In the US alone, $700 billion worth of defence programs are designed on Siemens software tools. In Australia, the business’ equipment and support structure can be linked to the Anzac Class frigates, Canberra Class LHDs, HMAS Choules and future surface, land and subsurface programs.
Join Andrew Seal, head of defence and marine solutions at Siemens, plus Defence Connect host Phillip Tarrant as they explore the business’ work in the Australian market, how it is gearing for growth – and what it has set for the future.
Enjoy the podcast,
The Defence Connect Team
Listen to previous episodes of the Defence Connect podcast:
Episode 57: PODCAST: Fostering the future of defence industry, Margot Forster, Defence Teaming Centre CEO
Episode 55: PODCAST: Exports key to the future of Australia’s defence industry, Richard Marles, opposition spokesman for defence
Episode 54: PODCAST: Mining boom to defence boom – Minister Paul Papalia, WA’s Defence Issues Minister
Episode 53: PODCAST: Gearing Victoria for growth, Greg Combet, Victoria’s defence industry advocate
Episode 52: PODCAST: Championing Australian defence exports, David Singleton, CEO, Austal
Episode 51: Pacific 2017: Future Submarine Supply Chain Briefing
Episode 50: Pacific 2017: RN officers on ASW and why they chose the Type 26
Episode 49: Pacific 2017: Raydon Gates, Margaret Staib & Mark Skidmore, QinetiQ Australia
Episode 48: Pacific 2017: Dale Bennett & Vince Di Pietro, Lockheed Martin
Episode 47: Pacific 2017: Michael Lenton, Leonardo
Announcer: Welcome the Defence Connect podcast, with your host, Phil Tarrant.
Phil Tarrant: Well, good day everyone, it's Phil Tarrant here, I'm the host of the Defence Connect podcast, recording from Pacific 2017. We're on the last day of it, it's been a big three days for everyone within defence industry. And I'm fortunate to grab Andrew Seal, who is the head of Marine and Defence from Siemens to come and have a chat with me. Andrew, how're you going?
Andrew Seal: Good, thank you.
Phil Tarrant: How are you finding Pacific? Is it all what you thought it would be?
Andrew Seal: Yeah, it's ... It's as it was two years ago. Big, busy, lots of meetings. Every two years, everyone's just talking. Especially at the moment with the scale of the programmes that are coming through, that the government's really put the roadmap down for the continuous ship building programme. So, it's ... Yeah, it's good to see defence industry with a real drive to innovate, be part of these programmes, and they can see a roadmap. They're not sitting there waiting, it's happening. So, that's great.
Phil Tarrant: Everyone I have spoken to over the last couple of days, and they range from the CEOs of primes through to some of the SMEs and they're saying it's, yes, it's another Pacific, but there's just a bit of a buzz about the potential for a lot of people to do good business moving forward and obviously, the government's dedicated a lot of spending to defence and the defence industry moving forward. What's your read on it?
Andrew Seal: Oh, without question. The energy's there, the desire to collaborate is there. The funding to develop new technologies and do research is there. In the past, it's been a bit famine and feast. So, people haven't really known what's ... Whether they're going to be in a programme or not in a programme, but now there's so much work to be done. It's not one person's space. The way defence industry's going to deliver this, the only way is to collaborate together, because there's just so much work to do.
Phil Tarrant: So, I think a lot of our listeners will be familiar with your business. It's a brand which most people would know, but they're probably not too sure or understand exactly what role you play within defence, because you don't make all the noise. You're quite quiet about it all. So, Andrew, what do you guys do? What's your exposure in the defence market?
Andrew Seal: What is Siemens Defence?
Phil Tarrant: Yeah.
Andrew Seal: It's like Siemens, there's a lot of angles to Siemens Defence. It's quite interesting, actually. Recently, about a year ago, we signed a global MOU with BAE, because we're their fifth biggest supplier on a global level and we supply to every part of their business. So, we have Siemens Healthcare, which is partnered with Airbus on the deployable hospital programme, JP2060 and that's something we do globally, in a very big way. In the US, Siemens' digital side, which is also used here, by land and navy, for their system platform offices, is the backbone that the majority of the US defence program's assets are designed and maintained on. We're talking Joint Strike Fighter, we're talking Mars Rover and NASA, we're talking their aircraft carriers, their nuclear submarines. 700 billion dollars worth of US defence programmes are designed on the Siemens software tools, which is a huge thing.
In the US, we are very integrated into the workforce development side. A phrase that gets kicked around a lot is "digital shipyard," that's something we brought here a few years back. And in the US, we partner with the state of Virginia, the US Navy, the primes like Huntington Ingalls, academia, to develop the workforce and innovate in what we call a shipbuilding centre of excellence. And in that journey, we invested a billion dollars worth of software into that academic environment. So, the workforce that gets deployed out goes into those yards with the digital capability to work at the front in the shipbuilding today.
Phil Tarrant: So, this digitalization of defence in the marine sector and we spoke about this industry 4.0, can you just give some clarity to our listeners about what that is and the way you see the world in that regards?
Andrew Seal: Yeah, industry 4.0 is a German concept about the next revolution in industry, so, the fourth industrial revolution. There was a collaboration agreement signed between Australia and German in April last year to bring that concept into Australia, to help Australian industry move to the next level, which is really pertinent to defence, because if we're going to do these programmes, we're not going to do it the old way. We're going to do it in a completely new way, in a digital way. And we need to develop the workforce of tomorrow along that industry 4.0 line.
So, there's a taskforce called the Prime Minister's Industry 4.0 Taskforce, which is led at a federal level. Siemens chair that board. We are now creating the first graduate programmes for industry 4.0. The first collaboration has been with Swinburne University. We donated 135 million dollars worth of software to them and we're now working our way around Australia with the concept of each state having a slight focus on a certain industry area. But ensuring that training goes from K all the way up to postgrad and the students, as they leave academia and move into the workforce, move into the workforce fully understanding how that industrial revolution looks like in the workplace and then can start to help businesses move forward.
Phil Tarrant: And what's your read on defence and the defence industry at the moment? There's obviously this big spending that's coming in, the government's outlined or slated a couple hundred billion dollars in that regard. And going back to my original point, you guys that make a lot of noise, you just fly under the radar, you do what you do and you're underpinning a lot of what's happening in defence. Are you happy to be in defence right now? Do you think defence industry's a great time for you guys to be delivering what you do to this market? Or are you looking forward, thinking it's going to get better?
Andrew Seal: Defence for Siemens is one of our key vertical market focuses, because it impacts across so many aspects of our business. This funding initiative and this regeneration of the defence capability is enabling us to make that a much more forward focus, rather than the more individual business unit focus it would have been in the past.
So, if we, again, look to the US, in the US we have a company called Siemens Government Technologies, which enables us to contract directly to the US government on all programmes including defence, and in the US we do in excess of a billion dollars a year just on energy efficiency contracts for the US defence infrastructure.
Phil Tarrant: Okay.
Andrew Seal: There's a massive infrastructure thing going on here. We're going to build a lot of new capability, but then we're going to build a lot of new infrastructure to look after that capability. We're going to upgrade the infrastructure we've got. So, Siemens see an excellent conversation around the building technologies, the energy infrastructure of all of that environment. Also in the deployable, the main deployable energy platforms. And because we now see this as a long journey, we can start to do some of the research in Australia that we're doing offshore on some of these, yeah, new journeys of technology that will be coming forward.
We've started one programme already with DST group and QT, we signed it back towards the end of 2015, which is to sea-trial superconducting propulsion technology, which, to the layman, essentially means we are having the size of the main electrical motors on navy platform submarines and surface in comparison to what we have today. So, what's halving the size and weight.
In a scale factor on the actual windings, it's 100 to 1 reduction. So, this isn't just a small route, this is a revolutionary research, it's real game changing stuff. And it's happening in Australia, it's not ... This is ahead of the US, this is ahead of what's happening in Europe, the lead is in Australia.
Phil Tarrant: What do you think, or what's your read, on the Australian collective capabilities to deliver this sort of innovation into defence and outside of defence? Do you think, as a nation, we've got what it takes?
Andrew Seal: I was here with our CEO yesterday. We had a lot of back to back meetings, we talked to everybody all day. And the two conversations that came up every single time was, the digital conversation and the workforce development industry 4.0 conversation. So, there's a total recognition across all of defence industry that to meet these timeframes and challenges, they need to do it in the new way, not the traditional way.
Phil Tarrant: So, this new way is the digitalization?
Andrew Seal: The digitalization…
Phil Tarrant: So, let's just pin down this, what does that mean? What does the digitalization of defence mean?
Andrew Seal: It's ... So, at the moment, we're at a space where the workforce is coming from a more traditional space of 2D, maybe 3D views of design. And design is a journey of lots of different software tools that create different outcomes. A true digital enterprise is when all of that is seamlessly integrated to one single enterprise. In the shipbuilder for example, in the past, the designers would design the ship and they would, within that design, preempt the workflow that happens in production. In a proper 3D digital shipyard domain, production can take that 3D model and then optimise what they do independent of engineering without compromising the engineered solution and design. So, they can choose to do the workflow pattern in a different way, they can choose to approach a weld in a different manner, or they could have options of different welds that, when you actually get down to making the thing, makes total sense.
So, what once was a desk operation design environment is now ... Digital interaction is happening right in the work place. People are standing there, in the factory, with a digital display in front of them optimising the production process with a close feedback into design if things need to change. So, it's much more efficient, it's much more effective, it's much more adaptable. And then at the end of that, what comes out, and this what we do in a year, is a complete 3D model which includes supply chain and all the information around that asset, to manage that asset going forward.
So, the terminology we use is "Single source of truth." There is one single source of data.
Phil Tarrant: The commonality will run through the whole process, yeah.
Andrew Seal: The data is completely, seamlessly integrated from cradle to grave.
Phil Tarrant: Interesting stuff. It's cool. You obviously enjoy it as well, yeah. Are you a tech guy? Are you a techie sort of ... What's your background?
Andrew Seal: You have to be a tech guy if you work at Siemens, it's like a toy store. When you take DST over there, you can ... there's so many interesting ... I mean, we're big. We're bigger than primes, anyway. So, we're an interesting entity. We're a very big business. I've mentioned the US a couple of times, but we have a conversation with one of the primes this week and someone said, "How big's Siemens US?" Siemens US is a 30 billion dollar, 50,000 people business.
Phil Tarrant: They're larger than one would think.
Andrew Seal: Yeah… And that's just the US, that gives you some sense of scale. So, the things that we can do and some of these research ... And it's like the one we're doing with DST and QUT on superconducting is really cutting edge stuff. There's a collaboration between Siemens and Airbus on the future all-electric passenger aircraft. We're talking electric 747s. There's hundreds of millions of Euros and hundreds of millions of engineers working on this, it's a long journey. This isn't going to happen for many, many years, but it's being worked on.
So, when we can start to open up some of that, knowledge and knowledge transfer and research into what's happening here, because this is a long-term journey, that really gets interesting to us. Because then we're creating new things, that are directly applicable to where defence will see its journey go, and that's the kind of stuff we want to do.
Phil Tarrant: And for Siemens in Australia, obviously you're committed to the Australian market. What's the biggest misconception, you think, about what you guys do? Because to my original point, you don't-
Andrew Seal: Yeah, that's a-
Phil Tarrant: You're not that outward, you know? You just get stuff done.
Andrew Seal: We are ... There's a famous phrase in Siemens. "Siemens doesn't know what Siemens doesn't know." We are so big and so broad, it is a challenge for us to communicate to people who we are and some people will still say, "Oh, you used to do mobile phones." Or something else. They don't realise that Siemens Healthcare, I think they've got something like 70% of the CT market. They've got the biggest managed equipment services in the southern hemisphere with Fiona Stanley. We're big and we're broad and we're touching the digital stuff, we're touching building technologies, energy.
We haven't talked about maritime, so, we're the only provider of electric propulsion to the Royal Australian Navy today. We did all of the ANZAC power and automation during that build. We were one of the big, tier two providers on that programme. So, LHDs, tools, there's all of that areas.
Phil Tarrant: And your kit's all over the joint, then?
Andrew Seal: Yeah, it is. It's all over the joint. And I'd say it's going to be a continuous process of getting that message out there across all of defence and defence industry as to all these things we can do. We are now starting to look at, especially with the big players, to bring the businesses together and do what we would call a "hackathon," where we'd bring knowledge experts across all the domains that we work in, they do the same, and then let's see where we can really add some new value together, because I think that's the only way you can get that dynamic going where you can truly draw out where the good points of collaboration are.
Phil Tarrant: So, you're committed to defence and defence industry in Australia moving forward?
Andrew Seal: Definitely.
Phil Tarrant: Yeah? In five years' time, what are we going to see from you guys?
Andrew Seal: I hope we'll see the first superconducting surface warship. That would be fantastic and that would be a world's first.
Phil Tarrant: As a techie guy, you'd probably enjoy it.
Andrew Seal: Yeah… I'd love to see a real, true digital shipyard environment. We're doing great work with Austin at the moment in their transition. We've got people coming in from the US on a regular basis. And to see the big programmes like Future Frigate, Land 400, truly doing that digital shipyard, digital production line stuff, engineers coming in to the Australian industry who are trained and capable of driving that digital conversation forward. We've done the industry 4.0 classes that soon ... Let's get graduation swaps going, that would be a really good thing to see.
Phil Tarrant: Well, I think it's quite a time to be in defence. Andrew, appreciate the insight. I must admit, I should be a lot more familiar with what you do in the Australian defence market, so I appreciate the education.
Andrew Seal: Thank you.
Phil Tarrant: It's not a bad thing to just get on with what you do and just deliver this capability without singing from the rooftops, and I quite appreciate that sort of ... You know? It's the Englishness, I guess.
Andrew Seal: It's nice to do a bit of singing, too.
Phil Tarrant: It is, it is.
Andrew Seal: So, thanks for giving us the chance.
Phil Tarrant: No, no. I appreciate it Andrew, and keep us up on what you're doing as you go down this path of delivering this innovation into defence in maritime. We want to hear about it. That's good.
Andrew Seal: Thank you.
Phil Tarrant: Thank you.
Andrew Seal: Thank you very much.
Phil Tarrant: Remember to check out DefenceConnect.com.au. If you're not yet subscribing to our daily market intelligence newsletter every single morning, DefenceConnect.com.au/Subscribe. Thanks for joining us, we're down here at Pacific 2017. We're enjoying our time here, navigating our way through some of the ... The great work that's happening in defence at the moment. It's a good time to be in defence. So, we'll be back again next time. Until then, bye.