and / or
administration.
C.. Quality management
Outstanding quality in our products and solutions is a key suc-
cess factor for our Company. We believe that Siemens is known
for high quality in its business processes and customer proj-
ects, which many customers consider essential in meeting
their needs.
Our main objective in terms of quality is high customer satis-
faction. We measure customer satisfaction using the Net Pro-
moter Score, which is discussed in more detail below. Internal
audits and assessments, together with regular benchmarking,
help us ensure the effectiveness and further development of
our quality management. Our quality management system is
designed to meet or exceed relevant recognized international
standards.
We aim to maintain a strong culture of continuous improve-
ment and high transparency. Transparency in this context
means to measure quality and make it visible. To that end, we
have developed a comprehensive quality approach throughout
the Company to increase the quality of our products and pro-
cesses. We have defined binding standards in the areas of
quality responsibility, quality controlling, process quality and
quality awareness for all Siemens units worldwide.