Interview with Paul Johnston, Siemens Digital Industries Software
„Ignoring China is not an option for multinational wiring harness manufacturers“
Paul Johnston has worked across product management, training, consulting, pre-sales, and business development.
Paul Johnston
In the run-up to the Automotive Wire Harness & EDS Conference 2025, we spoke with Paul Johnston from Siemens Digital Industries Software about the trends reshaping the wire harness sector – from SDVs and global market pressures to AI’s role in design and manufacturing.
With over 25 years of experience helping
customers automate and digitize electrical system and wire harness designs –
from early architecture and concept work through to manufacturing – Paul
Johnston has been at the forefront of innovation in this field.
Having delivered solutions to customers
worldwide, especially in the USA, Johnston has witnessed firsthand the rapid
evolution of electrical/electronic engineering tools over the past decade. Ahead
of the Automotive Wire Harness & EDS Conference
2025, he outlines the key trends shaping the industry and how companies
can position themselves to tackle upcoming challenges and seize new
opportunities.
ADT: We are in the midst of a dynamic and disruptive decade for the
automotive industry. From your perspective, what are the biggest challenges the
wire harness sector will face over the next five years?
Johnston: To be a supplier in the automotive
sector is to accept that there will always be challenges, competition, and
market disruptions. The external, new, and broad factors in the automotive
industry for the last half of this decade, which I can see affecting the wiring
harness community, are creeping, inexorable shifts. I consider this an era in
which the enterprise direction of international wire harness contractors is to
adapt and diversify their business products and services. Concurrently, there
is an important advantage in improving efficiency by flattening processes and
reducing variations. If you have 25 processes for 25 customers, that is too
much overhead. The first and biggest trend is the continued progress towards
delivering functions and features in vehicle platforms and other complex
“system of systems” products via software. The character of the vehicle becomes
largely defined by the software in it. This is the essence of the term
“software-defined vehicle” (SDV). Developing vehicles in this way opens up the
possibility of reducing overall wiring content (through the use of centralized
computing and rationalized network designs) or, at the very least, drives
changes in the componentry used in wiring harnesses. Tracking and adapting to
this architectural shift for electrical/electronics design, as it flows through
to manufacturing, is key for the health of any sizeable automotive wire harness
company. Fewer wires per vehicle – for example, taking out half a mile of
wiring content from a car design – is possible if not probable. If your profit
is predicted by how many wires of what length you cut in the manufacturing
space, that means your profit is threatened unless you adapt.
What is the second trend?
The second trend to watch is the economic
headwinds and the growing dominance of Chinese automakers globally. Here in the
American market, protectionist tariff barriers are currently in the news. These
measures are particularly designed to discourage or prevent Chinese automakers
from establishing a market presence or even selling their goods in the USA.
Disincentives in various forms are more stringent than ever, with new ones
recently added. It should be noted that the great wall of regulations to keep
Chinese automakers at bay has been a feature of American politics across party
lines and administrations for over a decade. Ignoring China is not an option
for multinational wiring harness manufacturers. In global market terms, the
Chinese domestic market for passenger vehicles is now approximately twice the
size of the USA home market. Chinese OEMs produce nearly twice the volume of
cars that US passenger car OEMs do. Furthermore, the manufacture or assembly of
roughly 4 out of every 10 American OEMs’ new cars in 2025 is still done outside
the 50 states. Protectionism is slowing the market trend away from the US
automakers in their home market, but it is not reversing it. Whatever the US
government does or does not do in the next five years to support its home auto
industry, a decline of market share regionally and globally looks almost
certain for US-based OEMs. So, as supplier partners and business-to-business
partners in difficult circumstances, our challenge is to find ways to be more
efficient and to innovate. Our best response, perhaps, is through our use of
technology to discover ways to help our customers accomplish more.
What is the third trend?
Third and finally, as a strategic goal, wire
harness Tier 1 suppliers need to deliver on a commonization of the design
process. Invariably, Tier 1s support many OEMs. Each customer has a different
set of data they pass on to communicate design intent, resulting in multiple
processes evolving to support each individual OEM. Capital enables a Tier 1 to
develop one common design and development workflow regardless of inputs – thus
eliminating waste and allowing for optimization of engineering resources. Engineers
can and will work on any OEM program instead of being dedicated solely to one
customer. As activity ebbs across programs, there will be flexible deployment
of more versatile engineering resources. In a unified “shared-across-customer”
process, costing and pricing are not peripheral to the projects harness makers
have with an OEM – they are paramount. There is a big impact on commercial
outcomes based on accuracy at the time of quoting. Where a Tier 1 currently
works principally in Excel, utilizing past program data as the baseline to
predict cost and price of new programs, they are accepting a lot of risk.
Capital will eliminate that risk. Understanding and absorbing rapid
architecture changes while preserving accuracy is a very difficult task.
Companies are often caught unawares of problems until very late – issues
showing up only when they start producing and even shipping finished goods back
to the customer. Late detection and resolution of problems is expensive.
Capital allows for accurate cost prediction based on BOM and process costs.
Templates are built by plant or customer, also letting users, for the first
time, have confidence in delta pricing on a per-change basis – something which
is at the heart of every Tier 1’s business model but not in their business data
models.
Siemens Digital Industries Software is deeply
involved in enabling digital transformation across E/E systems engineering.
Where do you see your portfolio making the greatest impact today in the wire
harness domain – and how are your solutions helping customers scale for future
complexity?
Ah, complexity is a complex thing! I will try to
avoid an intricate, lengthy explanation and give the gift of simplicity.
Enabling electrical/electronic designers begins with understanding their inputs
– starting from system requirements to digitizing product architecture and
progressing to physical implementation. This entails managing complex wiring
systems, often with vast customer-driven variations, through design,
manufacturing, and on to service or aftermarket phases. Siemens supports this
full lifecycle with integrated digital twin solutions across industries like
automotive, agriculture, aerospace and defense, marine, and construction. The
greatest impact is harmonizing tools and workflows across dispersed teams. The
Siemens Xcelerator platform provides a unified environment where engineers,
trained for cross-functional collaboration, can contribute effectively. Siemens
Capital, Teamcenter, NX, EZ-Plan, and Product Cost Management tools understand
each other to foster these collaborative workflows.
What does this level of tool integration mean for engineers in their
day-to-day work?
Engineers can manage product variability, costs,
and logistics much better with these suites of advanced tools. Capital
understands and manages the complexity of customer choices in electrical
distribution systems design. Whilst Capital is contributing an electrically
fully engineered release BOM, other Siemens tools and Capital are capable of
consolidating electrical design and harness manufacturing BOMs and Bill of
Process with other BOM sources at the enterprise level (PLM/PDM/ERP). Siemens
Xcelerator’s enterprise view of BOM transforms enterprise-wide processes,
reduces resource demands, and speeds validation cycles, making the vision of a
connected digital thread a practical reality. As an example of scaling for the
future, Siemens recently acquired with Altair exciting extensions to its
product range, and there are lots of additional synergies on the way from tool
and portfolio collaborations. The breathtaking complexities can be simplified
if you have solutions which harmonize, integrate, and unify.
Your presentation at the Automotive Wire Harness
& EDS Conference 2025 addresses future-defining technologies and the role
of AI in strategic decision-making. How can automotive companies determine
which technologies and AI applications are most likely to deliver long-term
value?
It is a generalization, I know, but automotive
companies are technology-savvy. I think a generalization like this is okay to
start with. Customers know what they want, set priorities based on their own
overall strategies, and employ in-house experts to review, evaluate, and
implement new software solutions. We will advise if asked, but we always want
to start out by listening. We trust what our customers tell us. At Siemens, we
listen to customers and craft solutions for their needs. Goals with AI tools
are generally saving labor. This is now impacting professionals whose knowledge
and expertise can be replicated adequately to automate tasks that were
previously reserved for humans. Designers, technicians, CAD librarians, and
even managers will be challenged to step up their productivity and step aside
from some familiar tasks. AI assistance in document review, AI tools to support
learning and understanding software functionality, and AI assistance in
analyzing large data sets, taking over compliance and audit tasks, are examples
at the design end of the product lifecycle.
And beyond design – what changes do you expect AI to bring once it
reaches the production floor?
At the
manufacturing end of the automotive wire harness business, artificial
intelligence and machine learning will come into focus first in the planning
and production process design areas and in operations and execution.
AI-equipped machinery will begin to realize the potential to eliminate manual
labor tasks in the assembly and testing of harnesses. In manufacturing, the
imperatives of keeping production moving and maintaining profitability, and the
reality of manufacturing at volume in low-labor-cost areas, slow down and often
suppress motivation to innovate. Business needs are seldom matched with a
generous budget in harness assembly plants, so the return on investment has to
be a very persuasive argument. Quality control, testing, and employee productivity
management functions are particular targets for software applications inclusive
of AI for harness manufacturers. Siemens’ own view of its mission is a
narrative of efficiency across all our business software solutions. AI
innovation is fundamental to the current and forward development plans of
Xcelerator. We tell you who we are and suggest how we can help you by defining
sequences of activities linked and optimized as digital threads. We reference
those digital threads if you have localized, domain-specific needs, and Siemens
Digital Industries Software typically has solutions and value that fit your
process. If your appetite for change is large and your desire to implement
end-to-end change is urgent, we can help you especially. We focus on digital threads
because this is key to adding long-term value to our customers. Cutting the
slack out of one or two steps in a complex end-to-end process like wire harness
design to manufacturing is a good success. The savings can be substantial and
long-lasting. Getting involved in wholesale transformation, with AI-assisted
solutions establishing some new end-to-end digital thread processes, is better.
That’s when we are delivering competitive advantage to our customers and our
customers’ customers, which truly yields long-term value – and that’s what
Siemens likes to do best.
