Be afraid… be very afraid

20 December 2000

No, its not Jaws, cinema’s fiercest shark. We don’t even know yet the new name that it will be given, but the merged Siemens Production & Logistics (PL) and Dematic will be a company its competitors would be wise to fear.

We commented in Issue 11 that Dematic was, while not unique, at least noteworthy for having recognised the role that materials handling companies can and must play if e-commerce is to fulfill its potential. It is all very well having mouse-click purchasing, but supply chain systems must improve equally dramatically if customer expectations are to be satisfied.

Dematic was already a $2bn a year company. Assuming it jumps through the last regulatory hoops, which it will, it will start its new life with sales of more than $3bn. This makes it several times bigger than any of its competitors. Not only does it have size in its favour, it has a clear vision – to lead the world in logistics automation by combining Dematic’s products with Siemens’ contracting, engineering and IT expertise. Quite a formidable combination.

In talking up the prospects of the merger, all the emphasis is placed on higher technology engineering and logistics automation. The prospects for good old fashioned crane building are seemingly ignored. Is this because Siemens is addressing itself primarily to the financial community, which prefers high, to low technology? Or does it genuinely regard cranes as a subordinate part of its future? Siemens PL should beware devoting all its attention to high risk, competitively won contract engineering. There’s still good money in off-the-shelf lifting products.