Denise Johnson, Caterpillar Inc. Resource Industries Group president, recently presented on her company’s progressive digital transformation to the Massachusetts Institute of
Smart Industry: What was the motivation for Caterpillar to aggressively adopt digital-transformation initiatives, such as automated mining trucks?
Denise: Our company has been successful for over 90 years by making our customers more successful. We saw three major issues in the mining industry that we could help resolve with autonomous machines:
- Safety—Removing people from the mine site and precisely tracking and controlling machine movement is a massive improvement in mine safety.
- Productivity—We saw the potential to maximize the utilization of a large capital asset. Autonomous trucks only need to stop for fuel and maintenance.
- Shortage of Qualified Operators—This was driving wages sky high during the last super-cycle. In addition, we saw the opportunity to reduce process inconsistency caused by human error. As a result, we started investing in autonomous-machine technology in the 1980's, and by the early 90's, had a functioning autonomous truck.
Smart Industry: What are the unique challenges/opportunities with digital transformation in the world of mining?
Denise: Among the industries we serve, mining has been an early adopter of digital technology. Mining was among the first users of laser-based grade and slope-control
systems, the first to use 3D mapping to model their ore bodies and use that data to drive mine plans. And mining was quick to adopt fleet-management systems to optimize productivity at sites. Mining companies all jumped on the ERP bandwagon in the 90's, and now are eagerly pursuing data analytics and automation as a means to drive safety and productivity improvements. The biggest challenge mining companies face is managing the investment in these initiatives in the face of a highly cyclical industry. Digital transformation requires a deliberate, consistent approach, and the volatility of commodity prices can make that challenging for our customers (just as it is challenging for us).
Smart Industry: Your technology is built to be used with competitors’ equipment. Does this undermine your efforts in any way?
Denise: We view digital technology as an enabler of our traditional machinery-and-parts business, but it is also a means of solving customer problems in an impactful way that can create new sources of revenue and profits. The reality of our industry, despite our leadership in the machinery business, is that our customers own mixed fleets of equipment. To create a safer, more productive mine, we need to address their existing fleets. Therefore, we must deploy our technology across all brands of equipment. But the combination of Cat technology on Cat machine will outperform any combination on our competitors' products.
Smart Industry: What most excites you about the near future of digital transformation in mining?
Denise: The next phase…digital transformation will lead to physical transformation of how mining gets done. Just as pneumatics and material science transformed mining in the late 19th century, and tire and powertrain technology enabled the efficiencies of scale in the latter part of the 20th, the data that monitors and is used to control what happens at a mine site will lead to a change in how material is mined. This is a new opportunity for Caterpillar to demonstrate the innovation of which we are capable, and the strength of our company to help our customers write the future history of mining.