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Electric vehicle transformation to net India investments worth $300 billion

Siemens AG’s order backlog stands at €102 billion (Rs 9.08 trillion), on increased demand for automation and digitization, and nearly 92% of Fortune 500 companies use its software, according to the company. From pharmaceuticals to automotive and batteries to semiconductors and intralogistics, companies are racing to be more flexible, efficient and sustainable, and Siemens is helping them get to market 20-30% more quickly than before, Cedrik Neike, CEO, Digital Industries at Siemens, told ET's Kalpana Pathak in an interview. Edited excerpts:

How are Indian companies responding to digitalization?

We're seeing a huge industrialization push in India. We are working with multiple companies in the automotive, pharmaceutical, and semiconductor manufacturing space. Currently, we're working with a big car manufacturer, a big two-wheeler company and a big OEM supplier. I think $300 billion is going to be invested in India in EV transformation. In the automotive industry, which is going from ICE (Internal Combustion Engine) to electric vehicles, so many new factories are being built, (and) they need to be flexible, competitive. At the same time, there's not enough batteries. So, there's battery manufacturing, which is being built in the world. There's a lot of semiconductor capability being rebuilt in the world. Also, the food and beverage segment is trying to reinvent itself massively because of supply-chain and also in terms of sustainability. In India, intralogistics is also one segment.

Can small enterprises afford digitalization? Cost is always a factor...

In India, it's not very large (currently) but we are seeing increased interest from micro, small and medium enterprises. Substantial interest is coming in, particularly, since large companies are driving it for their own efficiency. At the World Economic Forum, we looked specifically at India - what training do we need for SMEs, what financial sort of packages do we need for SMEs, what do we need to do with our technology to simplify it so it can be absorbed -because, as the supply-chains get more and more digitally integrated, if you're not capable of being Industry 4.0 standard as SMEs, you will not be able to be a supplier to the complete value chain... I think that is important. Germany has shown it. Germany's strength is built on SMEs much more than big companies. Big companies like Siemens are important but the capability to have the next 2-3 layers integrated into the value-chain is what makes the strength of the German economy.

But companies are digitizing selectively. Is there data wastage?

Yes. Everyone rushed at digitalization and digitalized the R&D process or the production planning process or the quality process. These were thus put as islands. You generated data, you threw it away. So, Siemens' idea is not to have 20 digital twins, but one single digital twin, which is comprehensive, so the data flows. When you invent a product, you use the same data to plan the production process, to check if the production process produces it, and for the product. So, that's what we're working on, and we will not be able to do it alone. So, our partnership with SAP, for example, is to integrate this to build those digital threads together, so that the ERP system and the production planning systems can talk. We're working with NVIDIA in the industrial metaverse to be able to have NVIDIA'S data and our data to flow through.

What are the sectors looking to improve turnaround times?

So, it's all about speed and adaptability. The reason why Siemens was so successful during Covid-19 is, we could, within 24 hours, take somebody else's semiconductor, redesign the product, and immediately redesign the production chain to be able to churn out the products we needed. The next industry which is really looking at it is food and beverage. The idea of food and beverage is to move from recipe-to-production in a day's time. That's the dream. So, you could dream up a new ice cream one day and the next day it would be produced. It's an integration you have to do, but I think it's going to go through all industries starting with the more complex ones, and then make its way through.

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