Siemens Digital expands Penang presence to tap regional opportunities

• Capabilities on par with Germany, US in delivering IR4.0 projects
• Penang CM sleeps easy thanks to talent pool’s manufacturing prowess

PENANG has done it again. Just as it has with Intel, Dell, HP, Agilent, Bosch, Motorola and a host of other global companies, Siemens is the latest global company to recognize the capabilities of its Penang team, established in 2010. It recently announced a commitment to triple its headcount and double its office space. It declined though to offer a fixed time frame for this expansion. Its current headcount in less than 100.

And while its always tempting to get a lock on how many more knowledge workers will be added, a Siemens executive notes that in the digital economy, and especially in the space that Siemens competes in, combining hardware and software delivery where the requisite skills sets are hard to come by, it is not about how many jobs but the skills set combination that sets one apart.

And the Penang team has set itself apart in the Siemens global footprint. According to Alex Teo, vice president & managing director (South East Asia), Siemens Digital Industries Software, Penang has excelled as a key contributor to digitalization solutions with the most recent being one that will be delivered to VinFast, a Vietnamese automotive company.

“The Penang team was a core backbone delivering the project with Software Architect’s and Project Managers playing a role,” said Teo. The team has also been delivering IR4.0 projects across the region.

An oft cited advantage of being based in Malaysia is its multi-lingual capabilities and Teo highlights this as well. “The Penang team can speak at least three languages and that is another key advantage for us as they are able to fully interact and understand customers issues, right from the management to the plant floor leaders and operators.”   

Teo believes that the capabilities displayed by the Siemens Penang digital team also dispel the perception that only German or US team can help deliver IR4.0 projects. “That’s not true. We have the talent here and will grow it.”

Little wonder that Penang chief minister, Chow Kon Yeow likes to tell people that he sleeps easy, thanks to the manufacturing prowess of Penang that helps the state compete for and win highly skilled manufacturing and services jobs. Chow was the guest of honor when Siemens announced its Penang expansion plans on June 28.

Equally important for Siemens in doubling down on its Penang operations, is the fact that its digitalization business has seen double digit growth in Asia, with additive manufacturing witnessing a doubling of growth in Southeast Asia over the past five years.

Having a beefed up team in Penang, including a larger R&D presence, will help it better capture more of these opportunities in the region as there will be a tighter coupling between product development and R&D so that the time from innovation to manufacturing is as short as possible. “We also won’t need to rely on resources from far away and can react quicker to market needs,” explains Teo. (pic, right)

For Siemens, reacting to the opportunities presented by the growing demand for digitalization isn’t just about increasing its resources to capture market share. With a culture that encourages innovation and embraces disruption, Siemens has changed its business model to better ride the wave of rising digitalization in the region. It has been moving away from being a mainly hardware manufacturer to melding its hardware delivery and software services into one package.

“We can’t just sell products. That is just 50% of the value. The other half is unlocked through services delivery,” says Teo.

Talent challenges

Despite its Penang team having proven its capabilities as a digital services centre for delivery and consulting, it is still a challenge for Siemens to find the right talent to help it deliver its services to the market. The challenge is more acute today as it has moved from mechanical design and simulation to needing skills in the mechanical, software and electrical domains. Yet schools are still teaching these skills in the traditional, silo methods.

“A smart factory still needs people with skills to operate that type of factory,” says Teo.

To help create the required skills set to bridge the gap caused by digital transformation that is revolutionizing business models, market needs and manufacturing processes, Siemens has been collaborating with various education institutions in Malaysia.

Teo shares that Siemens has long been successfully running a comprehensive skills programme targeting vokasional level that combines automation, hardware and engineering training.

Nine of the institutions are TVET-based, including the German-Malaysian Institute. Last Oct it also appointed the Kedah Industrial Skills and Management Development Centre (KISMEC) as a certified training partner under its Siemens Innovation and Resources Training Centre or SIRTC.

Its TVET focused collaboration resonates with the Penang government with Chief Minister, Chow explaining that the state wants to pay more attention to those who leave school after their SPM (Malaysia’s O-level equivalent). “We want to encourage them to go for vokasional  education and probably want to create new resources to help bridge this gap.”

The state, through its Future Foundation, currently offers 130 scholarships to students in Penang universities.