Siemens Acquires Preactor: What’s the Impact on the Manufacturing Operations Management Marketplace?

manufacturing operations solutionsMonday, June 3, Siemens announced the purchase of Preactor, a privately held UK-based provider of Advanced Planning and Scheduling (APS) software for a broad range of manufacturing industries. In addition to providing Preactor access to the German solutions company’s wealth of resources, the acquisition will extend and add depth to Siemens’ already diverse portfolio of manufacturing operations management offerings.

With 20 years of industry experience and 70 employees, Preactor has deployed its software across more than 4,500 sites globally. Its solutions help manufacturers respond to supply and demand changes, as well as react to real-time plant production conditions. The product enables users to optimize production and logistics by increasing certainty, boosting productivity, and lowering costs.

LNS Research spoke with officials from Siemens on Friday, June 7, about this acquisition. This post intends to discuss its anticipated impact on the Siemens portfolio, along with the impact to the MOM software marketplace at large.

Motivations for Expanding Siemens’ MOM Portfolio

While there are a number of reasons behind the Siemens-Preactor acquisition, several stand out as key drivers. First, APS software is completely complementary to other offerings that Siemens has in its MOM portfolio. In fact, as stated in a post of mine from May, The (Not-so-distant) Future of Manufacturing Software, APS software is one of the key enterprise business applications that bridges the gap of real-time plant scheduling and dispatching within manufacturing operations. Adding it to Siemens’ MOM portfolio is a natural extension.   

And second, there is minimal overlap between Siemens Product Lifecycle Management (PLM), enterprise quality management, and manufacturing execution system (MES) software offerings. APS software should fill a missing gap that can connect to both ERP-level planning as well as MES-managed production activities and events. This can bring a more holistic perspective into decisions made across the supply chain as well as deep within manufacturing environments.  

The Impact to Prospective and Current Customers

There should be a variety of potential benefits, short- and long-term, for prospective and existing customers. Although it will take some time, the more real-time plant production data that Siemens can link to Preactor APS, the more value we see that it will create for the APS solution. In the coming months and years, prospective and current customers can expect to be impacted in the following ways:

Short Term

  • Siemens will increasingly build Preactor APS into its portfolio of MOM products, ensuring compatibility with the portfolio and future software version upgrades
  • Customers and prospects will have a single supplier and a single point of responsibility for comprehensive MOM software offerings

Long Term

  • Enduring success will be largely dependent on the product integration between SIMATIC IT MES and Preactor APS
  • Customers will benefit from better coordination and optimization of long-term ERP scheduling, which is already available with Preactor
  • Customers will benefit from the realities of plant asset, inventory, and production order conditions managed by SIMATIC IT MES in the future

Because Preactor APS software is used across a broad set of manufacturing industries – including pharmaceuticals, chemicals, food and beverage, and discrete – it will be interesting to see which manufacturing vertical or verticals Siemens intends to pursue with the combined MOM offering. Siemens noted that although it’s already quite broad in industries served for its MES solution, it plans to be more industry specific and particular when including APS into the mix. We plan to stay attuned to these details over time.

The Impact to Existing Preactor Relationships

When such an acquisition takes place, a top-of-mind issue surrounds whether or not the buyer will continue to openly offer standalone instances of its new technology. With a vast majority of Preactor’s current business coming through partners, many of which are competitors to Siemens, there’s already keen industry interest on how the future of this relationship will play out.

In addition to providing an APS solution that’s integrated with Siemens MOM portfolio, there seems to be full intention on continuing to offer Preactor APS software as a standalone solution through existing partner relationships. A similar strategy has been taken with Siemens' PLM offering, which can be delivered as part of the integrated solution or standalone.

Siemens also reported that it plans to leverage these existing relationships to seek new opportunities for offering complementary software technologies to these partners.

Overcoming Technology Challenges with an Integrated Offering

In too many cases, unfortunately, we’ve seen failed APS implementations. For APS to not become shelfware, it’s important that the models have accurate and timely physical data and can also be flexible to adapt to changes in products and production capabilities. This is often the source of failed implementations, but can be addressed by a tighter, bi-directional MES and APS integration.

By integrating its existing strengths in MES and Preactor’s APS using SIMATIC IT as the common MOM platform, Siemens is in a good position to help companies in a range of industries realize the benefits of APS. However, for Siemens to be successful in this integration, it will be important that it views the acquisition as not just a “check in the box,” but as an important application to be integrated with SIMATIC IT and its other complementary applications.

Key Takeaways and the Impact to the MOM Marketplace

Like Preactor, most of the significant APS providers have already been purchased by ERP and MOM software providers. With Preactor’s ability to easily integrate across a wide range of enterprise and manufacturing software, the acquisition is a good step in the right direction for Siemens to build out open MOM solutions for the marketplace as a whole.

Preactor is a good fit for the Siemens' MOM portfolio as it fills an important gap in optimizing longer range production planning with the realities of what is happening inside the plants. That said, it will be interesting to see how successful Siemens is in simultaneously executing its strategy of both standalone and integrated APS with Preactor.

Because the maximum value of APS comes when integrated to both ERP and MES, we believe that this acquisition will likely result in some of Siemens’ competitors to further enhance integrated APS capabilities to compete with the coming Siemens-Preactor offering.

If you are a Preactor or Siemens prospective or current customer, LNS Research would like to hear your thoughts on this acquisition. Please feel free to share them in the comments section.

industrial technology blog

You might also be interested in:

9 Uses for Enterprise IT and MOM Software in Manufacturing

Next-Generation Manufacturing Software Platforms

What is Manufacturing Operations Management?

All entries in this Industrial Transformation blog represent the opinions of the authors based on their industry experience and their view of the information collected using the methods described in our Research Integrity. All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

Subscribe Now

Become an LNS Research Member!

As a member-level partner of LNS Research, you will receive our expert and proven Advisory Services. These exclusive benefits give your team:

  • Regular advisory sessions with our highly experienced LNS Research Analysts
  • Access to the complete LNS Research Library
  • Participation in members-only executive Roundtable events
  • Important, continuous knowledge of Industrial Transformation (IX)

Let us help you with key decisions based on our solid research methodology and vast industrial experience. 


Similar posts


Stay on top of the latest industrial transformation insights from our expert analysts

The Industrial Transformation and Operational Excellence Blog is an informal environment for our analysts to share thoughts and insights on a range of technology and business topics.