Navigate the Impact of Tariffs on your Supply Chain

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Navigate the Impact of Tariffs on your Supply Chain

Tariffs and global supply chains are more interconnected than ever. Organizations face heightened risks, rising costs, and operational complexity as trade tensions and regulatory shifts continue – especially following US-China tariffs and retaliatory measures.

How tariffs affect supply chains – and how to stay resilient

The impact of tariffs extends far beyond added import duties. They influence sourcing strategies, supplier relationships, production timelines, logistics networks, and customer pricing models.

To manage these dynamics effectively, Siemens Advanta’s Supply Chain Tariffs Analytics Solution helps organizations to:

Model real-time scenarios to assess the impact of tariffs on logistics, costs, and supply continuity

Analyze root causes at part level to identify vulnerabilities and evaluate dual sourcing opportunities

Shift perspectives between revenue and spend to better engage customers and suppliers with actionable insights

From disruption to strategy: leveraging supply chain shifts as opportunity

Tariff-related disruptions are no longer isolated events – they’ve become a recurring feature of global trade. To remain competitive, organizations must respond quickly and strategically to changing trade policies and supply chain impacts. This requires a shift from reactive mitigation to active opportunity management.

Turning disruption into advantage means understanding where volatility can open doors: for example, by optimizing production footprints, securing more flexible sourcing models, or rethinking logistics strategies with a long-term view.

How Siemens Advanta helps you build resilience and agility

To support organizations in navigating these challenges, Siemens Advanta provides tailored solutions across multiple dimensions of supply chain strategy. Siemens Advanta supports your organization through:

Supply chain optimization: improve efficiency by up to 30% and reduce lead times by 40% through nearshoring, real-time tracking, and automation.

Market diversification: leverage tariff engineering and supplier shifts to reduce expenses by 10–25%.

Innovation and cost reduction: boost productivity by up to 50% and lower compliance costs with AI-powered analytics.

Strategic partnerships: recover up to 99% of duties paid via duty drawback programs and free trade zones.

Strategic tariff mitigation: more than cost savings

Mitigating the effects of tariffs isn't just about protecting margins—it's about building long-term resilience. Siemens Advanta’s approach combines technology, analytics, and industry expertise to:

Identify cost-saving alternatives

Collaborate with key suppliers using proprietary cost insights

Support make-buy decisions and product redesign evaluations

Stay ahead of tariff impacts on your supply chain

In a volatile global trade environment, proactive planning is critical. Siemens Advanta’s innovative solution enables businesses to mitigate risks, enhance supply chain resilience, and drive sustainable growth.

Industry Experts

Please reach out to our experts for more information.

Roy Williams

Consulting Partner Business and Cost Transformation GB&I

Brittany Ng

Consulting Expert Energy North America

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Discover how Siemens Advanta helps you analyze tariffs, reduce risk, and turn supply chain disruptions into strategic opportunities.

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Supporting business strategy development and building services. Providing strategic guidance on benchmarking, operating models, and functional strategies. Supporting market segmentation, digital solutions, ecosystem design, and business modeling.

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Boosting digital businesses with optimized organizations, customer interactions, and innovation. Driving digital models, service organizations, and growth through design sprints and venturing. Enhancing sales, service, and the customer journey.

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Enhanced productivity, flexibility, and sustainability via lean manufacturing & digitalization for brownfield and greenfield factories. Aligned strategy with business goals, optimized processes, and scalable solutions, leveraging Siemens DI & SI.

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Dynamics shaping the Dental Industry

Siemens Advanta Consulting

Dynamics Shaping the Dental Industry

The ecosystem is characterized by intense competition and interdependence among several players.
Dental care is delivered via an ecosystem consisting of multiple players. Many a times, these players have overlapping products and capabilities which leads to competition for value across the chain. At the same time, many of these players are dependent upon each other to reach and deliver to their intended customers. The ecosystem has lot of push and pulls to say the least. Advances in dental technology, active investment by private investors, emergence of new service provider segments, regulatory shifts, changing demographics and associated demands of dental services is motivating players to either circumvent the traditional value chains or expand into adjacencies.

A deep understanding of ecosystem dynamics is vital for players to position themselves for success.
Understanding ecosystem interactions helps players identify opportunities and threats, enabling them to adapt and succeed in a competitive landscape. Better understanding can help players to rejig their portfolios, develop new partnerships, tweak their go to market strategies, divest non-core assets or all of the above.

We have distilled and highlighted key vectors shaping dental ecosystem in US.
We have uncovered 9 insights that we believe will shape the future of the dental care business in the US. Covering a wide range, from manufactures to service provides, these vectors are based on research and experience of Siemens Advanta team serving clients in dental ecosystem.

Industry experts

Please reach out to our experts for more information.

Sebastian Herrmann

Global Consulting Head Life Sciences & Healthcare

Nishant Verma

Consulting Expert Life Sciences & Healthcare North America

Dylan Son

Consulting Expert Life Sciences & Healthcare North America

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EcoDesign: Pioneering Sustainability in Product Development

Siemens Advanta Consulting

EcoDesign: Pioneering Sustainability in Product Development

As businesses face increasing regulatory pressure and consumer demand for sustainability, EcoDesign emerges as a critical approach to minimize the environmental footprint of products and services. By embedding ecological considerations into the design phase, companies can not only ensure compliance but also drive innovation and gain competitive advantage.

What is EcoDesign?

EcoDesign refers to the integration of environmental considerations into the design and development of products and services. It emphasizes on the entire lifecycle – raw material extraction, production, usage, and disposal – aiming to reduce resource consumption, lower emissions, and enhance recyclability.

EcoDesign is essential for companies looking to align with sustainability goals and meet evolving regulatory requirements while addressing the growing consumer preference for eco-friendly products.

Why EcoDesign matters: key benefits

For organizations, adopting EcoDesign principles offers multiple advantages:

Competitive advantage: Sustainable products open new market opportunities and enhance brand image

Cost optimization: Lower resource consumption in production reduces operating costs

Transparency: Improved engagement across the supply chain ensures better data quality on a product’s lifecycle, helping businesses make informed decisions

Sales enablement: Many customers are willing to pay a premium for sustainable products

What is required?

The Ecodesign for Sustainable Products Regulation (ESPR), which took effect on 18 July 2024, plays a pivotal role in the European Commission’s efforts to promote environmentally sustainable and circular products. Building on the EU's 2020 Circular Economy Action Plan, this regulation aims to increase the circularity of material use and support the EU’s climate and energy efficiency objectives by 2030.

With the ESPR now in effect, manufacturers need to proactively redesign products to comply with these standards. Delaying action could result in non-compliance and missed opportunities to capitalize on the growing demand for sustainable products.

In addition to the ESPR, various regulations worldwide, such as the Chemical Substances Control Law and the Plastic Waste Management Rules, are driving organizations to redesign their products to mitigate use of hazardous substances and reduce plastic waste. Meanwhile, regulations like California's Title 20 and the Greenhouse and Energy Minimum Standards Act are establishing minimum efficiency requirements for energy and water use, reinforcing the global shift towards resource-efficient products.

Who does EcoDesign apply to?

EcoDesign principles apply to all industries, from electronics and automotive to healthcare and industrial equipment. Any product that interacts with natural resources or energy can be redesigned to reduce its environmental impact, making this approach highly adaptable across sectors.

How to implement EcoDesign?

Implementing EcoDesign involves several strategic steps:

Set clear EcoDesign goals
Align your design efforts with sustainability objectives, whether it’s achieving carbon neutrality, fostering a circular economy, or reducing resource use
Cross-functional collaboration
Like compliance strategies, EcoDesign demands a coordinated approach involving R&D, product management, supply chain, legal, and sustainability teams
Life cycle assessment (LCA)
Conduct LCAs to evaluate environmental impacts at each stage of the product lifecycle and refine design criteria to minimize negative effects
Pilot and scale-up
Start with a pilot project to test EcoDesign criteria within select business lines. Once successful, scale up EcoDesign principles across the organization
Set KPIs and track progress
Establish relevant metrics to measure the success of EcoDesign initiatives, such as Product Carbon Footprint (PCF) and Environmental Product Declarations (EPD)

Overcoming challenges

EcoDesign implementation often faces hurdles, such as data availability and quality issues, stakeholder resistance, or difficulty in adapting current product development processes. However, these challenges can be mitigated through:

Collaboration between legal and technology teams

Transparent communication with all stakeholders

Data-driven decisions based on thorough lifecycle analyses

EcoDesign as a business opportunity

Beyond compliance, EcoDesign presents a unique business opportunity. Companies can position themselves as sustainability leaders, create new revenue streams, and offer innovative solutions such as circular economy use cases. With growing consumer interest in green products, businesses that implement EcoDesign can gain a significant competitive edge.

How Siemens Advanta can help?

At Siemens Advanta, we can provide end-to-end support for companies looking to adopt EcoDesign principles. Our services include, but not limited to:

Developing customized EcoDesign frameworks and integrating them into Product Lifecycle Management (PLM)

Conducting life cycle assessments and producing Environmental Product Declarations (EPD)

Supporting the implementation and scaling up of EcoDesign across the organization

Our tailored approach helps clients navigate regulatory requirements while capturing business opportunities in the growing market for sustainable products.

If you want to learn more about our offerings regarding EcoDesign, please download the detailed presentation on the topic here:

Industry experts

Please reach out to our experts for more information.

Dr. Stefan Kneip

Global Consulting Partner Pharmaceuticals & BioTech

Christian Neumann

Global Consulting Head Sustainability Business

Dr. Philipp Lill

Global Consulting Expert R&D Transformation

Gaurav Sen

Global Consulting Expert Sustainability Transformation

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Navigating Change: Manufacturing's Digital Journey

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Navigating Change: Manufacturing's Digital Journey

Change is no longer just an occasional challenge for the global manufacturing industry – it has become a constant force. Today, manufacturers are facing a perfect storm of pressures that are reshaping how they operate and innovate. The industry is undergoing a seismic shift, driven by a combination of technological advances, increasing competitive pressure from emerging challengers, and global economic factors that can no longer be ignored.

Technological breakthroughs like Artificial Intelligence (AI), digital twins, and 3D manufacturing are fundamentally transforming production processes and business models. Meanwhile, new competitors are catching up fast. These upstarts are achieving near-equal levels of quality while demonstrating greater agility and innovation, making it harder for established manufacturers to maintain their edge. At the same time, labor shortages, inflation, and slowing economic growth are further compounding the complexity of operating in today’s global market.

To address these mounting challenges, manufacturing organizations are turning to the Industrial Internet of Things (IIoT) as a vital component of their strategy. IIoT offers a path forward by unlocking new efficiencies, enabling real-time insights, and creating opportunities for predictive maintenance. It helps companies do more with less. Additionally, the pressure to meet sustainability standards and increase transparency in operations only adds to the urgency to adopt IIoT solutions.

For many manufacturers, successfully leveraging IIoT is no longer optional – it is crucial to staying competitive. By deploying IIoT solutions, companies can increase operational efficiency, improve customer engagement, and gain critical business intelligence that allows for more informed decision-making. However, despite these potential gains, successfully implementing IIoT is a complex endeavor.

While some companies opt for ready-made solutions, an increasing number are developing proprietary IIoT platforms tailored to their specific needs. This approach offers numerous advantages:

Tailored systems that integrate seamlessly with existing workflows

Reduced reliance on third-party vendors, lowering operational costs

The ability to refine platforms based on real-time user feedback, maximizing ROI

However, developing a bespoke IIoT solution also presents significant challenges. From integrating diverse technologies to ensuring data security and managing scalability, the road to success is paved with obstacles. Even more crucially, without a clear strategy and robust planning, companies risk turning these opportunities into pitfalls. Misaligning technology with actual work processes, underestimating the complexity of implementation, or failing to engage employees throughout the process can prevent businesses from realizing the full potential of their IIoT investments.

This is where integrated change management becomes indispensable. It’s not just about managing the technical side of IIoT deployment; it’s about aligning people, processes, and technology to ensure that the transformation delivers its intended benefits. Change management ensures that every layer of the organization – from leadership to the shop floor – embraces the shift, ultimately enabling businesses to turn challenges into competitive advantages.

Transformation and change: two sides of the same coin

Often looked at as the "soft and fluffy stuff," Change Management is also a technical discipline – reliant on fact-based research, analysis, and strategic thinking aiming at guiding an organization to sustainably introduce changes supported by the workforce. Change Management is essential for many reasons: minimizing disruptions, maximizing employee buy-in, and organizing training and development.

Bringing IIoT into any manufacturing organization requires both a shift in technology and a shift in mindset especially in relation to ‘how things were always done.’ “When organizations focus solely on the technical or operational aspects of a change initiative, they risk encountering substantial resistance and a lack of employee buy-in. This may also result in increased turnover, especially of key people.

In addition to focusing on raising awareness, acceptance and commitment of the workforce relating to changes, Change Management also works very closely with the project, or in the case of large digital transformations, the Transformation Management team. This integrated approach is essential for successful and sustainable implementation. While the Transformation Management team is planning and managing the different work streams of a project, Change Management generates valuable input for when and where those plans need to be adjusted for the organization to follow the changes and generate the expected benefits.

To sum it up, a successful Change Management program requires the acceptance of three factors:

It is Integrated. Change Management oversees the technology and people involved in the transformation throughout the digital journey – from conception to implementation – and is connected to the Transformation Management team.
It is Equal. Change Management is often introduced as an afterthought and is limited to communication and training measures. Doing so reduces the effectiveness of Change Management tremendously. Its contributions must be treated equally to those of project management or solution development.
It is Iterative. Change Management anticipates and adapts to volatile and uncertain situations. “An iterative approach corresponds to developing flexible strategies and plans, and continuously adapting them while already implementing them. This contrasts with a traditional approach that would involve setting fixed goals, detailed upfront planning and rigorous implementation towards a fixed target state.

How to do it right: learn from our experiences

“The reality is that the biggest reason [I] IoT-led changes fail is the inability to reach adoption in core teams and via key stakeholders. With IoT in particular, adoption issues stem from the organizational tendency to force people and processes to accommodate a new technology rather than figure out how the tech will add value.”

A simple example is the issues that could arise if an organization forgets that there are at least five different demographic groups in the workforce right now. From the Silent Generation (1928-1945) to the Baby Boomers (1946-1964), to Generation X (1965-1980), to Generation Y/Millennials (1981-1996), to Generation Z (1997-2010) – each of these groups learn and accept technology at a different pace.

As our colleague Britta Stutzman has written, “Successful Change Management boils down to understanding and relying on the diversity of our workforce; our job is to make sure we know as best as possible what keeps our employees motivated, how they like to learn and adapt to changes and finally what makes them engage in their job.”

But how do you create a transformation program in the right way to avoid the big risk of not having buy-in from the workforce? From our own experience, there are some aspects that contribute to a successful implementation.

Question if IoT is the right thing to do and how it helps: This might sound surprising, but what we encounter quite often is a situation where the solution is already decided, but the problem that it is supposed to solve, is still unknown. We know that everyone is eager to start and see the first features deployed, but not having clarity on why an IoT platform must be introduced and what should be achieved by it, will fall on the project’s feet later.
Design the IoT platform based on user feedback: Allowing those affected by the change to contribute to the solution significantly reduces implementation efforts. The people who will work with the IoT platform every day know best what features they need to achieve the expected benefits. This should also not be a one-time query at the beginning, but a continuous feedback collection throughout the rollout. Every deployment of new features will generate waves of valuable input influencing the course and outcomes of the project. Highly influential individuals must be identified and engaged early to minimize change resistance and develop influential change promoters.
Give clarity on how the IoT platform should be used: While it is always good to leave room for people to come up with their own ideas on how to make use of a solution, IoT platforms are very complex and for them to bring benefits, many different parties have to work together perfectly (e.g., to have correct data, actions can be triggered based on detected patterns). In one of our past projects, the client decided to forgo the focus groups and collaborative workshops on a new solution to let the workers show creativity in adjusting to the new tools. The workers did not have enough time to adjust to the changes causing frustration. Ultimately, the approach did not succeed, and the leaders realized that interviewing employees would provide the input to make the necessary changes.

Changing for tomorrow’s manufacturing success

Despite all the mentioned hurdles and risks associated with introducing an IoT Platform into a manufacturing setup, there is hardly a way around it for organizations that want to be prepared for the future. Fundamental changes in digitalization, automation, and demography need to be addressed proactively by any player in the manufacturing industry who strives to compete in the long run.

By opting to take the proprietary approach to IIoT, manufacturers can focus on both technology and employee acceptance of digitalization. The journey to developing a proprietary IIoT platform, despite its high investment and associated risks, underscores the necessity for strategic and early implementation of integrated Change Management. Success depends on the people within the manufacturing organization believing in, accepting, and driving the changes necessary for a full organizational transformation and manufacturing optimization.

Our contributors

Meet the experts behind the article.

Patricia Poppendieker

Global Consulting Expert Organizational Development and Change Management

Dr. Philipp Lill

Global Consulting Expert R&D Transformation

(PDF) Travelling the Digital Journey: A Literature Review and Framework for Change Management Actions and Tools in Digital Transformation (researchgate.net)

34 Digital Transformation Statistics For 2024 (digital-adoption.com)

Four Key Challenges for IoT Implementation – and How You Can Overcome Them (siemens-advanta.com)

How IoT Is Transforming The Manufacturing Industry (forbes.com)

Improving Operational Efficiency with Industrial IoT: Part 1 – IIoT World (iiot-world.com)

Industrial Internet Of Things Benefits, 2024 Trends, Examples & Challenges | Matterport

Industry Digitalization, Data-driven Process Optimization and Environmental Best Practices – IIoT World (iiot-world.com)

IoT in Manufacturing: Applications, Technologies & Examples (itransition.com)

Key Steps to Digital Transformation in Manufacturing: Cherry Bekaert (cbh.com)

Leading the 6-Generation Workforce (hbr.org)

leveraging-industrial-iot-and-advanced-technologies-for-digital-transformation.pdf (mckinsey.com)

Making the IIoT promise real | Whitepaper | Genpact

Managing Organizational Transformation for Successful OT/IT Convergence | The Internet of Things on AWS – Official Blog (amazon.com)

Manufacturing Optimization – The Paradigm Shift to A Smarter System – IIoT World (iiot-world.com)

successfuldigitaltransformationwhitepaperbysiemensiotservices.pdf

Without Change Management, IoT has no chance - Software AG | Software AG

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Accelerating the Future: Strategic Pathways for Emerging Battery Cell Manufacturers

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Accelerating the Future: Strategic Pathways for Emerging Battery Cell Manufacturers

Emerging manufacturers face immense pressure from EV makers, investors, and fierce competition amidst market volatility. The rapidly growing battery cell market demands speed and scalability. Those who can quickly ramp up gigafactories will lead the future of energy and transportation.

Speed and Scale – High Pressure on Emerging Battery Cell Manufacturers

The battery cell market is gaining significant traction, presenting a booming opportunity for emerging manufacturers. To capitalize on this growth, these manufacturers must prioritize innovation and speed while navigating a complex landscape to dominate the rapidly evolving electric vehicle (EV) market in the long-term. They face numerous challenges: EV makers demand swift, reliable supply chains and high-performance batteries, investors seek rapid returns and high multipliers, and there is fierce competition from established players with advanced technologies and large-scale production capabilities. Market volatility further complicates the scene, with EV demand projections for 2024 falling short, creating uncertainty through 2030. In this high-stakes environment, the ramp-up of gigafactories is crucial, as the ability to scale quickly has become a decisive factor for new manufacturers determined to lead the future of energy and transportation.

Why Speed is King – Addressing Triangular Pressures in a Volatile Market

The global EV market, valued at USD 388.1 billion in 2023, is projected to reach USD 951.9 billion by 2030 with a CAGR of 13.7%. Despite this, current delays in meeting the 2024 forecast create a volatile market. S&P Global reports that the anticipated EV demand boom for 2024 hasn't materialized, resulting in uncertain projections for 2030 growth. With global EV sales projected to grow by 36% in 2024, down from 62% in 2023, battery cell manufacturers face pressure to adapt. Economic challenges, including high interest rates in Europe and the US and a saturated Chinese market, contribute to this slowdown. Manufacturers must navigate tensions between EV makers, investors, government requirements, and industry players, showcasing their adaptability in a rapidly changing market.

1. Pressure from EV Manufacturers

EV manufacturers stress the need for quick, reliable supply chains, often setting strict deadlines for battery cell providers. Contracts typically include rigorous schedules, with delays leading to financial penalties and reputational damage. The demand for high-energy-density, fast-charging batteries in short development cycles adds additional pressure. Manufacturers must produce lighter batteries with shorter charging times, extended ranges, and reduced carbon footprints, all while meeting high-quality standards. The push for efficiency and excellence in production and quality underscores the intense demands on the EV supply chain.

2. Investor and Government Expectations

Battery cell manufacturers also face significant pressure from investors and competition for government support. Investors expect rapid production scaling within 3-5 years, demanding quick gains and substantial profits. This forces manufacturers to prioritize speed, efficiency, and cost-effectiveness. The need for considerable funding to scale up adds further pressure, requiring strong growth potential and adherence to demanding schedules. Competition for government incentives like tax breaks, grants, and subsidies is fierce. Emerging manufacturers must swiftly adapt strategies to meet eligibility criteria and align with investor and government demands to secure support.

3. Competition from Established Players

Leading companies dominate the battery cell manufacturing market with efficient, large-scale production facilities, setting high capacity and efficiency benchmarks. They use advanced techniques and innovative technology to produce high-quality batteries at lower costs, creating a cost-competitive advantage. This pressures other manufacturers to scale up rapidly while keeping costs low. To stay competitive, new battery cell manufacturers must streamline and accelerate their production processes to reduce costs without compromising quality.

Considering the triangular pressure, the role of gigafactories becomes critical in addressing the industry's demands for speed and scale. These production facilities are designed to meet the high-volume needs of the EV market, promising swift and efficient battery cell manufacturing to keep up with the fast-paced growth and innovation. Gigafactories, with their capability to ramp up production quickly, offer a strategic solution for emerging manufacturers to tackle the pressures of rapid scaling and market volatility.

Gigafactory Hurdles – Fast Ramp-Up and Scaling Challenges

Building a gigafactory and scaling up production involves overcoming intricate challenges. Emerging battery cell manufacturers must adeptly navigate each stage to achieve large-scale sustainable manufacturing.

1. Strategy & Setup

The success of a gigafactory depends on thorough strategic planning and meticulous operations setup. Analyzing target customer adoption rates and battery cell demand is crucial to accurately predicting market demand. This ensures that the factory's strategy aligns with future needs. Securing adequate funding is equally important, as large-scale projects and expansions require significant financial resources to support construction and operations.

2. Product Design

Emerging battery cell manufacturers must balance advanced materials and innovative designs with cost constraints. This requires continuous innovation to maintain economic viability while optimizing energy density and thermal management to maximize storage capacity and minimize size and weight. These efforts align with Design for X (DfX) principles, emphasizing manufacturability, cost-efficiency, and sustainability. Ensuring cell safety and stability prevents risks such as overheating or short circuits. Additionally, achieving consistent performance over numerous charge and discharge cycles is vital for longevity.

3. Factory Design & Planning

Securing an optimal location requires a balance between proximity to raw materials, market access, and logistical efficiency. Access to green energy sources is increasingly important to enhance the sustainability of the batteries. This directly impacts the facility's operational efficiency and cost-effectiveness by reducing transportation costs, ensuring reliable supply chains, and lowering energy expenses. Additionally, creating a scalable and adaptable layout is crucial for responding flexibly to market changes and accommodating future technological advancements and shifts in demand, ensuring the facility remains competitive and efficient.

4. Build, Commission & Ramp-Up

The build, commission, and ramp-up phase involves several critical tasks. Integrating and stabilizing new equipment requires meticulous oversight and collaboration with machine builders to ensure efficient manufacturing processes and prevent delays and cost overruns. Hiring and training a skilled workforce is equally important, as advanced manufacturing processes demand highly qualified employees to manage sophisticated systems and ensure smooth operations.

5. Operate

Once operational, a gigafactory must manage ongoing complexities. Handling maturing processes is a significant task, with errors occurring from electrode production to module packing, often making stacking a bottleneck process that requires continuous improvement and careful monitoring. Scaling up production while ensuring process stability is crucial. As the gigafactory footprint expands, maintaining stable processes in new environments, such as additional production lines or new facilities, is essential to uphold product quality and operational efficiency.

Holistic Planning – Leveraging Automation and Digitalization for Rapid Scaling

Emerging battery cell manufacturers must take a holistic approach, integrating advanced planning, automation, and digitalization to overcome these challenges and ensure rapid scaling.

Advanced Planning

Advanced planning forms the foundation for successfully ramping-up and scaling a gigafactory. This involves several critical components:

Integrated Market Analysis and Forecasting: Accurately predicting market demand and trends is vital. Manufacturers can accurately forecast EV adoption rates and battery cell demand using advanced analytics and predictive modeling. This ensures strategic alignment with market dynamics, reducing the risk of over- or undercapacities.
Strategic Financial Planning: Securing sufficient funding and financial backing is essential for large-scale projects. Understanding the major cost drivers of a battery gigafactory enables better decision-making and reduces CAPEX and OPEX. Developing robust financial models, engaging with a diverse range of investors, and establishing clear financial goals and milestones ensures the availability of necessary financial resources.
Digital Twin Technology: Enhancing gigafactory design and planning with digital twin technology allows manufacturers to create virtual models of the gigafactory. This enables detailed simulation and optimization of production processes, facilitating flexible and scalable factory designs. Additionally, virtual equipment commissioning accelerates new product introduction in a "safe" environment.
Virtual Product Design: Balancing performance and cost through virtual product design is essential. Engineers can analyze thermal management, electrochemical performance, and mechanical stresses under various conditions by simulating physical behavior and rapidly validating designs. This approach identifies potential issues and optimizes designs before building physical prototypes, saving time and resources.

Automation

Automation is an essential component in enhancing production efficiency and scalability within gigafactories. Key aspects include:

Advanced Manufacturing Systems: Implementing advanced automated production lines, robotics, and AI-driven quality control systems reduces manual labor, minimizes errors, and increases production speed and consistency. Transitioning from predictive to adaptive systems necessitates close collaboration with machine builders to achieve the target operating model.
Automated Testing and Feedback Loops: Integrating automated testing systems that provide immediate feedback and adjustments to production processes, enhancing overall product quality and reducing waste.
Energy Management Systems: Integrating automated energy management solutions optimizes energy consumption, reduces costs, and enhances sustainability. Smart grids, AI-based energy forecasting, and automated demand response systems contribute to more efficient energy use within gigafactories.

Digitalization

Digitalization is vital for enhancing operational efficiency and resolving bottlenecks in gigafactories. Key elements include:

Data-Driven Decision Making: Implementing IoT sensors, real-time analytics, and AI-driven decision support systems at every production stage provides actionable insights for continuous improvement and quick issue resolution. Real-time data collection and analysis help identify inefficiencies, predict maintenance needs, and optimize processes, with AI offering predictive analytics and automated responses.
Digital Twin of Production: This technology improves operational efficiency by simulating processes and predicting outcomes. The virtual model enables testing and optimization in a digital environment, leveraging real-time data and analytics to foresee issues and suggest improvements. Consequently, it boosts efficiency and reduces downtime.
End-to-End Digital Integration: Integrating end-to-end digital systems across the supply chain, production, and distribution networks into a single cohesive digital platform enhances coordination, reduces information silos, and improves overall operational transparency.

Leveraging a holistic approach ensures streamlined operations, cost reduction, and a competitive edge in the rapidly evolving battery manufacturing industry. This comprehensive strategy encompasses all aspects necessary to ramp-up and scale a Gigafactory effectively.

Best Practices – Lessons from a European Supercapacitor Leader

A top-tier European supercapacitor cell manufacturer scaled its production capabilities, positioning itself at the industry's forefront through strategic planning, advanced automation, and digitalization. The company predicted EV adoption rates using advanced analytics and market research, aligning production with future needs and avoiding overproduction risks. Diverse financial models attracted investors, ensuring sustainable growth and operational efficiency. Virtual product design balances performance and cost, creating a sustainable supply chain that meets high market standards.

Implementing virtual commissioning and digital twin technology improved production line setup and testing, reducing planning and setup time by 30% and operational costs by 15%. Flexible factory designs enabled rapid market adaptation, ensuring a competitive edge. Additionally, automation, including robotics and AI-driven quality control, lowered scrap rates by 30% and increased production efficiency by 20 p.p. Data-driven predictions have improved logistics, ensuring timely raw material availability and reducing lead times by 25%. Automated training programs and VR simulations effectively prepared the workforce to operate sophisticated machinery. Digitalization has enhanced operational efficiency through IoT sensors, real-time analytics, and AI-driven decision-making, continually improving production processes and doubling cell output.

Meanwhile, end-to-end digital integration enhanced coordination and transparency across the supply chain, using digital twins to optimize operations dynamically. This strategic transformation allowed efficient production scaling, high-quality standards, and cost reduction, securing the manufacturer's position as a European leader in the supercapacitor cell market. Embracing innovation and strategic foresight, the company met market demands and set new industry benchmarks, solidifying its competitive advantage in the rapidly evolving EV landscape.

Seizing the Future – The Imperative Race for Emerging Battery Cell Manufacturers

As demand for electric vehicles surges, emerging battery cell manufacturers are under intense pressure to keep up with rapid growth, high expectations from EV makers, investor demands, and fierce competition from established players. In this volatile and fast-changing environment, the gigafactory stands out as a critical factor in shaping the future of energy and transportation.

To navigate this uncertainty successfully, manufacturers must embrace a holistic strategy integrating advanced planning, automation, and digitalization. Scaling production quickly and efficiently will be crucial as the battery market evolves. How these emerging players address these challenges will determine their success and profoundly impact the global energy transition and the drive toward a sustainable future.

Battery cell manufacturers must take decisive action now. They can maintain a competitive edge in this ever-changing landscape by investing in thorough planning, focusing on automation, and adopting digital technologies. As the future of energy and transportation unfolds, those who can innovate and scale effectively will lead toward a more sustainable and electrified world.

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Johannes Eichenseer

Global Consulting Partner Factory & Supply Chain Transformation

Patrick Witte

Global Consulting Expert Factory & Supply Chain Transformation

Jesse Okpu

Global Consulting Expert Factory & Supply Chain Transformation

https://www.marketsandmarkets.com/Market-Reports/electric-vehicle-market-209371461.html

https://www.fortunebusinessinsights.com/industry-reports/electric-vehicle-market-101678

Global Auto Sales Forecasts: Slower EV Growth Offers Temporary Relief To Legacy Automakers | S&P Global Ratings (spglobal.com)

https://www.fastmarkets.com/insights/whats-in-store-for-ev-demand-in-2024-and-beyond/

https://ev-volumes.com/news/ev/global-ev-growth-forecast-in-2024-but-challenges-remain/

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Johannes Eichenseer

Global Consulting Partner Factory & Supply Chain Transformation

Transportation & Logistics

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Emerging battery cell manufacturers must swiftly innovate and scale under supply chain pressures and automation needs to excel in the fast-paced EV market.

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Pricing Optimization: Enhancing the classical Value-Based Pricing approach

Siemens Advanta Consulting

Pricing Optimization: Enhancing the classical Value-Based Pricing approach

Pricing analytics is a critical tool for companies looking to gain a competitive advantage. By utilizing pricing analytics, businesses can optimize their pricing strategies to improve profitability, boost customer satisfaction, and drive sustainable growth. Harvard Business Review underscores the importance of effective pricing strategies for capturing value and maintaining competitiveness, stressing that a data-driven approach to pricing is necessary for achieving strategic and profitable results. Integrating pricing analytics into decision-making processes helps companies align their pricing with market conditions and customer needs, driving greater potential for growth.

Overview of key pricing strategies

By having a look at the success stories of industry giants, the importance of choosing the optimal pricing strategy becomes even clearer. The best strategy depends on various factors, including market conditions, the nature of your products or services, and customer preferences. For example, Uber employs dynamic pricing, raising prices during peak times to balance supply and demand. Walmart often relies on cost-plus pricing, ensuring its prices remain low by adding a fixed margin to its costs, making it a leader in the retail industry, and Apple, a proponent of value-based pricing, prices its products according to perceived customer value, enabling it to maintain premium pricing and customer loyalty.

How to determine the go-to pricing strategy?

There are numerous pricing strategies available, and no single approach works best for every business. Understanding the strengths and weaknesses of different pricing models is crucial for selecting the one that aligns best with your business goals. Here are three widely used pricing strategies:

1. Cost-plus pricing

Cost-plus pricing is one of the most established and most straightforward pricing strategies. It involves adding a fixed percentage (mark-up) to the cost of producing a product or service to determine its selling price. This method ensures that all costs are covered, and a profit margin is included. While easy to implement, cost-plus pricing may not always reflect the product’s market value or customer willingness to pay. It’s best used in stable markets where costs are predictable, and competition is limited, often applied in retail markets.

Advantages of cost-plus pricing:

Simple and easy to implement

Ensures all costs are covered

Provides a consistent profit margin

2. Dynamic pricing

Dynamic pricing, also known as surge pricing or demand pricing, is a strategy where prices are adjusted in real-time based on current market demand, supply conditions, and other external factors. This approach is widely used in industries such as travel, hospitality, and e-commerce. Dynamic pricing allows businesses to maximize revenue by charging higher prices when demand is high and reducing prices to stimulate sales when demand is low.

Advantages of dynamic pricing:

Maximizes revenue potential.

Responds quickly to market changes

Helps balance supply and demand

3. Value-based pricing

Value-based pricing is a strategy that sets prices primarily based on the perceived value to the customer rather than the cost of production. This method requires a deep understanding of the target market and the benefits that customers derive from the product or service. By focusing on the value delivered, businesses can often charge a premium price that reflects the product's worth to the customer.

Advantages of value-based pricing:

Aligns price with customer value perception

Can justify premium pricing

Enhances customer satisfaction and loyalty

Each pricing strategy has its strengths and can be highly effective when applied in the right context. Cost-plus pricing is straightforward and easy to implement, but it often overlooks external factors like competition. Value-based pricing, however, is more adaptable and responsive to market conditions, customer perceptions, and competitive pricing, while being less complex than dynamic pricing.

In the following sections, we will focus on value-based pricing, examining its core principles and introducing a machine learning-based extension to traditional methods like conjoint analysis. This approach leads to more accurate and effective pricing strategies that are in tune with current market trends and customer demands.

Understanding when value-based pricing is the best strategy

Determining whether value-based pricing is suitable for your business involves a careful evaluation of several critical dimensions: customer, product, and competition. This holistic approach ensures that your pricing strategy is not only feasible but also aligned with your broader business objectives.

Know your customers:

Customer stability: Are your customers consistent over time, or do they change frequently? Stable, repeat customers are often more receptive to value-based pricing and allow you to better understand their valuations.

Customer diversity: How varied are your customers' needs and preferences? Diverse customer segments may perceive value differently, necessitating a tailored approach.

Customer willingness to pay: Are your customers willing to pay a premium price for the unique value your product offers? Assessing their willingness to pay is crucial for a successful value-based pricing strategy.

Understand your product:

Product type: Is your product a specialist item or a standard, commoditized one? Specialist products that offer unique value as well as individualized products, shaped to the customers’ needs, are better suited for value-based pricing.

Unique value proposition: What unique value does your product offer? Clearly understanding and articulating this value is essential for implementing value-based pricing.

Product performance: How well does your product perform compared to alternatives? Superior performance can justify higher prices and attract value-focused customers.

Analyze competition:

Competitive landscape: Do you face strong competitors, or are you a market leader? Market leaders with superior products often have more leeway to set prices based on perceived value.

Market position: Do you operate in an environment with low competition or where competitor products are very different from yours? Those conditions can favor value-based pricing.

Competitor pricing strategies: How do your competitors price their products, and what value do they offer? Understanding the competitive landscape helps position your value-based pricing effectively.

These questions are non-exhaustive, but a vital first step in determining if value-based pricing aligns with your business model. Every business is unique, and additional factors may need consideration based on your specific context.

The classical approach to value-based pricing via conjoint analysis

Value-based pricing is a strategy where prices are set based on the perceived value of a product or service to the customer, rather than its production cost. This approach focuses on understanding the benefits that customers believe they receive and pricing accordingly. To effectively implement value-based pricing, businesses often employ conjoint analysis.

Conjoint analysis is a methodological tool designed to determine how customers value different features of a product or service. This methodology provides a more nuanced approach than cost-based or competitive pricing methods by examining how customers value various product features and price combinations.

Conjoint analysis offers substantial benefits for value-based pricing by providing a detailed understanding of customer preferences and the trade-offs they are willing to make. Unlike direct price queries, which only ask customers about their willingness to pay, conjoint analysis assesses different combinations of product attributes and prices. Developed in the 1970s and continuously refined, this method captures realistic consumer behavior by presenting various product profiles with differing attributes and prices. This approach uncovers unconscious decision patterns and validates price points and product features, allowing businesses to set prices that reflect the true value perceived by customers.

The methodology of conjoint analysis involves several structured steps:

A product is deconstructed into its key attributes (e.g. brand, engine type, price) and levels (e.g., different brands, price points).

A balanced survey design is then created to ensure the statistical validity of the results.

Customers are presented with a series of choice tasks, where they select their preferred product profiles from various combinations of attributes and prices.

The collected data is analyzed using statistical models to derive preference scores (part-worth utilities) for each attribute level.

These scores indicate the relative importance of each feature and how much customers are willing to pay for different attributes, thereby helping businesses determine optimal pricing strategies.

While conjoint analysis provides valuable insights, it requires ongoing refinement. The accuracy of the analysis depends on the quality of the survey design and the data collected. Conjoint analysis may not fully capture the complexities of real-world decision-making or the evolving nature of customer preferences. As market conditions and consumer expectations change, businesses must continuously update their analysis to ensure its relevance. Key outputs from conjoint analysis, such as utility scores, market simulators, and attribute importances, need to be regularly reviewed and adjusted to reflect current trends. This ongoing refinement is crucial for maintaining effective value-based pricing strategies and ensuring that product configurations and pricing remain competitive.

An advanced value-based pricing with machine learning

Machine learning can address the limitations of the classical conjoint analysis by offering more accurate pricing adjustments based on current data. Classical pricing approaches, including conjoint analysis, often rely on fixed models and require continuous customer input through surveys to understand preferences. In contrast, machine learning can be applied to analyze large and varied datasets, including historical sales data, customer behavior, and current market conditions to uncover complex patterns and trends, providing a more dynamic and comprehensive view of customer value. This capability is especially beneficial for pricing innovative or highly customizable products, where determining the optimal price can be particularly challenging. By leveraging machine learning, businesses can make better-informed pricing decisions that adapt to fluctuating market conditions and align closely with customer perceptions of value.

The methodology for applying machine learning in pricing involves several detailed steps. Similar to conjoint analysis, the product is deconstructed into its fundamental attributes and levels—such as brand, features, and price points. However, instead of relying on surveys, machine learning models use historical sales data and advanced analytical techniques to derive the importance of certain attributes to customers. If little data is available, machine learning models can apply transfer learning from other segments to help determine preference scores for each attribute. These scores quantify how much each feature influences customer decisions and the sensitivity of customers to price changes. The resulting analysis informs the development of pricing strategies that optimize revenue while reflecting the value perceived by customers.

At Siemens Advanta, our approach helps businesses make data-driven pricing decisions by analyzing product performance, predicting market reactions, and prioritizing key product attributes. This method replaces outdated, opinion-based pricing approaches with precise, reliable data. For more information on how Siemens Advanta can help enhance your pricing strategies with machine learning, read more on our offering page.

Industry experts

Please reach out to our experts for more information.

Ebru Yildirimli Kafkas

Global Consulting Expert Advanced Analytics & AI

Dr. Paul Sutterer

Global Consulting Expert Pricing Analytics & Optimization

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Accelerating the Future: Strategic Pathways for Emerging Battery Cell Manufacturers

Table of Contents

Speed and Scale – High Pressure on Emerging Battery Cell Manufacturers

Why Speed is King – Addressing Triangular Pressures in a Volatile Market

Gigafactory Hurdles – Fast Ramp-Up and Scaling Challenges

Holistic Planning – Leveraging Automation and Digitalization for Rapid Scaling

Best Practices – Lessons from a European Supercapacitor Leader

Seizing the Future – The Imperative Race for Emerging Battery Cell Manufacturers

Our contributors

Author

Pricing Optimization: Enhancing the classical Value-Based Pricing approach

Overview of key pricing strategies

Understanding when value-based pricing is the best strategy

The classical approach to value-based pricing via conjoint analysis

Strategy & Digital Innovation

Customer-Centric Digital Acceleration

Business Performance & Transformation

Digital Engineering, Manufacturing & Supply Chain

Autonomous Green Lean Digital Factory

Digital & Sustainable Engineering

Procurement & Supply Chain

Intelligent Infrastructure

Custom Infrastructure Twins

Utility System Transformation

Digital Core

Sustainability

ESG Leadership

Circular Economy

Decarbonization

Data Analytics & AI

AI & Data Strategy

Enterprise AI

Industrial AI

Cybersecurity

Cyber Governance, Risk & Compliance

OT Cybersecurity

Product & Solution Security

Technology Integration & Solution Development

Technology Enablement

Vertical & Horizontal Integration

Custom Software Engineering

Solution Lifecycle Management