The Digital Future of the Heavy Equipment and Off-Highway Industry – Transcript – Part 3
On the Industry Forward Podcast, Dale and I spoke with Hendrik Lange, Director of the Heavy Equipment Industry at Siemens Digital Industries Software, about the challenges facing manufacturers of tractors, construction equipment, and more. We also discuss some of the ways the digitalization is making its way into the design, manufacturing, and maintenance of modern equipment.
You can listen to part 3 of the podcast and read the transcript below.
Conor Peick: Hello there and welcome back to the Industry Forward Podcast with Dale Tutt. My name is Conor Peick. In this episode, we are bringing you part three of the discussion that Dale and I had with Hendrik Lange, the VP of Heavy Equipment and Off-Highway Industries at Siemens Digital Industries Software. In this part, we continue our discussion of autonomous driving and operation in agricultural settings, and then cover the power of digitalization and the digital twin in the development, manufacturing, and service of heavy equipment and off-highway products. A quick note for today’s episode: we had to recapture a couple of Hendrik’s answers due to some audio issues during the original recording. So there are a couple of spots where Hendrik will sound a little different, but we hope you enjoy the episode nonetheless. Without further ado, here is part three of our discussion with Hendrik.
Conor Peick: Hendrik, as we’ve been talking about autonomous vehicles and the unique requirements of applying autonomous technology to the agricultural space, could you dive a bit more into how the application of the digital twin and digitalization can help companies in their development and design of these autonomous vehicles that can move around a field independently and operate robotics or locate weeds or other spots that need manipulation or treatment?
Dale Tutt: When applying autonomous technology to the heavy equipment industry, it means partially or fully replacing a skilled operator. The operator’s brain, experience, and ability to interact with the environment need to be replaced by technology. This requires specific sensors, sensor fusion, and control algorithms. Developing, verifying, and validating autonomous equipment in the virtual world requires a sensor digital twin to compute what the machine will see, considering the working conditions encountered by the sensors. This includes specific heavy equipment sensors for crop or health detection and a machine digital twin with multi-physics, multi-domain simulation focusing on vehicle dynamics and hydromechanical actuation for autonomous driving and operations. An open platform with real-time capability is needed to support all phases of control algorithm development, along with an environment modeling platform with high flexibility to cover all industrial application cases. This is a very difficult problem, and without a controlled model-based systems engineering approach, companies will struggle to verify and validate all functionality in the virtual world, affecting development time, quality, and safety.
Conor Peick: Switching gears a bit, Hendrik, I’m curious about where agricultural companies are on average in this process of digital transformation. Are these manufacturers looking to digitalization to help them overcome challenges and achieve goals like service-based, autonomous farming?
Hendrik Lange: The heavy equipment industry is undergoing a transformation. OEMs and their suppliers understand they need to reinvent themselves to develop highly connected smart equipment and systems that are more complex than previous products. This involves not just design but also manufacturing and servicing, enabling new business models sustainably. To accomplish this shift, they must exploit emerging digital technologies. OEMs leverage business strategies that prioritize sustainability and implement a digital enterprise to drive all their processes. They understand it’s not about being digital for the sake of it but delivering solutions that connect the digital and real worlds. This journey involves automating processes, eliminating non-value-added tasks, and leveraging technologies like design exploration. Everyone has different priorities on the digital enterprise journey, but it’s a top priority in engineering, manufacturing, and service. The service business offers new possibilities for continuous revenue streams, and this is top of mind for everyone in agriculture and heavy equipment.
Dale Tutt: I love that comment about not being digital just to be digital and really looking at how it’s helping benefit the business. Many of the topics you’ve talked about, like new business models, are driving business transformation. Even if they’re not looking at new business models, there’s still a demand to go faster, increase the velocity of processes, and innovate to address sustainability challenges like pesticide use and soil tillage. Digital transformation helps companies transition their business models to adapt more quickly in an ever-changing environment. Companies are trying to solve business challenges and go faster. Many are finding value in the comprehensive digital twin, understanding product performance, operations, and manufacturing. Connecting these functions within the company, from engineering to manufacturing and service, allows for automation. With the foundation of the digital twin and digital thread, companies can apply new technologies like AI more effectively. Digital transformation is imperative for companies to survive and thrive, moving faster and adapting to new business models.
Let’s talk about how digital transformation comes into play in maintenance and servicing of equipment. You mentioned engineering and manufacturing, but time lost to a malfunctioning piece of equipment can be very costly. Companies need to get into the field when the weather allows. If it’s too muddy, they can’t go in, and the last thing they need is equipment not working during those critical days. Are companies using digital tools to prevent downtimes or limit them when things break? What are you seeing in this area, Hendrik?
Hendrik Lange: Unplanned downtime is a no-go in our industry. New digital technologies enable heavy equipment manufacturers to be much closer to their machines in the field. We see digital platforms transforming heavy equipment manufacturers into solution partners rather than just machine vendors. This change is important commercially because margins are low with original equipment sales. A digital platform in maintenance and service provides steady revenue, which is crucial in a typically cyclic business. Being closer to end users and serving them well protects their brand. There’s a huge dealer network in many countries, and it coexists with this transformation. The question is how manufacturers can differentiate themselves and provide additional value to end customers, maximizing uptime, reducing total cost of ownership, and increasing productivity throughout the equipment’s lifecycle. Heavy equipment OEMs have an advantage over the dealer network by creating specific service information down to the serial number and coupling it with the creation process and design definition. They get a lot of information from the field, which circles back into the upfront process, helping define the next generation of machines based on real use cases. This precise definition of spare parts, service needs, and support for equipment in the field is unique and not something a dealer can do. This feedback loop offers new possibilities, improves the product, provides new revenue streams, and gives the end customer a better total cost of ownership. This is a huge topic for everyone and for very good reasons.
Hendrik Lange: As you talked about solution providers, not machine vendors, it highlights the change in the business model. Agriculture as a service really changes the equation. Being able to take all this information and feed it back into your process, having the digital twin, and the ability to look at that information and turn it into useful insights allows you to make changes. Another hot topic we’re seeing in other industries is over-the-air updates. With software-defined products, you can update the software and provide more capability in the future. In service and maintenance in agriculture and heavy equipment, much like in automotive and aerospace, and even in smartphones and electronics, you’re constantly getting updates and more functionality without changing the physical product, but by changing the software. Solutions that analyze changes in soil conditions or field conditions, or when using pesticides, can be updated over time to become more efficient. Early releases might significantly reduce pesticide use, but over time, you can continue to reduce the amount of pesticide used. It’s exciting what can be done, but you need the foundation of digital tools and the digital twin to do something useful with that data when it comes back in.
Conor Peick: Certainly. As we’re coming up on the end of our time here today, Hendrik, could you give us an overview or summarize the benefits that a heavy equipment and off-highway manufacturer can enjoy from embracing digitalization and the digital twin?
Dale Tutt: We talked about all OEMs rethinking their processes and investing in their digital enterprise to address the development of increasingly complex machines and adapt to new business models. By connecting the digital world and the real world through a digital enterprise, heavy equipment OEMs will find opportunities for continuous improvement through feedback loops in their processes, products, and product performance in the field. Through our Siemens accelerator, we enable heavy equipment manufacturers to implement the digital enterprise by deploying a digital twin approach, where digital product and production are interconnected and remain in sync with the real product and production.
How does this benefit OEMs? They gain enormous efficiency from streamlined interaction between various engineering domains and digital connection with suppliers. Changes and decisions at any level will be immediately visible to all affected, saving time and cost and increasing the agility of the development team. Being connected to a digital infrastructure where data from various domain stakeholders, including suppliers, can be shared and kept up to date ensures engineers are always in sync with the latest state of development, reducing mistakes at interfaces. Engineers from various domains will be implicitly connected through this common digital infrastructure.
Another core pillar of the model-based systems engineering philosophy is continuous verification and validation of overall requirements at the full system level. This reduces the risk of costly fixes near the end of the development program or worse scenarios seen in the past. Reduced risk of mistakes will immediately improve the machine’s overall quality and reliability. The advantages of deploying a model-based systems engineering methodology go beyond individual development programs. Making model-based descriptions of systems and subsystems available for all product groups promotes the reuse of systems and concepts across development programs. This makes organizations more efficient, helps improve time to market, and fosters faster innovation.
Conor Peick: How do you think these themes apply across the various sub-segments within heavy equipment and off-highway?
Dale Tutt: Whether we talk about the farm of the future, the mine of the future, or the construction site of the future, the overall challenges, requirements, and developments towards smart equipment are very much the same. Consider a construction site in the middle of the city—noise emission is a huge topic, as is labor shortage. You need to find a way to reduce emissions, including noise. The same labor shortage challenges exist. In mining, 30% of the operating cost is to clean the air. Technology and alternative propulsion systems that reduce this cost by using different equipment are a huge win. Mines are among the harshest and most unsafe places in the world, so safety through autonomous and semi-autonomous operations plays a huge role. These challenges are similar across agriculture, construction, and mining equipment. It’s an exciting but challenging time as our customers, the OEMs, and their suppliers go through this transformation.
Hendrik Lange: It’s been a great discussion. Many of the things we talked about today apply to every segment within the heavy equipment industry, such as mining. Digital transformation themes also apply to many industries, including systems engineering, software development, and improving product performance and sustainability. Companies need a holistic approach to digital transformation, considering technology, internal processes, and people. This has been a great conversation, Hendrik, and I appreciate your time and sharing this with us today.
Dale Tutt: Thank you for having me. It was a pleasure to be here and have the discussion with both of you.
Conor Peick: This has been the Industry Forward podcast with Dale Tutt. On behalf of Dale and the whole team here at Siemens Digital Industries Software, thanks for tuning in and spending time with us today. Next on our feed, you can look forward to a multi-part conversation that Dale had with the CEO and founder of an innovative aerospace company. It’s a fascinating discussion, so please make sure to subscribe and keep an eye out for those episodes as they release.
Siemens Digital Industries Software helps organizations of all sizes digitally transform using software, hardware and services from the Siemens Xcelerator business platform. Siemens’ software and the comprehensive digital twin enable companies to optimize their design, engineering and manufacturing processes to turn today’s ideas into the sustainable products of the future. From chips to entire systems, from product to process, across all industries. Siemens Digital Industries Software – Accelerating transformation.
