Digital heavy equipment manufacturing: Turning challenges into opportunities through simulation

By Hendrik Lange

The heavy equipment industry is experiencing a transformative shift driven by emerging technologies, changing market demands, and global economic pressures. Manufacturers of agriculture, construction, mining and material handling equipment face unprecedented challenges, from sustainability requirements and electrification demands to global disruptions and customization needs. Digital heavy equipment manufacturing—the integration of digital technologies throughout the production process—has emerged as a critical strategy for manufacturers seeking to remain competitive in this evolving landscape.

In this podcast below, Chad Jackson from Lifecycle Insights chats with industry expert Robert Huber from Siemens Digital Industries Software about the key manufacturing challenges in the heavy equipment industry and how digital heavy equipment manufacturing is helping OEMs adapt to changing market conditions.

Critical heavy equipment manufacturing challenges

One of the most significant challenges, characteristic for heavy equipment manufacturing, is balancing standardization with customization. Many manufacturers must combine configure-to-order and engineer-to-order approaches. While they strive to componentize and reuse approximately 80% of their designs across multiple products, the remaining 20% often requires custom engineering for specific customer needs. This complexity creates unique manufacturing challenges, increasing the need for digital heavy equipment manufacturing.

Particularly with engineer-to-order products, manufacturers must ensure designs work correctly the first time, as there are no production runs to refine processes. Unlike high-volume manufacturing, where processes can be optimized over multiple iterations, custom equipment must be designed and built to specification with minimal errors. This requirement places enormous pressure on engineering and manufacturing teams to collaborate effectively.

Adding to these challenges, many heavy equipment manufacturers have faced production capacity reductions in recent years. The agriculture and construction sectors were particularly affected in 2024, as customers delayed equipment investments due to economic uncertainty. This volatility forces manufacturers to make difficult decisions about production capacity and inventory levels, which requires them to balance the need to maintain production efficiency against the risk of building unsold inventory.

Simulation empowers today’s manufacturers

Simulation technologies have become essential tools for heavy equipment manufacturers navigating these challenges. These tools enable companies to test manufacturing processes, plant layouts and production flows before physical implementation. A digital heavy equipment manufacturing approach significantly reduces costs and risks associated with facility changes or new product introductions.

Plant simulation tools enable manufacturers to visualize facilities in 3D, which allows them to analyze key performance aspects like throughput, efficiency and ergonomics before commissioning. For example, simulation can help determine whether a single complex machine or multiple simpler machines would be more efficient for specific processes. These virtual evaluations cost significantly less than approaches characterized by rounds of physical trial and error.

Simulation also extends to robotic programming, CNC machining and other equipment operations. For engineer-to-order products, virtual simulation of machine programming reduces the risk of errors when manufacturing first-of-a-kind components. These tools have helped manufacturers reduce product preparation time significantly.

Digital heavy equipment manufacturing streamlines global operations

For manufacturers with global operations, digital heavy equipment manufacturing presents both challenges and opportunities. Leading companies are implementing centralized data backbones that enable process standardization across facilities while accommodating local requirements. This approach allows organizations to create centers of excellence for manufacturing engineering, rather than duplicating capabilities and efforts at each site.

Cloud-based manufacturing execution systems (MES) further support global standardization, allowing companies to deploy consistent processes across facilities regardless of location. This standardization improves quality control and provides flexibility to, for example, shift production between sites when necessary, which is a critical capability in responding to demand fluctuations or supply chain disruptions. An integrated MES also provides a closed loop between manufacturing engineering and manufacturing execution, enabling smart decisions for continuous product and process improvement.

Supplier integration—another crucial aspect of digital heavy equipment manufacturing—is an extension of this digital connection. Heavy equipment OEMs often rely on complex supplier networks, making visibility and collaboration essential. Advanced manufacturing systems extend process standards, work instructions, and quality requirements to suppliers, ensuring consistent quality and adherance to brand values regardless of the manufacturing location. Collaborative platforms allow OEMs and suppliers to work together on design and manufacturing processes, optimizing both for efficiency, quality, and sustainability.

Go from reactive to proactive

Closed-loop manufacturing represents the future of continuous improvement in the heavy equipment industry. By collecting and contextualizing data from across the manufacturing process, companies can accelerate learning and optimization. In addition, the integration of AI solutions with manufacturing data allows proactive rather than reactive approaches to production challenges.

For heavy equipment manufacturers facing industry volatility, implementing digital heavy equipment manufacturing processes isn’t optional—it’s essential for survival. Those who embrace digital transformation gain the agility and flexibility to respond to market changes, the efficiency to control costs and the quality consistency to satisfy demanding customers, all while improving sustainability outcomes.

Digital manufacturing in the heavy equipment industry isn’t simply about adopting new technologies; it’s about transforming the entire approach to production, from design through execution. As the industry continues to evolve, those manufacturers who successfully navigate this digital transformation will be best positioned to thrive in an increasingly competitive global market.

About the speakers

Robert Huber has over 30 years of experience in industrial manufacturing. Most of his career, he has been part of Siemens. After covering many roles in the areas electronics manufacturing and having lived in the US, Europe and Asia, Robert is now Vice President Global Portfolio Development for Digital Manufacturing.

Chad Jackson is the Chief Analyst and CEO of Lifecycle Insights. He leads the company’s research and thought leadership programs, attends and speaks at industry events, and reviews emerging technology solutions. Chad’s thirty-year career has focused on improving executives’ ability to reap value from technology-led engineering initiatives during the industry’s transition to smart, connected products.